Top Tips For Successful Business For Young Entrepreneurs
Top Tips For Successful Business For Young Entrepreneurs
Top Tips For Successful Business For Young Entrepreneurs. Neil DeGrasse Tyson once said that the best way to encourage our children to pursue careers in science is to get out of their way. He was right. He points out that the messes toddlers make are their way of experimenting with and exploring the world, and that it is only when adults interfere that they begin to drift away from that curious explorer mindset.
Similarly, encouraging our children to develop an entrepreneurial business spirit is a good way to help them succeed in life. Whether it’s mowing lawns, running a lemonade stand, or selling handmade crafts, our children are constantly looking for new ways to make money and, in the process, gain more independence in their lives.
In contrast to instilling a passion for scientific discovery, raising successful aspiring entrepreneurs necessitates a slightly more hands-on method of instruction. This is more difficult terrain, with more severe consequences for mistakes made. Remember to keep in mind some important ways you can assist your child, tween, or teen in their small-business endeavors while they are growing and developing their skills.
Young entrepreneurs who want to start a successful business should follow these suggestions.
1. Research the Small Business Regulations in your area
No local authorities will object to a second grader’s lemonade stand or a fifth-grader mowing the lawns of his or her neighborhood friends. When it comes to a teenager who runs his or her own small business and makes a few thousand dollars, this is not always the case. In this age of online commerce, many business licensing requirements have been relaxed; however, you don’t want your teen’s earnings to be reduced as a result of fines and other charges.
Research the laws that apply to small businesses in your area and seek expert advice from someone in the City Planning Office or the local Chamber of Commerce before starting your business. Make sure to dot your i’s and cross your t’s in this section, and delegate the majority of the work to your teen. Being an entrepreneur entails the necessity of complying with the law.
If your child’s successful business venture generates income in the five-figure range, you may want to consider formalizing it as a corporation. This can provide a variety of legal protections, assist with compliance with any licensing or permit requirements, and serve as a valuable learning experience as you navigate the associated expenses and observances side by side with your other obligations and responsibilities.
2. Don’t let the business take precedence over academics
Running a small business can be both exciting and time-consuming, to the point where it may tempt your teen to divert their attention away from their academics. If this occurs, it is critical that they treat school as a full-time, regular job while treating their business venture as a side hustle. This is true even if the small business generates enough revenue to provide a realistic prospect for financial success after graduation.
You should keep in mind and reinforce the fact that if their business fails, they will have little to fall back on if they do not have a high school diploma or equivalent. Of course, there are famous entrepreneurs who did not graduate, such as Richard Branson and Quentin Tarantino, but there are far more dropouts working low-skilled, low-wage jobs to make ends meet than there are successful entrepreneurs.
Having formal academic and business goals, as well as putting those goals on a timeline that allows for success in both, can be extremely beneficial to students. Adapt the goals to place a higher priority on schoolwork if academics fall behind schedule. For students who are enthusiastic about their business, you can have them write a business plan as well as an academic plan, using similar formatting to highlight the similarities between the two. A bonus is that juggling academics with running their own business can teach time management skills at a deeper and more meaningful level than any other experience available to teens.
3. Encourage them to hire new employees.
Becoming their own boss provides invaluable training, but managing others — particularly their fellow entrepreneurs — can provide invaluable lessons that no other life experience can provide.
If your teen’s business is profitable, encourage him or her to hire a friend, classmate, or younger family member to assist with some of the work that needs to be completed. This assists them in learning about the skills and challenges of leadership while also instilling an important lesson in them about the importance of receiving assistance.
By delegating tasks they don’t enjoy or aren’t particularly good at from an early age, your teen begins to understand the value of their time and expertise. It has a profound impact on their relationship with work as well as their potential for success. This is a skill that many adults still struggle with, and it has the potential to open many doors to professional success.
Begin by considering younger siblings and cousins as possible candidates for your child’s initial labor pool. Besides strengthening the bond between family members, many states grant exemptions from worker’s compensation and other employment laws when a family member is hired by the company. Make sure you check your local laws first, but doing so can save a surprising amount of money over the course of a business’s existence.
4. Assume the role of Managing Partner
Even the brightest adolescent on the planet will struggle to perform some of the most fundamental tasks of business management because they lack the perspective, contextual knowledge, and physical brain development necessary to be successful in those areas of expertise. As a result, it’s a good idea for you to take on the role of managing partner when your child decides to start their own company.
