How to Encourage Your Kids to Start a Business & Become Entrepreneurs | Money Management

Does your child get bored easily at school? Are they an outlier with a rebellious spirit that sometimes rubs their teachers or coaches the wrong way? Or do they simply enjoy creating things and have an interest in selling them to make money?

If so, your child might have the characteristics of a successful entrepreneur. And there's a lot you can do to help them develop the skills, traits, and values that will help them realize that potential.

The Benefits of Being an Entrepreneur

If you've never started a business yourself, it might seem a bit crazy to encourage your kid to start one of their own. After all, according to the Small Business Administration (SBA), over 50% of small businesses fail within the first five years. So, why on earth would you want your child to invest time and energy in an endeavor with such a high risk of failure?

I've been an entrepreneur for over 15 years and can tell you firsthand that there are many benefits to starting your own business. These benefits are even more profound for children. Starting a business isn't easy — not by a long shot — but the rewards are well worth the effort.

1. Freedom

Starting your own business gives you greater control over your future. You wake up every day knowing that you're steering your own ship and the path you take is entirely up to you. This autonomy leads to a powerful sense of self-confidence — and also leaves no room for excuses.

When children experience the power and responsibility that comes with this freedom, it changes their lives. Their first business (or their fifth) might not be a success, but they will grow and gain confidence from the experience.

2. Sense of Accomplishment

Small businesses are created to solve problems or fill a need. Entrepreneurs get to see their vision come to life to help others, which is incredibly rewarding.

Children especially love helping others. When they see their ideas help someone else in their community or in the world, they will feel a deep sense of accomplishment and empowerment.

3. Resilience

When you start a business, you make mistakes — lots of them. You have to either pick yourself up and start again, applying what you learned from those mistakes, or roll over and give up.

Learning how to bounce back from failure is a vital skill for kids. They develop a thicker skin as they learn how to overcome the obstacles blocking them from their goals — or find new ways to go around them — and they learn to rely on their strengths and skills to get them through tough situations. This resilience will be invaluable throughout their lives.

4. Discipline

When you run a business, whether it's an afternoon lemonade stand or a tech startup, you have to do a little bit of everything, especially in the beginning. You must learn how to create and balance a budget, market and sell your idea, manage your time and workflow, build relationships … the list is seemingly endless.

It takes discipline, intelligence, and creativity to fill the many roles needed in a startup. Your kid will learn how to do things they never thought possible because, as an entrepreneur, they have to.

5. Smart Risk-Taking

Human beings, for the most part, are risk-adverse. We generally don't like taking risks because, long ago, risks often exposed us to dangers that could get us killed. While that is still true in some cases, entrepreneurs often follow a different mindset, perhaps best described by journalist, author, and humorist Frank Scully: “Why not go out on a limb? Isn't that where the fruit is?”

Entrepreneurs must get comfortable taking risks. They must also learn which risks are worth taking. Some risks are a foolish gamble, while others bear fruit that's worth its weight in gold. Being able to tell the difference — and have the courage to go after the smart risks — can be useful in many aspects of your child's life.

6. Sense of Pride

Richard Branson once said about starting a business, “Above all, you want to create something you are proud of.”

Starting a business and reaching goals instills a strong sense of pride in children. This pays off in many ways, from a rich inner life to a thirst to continue building that sense of pride by trying new things. When kids get to see their ideas come to life, they never forget it.

7. Independent Thinking

Schools often teach that there's one right answer to a problem, but we all know that life rarely works that way. There are often many paths toward a solution, and some work better than others.

Some entrepreneurs are born with a fierce sense of independence and a willingness to think outside the box to solve problems. Others hone these skills slowly as they start and grow their businesses. Entrepreneurship teaches your child to use creativity to find solutions to problems. It encourages them to be curious enough to find new strategies and teaches them to be flexible in their approach. Independent thinking and an innovative approach are important leadership characteristics.

Examples of Young Entrepreneurs

On the surface, it might seem as if a child wouldn't have the know-how or capabilities to start a business at the ripe old age of, say, 8. However, there are many inspiring stories of kids who started successful businesses before they were even out of high school.

One of the most well-known examples of a young entrepreneur is Sir Richard Branson, who dropped out of high school at age 16 and started his first business, a youth culture magazine called “Student.” He then went on to start Virgin Records and now runs the Virgin Group, which controls over 400 other companies and endeavors.

Another entrepreneur, Ben Casnocha, started his business, Comcate, when he was 13. Comcate delivers on-demand software to small and midsized local governments to help them improve their customer service. Today, the software is being used in cities across the country and serves over 25,000 citizens and staff.

