Guiding a Kid with an Entrepreneurial Bent

Parent Cafe
1

One of my college kids seems to have a leaning towards and personality for being self-employed at some point down the road. Having spent our lives as employees, my spouse and I have limited direct experience to help with guidance.

So, if you have experience creating and running a business yourself, I’d love to hear what kind of advice, guidance, anything really you would give.

If your own child is self employed and has started a business, I’d love to hear those stories and experiences as well, especially if it is something more “brick and mortar” as opposed to creating an app, but really anything at all! I’m all ears.

This is a down the road in a few years type of thing at the moment. One thing we have talked about and that my child has implemented to some degree is working for and learning from other small business owners. Thanks, all!

2

Is this a small college or a large U? The reason I am asking is that if the college has an MBA program, that business department could be a wealth of information and provide an outlet for the kid to test the entrepreneurial gene. For instance, here in my neck of the woods, U Dub runs an idea lab open to all students and a very popular BPC. The BPC is also open to students of all colleges in the state, not just to the ones that wear purple and gold. The competition is definitely not limited to techies. One year, a kraut-making group won one of the top prizes! Another year, a startup that created a bra got the top honors. :slight_smile:

3

Thanks, @BunsenBurner

Small LAC although they do have some entrepreneurial oriented elements and several classes that my kid will look to take. A lot of it is the techie type stuff, however, but not all.

Kraut - yeah, fermenting has become a huge thing! My gramps with his kraut crock would be fashionable now. :slight_smile: One of the many angles my child is thinking about involves fermenting.

4

Well it helps when you can buy your company from your folks as I did! :slight_smile: (20 yrs ago!)
But seriously— my D is like me, artistically bent but realistic. She has started her own little business in the EU — editing webinar videos. She still has a contract to sing, but on some of her days off she has all the work she can get and recently hired a friend to help her out with the overage. I told her — that’s how companies start out. Most importantly keep track of money. People do not value what they do not pay for.(Even when she taught voice—she insisted on being paid a month ahead of time. )She may grow it or not—just keep it organized and organic. Organic in that, if she is good at it, it will grow of it’s own volition.

I am just about (fingers crossed) to sell my own company to a much larger organization. And then back to painting full time. It’s been good to me while it lasted. But,let us see.

5

There are many large schools that run similar BPCs that are open to in-staters as long as they are college students in the state. There are real money and fame as well as exposure to the VC community. So do check for “business plan competition yourstatebigU”.

Here is the local one, for example.

http://foster.uw.edu/centers/buerk-ctr-entrepreneurship/entrepreneurship-competitions/business-plan-competition/

6

I also believe that there are a lot on niche markets in the small business sector rather than the larger corporate sector. When D stumbled on this opportunity it was when she was just making small talk with another ex pat in a coffee house. I pointed out to her that many small business’, like my own, still need big business services but we cannot afford things like a full time IT department. She fills that specific niche. Producing content for the web sites of small companies. I don’t need to go into detail, but she services a very specific sort of company and has developed a client base through word of mouth. She also was able to turn that chance meeting into a serious business relationship. I’ve pointed out to her, more often than once, that dependability and professionalism are not really the hallmarks of her generation. Surprise them.Become dependable and professional. Become a good networker and know an opportunity when you see it. Then build it well and they will come. Whether or not she takes this further, I don’t know, but as a young artist she now has some actual options between gigs.

7

“I’ve pointed out to her, more often than once, that dependability and professionalism are not really the hallmarks of her generation. Surprise them.Become dependable and professional.”

This is so true and excellent advice! I hate to generalize, but I’ve found it particularly true in more artistic arenas.

8

Our S is an EE, but as his hobby buys and then re-sells items on Amazon. There are a lot of folks and companies doing this. He makes more with the hobby than with his full-time job, but gets better benefits from his job. Having both gives him more balance and a better financial cushion. He was buying and selling things on Amazon and ebay in college and has pretty good instincts about what to buy and what will sell. He does a lot of research, but enjoys it, so it’s still “fun.” He has a solo 401K for the “hobby,” which we encourage him to max out from the employer’s side, as he maxes out from the employee side at his job where he is an employee. He also funds a Roth IRA.

9

Thanks for sharing, @HImom. Out of curiosity, does he only sell for himself or does he consign from others? Does he have a niche he specializes in? It’s nice he has a side gig that he enjoys AND brings in great income. I would also imagine it is something he can invest more time in or pull back on depending on his free time and whim at the moment. Nice to have those employee benefits, too!

