No Kidding - young entrepreneurs

Kiplinger's Personal Finance Magazine, Sept, 2001 by Janet Bodnar

FAMILY | For YOUNG ENTREPRENEURS, there's no time like the present to get down to business. By Janet Bodnar

SO YOU think that kids today don't know the value of a dollar? Never do an honest day's work? Expect things to be handed to them on a silver platter?

Then you've never met Pankaj Arora, who, at 18, is a self-employed computer consultant; or Erica Gluck, 15, whose bright idea at the age of 7 launched a family business; or Devon Green, 10, who's bent on cleaning up the environment one can at a time.

Pankaj, Erica and Devon are part of a new generation of young entrepreneurs who are proud to wear a label that kids a generation ago hadn't even heard of. "Ten years ago, many adults didn't know what an entrepreneur was," says Bonnie Drew, editor in chief of YoungBiz Media, which publishes magazines and educational material for young people interested in business. But today's kids, with Bill Gates and Michael Dell as role models, "understand and think in business terms."

YoungBiz estimates that the top 100 young entrepreneurs in its annual survey earned a total profit of more than $7 million. While not all youth-run businesses make a lot of money, they all capitalize on simple ideas that appeal to their creators. Interview some of these young people and you want to smack yourself in the forehead and say, "Why didn't I (or my kids) think of that?" Other hallmarks of a flourishing kid-run enterprise are flexible hours, low overhead, good word-of-mouth--and parents who are upbeat, even when it means more work for them. "You can't be laid back with a child like this," says Mary Gluck, Erica's mother. "You have to make the time to help their passion along."

Erica's brainstorm

WHEN ERICA was 7 years old, she wanted to earn money so badly that she threatened to sell her teddy bears on the sidewalk. Then she had a better idea. She went to the two brothers who ran a pasta shop her family frequented, and asked if she could sell their pasta at weekend farmers' markets in the San Diego area. "Pasta was something we ate all the time," says Erica. "I really loved it, and I wanted everyone else to try it."

The first week they bought 120 packages at $1.25, intending to sell them for twice that. "We figured the worst that could happen was we'd be eating pasta every night for a month," says Mary. They didn't have to. Erica's pasta sold out, and Erica's Pasta was born, with an initial investment of $1.29 for a tablecloth.

Mary, an interior designer by profession, and Erica's father, Chris, formerly a general contractor, now devote all their time to the business. In addition to pasta, they sell pesto, olive oil and breads at three weekend markets, and during the week manage Pasta Press (www.pastapress.com), which publishes pasta cookbooks (for which Erica helped her dad create kid-oriented recipes) and other food-related material. "We never would have done this if it weren't for Erica," says Mary.

Now Erica's sister Katie, 12, has hatched her own sideline, Katie's Koop, selling fresh eggs at the Sunday market. Weekly sales total $250 to $300, and she keeps 10% of the profits. Both girls give 10% of their earnings to their church, save 50% and use the rest "for fun," says Erica.

She has pulled back a bit from the business to "be a teenager" on Saturdays--studying, hanging out with friends or holding down the fort at home while her mother goes to markets. But she still works every Sunday, earning at least $50 a week lugging cartons and coolers and organizing food demonstrations, one of her specialties. "She has a talent for food aesthetics and is good at getting people to try things," says her mom. In fact, says Mary, both girls are so critical to the business that "we'd have a hard time without them."

Pankaj's passion

I WAS BORN a geek," says Pankaj Arora, who started writing software when he was 12. He moved on to building computers, and now his business, paWare, "provides complete IT solutions for business."

Pankaj commands up to $300 an hour, and paWare could easily become a full-time job. (He ranks number nine on the YoungBiz 100, a list determined by entrepreneurial spirit and community involvement as well as business success.) But he fits his consulting around his school schedule--he graduated from high school in June with two years of college credit at Rochester (Minn.) Community and Technical College under his belt--often putting in 18-hour days.

He works by himself, but his parents lend lots of support. "We have PCs lying in every room and cable coming out of the basement," says his father, Jag, an engineer who works with mainframe computers. He and Pankaj's mother, Anita, a specialist in neurodiagnostic procedures at the Mayo Clinic, spent hours cleaning up their son's room before a visit from a photographer. Anita organizes his paperwork and frets that "food is not his priority. I fix a nice plate and leave it at his desk, and then he'll leave it to talk to a client."

At first, Jag worried that clients would get cold feet about working with a teenager and renege on their bills, but that didn't happen. Now he offers his son fatherly advice about staying in school. "I tell him it's like building a bigger engine. If you have more horsepower, you can go farther."