Where would we be without entrepreneurs? The world would be very different. Without entrepreneurship there would be no innovation; no inventive business ideas with the potential to revolutionize society, create jobs and boost our economy.
Thankfully, entrepreneurs are not a dying breed. There’s a new generation ready to take on the world’s problems and solve them. According to GoHenry’s Youth Economy Report, an enterprising 6% of young people have already started their own business and almost a quarter (24%) say being their own boss is a priority for their future career. What’s more, this desire starts as young as seven.
So what are the signs you have a budding entrepreneur on your hands? How do you encourage an entrepreneurial spirit and what skills do children learn from entrepreneurship? Read on for answers to these questions and more in our complete guide for kids.
How to explain entrepreneurship to kids
“One who organizes, manages and assumes the risks of a business or enterprise.” A dictionary definition isn’t all that helpful when you’re trying to explain entrepreneurship to kids.
“Entrepreneurs dream big, are passionate about what they do, work hard and don’t give up when things get tough” is a more child-friendly way of putting it. But to explain entrepreneurship more precisely, try using real examples.
Entrepreneurs find solutions to problems people don’t even know they have. Take Pleasant Rowland, for example.
Back in the 1980s, she saw a gap in the doll market. There were plenty of dolls for toddlers and there were Barbies, but there was nothing for girls aged 8-11. American Girl filled that gap. So successfully, that since 1986, over 16 million books and 36 million dolls have been sold.
But being a successful entrepreneur doesn’t necessarily mean you’re all about the money. It’s about your ability to innovate and change the way we do things. And that takes passion.
Apple co-founder Steve Jobs wasn’t motivated by money. His focus was doing something he loved and in the process, he created ground-breaking, game-changing products.
Why kids should be taught entrepreneurship early on in life
Teaching your kids entrepreneurship early on in life encourages self-reliance. It can also teach your children the value of money and hard work, about taking risks, learning from mistakes and the rewards that come from perseverance.
Starting a babysitting business young may not make your child a millionaire by the time they’re 18. But developing an entrepreneurial skillset early will help your kids through school and college, as well as in their future careers.
What skills do kids learn from being entrepreneurial?
Entrepreneurs share common traits. They have big ideas, even bigger goals and they think outside the box. To be a successful entrepreneur, though, requires certain skills.
To run and grow a thriving business you need to be able to manage money effectively. That means understanding income and expenses, cash flow and budgeting as well as tax. Teaching your children about entrepreneurship will accelerate their money management skills and instill a healthy respect for money.
When entrepreneurs encounter a setback, they don’t give up. They see failure as a necessary part of the learning process and focus on solving the problem and moving forward instead.
Children with strong problem-solving skills are resilient. They’re more likely to face challenges head-on and find ways to overcome adversity. They’ll see failure as a temporary setback instead of an ending point.
Successful entrepreneurs are critical thinkers. It’s a skill that allows them to assess opportunities, keep a business agile and pivot if necessary. Developing critical thinking skills — questioning what’s being said, analysing and evaluating the evidence to form a personal judgment— will help your child grow up making sound decisions.
To attract investors, entrepreneurs need to be able to articulate ideas and convince an audience. It doesn’t always come naturally. By starting a business young, your child will have plenty of opportunities to practice. Interacting with customers will help hone people skills that’ll support them in any future career they choose.
Successful entrepreneurs are focused. That requires strong time management skills. Knowing how to plan, create a schedule and stay consistent will help kids keep their goals in mind and cut out unnecessary distractions.
How to spot an entrepreneurial mindset in your kids
Is your child always questioning things? Are they creative? Do they understand the value of money? Are they always tinkering or taking stuff apart to see how it works? Chances are you have a kid with an entrepreneurial mindset on your hands.
Here are some signs your child might be a budding entrepreneur:
They show an interest in making money at a young age — whether it’s selling baked goods or mowing lawns for neighbors.
They love solving problems — almost to the point of obsession.
They’re calculated risk-takers.
They’re curious, always asking questions and challenging the status quo.
They’re independent — they get a kick out of figuring things out for themselves.
Different ways you can teach your kids to be entrepreneurial
Whether your kids show entrepreneurial traits or not, encouraging entrepreneurship will teach them valuable life skills. Here are some ways to go about it.