HoopSwagg creator Brennan Agranoff started his business when he was 13. By the time he was 17, it was earning seven figures — while he pulled straight As in school and participated in sports four nights a week.

Is your kid likely to reach these levels of success? Most likely not, but they could surprise you. And even a “failed” business can teach them invaluable lessons for the future.

How to Encourage Kids to Start a Business

As a parent, there's a lot you can do to encourage an entrepreneurial spirit in your child. My own boys are only three and two, but I'm already looking for ways to build their sense of independence, creativity, and innovative spirit. Here are some tips to keep in mind while you do the same.

1. Consider Their Strengths & Weaknesses

In his TED Talk “Let's Raise Kids to Be Entrepreneurs,” lifelong entrepreneur Cameron Herold says that parents need to look at what their child is naturally good at. Herold argues that kids who don't fit the mold of “a good student” shouldn't necessarily be pushed to get straight As; instead, they should learn the skills they need to start a business.

Today's schools, Herold claims, teach kids to go after “the good jobs,” such as doctor, lawyer, or engineer. Those who excel at science are pushed to go into science. Those who excel at math are often pushed into accounting or computer science. Kids who love these subjects tend to do well when they pursue these paths because their interests and natural strengths are aligned.

However, kids who are highly creative, who excel at finding innovative solutions to problems, or who just don't seem to fit any other “career path” are rarely encouraged to be entrepreneurs, which could be a great fit for them. Instead, they're seen as a square peg and often pushed to make themselves fit into a round hole.

Take a close look at your child's strengths. What do they love to do most? What are they good at? What are they interested in? How could they use their natural skills and interests to start a side business?

You also need to look at their weaknesses and any conditions that pose a challenge for them. For example, Branson had severe dyslexia growing up. Herold has attention deficit disorder (ADD), as did Steve Jobs. These conditions, along with bipolar disorder, are common in many entrepreneurs. Approached the right way, they can be an advantage, not a handicap.

For example, kids with ADD and attention deficit hyperactivity disorder (ADHD) can become obsessed with a problem that captures their attention and interest. Try to identify a problem in an area your child is already interested in — such as sports, fashion, or food — and give them the tools they need to solve that problem.

Kids with ADD and ADHD are also frequently impulsive. This can be maddening for parents, but it can be an asset to entrepreneurship because these kids will often move forward regardless of fear or uncertainty. They're not afraid to take risks. When they find a problem that interests them enough to focus on, work with them to analyze the risk and then turn them loose. They'll make mistakes, but they'll learn from these mistakes and do better next time. This cycle of failure and learning is common in entrepreneurs with ADD and ADHD, and it's one of the reasons they're often successful.

2. Widen Their Circle of Friends

If you want your kid to develop an entrepreneurial spirit, take a close look at the family, friends, and neighbors they spend time with. Aesop famously wrote, “You are known by the company you keep,” but another variation states, “You are the company you keep.” Both are correct. Your reputation is shaped and built, in part, by the people you spend time with, as are your character and values. As Casnocha says, “Surrounding yourself with people smarter and more successful than you is always a good thing.”

If you want to encourage your kid to think outside the box, expose them to people who already do that. Read them stories about kids their age who have started successful businesses. Find them friends and mentors who are entrepreneurs and can show them by example how hard and rewarding it is to start a business. Expose them to artists, musicians, writers, and speakers who are pursuing their passions despite overwhelming odds.

In short, connect them with people who will show them that their dreams are possible and, more importantly, will encourage and support their ideas along the way. A strong support network is one of the most important elements of successful entrepreneurship. You play a huge role in this support network. When your child comes to you with an idea, don't shoot it down or list the ways it won't work. Instead, work with them to figure out how they can make it work.

3. Teach Them How to Set Goals

Knowing how to set and achieve goals is an essential skill when starting a business. It's also a key part of the foundation your child will need to succeed in any area of their life.

Start small by talking to your child about something they'd like to achieve. It could be something small, like saving up for a new toy, or it could be a larger goal, like getting elected to their school's student council. Work with them to create a step-by-step plan to make this goal a reality.

Next, write down the goal and the action plan you developed. Research conducted by Dominican University of California psychology professor Dr. Gail Matthews found that more than 70% of study participants who wrote down their goals reported successful goal achievement.

Last, encourage your child on a daily basis to follow the plan. Your encouragement, or lack thereof, will be a huge factor in their success or failure. You can also use sites like stickK to help your child follow through on their goals.

4. Teach Them How to Handle Failure

No matter how old you are, failure isn't easy to deal with, but failure can be especially devastating for a child. That's why you need to start, as early as possible, teaching your child how to embrace failure, learn from each mistake, and be persistent so they never give up.

