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.
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.