Starting a business isn't easy, even as an adult. After all, about 20% of small businesses fail within the first year. That number jumps to 50% by the end of their fifth year.
Despite the challenges that come with being a small business owner, teaching your child at an early age how to run their own business can be an educational, valuable, and, yes, lucrative experience for them. Encouraging them to start a business at a young age can help them develop the skills, values, and traits they need to be a successful professional as an adult.
This article will walk you through the benefits of running a business as a child, as well as some fun, small business ideas.
Benefits of Running a Business as a Child
There are multiple benefits — social, financial, and educational — to being a kid entrepreneur. Here are some of the top reasons you should encourage your child to start a business.
Builds a Work Ethic
When you teach your child they have to earn the money needed to pay for things they want at a young age, it instills a strong work ethic in a child. Encouraging them to work hard and launch a startup company at a young age will set them up to become a hard-working, productive, and successful adult. In fact, 93% of the successful entrepreneurs surveyed for a recent Inc. article all had one common factor: they started working at an early age and that influenced their success in adulthood.
Encourages Creative Thinking
Starting a business will cultivate your child's creative and critical thinking skills. As they hit obstacles with their small business, they'll be forced to think of new ways to handle these issues, ultimately making them better problem solvers — a necessary skill to carry over into adulthood.
Shows the Importance of Planning
Operating a small business also teaches your child the importance of future planning, both personally and professionally. Through their own business, they'll see firsthand the need to plan in order to accomplish a goal and the consequences if they don't follow their business plan or think about their future needs.
Helps Them Be Smarter With Money
Managing money effectively is a critical life skill and the earlier it's learned, the better. These lessons are more likely to stick if a kid starts thinking about money management at a young age. Running a business, opening a bank account, planning a budget for it, taking payments from clients, looking at business expenses, forcing them to do the math on their own — this all helps your child improve their financial literacy skills and make smarter decisions about spending. The earlier they learn the value of a dollar and how to manage it, the more likely they are to manage their money successfully as an adult.
Grows Their Self-Confidence
Giving your child the autonomy to run their own business — taking an idea and creating something, and also stumbling over pitfalls that they figure out how to overcome along the way — will help build their self-confidence and self-esteem. There's no better feeling for a kid than to know they've figured out how to do something on their own.
Helps Them Save for College
Many teenagers — and even those younger — work to save money for college. Even if you're fortunate enough to have expenses covered through scholarships, grants, or your family, there are still other things that need to be paid for — books, dorms or apartments, school supplies, various university fees, social activities. Operating a small business while a kid is a great way to start saving early for these expenses you'll face in young adulthood.
Improves Their People Skills
As a business owner at any age, you're in a position where you need to communicate and interact with others. So, as a kid entrepreneur, running a small business will only improve your people skills and how you communicate with others, especially adults. Social skills might be considered soft skills by many, but they're critical to your success and happiness throughout life.
Creative Business Ideas for Kids
If your child is a budding entrepreneur who wants to start a profitable business but isn't sure where to start, here are some of the best business ideas for kids. And remember, with all of these ideas check your state, county, and city laws to see if there are any legal requirements you need to meet, such as licensing and permits.
It might sound cliché, but running a lemonade stand in front of your home is a great way to get younger kids thinking as an entrepreneur. It's a low-stakes business, but one with many rewards as they're able to see the value of their hard work and learn about saving their money. Plus, there are low overheads — all you need is a table, some lemons, some water, and some sugar.
Mowing lawns during spring and summer months is an excellent way for a kid to get their first taste of entrepreneurship. Encourage them to check with neighbors and family members to see if they need lawn service. As they provide excellent service, word of mouth should help their lawn care client base grow. Help them figure out a fair price for their work and encourage them to branch out to other areas of yard maintenance as they get the hang of mowing. They might even want to invest in their own mower and other equipment.
Shoveling snow can be a lucrative business for kids in colder, harsher climates. During the next big snowstorm, encourage your child to grab a shovel and reach out to neighbors. As they grow their business, they should be prepared to start knocking on doors and trying to sell their skills. Ideally, they'll have a steady list of clients that they know they need to hit up immediately following a storm.
