It may be the cock that crows, but it is the hen that lays the eggs

I was woken this morning by my twelve year old bouncing into the room declaring he had a new customer. It’s Sunday, but the world never sleeps if you are a young entrepreneur.

He had just learnt that a school friend’s mum had picked up on his facebook page that he is selling free range eggs from his own coop. She had put a weekly order in for half a dozen eggs. Zero cost of sale. Expected customer life time value 468 pounds.

Last year the boys starting lobbying to have a chicken coop at home. My husband and I had differing views on this. Mine was, show me the business case. His (the German half) show me your commitment.
The months since have been filled with learnings that would save many aspiring business men and women a fortune in MBA fees.

• Lesson 1: Pilot and test the market before making big investments

My husband decided that the boys should look after another family’s chickens before buying them their own coop and birds.

After 90 days, the boys learnt which birds lay the most eggs and when; which are the friendliest and how many hours a week were required to keep the chickens healthy and happy and the coop clean.

Interesting at this stage, the boys realised that the more prestigious pedigree chickens which had been top of their original shopping list were the lowest producers and the least friendly. This key insight resulted in the boys ultimately buying hybrids which had they not had Daddy’s compulsory learning phase they wouldn’t gone down this more practical path.

• Lesson 2: Balance supply and demand and find your customers first

The boys worked out at full production level how many eggs they would produce and how many friends and relatives needed to be signed up to off load their surplus eggs after giving free eggs to Mum and Daddy. Lobbying started immediately.

• Lesson 3: Get the business funded

The boys went into research overdrive reading books and binging and googling websites to find the best value coop with a good level of comfort for the chickens. This was their biggest expenditure and so they spend the most time on this decision.

At dinner with a friend who is a successful entrepreneur they traded clearing the table and loading the dishwasher for much needed advice on how to build a business plan. Tom (our friend) explained depreciation (over 6 years, until they leave home at 18) for the coop which made a big difference to their business case which ultimately turns in a healthy free cash flow of approximately £120 per year from year one.

• Lesson 4: Don’t compromise quality

The boys had the choice of spending £8 per chicken at Leek farmers market or buying ‘point of lay’ birds from a reputable supplier. They chose the latter (www.rarebreedspoultry.webs.com) and gained valuable knowledge from rare breeds’ founder, Bev which would have taken them years of trial and error to learn alone.

• Lesson 5: You are what you eat

The boys learnt by spending a bit more on good quality food for the chickens that the eggs were much tastier than the super market ones.

• Lesson 6: Build a brand

The boys were shocked that a new egg carton costs 10p each and at £1.50 per carton of 6 eggs that was 10p off their profits. What could they do to get their customers to recycle the egg cartons and therefore save themselves 10p a pop?

Brainstorming over email, they came up with a plan to paint two cartons per customer and have stickers made with picture of the chicken breed and the bird’s names. By personalising the packaging it would be harder (potentially even heartless) for their customers to throw the cartons away. So stickers were made featuring a cast of the different chickens – bluebelle; warrens; blackrock; speckledy; magpie, individually named Erica; Dolores; Zoe; Mila; Christina, Susan; Jessie; Zuri.

So far so good and the boys are pleased to be saving the 10p per sale and also in their own way, building a sustainable business and encouraging recycling. They also managed to talk Mum into paying for the sticker costs (honing the art of negotiation).

Food for thought.