Business as Childs Play

Can Business Be Child's Play?
Does your child want to start his or her own business? Helping them to do it safely and profitably can give them a rich set of skills that will serve them well into their adult years. It can also give you the opportunity to work closely with them, building cherished memories at the same time they develop their problem solving skills and increase their people skills.

A child who has a real business that requires commitment to schedules, budgeting and customer skills will improve their reading, writing and math skills in comparison with a child who does not use those skills in the “real” world. Taking a long term view, it can help with college admissions and job opportunities. It can build the child’s confidence and control of situations around him or her.

Where do you start if you want to support your child with their business?
Children under the age of eight should have well defined tasks, limited hours and close, caring adult supervision. Most of them are just not ready for a newspaper route or for anything that takes more than half an hour a day regularly and up to three hours on an occasional basis (once a week or less.)

Children from the age of 8 - 11 can take on more responsibility and somewhat loosened supervision. Ages 12 - 15 are capable of generating their own unique business ideas and excellent customer care. Ages 16 - 18 can very easily be establishing a business they could get into full time after high school or continue while in University.

As the business idea becomes more complex, more expensive and requires more time, parents need to evaluate their own needs. Since children under the age of 18 cannot legally sign contracts, a parent or guardian is going to have to sign contracts and assume credit risks. It is important to consider whether the business should be a sole proprietorship with the adult acting in the child’s interest until they legal come of age, a partnership between the adult and the child or become a limited liability company to reduce risks.

In these days, where nobody knows your age on the Internet, your child may need your help in obtaining a merchant account so that they can accept bank cards from their customers. You will want to be very aware of the costs, risks and opportunities involved in getting a merchant account. Any negative experiences may reflect badly on your credit, so make certain that your child is responsible if his or her business either uses or extends credit. And establish procedures to make certain that customers don’t just “fall through the cracks.”

In any case, you need to consider the child’s interests and capabilities. It may be wise to shut down a specific business as the child moves from one age to the next, then open another opportunity that gives the child a chance to grow.

Your child’s physical and emotional safety should be your number one consideration. Whether they’re running a lemonade stand on a hot summer’s day or taking care of the neighbour’s cat while they are on vacation, the child needs close supervision and guidance. It’s a good idea to make sure that the child doesn’t get in too deep, so you can help them simplify the job to make it go more easily and to help them succeed. In general:

  • Help them set a reasonable goal. This can be based on weekly income, monthly income or buying something special.
  • Ensure their safety.
  • Help position them for success.
  • Know who their business associates are.
  • Use it as a learning experience.

Finally, more and more parents are encountering the pleasant but unsettling experience of a child who is making a real income during their high school years. You need to be very flexible if your child enjoys it and is making enough money to support themselves after high school with what was once an exercise in learning to run a business.

Help your child chart their course so that it will work for them. Although you may have always planned for him or her to go to college right after high school, a growing and thriving business will require careful evaluation from all parties. It may be that they can continue the business on a part time basis in college. Or they may be able to go to school part time and run the business full-time. Perhaps they want to take a year off from school, work the business and then make a decision in a year or two about continuing with a formal education.

Early business decisions are seldom set in stone and don’t let your pride get in the way of recognizing your child’s career needs. Instead, help them set goals for themselves and develop some decision rules on how they will allocate their time in order to do the things they want to accomplish.