Saturday, I posted what I thought was an amusing anecdote. I told how I'd bought some treats from a young girl's bake sale, but she'd been woefully unprepared to take my money and give me change. I meant the story to be comic relief, but quite a few GRS readers found it unamusing — and, in fact, thought I came off as something of a jerk. Oops.
In retrospect, many people raised valid concerns (though some folks were making mountains out of molehills). I was something of a jerk. To make amends, today I want to provide a frame of reference so you can see where I'm coming from (not that this excuses my behavior), and I want to provide some tips for parents with entrepreneurial kids.
I was a grade-school entrepreneur
As I've mentioned many times, I always do what I can to support young entrepreneurs — that's why I bought the goodies from the girls last week in the first place. I believe strongly that kids should be encouraged to make and sell things, and even start their own kid-sized businesses. I probably feel this way because I was a grade-school entrepreneur.
To start at the beginning, my father was a serial entrepreneur; he was always starting businesses. Most failed. Some succeeded in a wild fashion. (The inheritance he left the family was in the form of his most successful business, the custom box company that for 15 years now has supported his wife, three sons, and a nephew.)
No surprise then that as a child, I wanted to make money too.
I made my first business venture when I was in the second grade. I sold lemonade by the side of the road. It was miserable failure. I was trying to sell lemonade in March, on an infrequently-traveled stretch of country road, in rural Oregon. I didn't sell any lemonade.
But in fourth grade, I started a little business that actually made money. Star Wars was huge in 1978, and like all the other boys, I collected Star Wars cards. Whatever change I could scrounge went to these cards. (We used to walk the sides of the roads collecting pop bottles. We'd cash in the deposits and immediately buy more Star Wars cards.) Collecting was frustrating. Sometimes I would have six of one card, and none of another. This bugged me until I realized that I could turn the surplus to my advantage.
I took all of my doubles (and triples and quadruples, etc.) and sorted them into random piles of about twenty cards each. I wrapped each stack in a piece of typing paper and wrote 10¢ on the package in black felt pen. I made as many packages as I could, took them to school, and sold them to the other boys. I took that money to the local variety store and converted it into new cards. It was brilliant!
I did the same thing with Hardy Boys books. I loved the Hardy Boys — my aunts and uncles knew this, so I often got books as gifts. After I finished them, I'd take them to school and sell them for fifty cents. (They cost two dollars new.)
I was learning practical business lessons, and I was only ten years old.
Throughout my childhood, my father encouraged my entrepreneurial and sales activities. He urged me to go from door to door selling greeting cards and seeds, for example. (These ventures failed for the same reason the lemonade stand failed — not a big enough customer base.) When I was a bit older, a friend and I drew and photocopied our own comic books through the junior-high store. We didn't sell many of these, but we had fun trying.
In high school, I was active in our Future Business Leaders of America chapter. I learned about economics, accounting, and business math. But I also sold a lot of candy for fund-raisers. (We were always having to raise money for conventions, and so on.)
Kid-sized entrepreneurship and salesmanship were a big part of my childhood. I didn't like it much at the time, but looking back I can see that it played a crucial role in making me the man I am today. Because of this, I do what I can to support kids who sell stuff.
- When I see a lemonade stand, I stop to buy lemonade.
- When I see a girl scout, I buy girl scout cookies.
- When my young friends sell magazines and books to raise money for school, I buy magazines and books.
- Every year, Kris and I look forward to visiting the girls at the Eastmoreland Garage Sale, who have sold newsletters, “stock tips”, jokes, and more.
And, of course, last weekend I bought some treats from two girls with a bake sale. When I did this, I had only warm, positive feelings for these kids, even during their confusion regarding the change. I shared their story at GRS not to be malicious, but because I thought the situation was funny, and because I could identify with the girls.
What color is your piggy bank?
Kris and I don't have kids, but if we did, you can bet I'd encourage their entrepreneurial ventures, just as my father encouraged mine. But there's more to helping your kid explore the world of business than just letting her loose with cookies and lemonade. Here are some ideas for helping your youngster make her first foray into the world of business.
- Encourage your kid to pursue their passions. Sure, your daughter could sell magazines door to door. But what if she's interested in something else? Like horses or soccer? Help your kids find a way to make money through their hobbies. Urge them to be creative. How can a 12-year-old girl make money through her interest in horses? I don't know — but I'll bet she can come up with a couple of ideas.
- Supervise the set-up. Though you'll ultimately allow your child to run the business on his own, it's a good idea to make sure he sets smart parameters. Be certain that his choices are safe and legal, and double-check that he has everything he needs. If needed, spot your kid some start-up capital, but make it very clear that this is a loan, and that you'll need this money back when the business venture is over.
- Answer questions. Again, let your child operate independently. But when she has questions, be there to help her. If you don't know the answers, help her do the appropriate research. Who knows? You might learn something along the way.
- Let your child sink or swim on his own. I know some parents are afraid to let their kids fail. That's sweet, but learning to deal with failure is an important part of learning to deal with life. It's also a vital business skill. Most successful businessmen and women have been unsuccessful in the past — often for long stretches at a time. It can be tough to watch your kids sweat as he tries to sell candy door-to-door, but it'll be better for him in the long run if you simply watch from the sidelines.
- Let your child make his own decisions about what to do with her income. If you already have a system for dividing your child's allowance, absolutely suggest that she use that system for her business income. But don't insist. Let her make her own decisions — and then follow up later to gently point out the consequences, for good or ill. (Note: I admit this tip is purely hypothetical; if you think I'm wrong, say so.)
- If possible, introduce your child to somebody doing the same thing in real life. When I was a young comic-book artist, I would have loved nothing more than to meet an actual comics professional. Sometimes the grown-up version of a job is less glamorous than what your kid imagines, but that's okay. It's good to learn what people do all day.
And, of course, make sure your child knows how to give proper change.
If you have a kid who shows an entrepreneurial bent, track down a copy of What Color is Your Piggy Bank? by Adelia Cellini Linecker. This slim volume is a great choice for kids from 10-14 who are beginning to show an interest in entrepreneurship. Linecker explores the types of jobs a kid can do gives advice for setting up shop, and explains how to manage money. It's a fun and informative little book. (I hear that The Totally Awesome Business Book for Kids is good, too — and it was written by a 13-year-old!)
I spent yesterday afternoon chatting with my lawyer. Before I parted ways, I asked him if he had any advice for grade-school entrepreneurs. “Yeah,” he said. “Make sure your parents don't take all of your money.” Ha!
I apologize if my post on Saturday seemed rude or insensitive. That wasn't my intention. Yes, I was laughing at the girl who couldn't make change for me, but I didn't intend to be mean-spirited. I love that she was out there selling donuts and cookies and lemonade, even if her small business was doomed to lose money. But I couldn't help but be amused by her timidity. Why? Because I've been there many times before.
You know what? I hope that twenty years from now, unbeknownst to anyone, I'll buy a new sofa or television or automobile in a store owned by this girl. I really do.
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.