Choosing to start your own small business is one thing, but what about when your child announces plans to become an entrepreneur? While there are certainly examples of minors and teens who have started successful businesses, they also face unique challenges.
To find out how to overcome them, we consulted four experts and discovered their top tips for parenting and supporting a child who wants to become their own boss.
Bring Your Child to Real Meetings
No amount of talking can accurately capture what it's like to be a small business owner responsible for complying with various regulations. So sometimes, the best way to teach a child about the realities of entrepreneurship is to give them a front-row seat.
Gary Morris, president of the marketing strategy company Grafted-In, explains that in order to provide support to your child and ensure they understand how to comply with all relevant regulations, parents can bring the child to real-world meetings.
"It helps if the parents have been in the entrepreneurial journey as well," Morris said. "If that's the case, they've most likely accumulated resources by way of experts such as certified public accountants (CPAs), business attorneys, tax advisors" and the like.
"So one thing a parent can do," he continued, "is help their children feel the weight and responsibility of these moments by having sit-down, grown-up meetings" with those experts.
And "if it's not the case that the parents have that experience or resources, they ought to help their children find them and go with them to those meetings."
Where can you find meetings or programs to give your kid some real-world experience? Attend a networking event in your area, consider a school-run program like INCubatoredu or look for an online course like "Be Entrepreneurial" from Junior Achievement.
Analyze Your Own Biases
For parents who aren't entrepreneurs themselves, preconceived notions of what small business ownership entails can sometimes present challenges.
Louisa Zhou, founder of the entrepreneurial coaching company LouisaZhou.com, summed it up nicely: "One of the most important ways parents can support their entrepreneurial children is to be aware of their own limiting beliefs and not project those on them."
"For instance," she explained, "maybe you as a parent think it's hard to make money because you were brought up to believe that. Well, if you teach your child this, [then] their business might not take off."
Zhou also advises you to "help your children understand that failure is just part of the journey. They will likely get rejected many times. But if you support them in seeing failure as a stepping stone to success, you've given them a massive advantage for later in life."
Know the Legal Limitations of Entrepreneurs Under 18
If your child wants to start their own business before turning 18, you'll need to research what they can and cannot do on a legal level without assistance from an adult.
"Young people sign contracts every day, and the law recognizes and enforces these contracts," says Kim Chan, lawyer, founder and CEO of DocPro. "However, there are laws that prohibit people under the age of 18 (known as minors) from signing certain contracts."
"For example," she elaborated, "a minor cannot take a loan, mortgage or buy an apartment in [their] own name. A minor cannot enter into a contract to purchase any non-necessary items and the relevant contract will be invalid. In other words, if a minor fails to pay, the seller cannot sue you to get his money back, but he can ask you to return the goods."
So as a parent, it's essential to help your child determine when they can sign contracts on their own and when they'll need your help. To get started, start familiarizing yourself with your state's laws to find out if they allow minors to form LLCs.
Be Prepared for the Mental Effects of Entrepreneurship
Being a small business owner is spectacularly rewarding, as all the founders featured in our 2021 #INCspiration roundup clearly demonstrate. But entrepreneurs also face a unique set of challenges, all of which can take a mental and emotional toll.
Cynthia Harlow, psychologist and founder of Personality Max, says that "entrepreneurship is no easy feat." This can be observed in data from the U.S. Bureau of Labor Statistics, which shows that about 50 percent of all establishments close by their fifth year:
Knowing that "makes it natural to ask if it’s the best thing for a minor to head into," she says. But, "while the predictable answer to that is no, it doesn’t have to be. The chances of the business failing are high, but this is where the influence of the parents comes in. Entrepreneurship can have both negative and positive impacts on minors, but with the parents’ support, it may have a less negative impact on the child."
For instance, Harlow points out that entrepreneurship can benefit children by increasing intelligence and business acumen, giving them the satisfaction of creating a thriving business, helping them become more resilient and adaptable and giving them a sense of purpose.
On the other hand, some of the potential negative effects of entrepreneurship include depression at an early age, a greater risk of substance abuse and a higher risk of suicidal thoughts.
So how can parents help? Harlow recommends that they:
"Encourage them" to persevere.
"Have a conversation with them from the start about the instability of entrepreneurship."
"Educate them on failure" and "how it's inevitable but shouldn't bring them down."
"Hire a financial advisor for them" if possible.
"Be available during the inevitable downtime of the business."
"Make it fun and encourage them to take a break regularly and when necessary."
At the end of the day, there's no denying that being the parent of a budding entrepreneur can be challenging. But just like entrepreneurship itself, it can also be one of life's most rewarding experiences.
And with the right resources, guidance and tools, you can help your child discover the joys of entrepreneurship for themselves.
Carrie Buchholz-Powers is a Colorado-based writer who’s been creating content since 2013. From digital marketing to ecommerce to land conservation, she has experience in a wide range of fields and loves learning about them all. Carrie is fond of history, animals and beauty in equal measure. In her free time, she enjoys knitting, playing video games and exploring Colorado's prairies and mountains with her husband.