@Happytimes2001 thanks. Love it “Let the market lead rather than having your idea of the product(s) drive the business. The market will decide if the idea is valid.” I am forwarding all the ideas shared in this thread with my kid and his friends. So far so good.
@casinoofny Also, never borrow money. Ever. If you need to borrow, the business isn’t supporting it. I know there are some who borrow and build or borrow to leverage, but a business with a great cash flow is a great thing.
And if your kids are going into tech make sure they get patents/trademarks and don’t share the technical details with venture capitalists until they have a signed non-disclosure or better a check.
@Happytimes2001 Business was started while in high school, but it was on a very tiny scale. Last year they became serious as it is already cash flow positive. Not going to VC as they want to grow and make it self sustaining for the time being. Thanks
@Happytimes2001, Silicon Valley VCs don’t sign NDAs. Depending upon the business, speed is more important than patents if there is a tradeoff. If you have scale, it won’t make any sense for others to copy you. If you have a patent but don’t have scale, someone will have found another way to serve the market while you are getting the money to pay to get your patents.
In others businesses, patents are critical. I have helped a client who spent a fair bit of money on patents for the US, Europe and elsewhere negotiate settlements of infringement cases for significant 8 figure amounts. Still quite a few to settle.
@shawbridge Actually they do sign NDA’s/contracts and there are other ways to share info ( I used NDA because that’s the easiest to understand). We know from experience and it’s not just VC’s that you have to be wary of it’s other “helpers” The suggestion is meant more in the gist of, don’t trust people who have really deep experience building and buying companies who seem too nice when they want to learn how a company does what it does including sales and go to market.
There are ways to share info (if needed) and still make sure companies don’t give away the farm. Many young entrepreneurs believe that having a VC or Angel investor with a big name is going to treat them ethically. They won’t. They are in it to make money. Often they buy in and sell out before the founders are ready. There are many companies who lost their idea to these “nice people” In the sense of having someone like an attorney on your side who knows what to share. Also having someone on your board is better than having an Angel investor with his/her hand in your pocket. Been in that business for 30 + years so we and friends have seen it all. Patents and trademarks are slow ( and also give away details) but holding info tightly is a proven technique. A good lawyer or retired person in that industry can help.
Young kids are too open and give it all away when the $$ people say they are interested in their idea. People starting their first company should have someone on board who is ethical and knows the tricks to protect them from someone who is unethical and knows the tricks 
@Happytimes2001 Thank for these detailed messages. You have been very helpful.
@casinoofny Sure. If you ever have a specific question send me a message. I love helping young entrepreneurs as does everyone in our family.
@Happytimes2001 thanks!
In my first couple of years of business I did not like to look at my finances if I was having a slow month or a slow quarter. I thought if I ignored the “negatives” I would somehow feel better. As one can imagine, it did nothing but cause me more stress. I finally learned to always stay on top of my books no matter how dire or bleak the numbers were at the time. It still caused me stress,: but it was manageable stress, and I was always able to guide the business back to a more profitable place.
I also had to overcome the fear of handling the difficult phone call or the difficult conversation. I would procrastinate and not call people/clients back as timely as I should have because I was fearful of how the conversation would go. Again, one can imagine that it just made matters worse and caused me more stress. Once I became able to manage my fear of handling the difficult call, I was able to deal with the situation and work to rectify it; and I always felt positive even after a difficult conversation.
Realitycheck I usually make the hard stuff the first thing in the morning while I am drinking my very strong cold brew coffee. Nothing worse than something hanging over one’s head.
Even when it is small…run it like a legit business…pay taxes, get tax ID #, file return. Even if they have to pay a tax preparer to do all of this. My Daughter started a business in HS…but this is the way she did it. Good luck to them.
Highly recommend the book, “The E-Myth, Why Most Small Businesses Fail and What you Can do About It” by Gerber. Have read it many times. Quick but fascinating read that focuses on the differences between a Technician, a Manager, and an Entrepreneur. Really great story about starting a business and properly resourcing it to scale.
@rickle1 thank you. I love the wisdom parents offer here. Everyone thanks so much! Please keep posting as I am sure many other students will be benefitting from this also.
Yes to this! Take cash flow and fund your business. Pay yourself a salary (you are an employee of your business). Incorporate or form an LLC based on your situation (speak to a CPA. File taxes, make payroll tax contributions, etc. Even if it’s just you, prepare for growth so you’ll be able to plug others in.
Been some great comments re the difference between a Lifestyle Business and a scaled business. Most small businesses are lifestyle businesses (whether they know it or not). That’s OK. Actually, it’s great. As the name implies, you/ your firm can be of great value to your clients, you can employ others, and you can make a very attractive income that provides the lifestyle. Lots of these out there.
Just know what you want to be. The reality is many lifestyle shops want to scale, they just don’t know how or aren’t willing to function like a scaled business (aren’t reinvesting most of the profits back in to expand, add capabilities, etc.)
I’ve had two, one of each. Actually, the one that was meant to scale failed partly because of the regulatory environment and mostly because I wasn’t a good operator. I was great at generating revenue, but lousy at scaling and planning. Also didn’t want to take on debt so ran it like a cash flow business. Took me a long time to figure that out. Be honest with yourself.
Does any parent have suggestions on marketing aspects? This is the area where kids are struggling as business is spreading through word of mouth. Does outreach works if you use advertisements on Google or facebook? Kids used FB and google but success was limited. Most business is coming through referrals as current customers are happy and they in turn telling their friends who are switching. Business service is better and cheaper. Business has a feed back loop. If customer want something else, they are trying to provide additional services, if they can and if not possible telling them they are looking into handling that aspect.
There are many online courses even some starters for free for marketing with just about anything like Instagram, FB, etc etc. Everyone has a theory since their selling their classes online but some actually have some good ideas. Building marketing success takes time. Kids want overnight success. Many overnight success were years in the making.
@knowsstuff Thanks and I understand kids impatience. Just saying that society ultimately benefits due to entrepreneurial dreams made real by folks. Education is a tool to broaden mind. Many folks, with great ideas ,who do not attend college still become big entrepreneur and contribute to society. Today’s ideas are tomorrow $$$$$.