Encourage them to problem-solve for themselves
No parent likes to see their child struggle. But if you always jump in and help out, how will they learn to handle tough situations on their own? Mastering a difficult task is character-building. Resilience comes from learning not to give up when things get hard.
For example, tackling a household chore that stretches your child will require them to use problem-solving skills. Even if they don’t succeed, praising them for keeping going is just as important as praise for a job well done.
Encourage their curiosity
Children are naturally curious. But the dreaded ‘why’ phase is something you want to continue. Encouraging your child to ask questions, explore, experiment, probe theories and evaluate the results will help them learn to think critically.
To nurture curiosity, wonder out loud and ask them open-ended questions. Instead of dissuading your child from exploring other hobbies, support their passions. When kids are deeply interested in something they are more engaged and keen to experiment. Try to be open-minded and see where it takes them.
Encourage them to start enterprises
The best way to nurture an entrepreneurial spirit is by encouraging your child’s money-making ideas. Help them make a business plan [link to business plan guide when live], spread the word and be their first customer.
If your child isn’t ready to dive into starting a business but interested in the idea, there are plenty of video games that can help teach kids entrepreneurial skills.
Teach them financial literacy
It’s never too soon to start teaching your kids financial literacy. Research by the CFPB (Consumer Financial Protection Bureau) shows children develop financial habits in early childhood. Make money talks part of your everyday conversation and put theory into practice.
“If you provide children with an income — in the form of an allowance — you give them the opportunity to have real life practice with managing their money,” says Beth Zemble, GoHenry’s VP for Education. To reinforce the link between earning and work you could consider paying extra allowance for completing weekly chores too.
Successful young entrepreneurs who have a thriving business
For Texas-born Mikaila Ulmer, overcoming her fear of bees after being stung aged four, resulted in a thriving lemonade business. Me & the Bees lemonade now sells over half a million units a year across the US. Mikaila’s book Bee Fearless: Dream like a Kid was published in 2020 and she’s now developing new product lines, including a natural beeswax lip balm.
Moziah Bridges started Mo’s Bows aged nine at his grandmother’s kitchen table in Memphis. Over a decade on, he’s expanded the business to include other accessories like neckties and hats. He’s also published a book: “Mo’s Bows: A Young Person’s Guide to Start-Up Success”.
Success stories from the GoHenry community
Our Youth Economy Report revealed that more and more kids in the GoHenry community are rejecting a conventional career path in favor of being their own boss. What’s more they’re making a success out of it.
15-year-old Ella, for example, started a lemonade stand.
“I’m someone who likes to plan ahead and I started thinking about college and cars. I thought if I could make a profit off of this, like serious profit and hire my family, it could be a great financial opportunity. That’s how I looked at it, and last summer I made $500.”
Matilda (12) went into the cupcake business.
“Last year I came up with the idea to sell cupcakes, and my mum helped me get some business cards printed. We asked if they could be displayed in the local grocery store, and orders soon started coming in. During the summer vacation I was earning about $75 per week – enough to buy a new bike!”
Creative business ideas for kids
Is your child eager to create a business but short of ideas? Here are a few to get them started:
Tech-savvy children could earn money helping friends and relatives set up new devices.
Animal-lovers could start a pet-sitting business, or offer a dog walking service.
Crafty kids could sell stuff they’ve made on platforms like Etsy or at local craft fairs.
Neighbors might be glad of an enterprising teen offering lawn care and mowing services.
Gift wrapping services or making cards and decorations will be in demand during the holiday season.
If your kids are still stuck, find more ways to inspire them in our article on helping your young entrepreneur find the right business idea.
How GoHenry can help
When it comes to encouraging an entrepreneurial spirit in your kids, GoHenry can help. An easy way to get your child financially independent is to allow them to have their own kids' debit card. They’ll learn to budget their money, spend wisely and manage cash flow too.
Plus, if you decide to pay your child for chores, you can set up tasks on your GoHenry app. They get paid as soon as the chore’s marked complete. And our in-app Money Missions tool is designed to accelerate financial literacy through fun videos, quizzes and interactive games.