How to Help a Child Start their Dream Business

As we all know, children are apt to change their minds frequently, so it's important to find a business that your child will stick with. In some states, starting a business can be done with allowance or chore money, and if so, you should encourage your child to pay for a business idea with their own money. For other states, there is a more substantial investment required, and if so, then it pays to do research well ahead of time before diving in.

One of the things that children need to do is find something they really enjoy, because their business will take up a lot of time, and you want it to be the child's business, not the parents'. With that in mind, one of the best resources for find your child's interest is What Color is Your Parachute? This is a book that will help them throughout their lives, so buying this book will be worthwhile.

Once you have What Color is Your Parachute?, go through both the "flower exercise" and informational interviewing to make sure your child not only wants to pursue their business idea, but also that they understand what they are getting into. Otherwise you could end up with very unhappy children and parents. Don't skip any steps, as this is very important. This is your child's introduction into the world of business, and you want to make it a happy one!

Research with your child what it takes to start a business where you live. You can begin at the Secretary of State website for your own state if you are in the USA. If you live in the EU, visit the local office and get the forms to start your child's business.

Then talk with your child about expenses versus income. If they plan to offer a product, how much will it cost to make? If they plan to offer a service, what will they need in the way of supplies? Will they sell or advertise with a web site? How much will they have to charge in order to cover their costs? (Important note: do not forget business liability insurance. Have a talk with your insurance agent before you begin!) Once you have that figured out, it's time to help your child make a business plan, which you can do for free.

While you are still in the research stage, and you have the business plan, don't forget to figure out how many hours your child will need to work on their business, and whether that schedule will still allow enough time for school, play, and family activities. If your child will have to give up extracurricular activities or games or television, make sure that they understand that.

If your child's business idea is not that unusual, it may be time to check out what is already available. For example if your child wants to design graphics or artwork to print out on different items and sell, instead of investing in silk-screening, check out a print-on-demand site like Zazzle.

Once your child is committed, it's time to fill out and file those forms. Next, find a suitable domain name and buy it, if your child's business will need a web site, and find suitable hosting. WordPress is free and easily expandable to suit most business models, small or large. Make some business cards for your child, and introduce them to networking. Your child will also need a bank account for their business, so don't forget to stop by your local credit union, where, in most cases, you can open a business savings account for as little as $5.00. Your child's business will also need some basic accounting software, and you can find some for free.

Don't forget to mention this enterprise to the person who does your taxes. A visit to your local IRS office may be helpful (take your child along!).

Junior Achievement is a long-standing program with a great track record. It's worth getting in touch with them to see if they offer programs in your area.

If your child needs a bit of hand-holding, make an appointment with your local SCORE office, or Small Business Development Center. Mentors are almost always delighted to work with children to help them refine their entrepreneurial skills.

Running a business is a lot of work, but it is always a great introduction to adult life, and many child entrepreneurs are running businesses that have taken off like crazy. 

• Be warned: there are many scammers out there who will think nothing of (almost literally) taking candy from a baby. Do business only with people you know and trust at first.
• Hire professionals: you need a business lawyer, not a cousin, and a CPA who understands small business, not a tax preparer. Otherwise, you could end up paying thousands or even tens of thousands of dollars in fines and unnecessary fees and taxes.