The wonder years: are your kids starting to ask questions about where businesses come from? Remember, it's never too early to teach young people the value of entrepreneurship

Entrepreneur, March, 2004 by Julie Bick

At age 6, Rachel Shein went door-to-door selling her little sister's birthday party balloons--until her parents caught her. By the end of elementary school, she was hawking brownies at the local ball games because she figured they were higher margin than lemonade. That same year, she was keeping the sales and expense ledgers for her mom's needlepoint store and her dad's real estate office.

Today, Shein and her husband, Steve Pilarski (also the child of entrepreneurs), own a multimillion-dollar bakery business in San Marcos, California, supplying pastries to coffee shops from Los Angeles to the Mexican border. They love the excitement, the creativity and the challenge of running the company, and they want to pass on that entrepreneurial spirit to their three children.

Nobody's sure if great entrepreneurs are born or made, but parents and schools around the United States have been embracing the value of teaching entrepreneurship to kids. From the venerable Junior Achievement Inc., an organization that reaches 4 million young people nationwide each year, to the mom and dad who bring their small-business problems to the dinner table each night, America's next generation is grabbing a ride on the entrepreneurial tidal wave. A recent Junior Achievement poll showed that nearly 75 percent of teens indicated they would like to start their own businesses someday.

SO MUCH TO GAIN

The benefits of teaching kids how to run a business are endless, according to Doug Miller, director of Children and Youth Entrepreneurship Education at the Ewing Marion Kauffman Foundation, a nonprofit organization dedicated to fostering entrepreneurship. "Kids gain life skills like responsibility, follow-through and communication. They learn business skills, like how to manage scarce resources," he says. "But most important, kids gain tremendous self-esteem as they try to overcome obstacles or see their ideas start to work. It all sounds too good to be true, but we have 20-plus years of research that says it is [true]."

There are a variety of ways for kids to sample from the business buffet of life. In the Shein-Pilarski household, the kids come to the bakery from the time they're born. "I'd show up to a customer meeting with a plate of scones in one arm and Spencer in the other," remembers Shein. "We share our enthusiasm with the kids, our love for what we do every day." Shein and Pilarski also talk about the bakery's problems in front of the kids--but not always all the ramifications. "We may lose a big customer, and Steve and I are thinking to ourselves 'How are we going to pay the mortgage?' We may share the information, but not our fears."

For other business owners, like Dr. Chris Miller, 53, psychologist and founder of the brainstorming and product design firm Innovation Focus Inc., raising entrepreneurial kids means giving his children a significant role in the business. When each of his sons reached the ripe old age of 10, Chris let them tag along to client meetings to participate. Some companies were skeptical when the junior help walked in the door. But it made sense to include them in his line of work, explains Chris. "For example, teenagers get headaches, too, so it was important for the client team from Excedrin to hear young people's attitudes toward headaches, how they feel about taking medicine," he says.

And what do the kids say? Chris' son Noah, a twelfth-grader who plays on his school's lacrosse team, gets a huge kick out of the whole experience. "I love to travel. I've gone with my dad to Chicago, New York, Colorado. I help get the session ready, like laying out name cards, hanging up displays." But he's most proud of his ideas. "After a big idea session, my mind is empty. I'm exhausted, but it's a good exhaustion. Like I've done something valuable." The approach also seems to be working for Chris' business. Innovation Focus, based in Lancaster, Pennsylvania, won the 2002 Ernst & Young Entrepreneur of the Year Award for Services in Central Pennsylvania.

TESTING THEIR WINGS

If you're not ready to let your kids join your company, or think they'll get more out of starting their own venture, help them kick off a business. Kids make great entrepreneurs because they have a lot of time and energy, and they don't have to worry about paying the mortgage. Plus, kids naturally think outside the box because they haven't yet been inside the box.

The first step is to listen and find out what they're interested in. Do they love to bake? Take care of pets? Run errands? Fix things? Next, help them figure out who their potential customers are, how to reach them, and what the message or selling proposition is going to be. Brainstorm with them on who the competition is, their pricing and how they can offer something with superior quality, price or service.

Once your child has decided on the type of business, who they are selling to and who they are competing with, plan out the resources they'll need to make, buy or borrow. It's also a good idea to create a little cash-flow model showing the inflow and outflow of money to see if the business is going to stay solvent.