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. These entrepreneurs are important to our economy as a whole, but also provide the inspiration and impetus to other fledgling, would-be business builders. 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.
Kids inherently have many of the traits necessary to becoming entrepreneurs (or "treps"): they are creative, ambitious, natural negotiators ("I will eat all my veggies 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, not just in terms of financial stability but also in terms of personal growth and fulfillment. Nurturing all this creativity and energy, and showing kids how to do something with it, can help foster your child's natural entrepreneurial spirit.
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 concepts 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 examine why and how he or she spends his or her hard-earned cash (wants versus needs, choosing between alternatives, etc.).
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 and turning it into a reality, the more developed his or her skills will be in creativity, problem solving and persistence.
Act on 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 concept. A good idea is not worth much if it is not acted on. Teaching kids to go for it, even with a simple playtime idea, can have lasting rewards. If your child wants to earn money, ask him or her to write down several ideas and then help him or her act on the best one. Does your tween think he or she can make a little money doing yard work for the neighbors? Help him or her 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 him or her 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, it is important to let her try her idea. Once she realizes it won't work, you can help guide her toward 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 "We chose the wrong materials; let's try something stronger"). This ability to make mistakes and learn from them is critical to the success of an entrepreneur. Remember the well-known quote by Michael Jordan: "I've failed over and over and over again in my life. And that is why I succeed."
Teach Kids to Set Goals
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 a mountain bike") but it's a whole 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 $600 so I can buy a mountain bike") and then create a budget to help her reach the goal. Having a goal on paper is harder to ignore than just saying "I wish I had a mountain bike." The experience can be priceless.
Personal FinanceThese simple tips will help you raise financially savvy kids.
Financial AdvisorOn the fence about whether or not you should give your kids an allowance? An allowance is the perfect way to introduce your kids to financial lessons.
Personal FinanceDiscover which of these three reward techniques teaches the best lessons about money.
Managing WealthUse summer holiday time to teach your children about earning, saving and spending money.
TradingFind simple and easy instructions on how to introduce your kids to the stock market.
Personal FinanceTeach your children to save up to meet their spending - and saving - goals.