Encouraging Young People to Be Entrepreneurs

When I was young, I was a budding entrepreneur. In the late 1980s, one could easy get forty cents a pound for aluminum, so I adamantly collected cans. I provided garbage cans for neighbors to toss their empty cans in, then I would go on a route and collect those cans, adding them to my own collection. Eventually, this became a pretty profitable enterprise for a ten year old boy living in a very rural area – I could make $30 or $40 a week working a few hours a day around whatever else was going on.

Unfortunately, several events killed my entrepreneurial spirit – chief among them, a painful experience where my collected aluminum for most of a summer was stolen by someone I trusted. The wind left my entrepreneurial sails – and it didn’t really come back until the last few years.

That’s a true shame, in my opinion, because I missed out on the best years to be an entrepreneur – late childhood until you settle down with a family. You have the time and the freedom to really let your sails unfurl and let that entrepreneurial wind push you towards your dreams.

Now that I’m a father, I’m looking at my children starting to grow up and I realize that it won’t be long before they reach the age where they will want to earn their own money. Here are seven techniques, learned from observing the parents and mentors of young entrepreneurs, that I intend to use to encourage my own children to make their own success. These techniques will work for anyone you might want to mentor, from

Let them see the possibilities from a very young age. Even now, I’m pointing out to my two year old son that people work to earn money. “Dad and Mom go to work every day so they can make money. We use that money to buy food, to buy our house, and our clothes. Usually, the harder and smarter we work, the more money we make for our time.” I try to constantly show him better ways of doing stuff – like it’s easier to stack the plates when taking them out of the dishwasher then putting the stack away than to put the plates away one at a time. That’s more efficient, and that’s the key to success.

Let their options for earning money be a choice with differing levels of success. I’ve fostered that a bit by having him help with household cleanup – he has some required things to do, like cleaning up his Legos, but he can sometimes earn a quarter by unloading the plates and saucers in the dishwasher, for example. He’s learning that he has an entrepreneurial choice – he can either go play and not stack the plates, or he can stack them and earn a quarter. Most of the time, he wants the quarter – he’s learned that quarters can be taken to the store to buy a new car. Tying the two pieces together, he’s learned that stacking the plates first gets the job done faster (while still doing it just as well as before).

Always provide positive encouragement. The worst thing you can tell someone is that they can’t do it. Instead, point out that they can do it, but before they get there, they’re going to need to add some skills. This is something that my parents and mentors both did quite well – my parents were always adamant that I could live my dreams once I got an education, and lately my mentors have shown me that effort and diligence can carry you quite far. I know that I can’t follow every dream, but I know that with the right tools, I can follow most of them – and it’s because of encouragement that I believe it.

Help them brainstorm. Entrepreneurship feeds on ideas, usually starting with a core idea that gets developed into a profitable enterprise. This requires creativity and critical thinking, and most of the time, both processes can be helped along with a guiding hand. Listen to their ideas and offer your own. Be willing to be a sounding board for what they’re thinking, and offer positive suggestions. For example, let’s say your nephew wants to start a lawn care business. He needs to think about equipment, about marketing, about policies and prices, and about time to execute these things. Suggest these, watch the wheels turn, and offer some help when it’s needed.

Strongly encourage them to plan ahead. The more planning one does in terms of the future, the more likely long term success will occur. Encourage them to write an actual business plan, and be willing to be an editor of that plan. Encourage thought about where this might potentially go, and whether or not it makes sense to make different basic choices to get there. Should you buy a sturdier lawnmower now, or get a cheap one to get started and upgrade later?

Invest in their work. Many beginning entrepreneurs are stymied by a lack of capital. They can’t afford equipment, business cards, or needed services. Offer to be an “angel investor” for their small enterprise, giving them an interest-free loan to get started. That way, you’re letting them get started while the fire is still burning hot and not putting them in a financial trap, either. I’ve invested in the budding entrepreneurship of multiple people in the last few years, including a person who’s starting a beverage company.

Let them fail, but help them get back up. Failure is going to happen. Vital equipment will fail, a key customer will quit, or all of your work product will get stolen – I’ve seen all of these happen. Let the person feel failure for a bit, but then help them get back up off the ground. This is something that I wish had happened to me when I was younger – I was reeling from the punch, but no one encouraged me to get back out there and keep fighting. Instead, I began to believe that entrepreneurship wasn’t for me – the biggest mistake of all.

The most important thing? Don’t be afraid to be a mentor. If you know someone who’s starting a business, offer to help them in some way, even just in the form of someone to bounce ideas off of. You’ll get nothing but benefit from this in the long run, in the form of a local businessperson who values you and a stronger sense of community and of your own sense of entrepreneurship.

