Helping the Little Entrepreneur
KIDS STARTING A BUSINESS
Starting a business is a great way for kids to learn real life skills and build confidence.
To help your child's success, have them follow the basic steps involved in starting a business by business professionals listed below. That will give them greater confidence and a better understanding of what they will need to do be a successful young entrepreneur.
Also, along with running a business, your child will need to understand some basic business math. See our business math category for subjects such as profit and loss.
Guiding Your Child in Starting a Business
Your son comes to you. He wants to open a lemonade stand. In today's market, he's more likely to want to start his own website, but you still face the same issues as a parent. You can let him have a go at it on his own, or you can offer some adult assistance. Offering to help him can start him on the path to becoming a lifelong entrepreneur, one of the best ways to gain real wealth and satisfaction.
If your child does want to become an entrepreneur, you should help with the basics. Be sure that you don't take and make decisions for your child. Instead, you should guide him or her through the process of starting a business, letting your child make the major decisions with only your help. The first task will be to make sure that your child has a plan. Maybe your daughter says, "I want to start a website." It's your job to guide her through how she plans to make money with her site as well as the subject for the site. Let your daughter decide what she thinks she enjoys and would like to work with on a long-term basis. If the decision is not to have a website, but another good or service offered offline, you will go through the same issues. If your son wants to have a pet sitting service, you should walk him through various options, such as grooming, walking, and washing, so that he can hone his business plan.
Your daughter or son should become familiar with a budget as well. You will need to guide him or her through a budget. Make sure that your child considers all of the costs. He should purchase supplies, such as pens, paper, and other basic office supplies for the business as well as an advertising budget and products specifically for the business. Have your child look at various suppliers for these materials and explain the importance of bargain shopping for the supplies. At this point, it is acceptable for Mom and Dad to loan money to the child for start-up costs but explain that as in all businesses, this loan must be repaid. Once you have a budget and the funding in place, your little one is ready to get down to the nuts and bolts of the business.
Most children who start businesses do not do so legally. They simply head out and hawk their lawn care or babysitting services without considering taxes and the other legalities. You may opt to permit your child to operate without a business license, but it is a better legal option to go through the legal channels now. Not only will it teach your child how to maneuver government bureaucracy, it will show him or her to make the ethical decision in these situations. You may have to register the business under your name or at least be a co-signor with your child, but still he or she will learn how the government works in such matters.
Once you have run through the legal issues involved, it's time to get down to business - literally. Help walk your child through creating a marketing campaign. Again, be sure that you don't do the work for your child. Guide her with questions about who she thinks will purchase her service, where she can find them, what makes her company unique from other similar ones. Use these questions to come up with an advertising idea and put it into motion.
Your child should now be at the point that he or she has everything needed to get the business going. When the business starts up, you will need to be there then as well, primarily for support. Go over customer service issues with your child, explaining how to be polite and how to deal with unhappy customers. You also will need to be there if the business doesn't go as planned or takes off more slowly than your child expected. Don't coddle him or her but require realistic expectations. Businesses don't take off overnight, so you need to be there to make your child feel better if no sales come in. Remember as you are going through this process that businesses start everyday, and many of them don't make it. Your child's business may be one of those business, or it may be something that stays with your child for a long time. Either way, it is vital that you are there for your child in this most exciting of childhood endeavors.
YOUR CHILD AND BUSINESS
INTERESTS AND SKILLS
It is important to start a business based on the skills and interests of your child. For example, if he or she likes to entertain, then they should consider an entertainment based business, such as a clown at younger kids birthday parties. If they like to use computers, they might consider a business typing or creating documents for others. Here are some other ways that kids can make money.
BUSINESS PLAN - SETTING REALISTIC GOALS
Every new business should start with a business plan. What are the objectives of the business? The business should have a mission statement explaining what the business is trying to accomplish. Also, the goals should be realistic. How will your child make money? What will be the costs? How much time will be needed. Will the business interfere with other aspects of his or her life, such as school, or after school activities?
Part of the business plan should include market research. Have your child study the market to see if there actually is a need for the product or service they plan on selling. Survey potential customers to see if they might be interested, and also how much they would be willing to pay. The more expensive it is to start the business, both in terms of money and time, the more important it is that your child do market research.
Does your child have the necessary financial resources to start the business? If not, would you be willing to lend the money? Let them know that if they are serious, and can put together a credible business plan, then you may be more willing to fund their new start-up.
What skills will be necessary for the business? Does your child have these skills? If not, what type of training might be required? Information on learning different skills may be found on the internet, or at your local library. Friends and family are also a great resource. If possible, study the business from others who have done something similar.
Safety should always be the top priority, so your child should check with you regarding any businesses they are considering. This also includes always knowing where your child will be. For example, businesses where your child needs to go door to door in unfamiliar neighborhoods should be avoided. Children should also stick to age appropriate activities.
Kids should not try to do everything from the start. Start small and have the child test the business on a few potential clients. Then check the results, and adjust the strategy if necessary.
Your child will likely need to do some form of advertising for the business. Handing out flyers to prospective customers is one way to advertise. Mom and Dad may also know people who are prospective customers. Word of mouth is a great form of advertisement. If your child does a great job, others will find out and seek them out.
Is the business making a profit? They will need to understand that the business must make a profit at some point, unless the strategy is a charitable one. Remember, revenues minus expenses equals profit.
So how is the business going? Is it making a profit? Is it matching the goals set in the business plan? Is the profit worth the time and effort involved in running the business? Is it taking away from studying? These are all questions that must be regularly be asked.
Finally, be sure to give your child lots of encouragement as they begin their business. Remind them that lots of very successful businesses were created by people that failed their first few times. No matter what, learning new experiences, such as starting a business, will help prepare them for the future.
Here is some useful advice for parents to help encourage their children to become entrepreneurs.
1. Take time to engage your children in serious conversation. You will be surprised how easy it is to link their world with yours and, at the same time, to build a relationship of open communication, shared knowledge and sound values.
2. Don't lecture them. Let your children provide as much input as possible. Let them talk. Listen. Be their business partner, not their boss. Let them develop their own business ideas - then act as the advisor to help them; understand the important real-life issues of running a successful business.
3. Explain what income, expenses and profit are - and then what to do with profit.
4. Start with a business that suits the child's budget. Build the business around something that the child enjoys doing; whether it is flying kites or working on computers.
5. Life can be unpredictable. Tell them to plan for the unexpected.
6. Let your children make mistakes. They need to discover that this is sometimes the way one learns.
7. Give your children pocket money. This is how they begin to learn the value of money. Help them to put some pocket money away for savings, giving and investing - but also to have some fun.
8. Encourage a policy of giving to others or organizations in need of funds. Our country needs people who care about each other.
9. Talk about costs in the home, purchases and reasons for their choice of products.
10. Help your children set individual attainable goals.