When Kids Start Their Own Businesses
Lucy Van Pelt, the famous crabby girl from the Peanuts cartoons, used to offer psychiatric help for 5 cents. And we’re all familiar with the suburban “lemonade stand.” Most of us would like to encourage our children’s foray into entrepreneurship. How can you do it, and at the same time teach children valuable, realistic lessons about money and business?
Know that the soil is fertile. Children are very interested in learning about entrepreneurship. But school guidance teachers are notoriously under-equipped to offer children much in the way of helping them along this path. Here’s how you, the parent or guardian, can step in and help guide the process:
First, more than ever, you have to dot the I’s and cross the t’s. For example, city officials are now known to cite children for operating unlicensed businesses – even the simplest and most innocent lemonade stands. Remember when police in Coralville, Iowa shut down 4-year-old Abigail Krutzinger’s lemonade stand after only 30 minutes? Whether the business is local or online, one of the first lessons you can help kids learn is how to comply with the law.
It’s also a great way to teach kids about risk. For example, your kids may want to start a lawn mowing business. Great. But they’ll need to buy a mower. You could provide the mower, but it may be a better lesson to lend them the money to buy a mower. They can pay it back, with interest, from their proceeds. And if the business fails? They’re still on the hook – they can pay back the loan by doing chores. Just like adult business owners who take out a business loan – that loan must be repaid, even when business is bad.
Don’t feel bad about charging the kids interest – you can drop that money into their college savings account, so it goes to them anyway!
The schools are generally not equipped to teach young entrepreneurs very much. Many teachers have never run a business themselves. That’s where the National Center for Teaching Entrepreneurship comes in. The NCTE is a non-profit, nationwide organization that works with schools to help children – especially low-income children – learn the basics of entrepreneurship.
When they start a new program in a school, they run a local “boot camp” to help teachers and interested parents and volunteers orient themselves to the program. They then work through local teachers, school administrators and community volunteers to help budding entrepreneurs get the training and mentorship they need prior to graduating from high school. To see if there is a program in your area, or to go about starting a program, visit http://www.NCTE.org.
The world of work is changing. Getting your children exposed to business and entrepreneurship early, can position them to thrive in the future.