Few, if any, successful ventures are successful from the beginning. Every business owner takes a step, falls down, gets back up, and keeps going, a little wiser for the experience.

Every time your child tries something and doesn't succeed, whether it's a project at school or a business venture, sit down and talk with them about what happened, what went wrong, and what they learned from the experience. How could they start again and make things better using what they learned? How will they avoid making the same mistake in the future?

5. Help Them Identify Needs & Opportunities

Most of the businesses Herold started when he was a child were based on fulfilling a need he was able to spot in his community. At the local golf course, he observed one hill by the 13th hole that everyone who didn't have a caddy had trouble climbing. So, he set out a lawn chair and carried their bags up that one hill. At the top, he got paid $1. He earned more money doing this than his friends did caddying all 18 holes.

It's often easiest to look for needs and opportunities in your child's own life. What problem or annoyance do they experience on a regular basis? How might they solve that problem? Starting small teaches them to look for solutions instead of simply lamenting a problem.

Next, expand your focus. Teach your child to be observant and look for unmet needs in their home, school, neighborhood, community, or the world at large. When they spot one, brainstorm different ways they could help meet that need.

You can also look for short-term opportunities to start a business. For example, your child might offer a neighborhood gift-wrapping service during the holidays or clean-up services after Fourth of July parties.

6. Force Them to Find a Way

Herold was not allowed to get a job when he was growing up. Both of his parents were entrepreneurs and said that he had to find his own way to earn spending money. Because this was his only option, he found lots of ways to earn money, and now he and his siblings are all lifelong entrepreneurs.

If you want to push your kid to stand on their own two feet, make sure that's their only option. If they want to buy something, they have to come up with the funds to buy it. Consider the old business adage “the hungry wolf hunts best.” If your child has no other choice, they will learn to rely on their creativity and determination instead of taking the easy route to get a paycheck.

7. Teach Them About Money

Financial literacy and personal finance should be taught in every school, but unfortunately, they aren't. So, it's up to you to teach your kid about money management.

This means more than simply giving your kid an allowance. While giving your kid an allowance for doing chores around the house can encourage a good work ethic, Herold argues that it's like giving them a paycheck and does nothing to build an entrepreneurial spirit. Instead, Herold suggests encouraging your kid to walk around the house to see what needs to get done, then negotiate the price of this task with you. This teaches them to spot opportunities and solve problems, and it builds their negotiation skills.

You also need to teach your child how to save money. Even toddlers can learn, using coupons and pictures, how to save up for things they want. Learning impulse control and developing the patience to save up for something they desire are important for managing not only business finances but also personal finances. Starting early can help your child avoid big financial mistakes later on in life.

8. Talk About Marketing

No business, no matter how fabulous, succeeds without customers. So, it's important that your child understands what marketing is and how to use it in their business.

Start by talking with your kid about the marketing they see every day — the ads that come up on their tablet when they're playing games or commercials that come on during their favorite TV show. What interests them about each ad? What do they like and not like about each one? What would they do to make the ad more attractive to someone their age?

You can have the same type of conversation when you're at the store. Even cereal boxes can provide some important marketing lessons for your child if you stop and talk to them about what they see and how it makes them feel.

If your kid is older, talk to them about social media marketing. Social media outlets like Facebook, Twitter, Instagram, or Pinterest can make a huge difference in the success of their business.

9. Foster Their Creativity

Herold recommends that, instead of reading bedtime stories to your child every night, you only read to them four nights out of the week. On the other three nights, ask your child to tell you a story. Put out three or four random objects or toys and ask them to construct a story about those objects.

This exercise not only builds your child's creative thinking skills, it also teaches them how to think on their feet. And, most importantly, it teaches them to have fun telling stories and being creative.

Herold also recommends encouraging your kid to get up in front of others in various ways. That could mean making speeches for community groups or putting on plays with their friends — anything that builds creative thinking skills.

10. Teach Them How to Ask for Help

Asking for help can be difficult, especially for kids who have a strong sense of independence. But everyone needs help from time to time, and knowing how to ask for it is essential.

Your kid will be a better entrepreneur if they know how and when to ask for help when they need it. This help can come from you or a mentor, their social network, or a community or government organization like the SBA. The SBA offers a free online course that teaches young entrepreneurs such things as how to evaluate their ideas, find financing, and legally register their businesses.

11. Teach Them How to Communicate Effectively

Solid communication skills are more important than ever. However, with the popularity of social media, text messaging, and increasing screen time for kids, face-to-face and written communication skills have taken a hit. Younger generations, especially, are losing the fine art of communicating in person.

