We read about them in the newspaper and watch them on television every day: people who have the creativity to develop an idea, the confidence to take the risks, and the tenacity to turn the idea into a successful business. Many parents hope that one day their own child will enjoy the level of success that is attainable through entrepreneurship - not only the potential financial rewards, but also in terms of personal development and fulfillment. Here are six tips to help steer your child down the road to entrepreneurism.
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- Teach Kids about Money
By teaching your child about money, you help them discover the relationships between earning, spending and saving. In doing this, children also begin to understand the value of money. This financial literacy can begin at a young age with simple money concepts like counting coins and making change for purchases. Older children can learn about savings accounts, balancing a check book and creating a personal budget. The key is to teach a concept and let them try, even if it means a little extra time in the grocery store while a youngster painstakingly counts out coins from the piggy bank. (For more tips, check out 5 Money Skills To Teach Your Kids.)
- Teach Kids about Economics
Young children are able to grasp simple economic principles, and the older they get, the more they can understand. Very young children can learn by role playing: kids can set up a pretend store and adjust their "inventory" based on what people are buying. Older children are receptive to economic theories such as supply and demand (have a conversation about why that concert ticket is so expensive) and the family budget.
If your child earns an allowance, this can be a great learning opportunity to help your child examine why and how they spend their hard-earned cash (wants versus needs; choosing between alternatives, etc). (To learn more, see our Economics Basics Tutorial.)
- Encourage Creativity and Tenacity
Does your child come up with crazy ideas during play time? If so, encourage them to expand on their ideas, and then do something about it. When you child excitedly says "I want to build a castle for my princess dolls!" help her do it. Instead of taking the easy route ("Sure, that would be fun but we don't have the right supplies…") help her figure out a way to make it work. The more your child practices taking an idea - even a completely harebrained one - and turning it into a reality, the more developed his or her skills will be in creativity, problem solving and persistence.
- Act Upon Ideas (Before Someone Else Does)
Many people come up with a great idea, do nothing about it, and eventually find that someone else has become quite successful with the same idea. A good idea is not worth much if it is not acted upon. Teaching kids to go for it, even with a simple playtime idea, can have lasting rewards. (Turn playtime into learning with these fun games. Find out more in From Play To Pay: Financial Games For Kids.)
If your child wants to earn money, ask them to write down several ideas and then help them act upon the best one. Does your teenager think he can make a little money doing yard work for the neighbors? Help him come up with a plan to make it happen. That way, when a really innovative idea is born, your child will have the skills to take the idea to the next step.
- Let Kids Make Mistakes
If we step in and fix a problem before a child has a chance to, we rob them of the valuable opportunity to learn from his or her mistakes. You can tell that your daughter's design plan for building the princess castle is flawed, but, as long as she's not going to get hurt trying something, it is important to let her try her idea. Once she realizes it won't work, you can help guide her towards a better solution.
When evaluating what went wrong, it is important to be honest so kids recognize their mistakes, rather than blaming something else for the failure (for example, instead of saying "It's too windy for the castle" try "This castle needs to be built out of a stronger material"). This ability to make mistakes and learn from them is critical to the success of an entrepreneur.
Remember the famous quote by Michael Jordon: "I've failed over and over and over again in my life. And that is why I succeed." (For more on MJ, check out Michael Jordan: By The Numbers.)
- Teach Goal-Setting
Learning how to set a goal and outlining the steps necessary for its achievement is an important skill to have as an entrepreneur. It is simple for kids to wish for things (i.e., "I wish I had $500") but it's a different animal to set a specific goal and determine what needs to happen to reach that goal.
Here again, setting the goal is usually the easier part; figuring out how to get there is the challenge. Help your child narrow down a clear goal ("I want to earn $500 in the next three months by babysitting") and then discuss ways to reach the goal. Set up a timeline so your child can measure his or her progress. Challenge your child to make a budget (take into consideration the going rate for babysitting, how many hours he or she expects to be available for this work, etc.). Having a goal on paper is harder to ignore than just saying "I wish I had $500".
The Bottom Line
Kids inherently have many of the traits necessary to becoming entrepreneurs: they are creative, ambitious, natural negotiators ("I will eat extra vegetables if I can stay up late tonight...pleeeaaase"), and excited about learning new things. We all want our children to grow up to be self-sufficient, productive members of society. Nurturing all this creativity and energy, and showing kids how to do something with it, can help turn your child into an entrepreneur.
Catch up on your financial news; read Water Cooler Finance: A Diving Dow And Rotting Eggs.