Teach Your Kid to Be an Entrepreneur

Why teach kids how to be entrepreneurs?

If you want your family to maintain and build cross-generation wealth, entrepreneurship may help you get there.

According to Thomas J. Stanley, Ph.D. And William D. Danko, Ph.D. in The Millionaire Next Door:

“In America, fewer than one in five households, or about 18 percent, is headed by a self-employed business owner or professional. But these self-employed people are four times more likely to be millionaires than those who work for others.”

The Entrepreneur website (entrepreneur.com) quotes Experian (August 2006) as saying:

“On average, entrepreneurs make at least 25% more than the general population.”

Who should teach kids how to be entrepreneurs?

Being an entrepreneur is not an inherited trait. It is learned behavior.

Some of us learn it out of necessity. We either really, really need something and have no other way to get it, or we really want something and so think through ways to get it. America is proud of the fact that over the years our country has attracted immigrants. The immigrants generally came to the country with very few assets and out of necessity, developed ideas to meet needs that allowed them to build businesses and earn a living.

Some of us learn it through observation. Maybe your parents or grandparents had their own business, or perhaps you worked for your next door neighbor in his or her business. Robert T. Kiyosaki with Sharon L. Lechter, in the book Rich Dad, Poor Dad, show examples of Robert’s experiences with his real Dad (the University Professor who advised him to study hard and be a professional) and his friend’s Dad (the entrepreneur who mentored the two of them to show them how to have their own businesses).

Very, very few of us learned anything at all about it in school. It simply has not been taught in formal educational environments until very recently. Although there are now starting to be a few programs, if you want your family’s children to learn how to come up with ideas and start a business, someone in the family needs to make sure it happens.

However, your family may not have an entrepreneur available to mentor the children. According to the Entrepreneur.com website – quoting – Northeastern University’s School of Technological Entrepreneurship, October 2006 “62% of entrepreneurs say they do not have a family member that is an entrepreneur.”

How can I teach my kid to be an entrepreneur if I am not one?

Statistics vary on the subject, from those in The Millionaire Next Door, which claims that only 20% of the workers in America are self-employed, to those that the Federal Reserve Bank of Minneapolis which quotes from a U.S. Panel Study on Entrepreneurial Dynamics which estimates that “perhaps up to one-half of all adults are engaged in self-employment or the creation of a new business at some point during their work career.” The Global Entrepreneur Monitor (GEM) suggests that up to a half a billion people worldwide were engaged in creating businesses in 2009.

Depending on which statistics you believe, most of us may have been at least exposed to the entrepreneurial concept and are likely to have tried out some sort of business activity sometime during our lives. When I was a child, for instance, my parents encouraged my brother and I to pick and peddle the red plums from our tree to the neighbors. Some of you probably ran the ubiquitous lemon-aide stand in your neighborhood or manned a paper delivery route.

If you panic at the thought of teaching your child to come up with ideas and build a business, don’t. There is help. There are multiple books, websites and training courses available. One book I found particularly interesting is Young Bucks – How to Raise a Future Millionaire by Troy Dunn. This author is father to 7 children and a self made millionaire.

The book has some practical and age specific advice on how to assess your child’s strengths and weaknesses so that you can pre-think some ideas to suggest (if needed) to your child on what kinds of money making stuff they can do.

His very first prerequisite however, is that you give your child the “gift of want”. They must have a reason to pursue entrepreneurial activities. If they really want something badly, they will be more likely to get started with a business.

He leads you the reader/parent through the various steps that you can take to assist (but not overwhelm) your child in deciding on, researching and setting up a business. He shows you how to tie key business concepts (such as marketing, pricing, location, etc) into your activities with your budding entrepreneur.

Of great assistance as well are the THREE chapters with ideas on what kinds of businesses can be started by kids at various ages, along with how much the parent would expect to have to pay in start up costs, lists of marketing ideas and more. For instance, one suggestion is: wash windows. Start-up costs would be around $25 for business card and, cleaners. Income could be from $5 to $50 per customer. The entrepreneur would give a demo in office or at a home (with parent along) by cleaning ½ of a window for free.

Obviously there is a parental (or mentor) time commitment in these activities. Interacting with your child in this area not only builds your relationship, but also shows your child that you have expertise and can help them.

Where else can we get information and resources about teaching entrepreneurship?

Junior Achievement.

Look for a local chapter of this large and historic organization (founded in 1919). They have (or you can help start) activities for elementary, middle and high school students.

Here is a description of what they do from their website: http://www.ja.org/ :

“JA Worldwide is the world’s largest organization dedicated to educating students about workforce readiness, entrepreneurship and financial literacy through experiential, hands-on programs.

Junior Achievement programs help prepare young people for the real world by showing them how to generate wealth and effectively manage it, how to create jobs which make their communities more robust, and how to apply entrepreneurial thinking to the workplace. Students put these lessons into action and learn the value of contributing to their communities. “

Kauffmann Foundation.

Here is a description of what they do from their website: www.kauffman.org :

“The Kauffman Foundation is working to further understand the phenomenon of entrepreneurship, to advance entrepreneurship education and training efforts, to promote entrepreneurship-friendly policies, and to better facilitate the commercialization of new technologies by entrepreneurs and others, which have great promise for improving the economic welfare of our nation.”

Check out the following activity with educator pages at http://www.allterrainbrain.org .  A description from the All Terrain Brain (ATV) parents page notes the following:

“Three Chicks Media, the Ewing Marion Kauffman Foundation, and WEATHERHEAD Experience Design Group have collaborated to create All Terrain Brain(ATB) to help kids ages 8-12 develop the self-confidence, perseverance, motivation, and creative thinking skills that are all part of being an entrepreneur. Based on the All Terrain Brain series of 25 fun videos, allterrainbrain.org encourages kids to take their brain off road, explore new ways of thinking and tap into their inner potential as an entrepreneur.”

Online Games.

See our games page for some of the many online and board games available to learn about having a business.

Other.

• The Network for Teaching Entrepreneurship at http://www.nfte.com/default.asp is a program, primarily for low income areas, to teach entrepreneurship to middle school, high school and young adults.
• Young Entrepreneurs at http://www.youngentrepreneur.com/ is maintained by the authors of Kidpreneur. It has a forum, blog as well as other resources pertinent to entrepreneurs (young or not).
• The book Kidpreneurs: Young Entrepreneurs With Big Ideas by brothers Adam and Mathew Toren is for the children themselves to explore.

Sources:

• Young Bucks – How to raise a future millionaire by Troy Dunn, published by Thomas Nelson with a 2007 copyright
• The Minneapolis Federal Reserve Bank Website at http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3482 quoted from: Reynolds, Paul D., and Richard T. Curtin, “Business Creation in the United States: Panel Study of Entrepreneurial Dynamics II, Initial Assessment,”

In the below video Cameron Harold extols the need to teach entrepreneurship: