We live in a time when entrepreneurship is revered and celebrated. Families watch episodes Shark Tank, and HGTV teaches us about making money in lots of different ways.
In spite of the popularity of entrepreneurship in popular culture, not everyone is cut out to be one. Exposing your kids to it will help them figure out if it could be the right or wrong path for them long-term.
Whether they go on to be the next great American entrepreneur, they’ll learn some valuable lessons in the process. They’ll learn about taking ownership and developing personal responsibility.
You’ll also be nurturing an interest and better understanding of money. These are all really positive things!
“Do I need to be an entrepreneur to teach my kids about it?” No. The important concepts and ideas are something anyone can teach.
There are also a lot of different ways you can help your kid get into business that are fun and easy.
Here’s what we’ll cover:
- Get them started early
- Business ideas
- Business basics
- Accepting responsibility
Let’s get started.
Get them started early
I advocate you pay your kids a weekly salary. It’s not an allowance. This is money they earn by completing their jobs and responsibilities.
My suggestion is that you begin with a $5 weekly salary. I break it out into three categories, Spend, Save and Give. $2 for Spend, $2 for Save, and $1 for Give.
While there are a lot of great apps and technologies for doing this, I think it’s important to give them cash, and to put the money in three clear jars.
You’re more than welcome to give your kids more than $5. What’s important is the breakdown of 40% of the salary to Spend, 40% to Save, and 20% to Give. Even if you start with $5, you’ll eventually increase it over time.
I suggest you designate one day and time every week for paying the salary. That way, you won’t forget to do it. We do it Sunday morning.
Earning extra money
It’s music to my ears when I hear someone say, “How can I earn more money?”
Teaching your kids about entrepreneurship by setting up a lemonade stand (or some other endeavor) is an awesome experience that I recommend you do.
You can also create a Job Board. In my house, this is simply a cork board with dollar bills and sticky notes explaining the job pinned to it. For example, you’ll find a note with $2 for cleaning windows and sweeping the garage.
You can create as many extra jobs as your kids are interested in doing.
Here’s a video I made you can show your kids to explain the jars and job board.
Here are some ideas to get you and your kid’s wheels turning.
- Arts and crafts
- Food/baked goods
- Landscaping/snow removal
- Pet sitting
- Baby sitting
- Dog walking
- Car washing
- Lemonade stands
- Pool cleaning
The internet has made it possible for kids to start just about any kind of business. With a little research, there’s a money-making opportunity that’s right for your kid.
You don’t need to be an expert in business to be able to teach these basic skills.
Opportunity is all around us. If you see a neighbor’s house with a lot of weeds, or with a driveway that hasn’t been shoveled, there’s an opportunity to make some money.
Every business has to start with an idea. Brainstorming ideas, and looking for opportunities is the first step in determining what business is right for your kid.
From there, you’ll need a name. Let your child decide what it should be.
Now, you’re onto the market and demographics of your ideal customer. Figuring out who it is and what they like and need can be a fun exercise.
How will you get your product and service in front of your potential customer? Marketing is an essential aspect of business.
How much will you charge? You’ll need to determine pricing.
Finally, what will you do with the profit? Will you spend it all, or will you reinvest?
What makes your product or service better than the competition? Why will your ideal customer want to buy from you?
When you do attract a potential customer, how will you pitch them? You’ll need to get clear on the features and benefits of your product.
In order to run a successful business, you need to have proper accounting. Pay close attention to your startup and ongoing expenses. Track your revenue, and finally figure out your profit.
How will you handle questions about your product or service? What will you do when you have an unhappy customer?
The best source of business is from existing customers. If you can help your kids understand the value of nurturing happy customers, that’s a lesson they’ll take with them for life.
Long-term, entrepreneurship can mean accepting personal responsibility for your financial security. It can mean relying on nobody else but you.
Put another way, with great responsibility comes great power. Instilling personal responsibility in your child will serve them for the rest of their lives.
As you go through the process of selecting a business idea, and developing your plan, it’s natural to want everything to be perfect. This is a mistake.
Don’t let perfect be the enemy of good. If you’re not embarrassed by your first iteration, you waited too long to launch.
Dealing with failure and not making excuses
Again, the idea is to teach your kids to be responsible for their success and their failure. The last thing you want is for your kids to be blaming others or other things when something doesn’t go just how they want.
Instead, teach them to look back at the experience and explore what went right, and what can be improved upon. When changes are needed, or a pivot is required, help them through that process.
No helicopter or bulldozer parenting
We want our kids to be happy. We want to help them avoid pain. But, we need to take a big step back and let me enjoy their successes and their failures.
I learned years ago that we support what we help to create. The opposite can also be true. So as you’re going through this process, understand that your ideas will be technically better than your kids, but they won’t necessarily see it that way.
It’s better to move ahead with your child’s C+ business idea, than it is to move ahead with your A+ idea. Don’t believe me? Try it and see.
Encourage personal development
Becoming a life-long learner is also one of the most powerful things you can instill in your kid. Encourage them to become an expert at whatever it is they’re working on.
Teaching your kids about entrepreneurship can be fun and extremely rewarding. The more you can promote it and support them, the better.
We spend a lot of time talking about passion, and I hope everyone finds theirs. But I also know how powerful it is to get really good at something, and to become an expert. If we can help our kids figure out if entrepreneurship is right for them, and how to do it, what a wonderful gift we’ve given them.
If you’d like to learn more, check out our Teaching Your Kids about Money course.
If you’re ready to take control of your financial life, check out our DIY Financial Plan course.
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