I continue to see stories of really young entrepreneurs, like this article, profiling 25 kids that made a million dollars before graduating from high school. This makes me wonder what starts that entrepreneurial drive in kids, and how early parents and schools should start teaching the basics.
There are already some good books out there for youth entrepreneurs, such as the classic one from my friends Adam and Matthew Toren, Kidpreneurs: Young Entrepreneurs with Big Ideas. They assert, "It's never too early! Even children can be introduced to basic business principles and the rewards of entrepreneurship”. Another one is Kid Start-Up: How YOU Can Become an Entrepreneur, by Mark Cuban, Shaan Patel, and Ian McCue.
Even if you are not sure that your child is a budding entrepreneur, there are several practical reasons to introduce him or her to the basics of business. Here are a few facts from the National Council on Economic Education emphasizing the need for more business training, starting much earlier:
More than 1 in 6 students in the USA do not have a baseline level of financial literacy.
Nearly 1/4 of millennials spend more than they earn.
67% of Gen Y have less than 3 months-worth of emergency funds.
As early as grade school, with parental guidance and resources like these books, kids can gain some valuable experience in starting, managing, and growing a successful business venture. The positives include:
Learn to make money. Even young children (ages 5-10) can and need to understand the concept of income – expense = profit. They need to understand that having money is not an entitlement, and not related to the volume of their demands.
Start a summer business. The best way to learn is a “hands-on” approach like creating a simple business to sell lemonade or deliver newspapers. In this context, parents can explain how their own business works, and where the family income comes from.
Bring the family together. All parents need to do things with their kids. A family that grows together, builds character and achieves financial success. The entire family can be active in the business venture.
Understand how business works. A place to start may be a reality game like ThriveTime for Teens Board Game, where they will be faced with money and life decisions like buying cars, managing expenses, paying for college, using credit cards, buying stocks and starting businesses.
Able to invest money wisely. Several companies, like Charles Swaab, offer programs like Money Matters: Make it Count, which teaches the financial basics to teens through Boys & Girls Clubs across the country.
If your child is old enough to get on the Internet, he or she is old enough to start learning business skills. Many education organizations provide free online tools to help students explore the world, increase intercultural awareness, and participate in a community of like-minded international teen leaders. It’s not a big jump to e-commerce and the costs and decisions of running a business.