In some cases, depending on your teen’s skill level and business experience, your role may be as simple as checking in once every two weeks to ensure that certain tasks are being completed. It is possible that it is to deal with the books and business metrics. You might even be tasked with the responsibilities of the sales department or accounting. Getting involved will depend on your circumstances, but getting involved will help them succeed while also demonstrating that you are concerned about their success.
Beyond the obvious benefit of increasing your child’s chances of success in business, partnering with your child has a second advantage. By collaborating on a business venture, you can develop a relationship that will last long after they have left the house. Whether the enterprise fails catastrophically or succeeds spectacularly and makes the entire family wealthy, the shared experience is incomparably valuable.
If your child requires start-up capital, you can require them to form a managing partnership in exchange for providing them with an informal business loan. You treat them as real investors in the business world, in that you provide them with start-up funds while also keeping an eye on the company’s operations to ensure that your investment is protected.
5. Consider Scalability as Your First Step
In advance of taking on their first client for any business idea, your teen should consider and develop a strategy for how they will progress to a second and a third client, and so on. If they are experiencing rapid success, they should also have an idea of the maximum number of clients they can serve based on the realities of their schedule and access to transportation, as well as a plan for expanding beyond that number.
The ability to scale up a business is critical from the very beginning stages of its development. Whatever they do with the information they learn, even if they never put it into practice and only make some pocket change from a worthwhile experiment, the exercise will introduce them to an important concept in life that many adults never learn.
It bears repeating that any plans for scalability must take into consideration the needs of students in terms of academics, athletics, and social development. During homecoming or baseball season, this may imply that the company’s growth is artificially slowed, but that’s fine with us. Entrepreneurially minded children require early and repeated instruction in the importance of work-life balance, which can begin right here.
6. Be Prepared to Pay Your Taxes
As your local business regulations, the IRS and your state Department of Revenue aren’t overly concerned with a kid making a few dollars here and there. However, if your teen earns at least $400 from their own business, they are responsible for reporting it and, in some cases, paying taxes. If they earn enough money, it may even have an impact on their ability to claim benefits as a claimable dependent.
Consult with your accountant about how to proceed with this aspect of your teen’s entrepreneurial journey, and devise a strategy for dealing with it. If they choose to be small-business owners for the rest of their lives, taxes will be their constant companion throughout their professional lives. Although companies such as H&R Block and TurboTax provide online corporate, small-business, and self-employment tax filing options, it is often more cost-effective to hire a certified public accountant (CPA) to handle your business taxes. If you keep your books in order, the amount they charge for the service is almost always less than the number of deductions they are able to find for you.
7. Keep in mind the availability of community resources.
Almost every municipality, county, state, and non-profit organization that caters to small-business owners has some sort of resource available. Examples include in-person education, online classes, grants and loans, mentorship access, and workspaces equipped with expensive specialized equipment. They’re out there, often paid for with your tax dollars, and they’re just waiting to be put to use.
Not all of these opportunities are open to teens, but in many cases, the staff will be delighted that someone as young as a teen has expressed an interest, and they will be even more delighted if the teen provides success tips. LinkedIn and local meetups can be excellent sources of mentoring and success advice, provided that you carefully monitor and curate the adults your child interacts with on a regular basis. Encourage your teen to learn more about these opportunities in the community by sharing this information with him or her.
When looking for resources and assistance, keep in mind that your child is still enrolled in school. For example, many schools offer business classes as well as workshops, technical equipment as well as social media advice, and experts on hand for students to consult when they need assistance with their projects. Many teachers and counselors will be eager to assist, particularly those who have business knowledge or experience that they do not normally have access to during the school day.
8. Begin by focusing on the end result
There’s a reason why this piece of advice from business management legend Steven Covey is a classic. Whatever business model your teen chooses to pursue, they should begin the journey by imagining how they want it to end, with clearly defined goals set from the start of the journey.
In order to earn money for a car, one must meet certain requirements, make a certain amount of time and financial investment, and operate for a specified period of time, such as a few weeks or months. The fact that you are starting a new business as something your teen might want to turn into a career alters each and every one of those factors.
There is no correct or incorrect goal in this situation, but starting without one in mind is almost always a mistake. Even the most successful businesses in the world can falter and fail if they do not have a clear guiding goal.
