What did you want to be when you were growing up? A doctor? An astronaut? An entrepreneur? It’s unlikely that you chose the latter because starting a business is not often on a kid’s to-do list. Yet, with the global workforce shifting to part-time, freelance, or self-employed work, having financial and entrepreneurial knowledge will become as important as knowing how to read and write.
Children should be exposed to entrepreneurial skills early on, so that they are comfortable and confident managing their own money one day. But they’re not yet getting that exposure. Only 19% of respondents to research conducted by the Sage Foundation and Livingfacts said they discussed money matters with their families when they were young. Those who did were more likely to own a business today.
Here are a few ways that parents and teachers can start teaching children the mechanics of running a business and being financially independent.
- Turn it into a game. If you want to bore a child, talk to him about debt and interest. Children learn through play, so when you’re talking about money, make it fun. Whether it’s a family game of Monopoly or setting up a make-believe shop, think of engaging ways to teach children the value of money.
- Go back to basics. Encourage your child to turn something she loves into a business. If she loves animals, she could walk the dogs in the neighbourhood. Let her come up with a name for her business and help her to set prices and create flyers to hand out to neighbours. When she’s made her first wage, explain the importance of reinvesting a portion of it back into her business.
- Look for opportunities for growth. A dirty dog is an opportunity for your child to expand her services to include dog grooming. If lots of dogs need a scrub, she can ask her friends to help and pay them part of her fee. Now she’s a real entrepreneur – she’s scaled her business, created job opportunities, and provided additional value to her existing customers.
- Watch it grow. Humans are visual learners. We remember more of what we see than what we hear. When teaching your child how to save money, label three glass jars with the words ‘save’, ‘spend’, and ‘share’. He’ll feel a sense of accomplishment watching his savings jar slowly fill up, until he has enough to buy a toy he’s been wishing for.
Encourage him to save at least 10% of his pocket money and anything extra he earned helping at the dog wash. Divide the rest between the ‘spend’ and ‘share’ jars. He can use that money to buy dog shampoo and to donate to the local SPCA. Essentially, you’re teaching him the importance and value of budgeting.
- Teach the hard lessons. Running a business is not always fun and often means doing things you don’t want to – like picking up dog poop. Entrepreneurs learn how to get comfortable with sacrifices, failure, and sleepless nights. Some weeks, there won’t be any dogs to walk, or a rainy day could ruin your child’s plans to wash the car for extra money. She might feel like she’s failed. Teach her resiliency and to try again tomorrow.
- It’s not only about money. Successful entrepreneurs are just as good at the softer skills of business as they are at managing money. Teach your child how to have engaging face-to-face conversations, how to write an email using full sentences and no text speak, and how to respect the decisions of others.
- Take part in Entrepreneur Day. School entrepreneur days have evolved from the traditional bake sale. Today, children are taught how to build businesses around their talents and passions; they learn about problem-solving, target markets, budgets, and product improvement. Help your child make the most of his next Entrepreneur Day at school. He won’t be able to walk and wash dogs, but he can sell the dog biscuits he made, while advertising his walking and grooming services.
- Give back. Every business owner has a responsibility towards his or her community. Teach your child the value of making a difference by encouraging her to walk and wash shelter dogs for nothing more than the pure enjoyment of giving homeless animals some love and attention. She’ll learn humility and the joy of helping those less fortunate.
South Africa needs more entrepreneurs and innovative thinkers, to help grow the economy, boost skills, and create jobs. I can’t think of a more significant role for our children.