Is your child eager to put a business idea into action? If so, they aren't alone.
Our latest Youth Economy Report shows that over a third of children have a part-time job of some description, yet, traditional earning methods such as babysitting and dog walking are falling out of favour as it becomes more lucrative to earn from home.
The entrepreneurial attitude of Generation Z means that 26% plan to be their own boss in the future, with one in five (21%) saying this is their career priority.
"It's inspiring to see the ambition of young people when it comes to earning their own money," says Louise Hill, COO and co-founder of GoHenry. "The future of work is rapidly changing now that kids are growing up surrounded by people just like them, who are starting businesses from their bedrooms and making money thanks to the explosion in digital opportunities."
If you want to inspire the entrepreneurial side of your child, here's how to help them launch their own business.
What age can you get a business licence?
It’s important to pay attention to the legal requirements even when a business is run by a child. For example, for certain businesses, such as playing music, selling food or trading in the street, you will need a licence.
To obtain a business licence, you must be at least 18 years old, pass an identity check and a criminal record check.
If your child is under 18, you can obtain this on their behalf.
There are also rules you must follow if you:
In the UK, the age of contractual capacity for individuals is 18, so a child can’t sign a contract, but a parent can on their behalf.
You may also want to consider Public Liability Insurance for your child if they are working for members of the public in any type of property or outdoors in the garden, this insurance protects from the cost of any unexpected incidents that under 18s could be liable for.
Other important points to remember when helping your child form their their own business
- Ensure your child researches their business idea before they start – they should know who their customers are and how they will sell their products.
- Give your kid advice and help, but let them do the work.
- Teach your kids how to be savvy about their business decision-making.
- Make sure they get customer feedback to improve their offering.
- Emphasis the importance of tracking their daily or weekly incoming, outgoings and expenses.
- Let your kids learn from their business mistakes.
- Show them how to save the money they earn and re-invest it in their business to help it grow.
- Ensure they know who their competitors are – as this will affect their sales.
- Talk to them about how to make a business successful i.e. motivation, hard work, attention to detail and customer service.
- Give them help with determining a price for their product or service.
10 Steps to help your kid launch their business
1. Help them decide what type of business they want to start
The key to helping your child launch a business is to make sure they are passionate about what they want to do. This means they will be motivated to work hard, and are more likely to stick to it when it feels hard.
Start by seeing if they have an idea and if it's viable. Perhaps there’s a gap in the market, or they’re aware of something they know their friends are interested in doing (remember the loom band trend and fidget spinners craze).
If they are stuck on where to start, here are some ideas to mull over:
- Car washing
- Lawn mowing and landscaping
- Pet sitting.
- Dog walking
If they need further inspiration, see our posts below which can help them get started:
- 25 simple and creative things kids can make and sell
- The best small business ideas for kids
- 30 small business ideas for kids
2. Create a business plan with them
A business plan is a written account of your business idea. It allows your child to focus on what it takes to plan out a business idea.
A good business plan includes information about the core business idea, customers, how to reach your customers, startup costs, and pricing so that you can make sure you'll make a profit.
The Princes Trust has free templates to adapt to your child's needs and age.
3. Give them honest feedback and suggestions
As encouraging as you want to be, you need to be willing to give constructive feedback, so your child can use their money and time effectively.
If they have an idea that you know won't work, tell them and try to adapt it together into a workable idea.
At the same time, the goal of launching their own business isn't to make millions but to help them learn business and life skills such as money management, good communication, and customer service (as well as a bit of profit.)
4. Introduce the concept of money management
Money management refers to how your child will handle the financial side of the business, from budgeting, to incoming payments, outgoing costs, saving and investing their profit.
This is where GoHenry can help – the app allows your child to track the incoming and outgoing money for their business very easily.
5. Work on their customer service and communication skills
If you have a very confident child, customer service and communication will likely come easy to them. However, many children find the communication aspect of running a business tricky.
You can help them by ensuring they are clear about what they are selling, the price of the item or service, what this entails (is delivery included, for example) and what they will do if the customer isn't happy.
Role-playing some scenarios with you can help them to know what to say and do in certain situations.
6. Manage the legal requirements with them
Kids don't need permission to run a part-time business from home; however, they need to be aware of specific product sales rules.
Anything they sell must be as described, of satisfactory quality, and fit for purpose. The buyer is entitled to a refund if the product fails to meet any of these criteria.
7. Pay taxes (if needed)
Children under 16 in the UK don't have to pay taxes as long as their earnings don't exceed the maximum amount of personal allowances, currently £12,570.
However, once they reach 16, they need to start paying National Insurance (usually a flat rate of £3.15 a week). These are known as National Insurance contributions, and if you're over 16 years of age and have self-employed profits over £190 a week, you need to ensure this is paid.
8. Let them make realistic business goals
Ask your child to set some business goals with you. These could be financial goals (we'll make X profit in three months), or achievement goals ( in 12 weeks, we will have sold X amount), and anything else they want to achieve.
Revisit these goals in three months and see whether your child has achieved them. This enables them to reassess where they have been going right and wrong with their business.
9. Help them create an online presence for marketing
Marketing is vital for business. How will your child's customers hear about your services or products without it?
You don't have to spend money setting up a website, as social media is an excellent place to promote your business.
An Instagram account, for instance, allows customers to contact you, read reviews, see what services or products you offer and find out what offers you may be running.
10. How can your kid get paid?
One of the most important aspects of launching a business is how people can pay for goods and services.
While some people pay in cash, there are multiple benefits to your child being paid via an online transfer to their GoHenry prepaid debit card account.
The GoHenry app will allow them to track incoming money and set up a separate savings pot to place their earnings. As a parent, you can also use the parental features to keep an eye on who has paid and who hasn't and help your child chase payments.