Taking care of pets is an enormous responsibility and a great learning experience for kids who can handle it. While they might get some regular clients who travel frequently, they should also learn how to promote their services through fliers and social media. Also, depending on their age, they should never go to a stranger's house on their own, and vet new clients carefully for safety reasons. But feeding Fluffy and Fido is an excellent business opportunity for animal-loving children.
Babysitting younger children is another way for your kids to make money. Like pet sitting, being a babysitter is also a lot of responsibility, as they'll be in charge of young kids. And they'll likely need to get trained in first aid and other areas before they can start babysitting.
Starting a car wash is another great business for making money as a kid. They can probably find many of the items they need — a hose, soap, buckets, rags — lying around your family's garage. From there, reach out to neighbors to see if they need their vehicle washed and don't be afraid to knock on doors. While many clients will want their car washed in their driveway or in front of their home, your child might also consider finding a central location — a parking lot or grassy lot — where the owner might give them permission to set up operations for a day and attract people driving by.
If your high school age child is an excellent student who is a whiz in specific subjects — maybe they have a flair for languages or they're amazing at crunching numbers — they could tutor other students who are struggling. Similarly, if they're musically inclined, they might consider offering music lessons.
It's a good business that will work well with their schedule, as both your teen and their potential clients have the same availability after school and on weekends, and they can easily find a place to tutor for free – your home or the home of the student they're tutoring, the library, even their school. They can market their tutoring services on bulletin boards in your community and around their school, and find other ways to reach parents, as they'll be the ones who hire them.
Many families live busy lives and sometimes need a little help to take care of their four-legged friends. Dog walking can be a great way for your animal-loving kid to start a business and make some money. Unlike pet sitting, dog walking can become a regular gig for your child, as many clients will probably require their services daily or several times a week.
Running a garage sale where they sell old toys and clothing, as well as other unwanted family items (after asking you, of course) is another way for your child to learn about the business world. They'll need to promote their garage sale, price items, display them in your yard or driveway, interact with customers, and take payments.
Starting a YouTube Channel
If your kid enjoys making videos, consider helping them start a YouTube channel. Though the platform has made it more difficult for kid entrepreneurs posting videos to their site to monetize their work, there are still ways to make some money. If they gain enough followers, they can consider selling merchandise (like t-shirts), finding sponsors, or sharing their videos on multiple platforms. It's important to pay close attention to whatever your child is doing online, though.
Running an Online Store
Your kid can create an online store to sell, well, just about anything. Maybe they will get on Etsy to sell handmade greeting cards or scarves. Perhaps they can turn to Ebay to sell items that are going unused at home. Or maybe they might consider opening an online business through an ecommerce site like Amazon, to sell their products.
Creating a Social Media Brand
Even kids can be social media influencers these days, using apps like Instagram and TikTok. It could be a fun way for your child to make some money, but there are concerns that come with it as well. Influencer culture isn't for everyone and, similar to running a YouTube or other video streaming channel, safety is always a concern whenever a child is online.
Playing Video Games
Believe it or not, there's a lot of money to be made playing video games, whether you're entering tournaments or streaming your game play, and even kids can get in on the action. In fact, some teens have even become millionaires playing video games.
Let Skynova Guide Your Child as They Start Their First Business
As your teen starts to grow a business, Skynova tools can help them along. Our all-in-one accounting platform makes it easy for them to track income and expenses and to manage their business finances. All they have to do is plug in their sales, expenses, and other numbers in order to generate the paperwork they need for accurate bookkeeping. It's easy enough for teens to handle on their own!
Skynova is here to help your young entrepreneur follow their dreams and develop the life skills needed to grow into a successful adult.
Notice to the Reader
The content within this article is a general guide and may not apply to your specific situation. Always consult with a professional accountant to ensure you're meeting accounting standards. Also, be sure to check with your state and local laws to make sure your child has the right permits and licenses for the work they're doing.