Do your kids keep asking what they can do to earn more allowance? Do they know how to save up for something they want? You might have a budding entrepreneur on your hands.
From setting up a lemonade stand on the corner to creating smartphone apps, kids are learning the ropes of running a business early.
• The 2011 Free Enterprise National Survey found that 64 percent of high school juniors were interested in starting or owning their own businesses. And, in fact, 15 percent of respondents had already started their own business.
• The 2010 Ewing Marion Kauffman Foundation’s Youth Entrepreneurship Survey found that 40 percent of students between the ages of 8 and 24 would like to start a business in the future or already have done so.
Yet with all this interest in entrepreneurship, few students are getting this information from school. According to the Council for Economic Education, only 15 states require public high schools to offer a personal finance course, and there are no national standards for an entrepreneurial education.
What Can You Do?
If you have a budding entrepreneur in the family, what can you do to encourage and equip them to take on the challenges of starting and running a business?
Kim Danger, personal finance expert and founder of MommySavers.com, says that even if you’re not a business-minded person, you can help your child or teen grow in this area.
“It’s never too early to start learning about financial matters, whether it’s managing their allowances or starting their own dog-sitting service,” Danger says. “In addition to talking with them about money matters and being a good role model when it comes to finances, there are some things you can do to help them get some real-world business experiences.”
• Take them seriously. If they have an idea for a product improvement or a service they can provide to neighbors, don’t dismiss it. Listen to the idea and ask them questions to help them figure out how to make that idea a reality. Even if they don’t make a dime, they’ll get a boost in confidence and some lessons in planning and critical thinking that will pay off later.
• Don’t do too much. It can be very tempting for adults to take over a project and “do it right,” but kids need to learn from mistakes, and to take responsibility for decisions and their consequences. Entrepreneurship means facing a lot of challenges that require persistence, patience, determination and creative problem solving. They’ll miss out on all those lessons if you do the legwork for them.
• Make sure it’s a labor of love. It’s one thing to come up with an idea to make some short-term pocket money. But starting a business takes a lot of time and effort, so it needs to be something that they can be passionate about. Starting a pet-care business when they don’t really love dogs will not end well.
“Kids have energy, imagination and creativity that could very well lead to the next big idea or make a big difference in their world,” Danger says. “All they need is some encouragement from you and they can start creating their own future today.”