The first day, our new restaurant was jam-packed. People queued up to sample the food, and we immediately made a profit. We had an incredible chef, and the waiters were efficient and always full of alacrity. The restaurant thrived that whole summer, and our reputation spread across town.
That is, until the summer holidays ended and we had to go back to school.
It was 1975 and, at the age of 10, The Blue Whale Cafe was my first attempt at running my own business. My sister and I cadged food from our mum, and paid for our other (minimal) expenses from our piggy banks.
The menu was simple. Mum happily made cheese sandwiches (regular or toasted) and cups of tea for our customers (neighbors who stopped by on the way to do their daily shopping). Our tables were fabricated from apple and orange crates commandeered from local stores, and our chairs were sequestered from our dining room. Since most of the food and labor was free, it’s not surprising that we were a financial success.
I believe that even if a child doesn’t grow up to become a full-fledged “entrepreneur,” the skills they develop by practicing entrepreneurship at an early age are invaluable in life. Running a business teaches self-sufficiency, creativity, persistence, and collaboration. It builds confidence and teaches you how to work through failures until you reach success.
So when my three sons – ages 10 to 13 – recently decided to start their own business, I encouraged them from the beginning… and was happy to help them along the way.
Here’s how it happened…
Though my boys visit me and my wife frequently here in the U.S., they live in Europe. With the U.S. dollar being so weak lately, their trips to the States have been incredibly cheap. And the things they’re passionate about – including musical instruments, Yugio cards, and skateboard gear – are three to four times cheaper here.
Needless to say, their friends in Europe started asking my sons to bring back some of these goodies for them. My sons were happy to do it – but I have to confess to planting the seed of profit in their minds. “Rather than just bringing back a few things for your friends,” I said, “why not see if you can help finance your own ‘habits’ by buying stuff in the U.S. and selling it abroad?”
They agreed with my logic, and wanted to start with skateboarding gear.
We did a little research and found that a skateboard that sells for $80 in stores in Europe can be as little as $30 in the U.S. Even adding import duty to that would bring their actual cost to no more than $38. We decided that they’d sell their wares for $60.
We discussed the importance of making a profit in business. And we laid out a plan for handling their income. They agreed that they would save most of the money they made… perhaps invest a little in producing a brochure that they could hand out at school.
We also talked about what would happen if their venture really started to grow. For one thing, it would make it possible for them to go directly to skateboard manufacturers and negotiate better prices for their merchandise. But, at some point, it would also mean that they would have to pay taxes on their profits.
“Taxes?!” was their unanimous cry. And though there was no immediate need to worry about it, we decided it would a good idea for them to get into the mindset of running a real business and at least understand how taxes affect profitability.
My sons spread the word at school about great gear at great prices, and drew up a list of who wanted what. They took a deposit with each order that would cover their costs even if the purchaser didn’t go through with the deal.
What they now have is a low-risk venture with relatively good profit potential. They started small – with no capital outlay – selling something they know a lot about. They also have a somewhat captive marketing audience at school and in their friends. If the business grows, their challenge will be to bring more and more items into the country – and, if the demand exceeds the number of trips they can make, to see if they can still make a profit if they have to pay shipping costs.
Fostering Entrepreneurship in Children
Whether it’s a “restaurant” fabricated from fruit crates, a perfume made from flower petals and water (one of my sister’s early ventures), a lemonade stand, or my sons’ skateboard importing business, I’ve learned a few things over the years about the benefits of fostering an entrepreneurial “can-do” spirit in children.
1. Share Your Enthusiasm to Make a Business Out of Things Your Children Already Love. It’s easier to go with the flow than to push water uphill. I could have spent months trying to persuade my kids to start their own restaurant… but that just wasn’t their passion. They were interested in skateboarding. So a business based on that was a great foundation upon which to grow a new business idea.
2. Plant Seeds and Let Them Grow. Kids are smart and can work a lot out for themselves. But they may need you to suggest a few “What if?” questions that allow them to see wider possibilities than the one they saw initially.
3. Help Your Children Prepare for Potential Challenges. I asked my boys questions that would prepare them for dealing with order cancellations, import duties, and taxes.
4. Ask Questions – but Let Them Work Out the Answers. This is the kids’ project. You want them to feel a sense of achievement as a result of their entrepreneurial venture – not that you did the whole thing for them. You can help out where necessary. But remember, children are incredibly resourceful. They can figure out things for themselves… with a little nudge here and there from you. Let them know that you are always available to help them, but stand back and give them a chance to do as much as possible themselves. Yes, they will make mistakes – but, though disappointing, mistakes are some of the best teachers.
5. Involve Both Parents. This is important whether you are together or separated. Your spouse (or ex) can offer ideas, insights, and experience that your children can benefit from.
6. Recognize the Difference Between Ideas and Actions. This is a big concept for anyone – adults and children alike. You can come up with “great” ideas for projects or businesses. But until you put them into action, nothing happens. By getting a few projects going yourself, you can give your children the courage to try their own.
7. Persistence Pays. The twin of action is persistence – staying the course. And encouraging your children to dip their toes into entrepreneurship teaches them how to handle “failure” and not give up. In any undertaking, there will be unexpected setbacks. And entrepreneurship is the perfect way for your kids to learn how to cope with those setbacks and think their way through creative solutions.
8. Clear the Path. Your kids are never too young to learn about the Ready, Fire, Aim approach to achieve success in any endeavor. Too much planning and over-thinking is the enemy of action. Teach your children to get a project started – and then build upon what they discover.
9. Don’t Make Money Goal #1. Not every project has to make a profit in order to have value. So don’t discourage your kids if they aren’t interested in making a buck. If, for example, your daughter wants to put on a free piano recital in your backyard and have attendees donate money to orphans in Africa, that is a wonderful goal. The point is to help your children become strong and happy, not to impose your own vision upon them. Because if your kids enjoy what they’re doing, they’ll be much more likely to achieve success.
The greatest gift my parents ever gave me was this single piece of career advice: “We don’t care what you do as long as you’re happy.” This has inspired some interesting choices along the way. But I can honestly look back and say that although some of the choices I’ve made have been plain hard work, I’ve never had a dull, boring, or unhappy job in my life. And my sister and brother say the same thing.
For me, the main benefit in the time I’ve spent teaching my kids about entrepreneurship has been the fun we’ve had learning new things together. That, and discovering more about what my kids are passionate about. At the same time, I know I’ve been helping them learn some major life skills.[Ed. Note: If David’s young sons can start a business, you can too. And don’t worry if your parents aren’t available to help you get it off the ground. ETR’s team of experts are here for you. They’ve put together a comprehensive program that can take you from a simple idea, passion, or hobby to a fully functioning online business in just a few days. ]