About 60% of teenagers are more interested in starting their own business instead of working a traditional job, according to a survey from Junior Achievement USA.
While chances are that there’s no class at school that focuses on starting a business at a young age, there are plenty of ways that you can support your teen’s business endeavors. From how you can set the stage for their success to the legal requirements involved and how to provide them with valuable resources, here’s just a few ways you can help foster your teen’s entrepreneurial spirit.
3 Helpful Tips for Bringing Their Ideas to Life
1. Bringing a business idea to life
For teens who are serious about becoming an entrepreneur, becoming a sounding board for their ideas and goals is a fantastic way to show your support. If they don’t already have a business idea in mind, guiding them through a brainstorming session and sharing ideas can be a great bonding activity.
However, if they already have an idea that they’re passionate about, creating a business plan can bring the idea to life in more ways than one.
In fact, having a well-constructed business plan is one of the first steps of starting a business, and can help you “clarify your strategy, identify potential roadblocks, decide what you’ll need in the way of resources, and evaluate the viability of your idea or your growth plans before you start a business,” notes one Shopify article. For teens, encouraging them to create a business plan is a fantastic way to support their business endeavors while also getting them to think about the big picture, rather than their initial idea.
The Shopify article goes on to break down the creation of a business plan in nine simple steps, with a few key elements involving performing a market analysis and defining a marketing and financial plan. As such, creating a business plan will allow your teen to fully explore all aspects of their idea and will help them piece together (and gain an understanding of) what goes into building a business from the ground up.
Creating a business plan will also present an opportunity to outline both short and long-term goals, thus making it a great reference point down the line.
2. Creating a business — how to actually get started
After creating a thorough business plan, helping your teen actually start a business will involve plenty of paperwork, particularly when it comes to ensuring that everything is compliant with the law. The U.S. Chamber of Commerce website notes that you can start by helping your teen get a business license, which can be procured through your local town or city hall.
“City and county officials in the jurisdiction where the business is located can outline the requirements, explain penalties for noncompliance, and provide the proper paperwork to get the process rolling,” Business News Daily notes. The Chamber of Commerce site goes on to note that you’ll need to be aware of the state’s laws on teen labor and consent, pointing out that minors aren’t legally allowed to enter contracts without adult consent in most states.
“If the business plan is ambitious enough to need a loan, an adult will need to cosign: No one under the age of 21 can apply for a loan without adult consent.” Understanding the tax responsibilities involved with starting a business is another factor.
Starting a business will also require your teen to think about choosing a legal structure. While there are several options out there, such as a sole proprietor or a corporation, choosing to form a limited liability company (LLC) can present many benefits, thus making it a worthwhile consideration.
For example, Investopedia notes that an LLC protects a business’ owners from being personally pursued for repayment of the company’s debts or liabilities. That said, it’s also noted that an LLC is a formal business arrangement that requires articles of organization to be filed with the state.
It’s worth mentioning that anyone under the age of 18 cannot form a business entity, though parents can. Thankfully, this doesn’t have to be a stressful process, as there are plenty of online services that can help you seamlessly get things in order, with popular options including Legalzoom and Northwest Registered Agent.
Reading comprehensive reviews on a particular service can be a great way to determine what you need, as well as compare and contrast one service to the next. For example, one Legalzoom LLC review covers various aspects of the service, from what the company offers to the price points involved as well as the packages offered.
3. Providing access to valuable resources
Indulging in your teen’s entrepreneurial interests and doing some research can be another great way to support their business endeavors while setting them up for long-term success. Gathering resources such as free online courses and video tutorials, etc., can all work to provide your teen with supplemental insight and knowledge on the business creation process. And, if you know someone who has successfully started their own business, reaching out and setting up a meeting is a great way to allow your teen to ask any questions while getting solid advice from someone who has first-hand experience.
An article from uschamber.com outlines several business resources for young entrepreneurs, including various programs and camps out there that are geared towards giving young entrepreneurs the tools that they need to succeed.
Beta Camp is just one resource listed by the U.S. Chamber of Commerce, and is defined as a three-month virtual enrichment program for kids aged 13 to 18. “During the three-month program, students will attend a virtual workshop on Saturdays. They’ll get hands-on experience working on a team and building a real business. During the program, they’ll receive one-on-one mentorship opportunities and interact with like-minded peers.”
For parents of teens that have ambitious business goals, knowing where to start in properly guiding and supporting them can leave many feeling at a loss. However, by encouraging them to get their idea onto paper in the form of a business plan, ensuring that they are well aware of the law, and giving them access to various resources are all ways that you can help them garner success in the long run.