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Youngster Trying to Earn a Buck

Working Capital Loan

Learning how to raise working capital at a young age.

Now that I look back, I was an entrepreneur at a very young age without even knowing it. In elementary school, these handheld video games were popular; this is before there was Gameboy or PSP. These games usually had only two buttons and ran off watch batteries or AA batteries. In 5th grade I had a teacher named Ms. Graves, and she used to hand out tickets to the students for making certain accomplishments, for example getting a 100% on a spelling test, or completing homework on time for the whole week, or even class participation. At the end of every week she held a raffle with those tickets and you could win things like “homework coupons”, where you could use this coupon in exchange of not having to do the homework for that night, or another prize would be pizza party for you and a couple of classmates of your choice. She would buy a pizza during lunchtime and you would stay in the class with some of your friends and enjoy some tasty pizza while the other kids had to eat their boring PB&J. One day I brought my handheld game to school so that I can play with during recess. (The picture of the video game above was one of my actual games I used to play with as a kid). Of course all my friends wanted to play with it. Before I knew it, I had a line of classmates waiting to play this game. Problem was, if several classmates wanted to play how did I choose who would play first. That problem was solved right away; one of my friends offered me two of his raffle tickets in exchange for him to play my video game for the entire recess. Well that problem was solved right away, but there were still more kids wanting to play and I had my first real experience of “supply & demand”. So I was now in a real dilemma, how can I get my hands on another video game? If I remember correctly they were around $20 dollars each, and being a kid I probably had a couple of dollars in my piggy bank, my baseball collection, and old toys. I had to figure out how was I going to raise some working capital for my newfound business! Well first thing that came to mind was asking my parents if I could do some extra chores around the house. I was hesitant at first, because a year before this great idea, my parents offered myself and my brother to pick up rocks in the backyard so they can lay down some new sod. We were paid $5.00 per bucket, let’s just say we spent the whole picking up rocks and made about $5.00 each. Going back to the story, my parents did offer some extra chores so I was able to get my $20 dollars to get my second game. I now had two games in rotation, making me 2 raffle tickets per game per recess. I was making a total of 8 tickets per day and still had a waiting list of classmates waiting to play the game. Back to the drawing board I went and figured I needed to see how I was going to get some more money to buy some more games. I figured I wasn’t going to do any more chores, so I decided to sell some of my favorite baseball cards at that time. I took my collection to the local card shop and ended up hocking some of my prize possessions to buy myself one more game. Again, had all my games rented out and still more kids were on the waiting list. Now I had three games rented out at 2 tickets per game twice a day, I was making 12 tickets per day off my game rentals. I didn’t have any more baseball cards to sell, and I definitely didn’t want to do any more chores. So I had to come up with a way to make $20 dollars and I needed it fast. I then realized I had all these tickets and some of my classmates wanted more tickets to increase their odds of winning the weekly raffle. I asked if anyone wanted to buy some, I ended up selling a bunch of my tickets to earn that $20 dollars to get myself one more game. By this time, I had enough game systems to keep the waiting list reasonable and I was making 16 tickets per day. Though this was a great experience my teacher was wondering how I acquired so many tickets and how I was winning so many prizes each week. She felt it wasn’t fair, and terminated my rental business.

What I learned from my first business attempt.

Back then I had no clue what I was doing, but now that I think about it I was running my first small business when I was in 5th grade. My motive, well I wanted to win those “homework passes” so I could skip doing homework after school and instead I can be out and play with the other neighborhood kids. I found a market and I knew who my customers were. I had my first experience of supply and demand. I had to learn how to raise working capital to buy more inventory/equipment.  I had to sell some assets (baseball cards & raffle tickets) to raise some capital to buy some more games. By collecting the rental fee of tickets from my other classmates, it lowered their chances of winning the raffle, and it greatly increased my odds of winning. Like all businesses, I was regulated by the local Government (my teacher) hahaha. The only thing I didn’t have to experience was having to get a working capital loan (borrowing money from my parents) to buy more video games. This was a great experience and until recently I didn’t realize how much I learned. Thanks to my parents, they encourage my efforts, and I will do the same for my kids.

If you’re interested in hearing more about our business financing programs, please feel free to call First Capital Business Finance 888-565-6692 and one of our loan experts will be happy to answer any of your questions.

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