The other night, I was over at my friend Caren's house for dinner, and she and her son were strategizing their lemonade stand for the next day. Caren suggested using powder. Her son insisted insisting on the real thing. His argument was that it's faking it if you don't make it from scratch. Her argument was that the lemons were too expensive. He was going for authenticity. She was going for a return on investment. It was a classic founder/investor conversation.
Kids are natural entrepreneurs. Earlier this year, there was a run on glue because so many kids were making and selling slime. A few years ago, the trend was bracelets made out of little rubber bands. My kids (7, 8 and 9) made a killing the other day selling “stress paper" (paper that is covered in tape so that you can't rip it) to the women who do my hair and make-up at MSNBC (I host the show Your Business for the network).
What Parents Can Do to Raise an Entrepreneur
Despite this, I believe that many parents do not take the opportunity that my friend Caren did to try and turn this entrepreneurial instinct into a lifelong lesson. So, my sister and I decided to write a book called The Startup Club—a fictional story for elementary-aged children about two best friends who start a company called CJ Chainz. Through it, readers learn (in a fun and age-appropriate way) the difference between revenue and profit, how to deal with competition, what to do when you work harder than your co-founder and how to make the perfect marketing materials.
The Startup Club
According to the 9th Annual T. Rowe Price Parents, Kids and Money Survey, which surveyed more than 1,000 parents and children aged 8 to 14 in January 2017, the majority of parents only talk about money when their kids ask about it, and yet, parents who do have these conversations have kids who are more likely to say that they are smart about money. As an entrepreneur (I founded the coupon company Goodshop) and a television host who covers business, I have used business as a way to get my kids thinking about money. Regardless of what jobs our children have when they are older—whether they start something on their own, or join a large organization—an entrepreneurial attitude will serve them well. So, as a family, we spend a lot of time around our dinner table and through our days doing fun things to help our kids understand what it takes to start and run a business.
Want to cultivate your children's entrepreneurial instincts? Here are some activities you can do with kids of any age to teach them the basic concepts of running a business.
Profit and Loss
Ask your kids to come up with an idea for a simple product that they could sell (for example, lemonade, cookies, rubber-band bracelets). Then have them take a quick guess at what they would have to price that product at to make a profit. Next, go to do the math. You can take them to the store or look up the prices online to find the cost of the supplies. Once you have those costs you can show your kids how close (or far) they were on their pricing strategy.
Bring home three cereal boxes and ask your kids what they like about each box. Have them talk through the design, the information written on the package, the logo and anything else they notice. Then, ask them which one they like best and why. This helps them start to think about the best way to convey information about a product.
Get a group of three kids together (bring in some friends) and ask them how they would divide up the work if the three of them started a lemonade stand (or other business) together. Let them each think about what they are good at that might contribute to the business. Then, have a discussion about if one person should ultimately be in charge, and if not, how they will work together equally.
After your next visit to a store with your kids, ask them how they thought the salespeople treated you. You can get into details of what went well and what could have gone better.
Ask your kids to come up with a business idea. Next, have them ask all their friends if they think it's a good idea and if they'd be willing to pay for it. They should write all the feedback down and then evaluate whether they still think their idea is a good one and what they can change based on the feedback.