SummaryFrom lemonade to the latest invention, Jennifer Elia shows how to support your kid’s entrepreneurial spirit and build a business sense to last a lifetime.
Learning how to run a successful business will serve children when they grow into adulthood, regardless of what field of work they choose to pursue.
From lemonade to the latest invention, here are some steps to support your children’s entrepreneurial adventure.
1. Brainstorm ideas
When my oldest daughter wanted to take skating lessons on top of all her other activities, we had to think about it. We weren’t opposed to her doing so, but the extra funds to finance it were a problem.
She decided she needed to start her own business. I let her run with it, and we sat down to think about what kind of business she would like to have. At seven, she started a horse treat and cookie business that paid for her lessons for four years.
When deciding children what business to start, it is important to brainstorm ideas of what business your child would enjoy running, what they know a lot about, and where they will have opportunities to sell their products.
My daughter is horse crazy and has been since she was a toddler. The choice to make horse treats was easy because her second favorite activity is baking. She knows many horse loving people as well, and regularly visits barns. Hence her business, aptly named Horse Crazy Treats, was born.
2. Business Plan
A business plan is essential. If you don’t have a blueprint, it is nearly impossible to build a house. The same goes for a business. Take some time with your child to create a solid plan to give their business its best shot.
I recently did this with my son. He had started making crafts to sell and had done quite well, but was not very focused. Now that he was eight and had experience selling a few crafts, I wanted him to think about what he was doing and how he planned to succeed at the annual craft fair.
So, we took out a notebook and answered the following questions:
- What products do you hope to sell?
- Why do you think these products would appeal to your customers?
- What supplies do you need to make each product?
- What kind of packaging is needed?
- Does your product have a shelf life?
- Do you need any special equipment or skills to produce this product?
- If you do, do you have these already? If not, how will you get them?
3. Find a market
Now that you have a great product and a plan of how to create it, you need a place to sell it. If you have carefully thought out step one and two, it should be easy to find a venue.
Does a local store carry consignment items? Could dad or mom get orders through work? Is your product something that friends in your activities would be interested in buying? Is there a local craft fair or flea market where you could rent a table? Do you have a friend or family member with a business that could sell your product?
My children have found markets at craft fairs, their old preschool, their co-op, and through email and Facebook. Just remember to add any of the costs or commissions to your budget.
4. Design a sales pitch
If you think of any product that you buy, there is probably a tagline, packaging feature, commercial, or publicized benefit that leads you to purchase it. Help your child come up with their own jingle and packaging. Make sure that your child can answer questions about the product and state why a customer should want to purchase it.
My son is a born salesman; he can engage anyone and get them on board with whatever he is selling. He is convincing, personable, and savvy about what people want to know before they buy.
My daughter is more timid and prefers to have the product speak for her. Both of them have been successful because they have used their individual talents to market their product.
My daughter is very visual and can design beautiful displays that catch customers’ eyes and entice them to buy. My son uses his wit, interpersonal skills, and engaging personality to draw in his customers.
Together, they would make quite a team! However, we have been working on honing their gifts, while striving to improve the side of marketing that is more of a struggle for each.
Marketing is important. Don’t short change this step! No matter what field your child moves into as an adult, being able to sell their ideas will serve them tremendously well.
5. Create a financial plan
Before jumping full on into a business venture, it is crucial to make sure it is financially sound. Learning to “pencil out” ideas and judge their financial merit is something that will serve every person for the rest of their lives!
This is where the cold, hard truth comes into play. Even the best product will fail if the company can’t afford to produce it. Also, most businesses flounder not for lack of customers, but because of poor financial decisions. Know your limitations and your potential before spending any money.
- How much money do you have to invest in your business?
- How much will the supplies for each product cost?
- For how much could you reasonably sell the product?
- How many do you need to sell of each product to break even?
- How much profit do you hope to make?
- What will you do with your profit?
- What percentage of the profits will I donate/tithe?
- What percentage of profit will you reinvest into the business?
6. Analyze Progress
Once your child’s business begins, remember to regularly take a step back and see how it is doing. Are costs being met? Is a profit being made? Which products are selling the best? Is there anything that could be done to improve the product, sales venue, or marketing? What goals does your child have for the future of the business? Is your child still enjoying the business he or she created?
My daughter’s horse treat business served her well for a few years, but then her sales started to drop. Since the treats were perishable, there was a sharp increase in loss due to spoilage because of the slow down. Also, her time commitments changed and she found it challenging to fit in the baking time the business required.
She still wanted to have a business and enjoyed making her own money. After a bit more brainstorming, she decided to create hair clips instead. This business has been going well for three years. After each major sales campaign, she calculates which styles sold best and which weren’t very popular.
This way, she has grown her little business and manages to stay afloat instead of continuing to produce items that aren’t likely to sell. Monitoring progress and trends is an important business habit to develop.
Has your child started a business? What has he or she learned from the experience?