John and Marci Seither's three children wanted to go to summer camp, but there was one obstacle in their way. To be more accurate, there were 700 obstacles, one for every dollar it would cost to pay for the experience. The kids didn't have the money, so they cast their hopeful eyes toward their parents.
"I told them Mom and Dad worked hard for their money and that we were not just going to hand over that money," Marci says. She told her kids that instead she'd give them a $200 interest-free loan to help them start a business and earn their way to camp.
The kids started a soap-making business and successfully raised enough money to pay Mom back, pay for camp and even make a donation to an orphanage in India. The project helped them see how entrepreneurship — the art of starting and operating one's own business — pays far bigger dividends than entitlement does.
Parents play an essential role in helping their children identify, research and carry out business enterprises. Along the way, they can help kids learn lifelong lessons about initiative, business, money management, faith and family cohesion.
An entrepreneurial project can help kids pinpoint their talents and abilities, says Linda Knasel, a professional counselor specializing in parenting skills with Desert Streams Christian Counseling in Kalamazoo, Mich.
Entrepreneurial projects can keep kids busy and away from negative influences. They can also help shy kids find something to talk about and feel good about. Kids can establish patterns of creativity, problem solving and initiative. They can also learn other key skills such as time management, teamwork and delegation.
"Children can make mistakes and easily recover," Knasel says. "They begin to also discover the value of a buck and the time and effort that goes into earning one."
Finding the right project
Parents and kids are collaborating to choose projects that go beyond the traditional lemonade stand.
When the Seithers helped their children — then 11, 10 and 8 — begin a business melting and pouring fragrant soaps, they did some prep work first. The kids researched the best prices for materials and selected fragrances. They also developed their own recipes. Their experiences offered opportunities to talk about marketing and profit margins while they mixed, measured, stamped and wrapped each bar.
At age 10, Emily Voth, daughter of Chuck and Sharon Voth, wanted to sponsor a Compassion International child. She and her sisters, ages 8, 6 and 4, made bracelets and sold them to a nearby gift shop. They eventually sponsored three children with the revenue.
Matthew Flaig, 14, put his technical abilities to work designing apps for smartphones as well as offering his services in video, sound, lighting and other technical areas.
A winning idea is one that best fits each child's age, skill and temperament. Assess how God has gifted each child, Knasel advises.
"Do they need to get things done and love tasks?" she says. "Are they more interested in social interactions? Do they like to get attention and entertain? Do they love to analyze things and get things right? Each of these traits calls for different applications of skills with potential work activities."
Finding the right match is not a "one and done" procedure because kids keep growing and changing. Parents need to be discerning about when to ask their kids to see a project through to completion and when to acknowledge that a change of interests dictates a change in projects.
Only consider projects that genuinely interest your child. If you find that match, your child will start the entrepreneurial journey with more enthusiasm. Without your child's "want to," the project has little chance of success.
Dave Flaig, Matthew's father, says this is true of all his children. "We wait for them to have that hunger," he says. "If we gave the assignment of starting a business, their hearts wouldn't be in it."
The best ideas result from collaboration, where children and parents brainstorm and dream about the possibilities. Research ideas together to find out which ones are feasible, looking at the skill sets of your children and the marketability of the item or service. Then empower your children with encouragement and the skills they need.
Donna Partow, author of Making Money From Home, recommends a three-step process she calls "expose, involve, upgrade" to introduce children to entrepreneurial projects. This involves exposing as many people as possible to the business; involving people by providing samples, services and helpful information; and upgrading them to paying customers.
"Let [your kids] be your trainees," Partow says. "Tell them that this experience is a course they're taking, and you're their teacher. It will be a semester together in Home Business 101. Whether you make any money or not, you will learn things together."
This kind of family business apprenticeship is how Matthew Flaig began to build his expertise in sound and lighting technology. At age 9, he started hanging around the control booth of the church where the Flaigs were pastoring. One of the lighting technicians asked him to push buttons when needed. He soaked up the knowledge, read the lighting manuals and soon didn't need guidance on which buttons to push.
"He was running the whole lighting system by the time he was 10 or 11," says Matthew's mom, Heather. "It was 'watch what I do, do what I do, do it while I watch, then do it independently.' "
Game on: operating the business
The entrepreneurial child will learn and practice lessons that will carry forward into later business enterprises, including nuts-and-bolts skills such as marketing, pricing and budgeting.
Parents can help their kids identify things that are unique about them and their business. This information can be used to create a brand — the name, design, symbol or feature that distinguishes their product from others.
