Your preteen is likely eager to start earning money of their own so they don’t have to wait until holidays or birthdays to get the things they want. Once they reach this stage, it’s a great time to have fun with them while teaching them about entrepreneurship. Read the tips below for challenging your child to come up with a small business plan and, if realistic, helping them bring it to life.
Embrace their ambition
Your child may have some very ambitious ideas as to how they can earn money. Some of them may not be realistic, but rather than shooting them down, work with your child to decide how they can implement their ideas on a smaller scale. For instance, they may not be able to open their own fully-functioning bakery at this age, but if they’re skilled bakers, they may be able to take orders from family friends or neighbors who need cupcakes for an event.
Harness their creativity
If your child isn’t sure how they can make money, help them brainstorm the things that they like to do or are particularly good at. Challenge them to think creatively about how their skills could be marketed as a product or service to others.
Identify community resources
For money-making ideas, there are resources in the community that can help. For example, some community centers may offer babysitting certification courses for preteens and teens who are looking to build their resume from a young age.
Help them develop a plan
Creating a small business plan with your child can be fun. Help them think about all the things they’ll need, such as a company name, product or service to sell, and advertising materials to raise awareness of their business. Have them brainstorm a list of equipment or tools they may need to make their business run and encourage them to be as detailed as possible. For example, if they want to mow lawns they won’t just need a lawn mower, they’ll need a gas can and the gas to make their mower run, as well.
Talk about cash flow
Once your child has a list of required items for their business to operate, help them determine how much money they’ll need to get their business off the ground. Do they have the money already or will they need to save for start-up expenses? If they need to save money, open an account for them so they can track how much money they have and still need.
Be sure to remind them about the ongoing expenses of running a business. For instance, they may only have to buy a table for a lemonade stand once, but they’ll constantly need to refresh their supply of ingredients. Remind them that all the money they make won’t be able to go directly into their pocket, as some will need to go toward keeping the business running.
Make it official
Even though your child is just that – a kid – they may be subject to the same rules as adults when it comes to running a business. Teach them about permits and why they exist. Then research if there are any licenses or permits they’ll need. There may also be income thresholds that, if your child’s business takes off, could require your child to pay taxes. Speak with a tax professional for advice on how to prepare for this.