Your child will have an edge in life if they learn how to communicate well. For inspiration, check out child prodigy Adora Svitak's TED Talk, “What Adults Can Learn From Kids.” Svitak is only 12, yet she speaks with the clarity and professionalism of a seasoned adult. Her talk is also incredibly inspiring.

One way to help your child be a better communicator is limiting their screen time. Consider getting rid of your TV, limiting screen time on personal devices, or taking a page out of Michelle Obama's book and not allowing any screen time at all during the week unless it's strictly related to homework. Instead of watching a show or playing a video game, your child now has free time to talk, read stories, play games, or be with friends. All of these things will help them become better communicators.

Keep in mind that you're a role model for your child. They learn from watching you, so it's important to model the types of behaviors you want to see. Make sure you're actively listening when someone speaks to you, not looking down at your phone or thinking of what to say next. Give your child your full attention when they speak. When you're talking about your day, be detailed and descriptive. Tell stories with a flourish to make them lively and interesting.

You can also try role-playing to help your child learn to communicate better. Role-playing is especially useful when they're nervous or scared about a situation. For example, your child might need to confront a friend about something they said that hurt their feelings. Role-playing this scenario gives your child a safe place to work out what they want to say and practice saying it so that they communicate better when the time comes.

Small Business Ideas for Kids

Your kid is only limited by their imagination when it comes to starting a business. And you'll likely find that, once you start encouraging the skills and traits outlined above, they'll come up with business ideas you would have never thought of.

If you want to help them get their feet wet as an entrepreneur, here are some small business ideas for teenagers and kids.

1. Selling Old Toys

Go through your child's old toys or video games and separate out the ones they've outgrown or are willing to part with. Sell these on Craigslist, eBay, or in local consignment shops.

Instead of doing all the work yourself, make your child do every task they're capable of. If they're young, they might not be able to create an entire eBay listing, but you could show them how. Let them be the one to take pictures, decide on a price, and come up with the product description. Give them as much autonomy as they can handle so they have the sense of pride that goes along with earning their own money.

Another related business idea is to take them to thrift stores and garage sales and buy used items to resell for a profit.

2. Selling Crafts

Does your child love to paint? Knit? Make jewelry? If so, they could be selling their wares to others.

If your child loves to make things, they can set up a shop and sell them on Etsy. Other options for online selling include DaWanda, Zibbet, and iCraft. They could also turn their art or illustrations into salable products using sites like Zazzle.

3. Tutoring

Is your child a whiz at French? Do they play the piano well? Are they in AP Math in school?

If your child excels in a particular area academically, musically, or even artistically, they could tutor others their age or younger. Tutoring can be a great way to earn money on the side and reinforce skills they already have.

4. Animal-Related Care

If your child loves animals, they might love starting a business that provides animal care. That could include dog-walking services, home-play visits during the workday, pet sitting, or even pet grooming.

5. Blogging

If your child loves to write and tell stories, they might enjoy writing a blog. Blogs can be very lucrative once they gain a following, but this takes years to build. However, if your child is a gifted writer and gets the word out, traffic might increase exponentially.

If your child is comfortable using technology, they might also be interested in podcasting or creating informational videos on YouTube. They could talk about anything: video game techniques, knitting, toy trains, fashion tips, even how to build an awesome fort. Keep in mind that the more specialized the topic, the likelier it is to gain a devoted following.

6. Odd Jobs

People always have chores to do around the house. Seniors especially find some tasks, such as raking or pulling weeds, challenging. These are tasks that your child is capable of and from which they could make money.

Brainstorm a list of household chores they can complete well. Then, work with them to create a flyer to pass out in your neighborhood.

7. Gardening

If your child loves to garden, they could start an organic garden and sell their fruits and vegetables at your local farmers' market or food co-op. They could also go door-to-door in your neighborhood and sell fresh local food to others who don't have the time to garden or make it to the grocery store regularly.

You can extend this idea to other food if your child loves to bake or cook. Everyone loves homemade cookies, bread, jam, and pies; selling these can also become a small business.

Final Word

When children are young, they believe they can do anything. As adults, it's hard to remember what that feels like sometimes, but that spark of optimism is within all of us. Our children don't doubt like we do. They're not plagued with the fears and insecurities that often crop up as we get older.

Children are in the unique position of truly believing, without a shadow of a doubt, that they can accomplish their dreams and make the world a better place. You can help them do this by fostering their independence and a strong sense of self and encouraging their creative ideas to flourish. As you help your child blossom into an entrepreneur, you might find yourself learning some valuable life lessons along the way.

Has your child ever started a business? What did you do to help them?

How to Encourage Your Kids to Start a Business & Become Entrepreneurs is a post from Money Crashers.