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  1. Tyler says:

    I think it is important that young entrepreneurs learn from their mistakes and keep trying new ideas. You never know which ideas are really going to take off unless you try.
    People rarely hit a home run with their first business venture, but the successful ones always learn something new with each failure.

  2. Rick says:

    This is one of the best articles I’ve seen in a long time — and one of the most important. I wish my own parents had done this with me when I was that age.

    Our society works off the innovation and creativity of entrepreneurs, and entrpreneurship is by far and away the best way to succeed in life. It also teaches us how life works. I definitely plan to encourage my children to become entrepreneurs.

  3. Debbie M says:

    Do you know anything about the official tax consequences for kids?

  4. Great post, Trent. It’s funny how you say that the early years are those that can influence kids to have an entrepreneurial spirit the most. As a kid (think late 1970′s), I actually sold those greeting cards from the back of comic books. (side note: I WISH I still had those comic books). I cut grass, raked lawns, babysat, sold sodas and snacks on the bus, and sought every which way to make a buck. I was never encouraged to keep this up though, because I was always told that I wanted to be a medical doctor. Only after I got into college did I realize I had NO desire to be a doctor. By then, I was deep in student loan and credit card debt and didn’t see a way out except by working a minimum wage job.

    Here I am 25 years later with three entrepreneurial kids and believe me, I WILL encourage that. My daughters baby sit all the time. My 14 year old already has almost $1,000 saved and her 13 year old sister isn’t far behind. My 8 year old son goes door to door (we know all our neighbors) and offers to shovel snow, pick up trash, help clean their garage, sell homemade cookies, or pick up pine cones. The neighbors always over pay him and he comes running up saying, “Dad, I just got ten bucks for shoveling his driveway!” After looking at the driveway, I think, “I wouldn’t do it for less than $50.” Ahh, youth . . .

    Thanks for reminding us to encourage that spirit in our kids. We need more encouraging in our society.

  5. Susy says:

    My parents did this for me, they did a great job fostering my entrepreneurial spirit. When we were really young we got paid to do certain chores around the house. When we got older they encouraged us to start little businesses. I had a popsicle business and a chocolate business, as well as a few others.

    My parents provided supplies for a set period of time (usually 2 months) then we had to start buying them out of what we earned. They also made us donate 10% of our earnings to charity. They encouraged us to save our earnings by matching whatever we put into savings.

    Needless to say, I never held a “real” job till I was 20 (but I had more money saved in the bank than most people I knew).

    They taught me great lessons on multiple income streams, being generous with money, and saving. Lessons that have been of great worth to me in my later years!

  6. Excellent post! You really made me think…

    …only I would make the lessons of 1) value of money and 2) the entrepreneurial spirit as separate but equally important lessons.

    1) The value of money is essentially understanding that we may produce a unit of one thing (a product, physical labor, services, ideas) to receive some unit of compensation (money, tangible/intangible assets). It also teaches children that money is something that is earned — not something for which we are entitled. It sounds as if you are doing an outstanding job of that with your children now…

    2) Entrepreneurial habits have everything to do with self-awareness and emotional intelligence and almost nothing to do with money. If children believe that they are “working for money” then they may mistakenly seek out a career or entrepreneurial path that pays more money for the purposes of aligning with social conventions. I believe that, to be a successful entrepreneur, you must first find something that you enjoy so much, you would be willing to do it for “free.” By virtue of your passion, the money will follow; therefore, money should only be incidental to the chosen path and not necessarily any part of selecting the path.

    Thanks again for the thought-provoking post…

  7. sara says:

    I was always saving for something big as a kid (going to camp, buying a car, going to europe) and always working to earn the money. I baked cookies and sold them to the neighbors out of my wagon to earn money to buy my first bike. My parents did a great job teaching me to work and earn, I wish they would have a helped me to also invest in long-term savings plans, for when I really needed the money as a young adult, instead of only cashing it out for shorter-term goals.