Early in the process, sit down with your budding entrepreneur and ask them what they hope to accomplish. “Making a few bucks” is an admirable goal, but it’s important to be specific. That high-level goal can assist them in assigning priorities, making wise purchases, and setting up timelines for tasks in ways that they would not otherwise be able to do so on their own.
9. Show them how to set goals and then follow through with them.
Knowing how to set goals is critical for any type of success, but it is especially critical for small business success. It will assist your child in achieving success in whatever endeavors they choose to pursue in school, college, and beyond.
It’s simple to start with a smaller goal — something that will require multiple days of effort but will undoubtedly be accomplished if the child puts forth the necessary effort. For example, setting a goal of saving enough money to purchase a $20 video game is a reasonable first step. For a month, they set a goal of earning $1 per day while taking up to 11 days off to rest. As long as they meet their daily goals, they will be able to complete the game successfully. Even if they are successful in purchasing a ticket every week, there is no guarantee that they will win the lottery as an initial goal.
When you tie cash flow to realistic goal setting, you introduce them to the concept of setting goals and working toward achieving those goals. Whether or not this small business succeeds, the experience of working toward a specific goal, as well as the lessons learned as a result of this endeavor, will benefit your young entrepreneur for the rest of their lives. Instruct your budding entrepreneur to write down their objectives and commit to a timetable for achieving them. When they reach the end of their timeline, sit down with them and discuss their performance. What, if anything, might they do differently the next time if they don’t reach their goal? If they did, what could they possibly do to increase their chances of success even further or more quickly? With a track record of success and understanding, they can progress to loftier, more complex, and less certain objectives.
10. Demonstrate prudent risk-taking.
If a company’s key decision-makers are willing to take risks, and if the majority of those risks turn out to be profitable, it will be successful. Making decisions based on risk may appear to be a natural part of childhood, but when you factor in money and parental approval, those decisions become much more intimidating.
The most effective way to assist your child in overcoming this obstacle is to lead by example. Exhibit the ability to take small and large risks in your everyday life. Better yet, have a conversation with your child about the dangers. Include information on what made them risky, how you weighed the risks and benefits, what you gained from taking the risk, and, most importantly, what you did to minimize the consequences if the risk didn’t pay off.
You can use the conversation you’ve established with your child as a framework for assessing the risks associated with their business after you’ve established a habit of doing so. This not only assists them in the success of their business, but it also allows them to practice and master a necessary life skill.
11. Encourage the development of original ideas.
Creativity is a skill that can be learned. It improves with practice and deteriorates if it is not used on a regular basis. Creativity is also essential to the success of small businesses, as well as the success of businesses in general. How your child will develop a viable business model, how they will expand on their concept in order to aid the company’s growth, and how they will devise solutions to the problems and challenges they will face are all important considerations.
Some suggestions for encouraging your child’s imagination are as follows:
- Some bedtimes, instead of reading stories, the family will make up their own.
- Various types of pretend games can be played with your child, ranging from pure imagination to more structured activities such as Dungeons & Dragons or theater sports.
- Make time for art and craft activities where your child can express himself or herself creatively.
- Change your behavior from simply answering questions or solving problems to instead developing the habit of exploring answers together.
- Play “what if” games with your child, in which he or she explores the possibilities of making small adjustments to their lives or the world around them.
- Set aside a period of time for your child to become bored, and then allow them to come up with new ways to pass the time.
- Most importantly, resist the temptation to rush to your child’s aid when he or she is facing a difficult situation. Allow them to come up with their own innovative solutions as long as it is safe. If you are always there to save the day, they will never learn to develop their own creative problem-solving abilities. Instead, they turn to others for assistance, which is a bad habit that can be fatal to one’s chances of achieving entrepreneurial success.
12. Demonstrate to them how to seek assistance.
One of the ways in which schools frequently harm our children is by insisting that students complete independent work. Asking a classmate for clarification is considered disruptive in the classroom and will result in a punishment. It is possible to be accused of cheating if you look up a tutorial to assist with your homework. Despite the fact that this is sometimes necessary in the context of school, a small-business owner can always turn to others for assistance.