10

If your kid wants to bootstrap it, it would be helpful to know something about the following subjects:

  • Marketing (learn how to get the product to your target market and persuade them to buy it)
  • Economics (micro- at least) -- learn about some of the theories behind what makes businesses, consumers, investors and labor tick.
  • Finance (got to figure out how to fund the business and take out additional capital for expansion; the difference between, and uses of, debt and equity; and learn about the Time Value of Money.)
  • Accounting, both financial and managerial. (you need to be able to produce and understand a basic snapshot of your firm -- the balance sheet -- and keep accurate quarterly statements.)
  • Operations Mgmt (how to efficiently utilize labor, capital and processes to produce a lot of product at relatively low cost so that demand can be consistently met at the price it desires)
  • Business Law (learn about the different types of businesses and basic contract law)
  • International business (just in case the firm goes global, it will be helpful to know about currency and trade issues)
  • In support of Marketing, a Demography (or "Population Studies") class and a Psych class would also be helpful.
11

He did sell books for classmates in college and they’d split what he earned. Since then, he has only sold things he buys new.

He buys things he thinks he can make a significant profit, since he has to take into account postage, Amazon’s share, and some profit to make it worthwhile, as well as the small % of deadbeats and scammers he runs into. He buys things he knows pretty well, for the most part, so he knows the market and values.

Another friend buys things from abandoned storage lockers as well as lots from lost and found from airplanes. It’s amazing the stuff he ends up with and sells them at a store in Denver.

12

I own a small business. There is so much I could write a book myself. I’d suggest working at a few different companies first to see the flow of business with an idea of what does and doesn’t work. Just plain old business 101.

He has to answer what will make him unique and stand out from the competition. Find an accountant he trusts, find a lawyer he trusts. There are a ton of laws out there he may never heard about. We started with a payroll service right away so we never got in trouble with the irs. Even if you don’t make money you have to file business taxes.

Don’t grow faster than he can afford. People go broke trying to get too big too fast.

Under promise, over deliver. Do not hire employees until he absolutely has to, and then hire to fill his weakness. Never assume you shouldn’t have to do anything. I am not above any task in my business. I’m a firm believer in solo business. Never get a partner, never hire family.

13

." Find an accountant he trusts, find a lawyer he trusts. There are a ton of laws out there he may never heard about. We started with a payroll service right away so we never got in trouble with the irs. Even if you don’t make money you have to file business taxes."

YUP! Especially the accountant. Like I’ve mentioned before—my graduation gift to D was an hour with an accountant who specialized in her field. She still uses him since she files business and personal taxes in the US as well as in Europe. She has a European tax accountant as well. This will ultimately save your young entrepreneur time and money.

" Never assume you shouldn’t have to do anything. I am not above any task in my business."
my title: CEO and TPP**

**(toilet paper procurement specialist).

14

There is something else I think besides the great advice above (often towns and cities have something I know NYC does, they have retired business people who are there to help those starting a business or thinking about starting a business, can be really valuable).

The biggest thing I think that the OP and their spouse can do is to encourage the kid, and also to let them know that as much as you can, they have something of a net available if things don’t go right. If the kid is truly entrepeneurial, knowing that someone has his back, even if it is simply to give them encouragement, is huge.

They will have plenty of people telling them that going the entrepeneurial route is impossible, that they likely will fail, that it is the road to ruin, that they should be looking for a job that pays well and will provide career advancement, benefits, etc. He needs to hear that it is okay to fail, that typical entrepeneurs who are successful have quite a few failures before becoming successful, that trying and failing is not a crime nor does it reflect on him. One of the things that scares me these days with parent’s obsession about kids being on the right path to an elite school, the whole focus on doing things that are safe or play the admissions game, is that that is the direct opposite of entrepeneurial spirit, the whole idea is to do something new and different and take risks. And in this climate, many of the same people who laud business people who have created something new are often the same people saying ‘you’ll be sorry’, yet those business people failed a lot (I think the typical profile is like 6 failures before a success).

Having his parents encourage him will go a long way to dispel the naysayers, as much as we think we don’t have influence, we do. In some ways it isn’t much different than kids going into the arts, which is a leap that is seen as risky and potentially fatal, and encouragement and support is huge. Again, knowing there is someone there encouraging them and also who has their back is huge, even if the only thing parents can give is their love and support, that is huge. Thing is, if the kid is entrepeneurial at heart, then he will want to do it on his own and likely only needs the encouragement (that, and maybe keeping him on your health insurance until he is 26:).

Another thought is he should reach out to entrepeneurs he has heard of, write to them, and ask for advice, I know two people who did very well as entrepeneurs, the guy who is the CEO of the company I work for now, and the guy who founded our division and sold it to this company, and both of them love it when others reach out to them and ask for advice, because they were there and know what it is like:).