  8. janewilk says:

    Trent, great post. Two things, though: one is that very young children (under age 5) have an innate need to “take the long route” to do things. You have probably noticed this in your son if you’ve ever seen him make multiple trips back and forth across a room to bring Legos from one place to another, or at the beach when bringing lots of buckets full of water to a spot higher up on the sand! When kids are around age 4 or 5 their “efficiency” switch kicks in, and they start conserving energy by combining tasks, figuring out ways to make fewer trips back and forth, etc. Be sure to give your son space to do things the two-year-old way, because it satisfies a deep developmental need – the repetition helps solidify and strengthen connections in the brain, for example. Besides, he probably views putting away dishes as a fun activity (he probably enjoys hanging out in the kitchen with you, too!) and may enjoy making it last a long time. The other issue is that I might urge a little caution in making money such an important goal in the life of a child. Obviously money is necessary, especially in the life of adults. But little warning bells went off in my mind the other day when my eleven-year-old told me that she didn’t want to grow up because she didn’t want “financial things” to deal with. Now, we are cautious with our money and will sometimes say things like, “We’re choosing this brand instead of that one, because it tastes the same but is half the price!” We are not worried about money and certainly wouldn’t have those conversations in her presence if we were. But somehow she’s picking up on the idea that “financial things” are a burden and a responsibility that she doesn’t want, at least right now. Just some thoughts from a money-wise parent of an older child (and early childhood educator)…

  9. Luis Davila says:

    Hi Trent,

    This is a great post! I would add on the mentorship part that there are great organizations out there that focus on promoting entrepreneurship among young people by creating relationships with positive role models. For example, Junior Achievement is a great organization for this. They bring role models to classrooms to teach kids about entrepreneurship, work-readiness skills and financial literacy. They truly inspire kids to succeed in a global economy!

    Luis
    davilaluis.wordpress.com

  10. jblee says:

    That’s really nice Trent. It’s really important to teach young kids the value of entrepreneurship. Becoming an entrepreneur isn’t just about making money; it’s about contributing your service and ideas to society. It’s about creating jobs and becoming a mentor or leader to them.

    We really need entrepreneurs, especially in my country. I must admit that most of us are still in the employee mindset. A lot of individuals here don’t like the hassle and responsibility of an entrepreneur.

    My take on investing in their work: I guess it depends upon the level of trust and competency of the individual, but you should be ready to lose your money especially to someone starting his first business. An uncomfortable ambiance may arise between the two of you if his business goes bankrupt.

  11. richsnail says:

    I love this post. I was very fortunate to have parents who asked me to budget young, and still thank them for this today. My allowance always was tied to some house-work like setting the table, gardening or other boring stuff, and I could only negotiate it after I drew a clear 3 month budget showing why i needed a raise.

    At the time I did not really understand. But now I am truly happy they taught me so much so young.

  12. Eric says:

    I have thought a lot about this post since I read it yesterday. My son had some severe health problems at birth which required him to be on ECMO for 11 days. Basically there is no insurance he could ever get on his own. In order to get medical coverage he will have to work for a company which offers it with a no pre-existing conditions clause. Heck, I couldn’t even take a job which didn’t offer it because I couldn’t buy coverage for him!

    So I am wondering how to teach him about entrepreneurship….since he really is locked into a certain path by our society. Sure he can want to earn a lot, I can tell him about working hard, etc. but I can’t say “if you have a dream follow it” because that is not the way our society is setup currently. (and yes, technically I could but the first time he had any sort of medical problem without insurance he would be screwed.)

    One of the things I have noticed a lot about your blog is that it doesn’t take into account the current state of medicine in the US. I wonder if that is because you are basically healthy and your family is so you think “hey if I quit my job and wrote full time we would just have to pay a bit more for insurance” I wonder how different your posts might be if your son had a condition which needed constant medical care such that you couldn’t really buy insurance yourself. How would you talk about following your dreams, entrepreneurship, etc. knowing that you had to stay at a job with insurance?

  13. Stephan F- says:

    When I look into the future of my children I think I am seeing the need for them to be ready to be an entrepreneur rather then being an employee. Large companies are continually downsizing. I loved that report last year of IBM denying it was laying off 2,500 because it didn’t have that many people left.
    I want her to be an employer not an employee. We just ran a deal with her transitioning her from training pants to underwear to get a doll and she had a great time with it, though to her it took a very long time to see results. We all start small.

  14. Justin says:

    I definitely think you are on the right track with teaching your child(ren) a wonderful work ethic.

    That being said I have to challenge your use of the word “entrepreneur”. It seems you were always a hard “worker” (albeit an efficient one as well) and are teaching these same skills to your offspring.

    For me, the word entrepreneur would imply receiving goods (usually money) for someone else’s work. Lets take the putting away dishes example. So you are paying your son $0.25 for this. For him to be a true entrepreneur he should “enlist” or “recruit” someone else (maybe a little sibling) to do the work for $0.20, thus leaving him a $.05 without having to do anything.

    Its creating these “businesses” and streams of income that will truly teach him an entrepreneurial spirit. It is also what I believe the best way to truly create wealth.

    Those are just my two cents!

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