Model seeking assistance so that your children can see you asking your parents or partner for help, polling social media groups, calling an expert with relevant knowledge, or searching for an instructional video on YouTube, among other options. Make this commonplace and encouraged — a tool that you can use to achieve your goals in the same way you would any other resource. Knowing who to turn to for assistance and how to do so is critical to achieving success in any form of entrepreneurship.
When your child feels comfortable approaching you for assistance, demonstrate some of the most effective methods of doing so. Investigate online tutorials and free training opportunities, and seek out resources at your local library, Chamber of Commerce, and small-business development center. While out running errands or taking road trips, listen to audiobooks and podcasts together. Teach your children from an early age and on a regular basis how much help is available, where to find it, and how to distinguish the good advice from bad.
13. Recognize and Reward Mistakes Whenever You Have the Opportunity
Rickson Gracie, a world-renowned Brazilian jiujitsu competitor, writes in his memoir that his father told him before his first jiujitsu match, “Win and I’ll give you a present.” In the event of a loss, I will provide you with two gifts.” This is too transactional to be appropriate for most children, but the spirit is strong throughout.
Children and adults who are afraid of failing are less likely to make the decisions that are necessary for them to be successful in business. As a result, when your children lose a game, make a mistake, or fall short of a goal, encourage them to embrace failure.
Because the majority of people fail the first time they attempt something, your children are likely to fail as well. Nobody is born with all of the skills and abilities necessary to achieve success on the first try.
Congratulate them on their efforts and share openly with them the ways in which they made you proud. Discuss which variables they could control and which variables they could change the next time they tried, as well as what they could do to minimize the variables they couldn’t control or change.
Last but not least, tell them that it’s perfectly acceptable to be disappointed in the outcome, but that you will never be disappointed in them as a person. The short-term discomfort of trying and failing leads to the long-term satisfaction of achieving success in a difficult endeavor.
14. Instruct them to find a solution
In his book, “Rich Dad, Poor Dad,” author Rob Kiyosaki tells a story about how he was given a job as a child that didn’t pay anything. Rather than rewarding him for his efforts, his friend’s father, who had given him the job, challenged him to figure out how to make money off of what he had learned.
The work in question consisted of cleaning up after a convenience store transaction. Young Rob discovered a flaw in the way comic books were distributed and exploited it to start a comic book rental business in his family’s basement.
That is not to say that you should take such a drastic approach to teaching your child how to solve problems and identify business opportunities as described above. However, by stepping back a little further than you’re comfortable with when they ask for help, you can encourage greater independence and creativity in them. Compel them to identify the problem clearly and independently and to develop their own solutions, then recognize and reward them for their efforts, even if the solution they propose does not prove to be effective.
Help your child experience necessity more frequently and then watch to see what they come up with as a result of their efforts. The lessons they learn will last a lifetime, regardless of whether the finished product generates a full-time adult income or just some after-school pocket money.
15. Allowing them to cut corners is a no-no.
Two of the most important characteristics of a successful entrepreneur are meticulous attention to detail and a willingness to put in long hours. Without micromanaging, observe how they approach the work of their company and assist them in realizing the importance of doing it correctly from the beginning.
This can sometimes lead to conflict between the two parties. It is not always the case that children and teenagers exhibit either of these characteristics. That’s fine with me. If you get through it successfully, you’ll have accomplished two objectives. The first step is to assist your child in becoming successful in their business by encouraging them to provide high-quality service to both themselves and their customers.
The second point is even more significant. They begin to internalize the significance of the extra effort once they see the results of their efforts. That lesson will carry over into their academics, athletics, and interpersonal relationships after they graduate from business school. It will set them up for success no matter where they go in their adult lives after they graduate from high school.
Whether your child is destined to make $1 million by the age of 18 or to cherish the memories of a summer spent working for themselves, they can benefit from the lessons learned through the process of starting a business. It is not your responsibility to do it for them or to get in their way, but rather to strike a balance between the two. Give them enough support to allow them to thrive, but keep your hands off them long enough so that they can truly claim that they completed the most important parts of the project on their own. That is not only the best way to prepare young entrepreneurs for success, but it is also the best way to raise happy, empowered children.
Always remember to keep things light and enjoyable. Not that you’re trying to raise the next Steve Jobs or that you’re trying to get your child on the cover of Forbes before they’re old enough to drive is the goal here. Its purpose is to teach them valuable life lessons that they can apply to a new business, an online business, or even just going to work every day of their lives.