How to Teach Your Children to be Entrepreneurs

The 5-year-old Entrepreneur

Did you read the news about a five-year-old girl in London who set up a lemonade stall in a street? There was a music festival nearby and she thought it would be nice to sell cold home-made lemonade to people attending that festival. Within half an hour of opening her stand four council health inspectors arrived and read her a letter telling her that because she didn’t have a trading permit she would be fined £150. That’s $245. The little girl, who was with her father burst into tears. She and her dad packed up the lemonade stall and she cried all the way home, telling her father, “I’ve done a bad thing”. Her poor dad offered to get her a council permit so she could open another lemonade stall the next day, but understandably she told her dad that it was “too scary”. The actions of the health inspectors are so foolish that you may find this story hard to believe. To prove to you it is true, here is a link to the news story.

The council that the health inspectors were from later withdrew the fine and apologised unreservedly. I hope the council is also sending those health inspectors to further training – ideally in common sense. But what damage has been done to this little girl who had a brilliant business idea? In my last blog I wrote about the importance of teaching people to be self-starters. I explained that full-time jobs are fast disappearing and in the next 20 years around 40% of all jobs will disappear as robotics and automation is rolled out. In the future more people will own startup companies, which sell products and services online. Alternatively people will have multiple jobs and projects, jumping from contract to contract. We are all going to have to become more entrepreneurial minded and creative about creating work opportunities. We also need to teach our children to be self-starters and opened to the idea of setting up enterprises.

How to Teach Children Entrepreneurial Skills

Harvard Graduate School of Education found that children taught entrepreneurial skills show a positive change in attitude and are more likely to focus on academic and professional aspirations and leadership. In training children how to be entrepreneurs, the first step is to ask them to come up with ideas for a business or money-making venture. Selling our goods and services is part of life – an important part. You might want to shelter your child from economic realities. That is understandable. Perhaps there have been times when you struggled to pay your bills, but remember that going into business can also be fun, rewarding and enhance our creativity. This is what we want to show our children. Being able to pay your own way in this world is also an essential life skill.

Give your children some pencils and paper and ask them to write down business ideas. No matter how wild or crazy their ideas are do not discourage them, instead ask practical questions. For example if your seven-year-old wants to set up a business training lions, ask him where he will need to base his business to find the most clients? Africa? Or should he market to zoos online around the world? What expertise does he have in this area that will ensure clients book him? If he doesn’t have these skills, what skills does he have that will earn money? Maybe he likes cats as well as lions. Could you put up a note in a shopping centre offering to feed people’s cats while they are on holidays? You could supervise your child and make sure he does the job properly, but let him keep the pay. By asking the right questions you are already encouraging your child to think like an entrepreneur.

Get your child to set financial goals. Perhaps they want to earn $20 to buy a new toy. If they play a musical instrument, would you allow them to busk on a street while you watch on?

Support your child regardless of whether they succeed or fail. At school children are taught that failure is bad. In the entrepreneurial arena, failure is not a bad thing, failure is a teacher. It teaches us how to improve our approach. If your child gets no money on their first busking attempt, assess what went wrong. Could they set up the next day in a spot with more pedestrian traffic, perhaps out the front of a supermarket? Entrepreneurs think differently to other people. They are never destroyed by failure. They learn from failure and keep going.

Teach your child how to write a business plan. If they want to raise a ‘kidpreneur’ show them how to write a guiding principle and then set goals with deadlines. If your child wants to set up a lemonade stand with a friend, teach both children how to write a business plan that covers the division of profits. Also encourage your child to give to charities. Perhaps your child has been upset by a TV advertisement on endangered animals. Suggest running a business venture and giving the money to a charity to help save animals. Could you speak to the principle of your child’s school about running a cake stall for the cause? It would also teach other children at the school about the issue. Or could your child sell their old toys at a community market and give the money to the charity? It is vital that we teach children not to feel powerless if they are upset by an issue. They need to know that they are capable of making a difference in this world.

Invest in your Children

Another idea is investing in your child. Do not just give them the money to set up their business enterprise. Tell them you are investing in them, but you want either a share of their profits or the loan repaid with a little interest. It is vital children learn how businesses operate.

An advantage of teaching your child how to run a business is that they learn how to deal with people. People spend too much time on screens and texting their friends these days. If children stand at a stall and sell their toys they will learn how to speak to new people. Instruct your children to look people in the eye, to be polite and respectful to their customers, to be friendly but maintain a professional distance.  They must look at the person they are serving and smile. Lead by example. Perhaps you and your child could first volunteer to work on a community stall, maybe just selling raffle tickets at a market first. People often enjoy interacting with children in these settings.

Needless to say your child’s safety must always come first. If setting up an online business, never put personal details or photos of your child on the internet. Never let your child go selling door-to-door unaccompanied. You never know who they will meet! Allow your child to start their own enterprises, but like a lion watch over your pride!

Your child will not necessarily grow up to own their own business, but you are still teaching them skills that will be invaluable in the future. You are teaching them how to talk to people, work hard, be creative and most importantly to have passion in life!