Children go into business for a variety of reasons. Some need extra cash to pay for recreational activities. Others have a desire to save for the future. Still others have a little extra time and want to make good use of it. Whatever the motivation, starting a summer business is a good way for children to learn entrepreneurial skills. Here are some things to consider:
To get your child started in a business, help him make a list of what he likes to do and businesses that relate to those interests.
“When Ben decided he wanted to start a business, we sat down and talked about what he could do,” says his mother, Stephanie. “He has always loved animals, so it seemed a good fit for him to take care of other people’s pets.”
Once your child has made a list of what he enjoys doing and the kinds of services or products he can provide, have him analyze the market. Are there people who live in your area with specific needs? Talk with your child about those needs and how he may be able to provide a service or product for them. In Ben’s case, there were plenty of people in need of summer pet care. Also, look at small businesses in the community. Do any offer a similar service your child could provide at a lower cost?
Many small businesses successfully run with one person. The key question to ask is, how much time does your child have to devote to the business? If he is on a swim team or involved in another sports program, his time may be limited. For this reason, your child may want to consider working with another family member or friend.
For the Andersons, this was the best way to go. Their oldest child, Brandon, had karate lessons several times a week and a few summer tournaments on the calendar.
“While Brandon was at lessons, the girls and I mixed and baked cookies, so they would be ready to sell the next day,” reports their mother Kim.
The upside to having a joint venture is less work for each individual and more potential for the business to grow. The down side is they have to split the profits, and one party may feel he or she is doing more work than the other.
“There were times the girls complained that their brother didn’t help with the mixing and baking,” Kim says. “But I reminded them their brother was the one in charge of advertising. And he was always there when it came time to sell.”
Before advertising, choose a name that fits. Some business names are cute and clever. Others have names that clearly state who is running the business and what it offers — Ben’s Best Home Pet Care. With a little creativity, your child can come up with a name that’s cute, clever, and states its purpose.
The best place to begin advertising is with family, friends, and neighbors.
“One thing that made Ben’s business so successful was we lived in the same community for 10 years,” says Stephanie. “People knew our whole family and felt comfortable letting Ben take care of their pet.”
One of the cheapest and most effective ways to advertise is to print up flyers and pass them around the neighborhood or community. Flyers should be printed on bright paper and include the business name, child’s name, phone number, address, services or products offered, and price (if desired). Posters that are tacked on bulletin boards are another good option, especially if they have tear-and-take tabs on the bottom of the poster that lists the service provided and a contact number. Other advertising options include business cards, newspaper ads, phone calls, and emails.
Before your child delves into business, have him list all of the supplies needed and the cost of each item. If he has money in his savings account, he can use that to get the business up and running. If not, perhaps you can loan it to him with the agreement he pay it back. That’s what the Andersons did.
“When my kids started Yum Yums, they were pretty broke,” Kim states. “I told them I would pay for the initial supplies, and they could reimburse me as the business took off.” Another option? Have your child do extra chores around the house to raise money for start up.
The flip side to counting the cost is determining the price. If your child is making a product, such as Yum Yum Cookies, go to a place where similar products are being sold. In the Andersons’ case, a local bakery. What are similar products selling for? How much can your child reasonably charge after paying for supplies and still realize a profit?
If your child is providing a service, find out what his competitors are charging for the same services. Do they charge by the job or the hour? What are kids his age earning for doing similar work? One key question your child should ask himself is, “Can I offer this product or service for a little lower than market rate and still make a profit?” If the answer is “yes,” he’s in business!
Before embarking on the business, have your child determine exactly what services or products he will offer. This should then be communicated to future customers. If, for example, your child starts a lawn mowing business, will he provide his own gas? Sweep the driveway? Rake, if necessary? Depending on the business, he may want to have a written description of what he provides. When the service has been completed, your child should give the customer a receipt and make a duplicate copy for himself.
Even though your child is young, he can earn the respect of customers by maintaining good work ethics. Impress on him the need to be on time, respectful, and hard working. This is also a good way to help the business grow. Remind him that current customers may pass along his name to potential new customers.
At the onset of your child’s business, establish safety rules. Insist that he inform you of his whereabouts at all times. Avoid letting him sell door-to-door. Stress the importance of not talking with strangers while he is alone. Remind your child that if he ever feels uncomfortable, leave the situation and find a trusted adult immediately. If you have an extra cellphone or one he can borrow, let him take it while he is gone.
Being a successful entrepreneur means managing money wisely. Encourage your child to record his income, expenses, and profit by making a chart in a notebook or using a ledger. This will show him how much money he has put into the business and how much he has gleaned from it. Allow your child to spend some of his earnings, but encourage him to save some and put some back into the business. If he has borrowed money from you, he needs to pay you back. This is also a good time to teach your child about benevolent giving. Is there an organization he can give to?
Once kids experience the accomplishment of working, earning, and spending, they may decide to keep going. That’s what Ben did.
“He had so much fun taking care of other people’s animals, he kept the business going for several years,” concludes Stephanie.
For the Andersons, Yum Yums was a summer experience that was shelved when school started.
“By the time fall rolled around, my kids were ready to shift gears,” Kim finishes. “That’s okay, though. It was a great experience, and I’m glad they did it. My kids worked together for a common goal and learned a little about what it takes to run a business.”
Denise Yearian is the former editor of two parenting magazines and the mother of three children.