How can kids start a business?

Business for Kids
Written By Inge von Aulock

Starting a business as a kid can be an exciting and educational experience. Here’s a step-by-step guide to help kids get started:

Starting a Business for Kids: A Step-by-Step Guide

Step 1. Brainstorm Business Ideas

What are the best business ideas for kids? Encourage kids to think about what they are passionate about and identify problems they can solve. Common kid-friendly business ideas include:

1. Lemonade Stand

A classic business idea that teaches kids the basics of supply and demand, customer service, and pricing.

Resources:

2. Pet Sitting or Dog Walking

If your child loves animals, pet sitting or dog walking can be a great business idea. It helps teach responsibility and time management.

Resources:

3. Lawn Mowing and Yard Work

Offering lawn mowing and yard work services can be a lucrative business for older kids and teenagers. It also teaches physical responsibility and customer service.

Resources:

4. Handmade Crafts and Jewelry

For creative kids, making and selling handmade crafts or jewelry can be a fun and profitable business. They can sell their products at local markets or online.

Resources:

  • Etsy: An online marketplace where kids can set up their own shop to sell handmade items.

5. Tutoring and Homework Help

Kids who excel in a particular subject can offer tutoring services to their peers. This business idea teaches teaching skills and reinforces their own knowledge.

Resources:

  • Khan Academy: A free resource that can help kids prepare their tutoring sessions.

6. Baking and Cooking

If your child enjoys baking or cooking, they can start a business selling their treats to family, friends, and neighbors.

Resources:

7. Car Washing

A car washing service is a straightforward business that can be started with minimal investment. It helps kids learn about customer service and basic business operations.

Resources:

  • Starting a Kid's Car Wash Business: Tips and steps on how to start a car wash business for kids.

8. Babysitting

For older kids and teenagers, babysitting can be a rewarding business. It teaches responsibility and childcare skills.

Resources:

  • Red Cross Babysitting & Child Care Training: Provides training and certification for young babysitters.

9. Selling Digital Products

Tech-savvy kids can create and sell digital products like e-books, artwork, or music. This business idea leverages creativity and technical skills.

Resources:

  • Canva: A graphic design tool that kids can use to create digital products.

10. Recycle and Upcycle Business

Kids can collect recyclable materials or upcycle old items into new products. This business idea teaches environmental responsibility and creativity.

Resources:

  • Eco Kids Planet: Provides ideas and inspiration for eco-friendly projects and businesses.

These business ideas not only provide an opportunity for kids to earn money but also teach them valuable life skills such as responsibility, time management, customer service, and financial literacy. By encouraging and supporting their entrepreneurial spirit, parents can help their children build a solid foundation for future success.

Further Resources:

  • Junior Achievement: Offers ideas and inspiration for young entrepreneurs.

  • Young Entrepreneurs Academy: Provides a structured program to help kids develop their business ideas.

Step 2. Create a Business Plan

A simple business plan can help outline the business idea, target market, pricing, and marketing strategies. It doesn’t need to be complex; just a basic roadmap to guide their business journey.

Elements of a Basic Business Plan:

  • Business Idea: What are you selling or offering?

  • Target Market: Who will buy your product or service?

  • Pricing Strategy: How much will you charge?

  • Marketing Plan: How will you reach your customers?

Resource:

  • BizKids Business Plan Template: A kid-friendly business plan template.

Step 3. Set Up a Budget

Teach kids the basics of managing money by helping them create a budget. This should include startup costs (e.g., materials, advertising) and ongoing expenses (e.g., supplies, transportation).

Resource:

  • MoneySmart: Provides financial literacy resources for kids.

Step 4. Legal Considerations

Depending on the business, there might be legal requirements such as permits or licenses. It's also important to understand any local regulations regarding child-run businesses.

Resources:

  • SCORE: Offers information on legal considerations for starting a business.

Step 5. Start Small and Test the Market

Encourage kids to start small and test their business idea. They can begin by selling to family and friends or setting up a small stand in the neighborhood.

Resource:

  • Kidpreneurs: Provides resources and books to help kids start their own business.

Step 6. Marketing and Promotion

Teach kids basic marketing strategies, such as creating flyers, using social media with parental supervision, or word-of-mouth promotion.

Resource:

Step 7. Track Progress and Adjust

Once the business is running, help kids track their earnings and expenses. Encourage them to review what’s working and what’s not, and make adjustments as needed.

Resource:

  • My First Business Plan: Offers practical tips for managing and adjusting business plans.

Real-Life Examples of Kids Starting a Business

  • Mikaila Ulmer: Started a lemonade business called Me & the Bees Lemonade at age 4. She began by selling lemonade sweetened with honey at a stand and eventually expanded to selling in stores nationwide.

  • Moziah Bridges: Founded Mo’s Bows at age 9, selling handmade bow ties. He appeared on Shark Tank and now has a successful business selling bow ties and other fashion accessories.

Resources:

By following these steps and utilizing the provided resources, kids can successfully start and run their own businesses, learning valuable skills and gaining confidence along the way.

What legal steps are needed for a kid's business?

Starting a business as a kid involves several legal considerations to ensure compliance with local, state, and federal regulations. Here’s a step-by-step guide to help navigate these legal requirements:

1. Choose a Business Structure

Selecting a business structure is crucial as it determines the legal and tax obligations. Common structures include:

  • Sole Proprietorship: Simplest form, ideal for small, low-risk businesses.

  • LLC (Limited Liability Company): Provides personal liability protection and can be a good choice for more substantial businesses.

Resource: SBA Business Guide

2. Register the Business Name

Registering the business name, also known as a "Doing Business As" (DBA) name, is essential to ensure it is unique and complies with local laws.

Resource: U.S. Small Business Administration - Register Your Business

3. Obtain Business Licenses and Permits

Depending on the business type and location, various licenses and permits may be required:

  • General Business License: Required by most cities or counties.

  • Special Permits: Depending on the business nature, special permits (like food handling for a lemonade stand) might be necessary.

Resource: SCORE - Business Licenses and Permits

4. Get an EIN (Employer Identification Number)

An EIN is necessary for tax purposes, especially if the business will hire employees or operate as a corporation or partnership.

Resource: IRS - Apply for an EIN

5. Open a Business Bank Account

Separating personal and business finances is critical. Opening a business bank account helps track income and expenses accurately.

Resource: NerdWallet - Best Business Bank Accounts

6. Understand Child Labor Laws

Child labor laws vary by state but generally limit the hours and types of work children can perform. It’s essential to understand and comply with these laws.

Resource: U.S. Department of Labor - YouthRules!

7. Consider Liability Insurance

Depending on the business type, obtaining liability insurance might be wise to protect against potential lawsuits or claims.

Resource: The Hartford - Business Insurance for Small Business

8. Tax Obligations

Understanding the tax obligations is crucial. This includes income tax, sales tax, and possibly self-employment tax. Consulting a tax professional can provide clarity on these requirements.

Resource: IRS - Self-Employed Individuals Tax Center

That’s a Wrap

Starting a business as a kid involves several legal steps to ensure compliance and protection. By following these steps and utilizing the provided resources, young entrepreneurs can set up their businesses legally and successfully.

Inge von Aulock
Previous

17 Simple Passive Income Ideas for Retirees (Trending in 2024)
Next

Investing for Kids Made Easy: 6 Accounts to Kickstart Their Portfolio