"We are in an age with the Internet where people are intrigued with the novel, so parents can help their child identify those things that are novel, entertaining and interesting about themselves," Partow says. "Parents need to be involved, but kids can create their own personal brand and, out of that, get a following."
With a specific financial goal in mind, help kids determine their target market and then set the right price for their products and services. Factor in labor and material costs.
"There are two ways to make money: Sell a lot for a little, or sell a little for a lot," Partow says. "You have to find a way to target people who really have money, unless you can produce a massive volume."
Case in point, Partow's daughter made bracelets that she sold for $10 each. After comparing the costs of labor and materials with her profit, she realized she was not making enough money. She recruited an investor who funded the purchase of higher-quality beads. For the same labor, she could then sell each bracelet for $25 and changed her target market from teenagers to their mothers.
Once the proceeds from the business start rolling in, parents can come alongside their kids and determine who should be responsible for handling the funds. The money can be put in a bank account, kept at home by the parents or entrusted to the child. Ask the children to do their own accounting and record keeping. Mastering this task helps kids improve their math skills and can uncover new opportunities for profit.
Distribution — making sure the product or service is successfully delivered and payments are received — is another area where parents can walk beside their kids. The key phrase, Partow says, is "simple and safe."
Use existing and trustworthy distribution systems, such as Etsy.com for crafts, eBay for collectibles, Amazon for information products and PayPal for payments. For face-to-face selling, Partow suggests tapping into an existing network of family and friends or using local craft fairs, farmers markets and the like.
"Never put your children at risk in their home business by allowing them to market or deliver products without parental supervision," Partow says.
Emphasize evaluation and follow-up to help kids learn how to see projects through to completion. Encourage kids to test for customer satisfaction.
"Check in and say, 'I've been walking your dog for two weeks now. How is he doing? Is he happy?' " Partow suggests. "Send customers thank-you notes. These are basic business practices that have value."
The evaluation process must also include how the project is affecting the child and the entire family. Since Matthew's app business has taken off, his parents make sure it doesn't take too much of his time and detract from his duties at school, home and church.
"We look at what's working and what's not," Matthew's father, Dave, says. "Are we managing our time, talent and resources well? What can we do differently or better? We evaluate our products and systems and have that culture of continual improvement."
Perhaps the biggest question to answer when evaluating a project is whether it is good for the child, says Knasel, the professional counselor with Desert Streams.
"Is it an opportunity to refine and learn valuable skills, or is it a pain for them and causing them to hate work?" she says. "Is it in balance with their other responsibilities? Does it increase their character or challenge it? How much time do you as a parent have to invest in the project? What do you see as the benefits and the liabilities?"
Learning the larger lessons
Financial management should also be a topic for discussion. A child's first impulse may be to think, I can put this all in my pocket. Parents can talk about reinvesting in the business, saving, tithing and other charitable giving.
Partow recommends a 10-10-10 system, with 10 percent going to each of the following categories: to church as a tithe, to savings and for reinvestment. The other 70 percent is discretionary. Since Matthew has a joint bank account with his dad, he gets online statements of his income and tithes based on that amount. He is responsible for his own accounts and consults with his parents on major business purchases.
The Flaig kids use a money storage system of one ziplock baggie and three envelopes. The baggie is for tithe, and the envelopes are labeled "Save Wisely," "Share Generously" and "Spend Responsibly." The parents match money placed in the "save" envelope, and the kids have discretion about where to give the money in the "share" envelope, while the contents of the "spend" envelope are used with parental guidance.
The biggest lessons of a young person's entrepreneurial enterprise transcend business and money. Kids can enjoy using their God-given talents to bless others. They will treasure the memories and experiences gained along the way. Kids will learn how to set goals and marshal their resources to achieve them.
"What we've tried to teach the girls is that eternal investment is more important than this temporal investment," says Chuck Voth, whose three daughters made and sold bracelets. "Our focus has never been on making money, but more on ministry and how we can serve others. We've talked more about what kind of experiences will benefit you the most in life."
Consider these small-business ideas that kids could do with little to no training or start-up costs.
Kids can charge a fee to do the following services:
- watch younger children for a few hours
- care for neighbors' pets; walk or bathe dogs
- cut grass, rake leaves, pull weeds, shovel snow
- tutor other students
- organize a neighborhood yard sale and sell unwanted household goods
- set up tech gadgets for those less tech-savvy
- assist at a child's birthday party or help entertain party-goers
- wash and vacuum cars
- help clean or paint
Kids can make money from the following sales:
- sell items on eBay or other online auctions
- make and sell handcrafted items or baked goods
- sell snacks for a profit at community events
- sell produce grown from a backyard garden
- design unique T-shirts or other crafts to sell at craft fairs