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Homegrown
Cash
Turning Time and Talent into Profit
By Lori B. Murray and Jennifer Maybin
Fifteen-year-old Blair Sheridan Barber of Phoenix, MD, doesn't get to watch much Letterman. During the summer, when everyone else is taking advantage of summer break by staying up late and sleeping in, Blair is up at the crack of dawn taking care of business. Blair sells homegrown tomatoes at a roadside stand in front of his house. Although he doesn't have to travel far to get to work, Blair still has to stay on a regular schedule to keep things running smoothly.
Summer Plans
Blair starts working on his summer business in May, which is when he plants the tomatoes. This ensures that they have plenty of time to grow and are ready to sell during the summer months. Throughout May, he checks on the growth of the plants and waters them once a week. By the time summer arrives, he is ready to set up shop.
Like many young entrepreneurs, Blair runs his business only during the months of June, July, and August. Not only is it a good time for tomatoes, but it is a good time for him, too. Working during the summer gives Blair a little money to spend or save during his vacation and doesn't interfere with school.
Early to Rise
Next, he takes all the tomatoes he's picked to the garage. "I weigh them, sort them by size, and price them," says Blair. Then he's off to the stand to begin selling. It takes about 10 minutes to set up the displays and arrange the tomatoes by size and price. Once this is finished, Blair is ready to do business.
Customer Service
On most days, Blair's Tomatoes opens around 8 a.m. and closes at dusk. Because his stand is located in a convenient, high traffic area where many people travel to and from work, he attracts plenty of repeat customers.
How long he works at the stand each day depends on the number of people that stop. "Some days I only sit at the stand for about an hour," says Blair. "If I'm not out there, we use the honor system. If people need service, they can honk and I'll come out." However, when there are a lot of customers, Blair can spend over three hours a day at the stand. Sometimes, when business is really good, he has to pick more tomatoes and restock the stand.
Pay Day
Blair knew that he would have operating expenses such as the water bill, fertilizer, bags, and wear and tear on equipment. Another cost he needed to consider was the value of the next best use of all the time he was going to spend on his business. That value is referred to as the "opportunity cost" of his time. The profit he would have left after his operating expenses needed to be enough to compensate for that time. For example, if his next best opportunity was to earn money working for a neighborhood employer, his profit would at least need to cover the wages he would have been paid.
With these issues in mind, Blair calculated his expenses, checked the price of tomatoes in local grocery stores, and determined the opportunity cost of pursuing the business. Then Blair decided to sell his tomatoes for $1 per pound.
Last summer, Blair grew 50 tomato plants and made a profit of $2,400. Knowing that the alternative was working for $6 an hour and earning only $1,500, he feels he did pretty well for a part-time business. By managing his time wisely and working hard, Blair plans to repeat his past success this summer.
Worth Your TimeStarting a business often takes long hours of hard work and careful planning. Aspiring 'treps have several tools available when it comes to managing time, and all are helpful in starting good time management habits.
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