by Greg Bier
The desire and skills to be a successful entrepreneur can be recognized early in a person’s life. Many young people realize the value of hard work, creativity, and effective marketing in their own way and try to relay those skills into profit. With the guidance and direction of parents and experienced entrepreneurs, the young entrepreneurial spirit can begin to form.
Signs of the Young Entrepreneur
While children or young adults might not necessarily have a business plan or feasibility study in hand, they do have certain traits that demonstrate that entrepreneurial drive. The most concrete sign for these students is the desire to earn money. Whether it takes the form of the age-old lemonade stand, mowing the lawn, or babysitting, the knowledge of working for a profit exists. Common traits found in young entrepreneurs include independence, creativity, persistence, and confidence. By matching these traits up with the motivation for profit, a budding entrepreneur is born.
Key Lessons for the Young Entrepreneur
In a world where it seems children can get anything they want, it’s important for a young entrepreneur to struggle a bit to develop motivation and inspire creativity. Being a bit stingy with a general allowance motivates children to find ways to earn money. It also communicates the value of money so they know where it comes from, how to manage it, and how to determine the real value of a product. Young entrepreneurs learn “opportunity cost” through this process by analyzing their work and time in comparison to the cost of what they want to buy. This provides a life lesson as well as a business lesson.
Some parents might balk at the idea of making their children spend their own money at a young age, but this lesson is key for the young entrepreneur. Children will begin to scrutinize what they want and what they are willing to pay with their own funds. If a parent buys everything, then they only see half of this equation: how much they want something. The value of the process is finding that balance between desire and spending.
A concrete way to show this process to children is through setting up a bank account. They can see their income vs. their spending in a very organized way. Children also benefit from understanding how checks and debit cards work. Some older people still have a hard time understanding that, when you use a debit card, that money is gone. Even though checks might seem obsolete in our technological age, they do offer a more hands-on experience in actually writing out the amount deducted, as well as in balancing a checkbook. As mentioned earlier, this is a lesson many adults could benefit from, and it is essential to an entrepreneur.
Avenues for the Young Entrepreneur
A key facet of this process is the student’s ability to come up with ideas to earn money. The creative spark begins early. They may begin branching out and realize the assets they possess, such as video games, CDs, DVDs, and toys, and begin to sell those online via eBay or Craigslist. Online ventures open up a whole new world for potential entrepreneurs, as long as they are guided and supervised by parents. As a child becomes more interested, he or she may express a desire to work with a parent, or for the family business. This is a great opportunity for a young entrepreneur to learn how a business is established and maintained, as well as providing certain tax advantages for you, the business owner.
Young entrepreneurs also benefit from any experience that relies on teamwork. Athletics teaches goal orientation, social skills, and the importance of communication. In a similar way, school activities, such as plays, promote self-confidence, creativity, and public speaking skills. The goal of these activities is to have a child engaged and involved with other children. If this is a fairly diverse group, then your child can learn how to be open-minded and conscientious,
Games also have the potential to provide great entrepreneurial lessons. Games such as Sims 2: Open for Business Expansion Pack, Lemonade Tycoon, DQ Tycoon, and Hotel Giant build problem-solving and critical-thinking skills. Many children think they are just having fun, but they are acquiring essential business skills as well.
Young entrepreneurs display traits of venture-related success early in life. If pursuing those skills is a goal shared by children and parents, a multitude of opportunities and growth experiences are available. The independence, self-confidence, and drive that children possess can translate to a successful business, as well as a successful life. In nurturing these skills, it’s important that you, as a guide and teacher, provide your children real-life, practical experiences that show them how money is earned, as well as how they can analyze their wants and their needs in spending their hard-earned income. Those are lessons they’ll carry with them, no matter their entrepreneurial path in life.
Dr. Greg Bier is a Professor of Management at the University of Missouri. He leads the newly formedEntrepreneurshipAlliance in the RobertJ. TrulaskeSr. CollegeofBusiness. He is also a partner with Entrepreneur MO. Follw Greg @gregbier