Mercedes’ Pawsome Bitez: my 9-year-old’s Entrepreneurial Journey
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This past January, my daughter came to her dad and me and asked if she could have a cell phone. Both of us gave her a pretty unequivocal “No” response, but she persisted and asked if she could have one if she paid for it. Since we are trying to teach the kids about financial responsibility, we decided that she could buy herself a cell phone when she could pay for the phone herself and make the monthly cell phone bill payments. Going over her allowance, she asked how long it would take to save up for a phone. The answer she heard was “FOREVER!!”
So, my 9-year-old daughter came up with a plan. She sees me and my husband owning our own businesses and making enough money to live on. If she starts a business, she can get a cell phone. (I love that her mind works this way). What can she make and sell to be able to make money? Well, she loves to bake, so she can start a cookie business and sell them at school! I nixed this idea quickly; it isn’t like it was when I was in school. Kids are not even allowed to bring in homemade cupcakes for their birthday. There is no chance she can sell cookies at school, BUT she could make homemade dog treats.
Since then, Mercedes and I have started a business: Mercedes’ Pawsome Bitez!
Here’s how:
Starting a dog treat business inf Florida is a lot more difficult than just setting up a lemonade-type stand and selling treats, especially in this day and age where kids are being hassled for things that were very common 15 years ago. There are key steps that have to be taken, which is why I spent several weeks just baking with Mercedes to make sure that this is something that she really wants to do and wont just stop after a few weeks.
Step One: Research. We looked online and in stores what dog treats were being sold at by people like us, boutique stores. Who is our competition? What products do they offer? and what is their price point? Where do they offer their products? What do their customers say about them?
Then we looked at our target market: who are we trying to sell to? Dog owners, of course, but do they want treats that are natural? Human-grade ingredients? Cheap? Are they looking for and willing to pay for premium products? Why? One of the best ways we found to do this was to work with a company called Diva Dog Bakery. Their course was able to provide us with a quick-start guide on getting our business off the ground.
Step Two: Register the Business. We registered her business as an LLC. To do this, we had to register with SunBiz.org as well as get an EIN number from the IRS. What I learned is that getting an EIN is FREE! If you go with someone who is charging you to set up an EIN, you are going with the wrong person. The only thing that should cost is registering your LLC with the state. We went with an LLC with myself, my husband, and Mercedes as the joint owners because of her age, but there are other options:
Sole proprietorship and partnership: These are the simplest business structures, but offer little to no protection from personal liability. Since I am primarily an insurance advisor, I wanted to make sure that Mercedes and the rest of the family was as protected as we could be.
LLC: This structure offers significantly more liability protection for your assets, which is why we signed up for it, but it is one of the more paperwork- and fee-heavy options to start.
Corporation: This structure offers the highest level of liability protection, but is more complex to establish and operate.
Step Three: Licenses and Permits. We weren’t really a business at this point yet, we still had to register to get licenses and permits from the state of Florida and local municipality. We had to get a business license. We had to register with the Florida Department of Agriculture, with whom we also had to register our products and get guaranteed analysis for in order to be able to sell them. The guaranteed analysis requires us to have our products analyzed for what they contain: Fat%, Protein %, etc. We also needed a sales tax permit since we were selling products directly to consumers, in person as well as online. All of these things required paperwork and, in some cases, fees.
Step Four: Make the Product. We had really been making our treats all through this (several month) process, testing different combinations on our dogs and on friend’s pets. We found that we needed some Natural Peanut Butter, but didn’t want to have any treats whose main ingredient was peanut butter because 1) it made the whole house smell like peanut butter and, 2) it gave our dog tummy trouble. We also found that using dried blueberries in one of our recipes worked a lot better than frozen blueberries. We came up with FOUR options to make available at all times and
Step Five: Market! Since we have started, we have gotten a few people interested who we used as testers at the beginning. Their dogs loved the treats so much that they have ordered several bags. We are applying to some of the Farmers’ Markets in our area to be able to get our product out there. Online, Mercedes’ Pawsome Bitez has its own website, which is attached to the one for my business, and an Etsy shop for people to buy and have the treats shipped to them. We are also going to dog-friendly businesses and offering them a discount for wholesale orders as well as samples to try out.
It has been a HUGE deal to start this business and all through the process Mercedes has been very enthusiastic and engaged. We are going to really focus on this as our summer activity and probably scale it back a bit during the school year, but she is involved in baking, marketing, and tracking her expenses vs profit. I am very proud of her and, hopefully, this will be a step in her financial intelligence and encouraging her entrepreneurial spirit! Come see Mercedes Pawsome Bitez!