These business ventures aren’t really about making money. In fact, if extra income is that the priority for the summer, employment is that the safer route.
But, like putting them in reading programs for kids, starting a business provides a useful life experience for youths, plus it develops very practical skills like organization, money management, problem-solving, and communication.
If your budding entrepreneur shows interest in starting a business this summer, here are some tips to assist make the experience a positive one:
1. Choose a business. Allow them to pursue their passion.
It’s important that your child is addicted to what he or she is doing. You wish them to enjoy the experience and not lose interest and be back on the couch by the tip of June.
Have your child make an inventory of their favorite things to try and do If they don’t have already got a particular business idea in mind. If they love animals, they might start a pet-walking or pet-sitting business. Maybe they need to create candles and sell them on Etsy. They might design a mobile app, teach music lessons or maybe hold an acting workshop for younger kids within the neighborhood.
It’s okay to think outside the box. Do not mention things won’t work or that nobody would buy their idea. This process may be a learning experience; the tip result doesn’t necessarily matter.
2. Set goals and make a thought.
Have your child consider all the nuts and bolts needed to show their idea into a reality. What reasonably equipment, supplies or training do they need? What do they need if they’ll be mowing lawns? A garden tool, gas for the garden tool, etc. If they’ll be babysitting, should they take a CPR or tending course beforehand?
They should write down their goals for the business, including both financial goals and anything they require to attain. It’ll be fun and academic to revisit these goals in September.
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3. Introduce the concept of cash management.
For learning complex topics like calculating gross profits and managing overhead, a summer business may be a good way to introduce kids to basic money management skills. Keeping track of business expenses and income can be for teenagers. Adding up price totals and counting change can be practiced by younger kids.
You may have to give your child money to starter their business. If so, have them itemize all their upfront costs, so that they know exactly what proportion is required. You’ll offer to fund a specific amount, as long as they contribute a number of their own birthday money or allowance. You’ll even hold an investor meeting where your child pitches their idea to you and descriptions their financial needs.
4. Work on customer service and communication skills.
The essential building blocks for entrepreneurship are being an efficient communicator and empathetic listener. To understand their business’ value proposition and succinctly explain their product/service, help your child develop the way. Stress the importance of customer service, and encourage your child to pay attention to and accommodate special requests when needed.
5. Manage the legal requirements.
Child business owners are subject to the identical rules and legal requirements as adults. You’ll know if any local licensing or permits are needed by checking along with your local city/county clerk’s office.
In some cases, you will actually want to form a political candidate company structure, but as long as you’re concerned that the business will start or put your family’s assets in danger. For instance, our oldest son loves designing apps. If it seems that an app is going to be commercially successful on iTunes, we’ll conceive to roll it under our company. And, if we didn’t have already got a company, we’d form an LLC (Limited Liability Company) for it. You’ll be able to decide the scope of your child’s business and your family’s liability protection needs.
6. Pay taxes.
If your child’s earnings are greater than $400, they must file their own legal document. Presumably, they won’t be in an exceedingly position to owe any tax, but they’ll have to pay self-employment tax. Help them harden this previous time — perhaps setting aside 15 percent of the earnings for tax time. On Form 1040 Schedule C, and self-employment tax is reported on Schedule SE, they’ll report their business income and expenses. And just in case you’re wondering — yes, you’ll be able to still declare your child a dependent whether or not they file their own return.