Many teens will spend their summer vacations lounging on the couch, watching TV, or playing video games non-stop. However, nearly every one of them would like the opportunity to make money to spend how they want. Why not encourage your teen to start his or her own summer business? This is a way to keep them occupied, engaged, and making money that is their own. It’s actually not that difficult to teach your child the basics of a business venture even if you don’t know how yourself.
1. The Idea – First, you’ll need to find an idea that works best for yourself and your teen. Lawn-mowing and yard care is always a highly sought after service your teen could invest in. Selling night-crawlers if you live near a river, lake, or reservoir could be ideal as well. The whole purpose of this step is to fill a need that is neglected in your area that is safe for your teen to practice.
2. Bookkeeping – If you don’t have the money to purchase proper bookkeeping software from the likes of Intuit for the simple use of your teen’s new business, free accounting software can be used such as GNU Cash. Have the teen set up the entire account in order to start tracking funds, inventory, and supplies. You can even go so far as to demonstrate how net-worth works from a business perspective. Although you may not have an actual bank account open for your teens business, have a cash reserve that is labeled “bank” as a reference.
3. Supplies and Inventory – Once the accounting software has been set up and ready to start entering information, now is the time to gather the supplies. While your teen may not have the money to invest in what is needed, you can demonstrate how a “loan” or even how purchasing “shares” in a company works as you supply them with starting capital. Once this has been established, the teen will need to develop a supply and inventory list as well as any equipment he or she needs in order to complete the task.
4. Advertising Budget – If they don’t know you exist, how are they going to contact you? Helping your teen set up an advertising budget will demonstrate the importance of marketing. Although this may entail simple flyers, business cards, and pin-up sheets on cork-boards at the supermarket and telephone poles, it is still an important lesson about the importance of marketing your business for success. You could even get creative and put some graphic design lessons within this aspect if you have a talent for it. At any rate, advertising is important for any business and staying within the allotted budget could mean the difference between survival and bankruptcy.
5. Payroll – As your teen is probably not going to be able to afford his or her own hourly wages, you’ll need to help them determine a fair commission of the services. This is where strict adherence is important. You need to teach the teen that the business needs to be able to sustain itself for continued growth. If they were to take all of the money, there would be nothing left for advertising, equipment, or inventory. The commission should be able to give them a little bit of spending money, but not too much to starve the business.
6. Employees – What teen doesn’t want to include his or her friends in the business venture? However, does your teen understand what it means to take on additional help? Although they won’t have to worry about insurance premiums or social security taxes, they will still need to realize that increasing the payroll budget decreases another aspect of the business. Having additional help could increase the income in a business that is geared towards timeliness or services that are on location. Two lawn-mower customers at once are better than one.
7. Strategies for Improvement – Using the reports generated by GNU Cash or other bookkeeping software, your teen can see where the money goes. This can help them develop a strategy to increase profits by lowering costs or coming up with plans and innovations to increase revenue. In this regard, the teen will need your help or you can sit with them as they scour the Internet for suggestions and ideas. You might learn something yourself by this experience.
A summer business can work for your teen in a variety of ways. It can teach discipline, dedication, bookkeeping, and could possibly instill pride and responsibility in your child if you support their ideas. They will be faced with real world challenges and have to develop ways to overcome disadvantages. It is a worthwhile endeavor and could inspire your child to continue learning more about business ethics and social responsibility. In any event, it will be a learning experience as they have an opportunity to make their own money to spend in any way they wish.
Rachel is an ex-babysitting pro as well as a professional writer and blogger. She is a graduate from Iowa State University and currently writes for www.babysitting.net. She welcomes questions/comments which can be sent to rachelthomas.author gmail.com.