Why Business For Kids?

Every now and again, I meet someone who is new to the area of financial education, and when that happens I find that I need to go back to basics and explain why it is that we believe business experience is a vital part of a well-rounded financial education.

I find that many people get focused on the earning of money when they think about business for kids. Many people see business as difficult, and stressful, and as a complicated way to make money. It seems to them that understanding business is optional, as most kids will never need that understanding.

Nothing could be further from the truth.

Kids gain so many benefits from running a business, above and beyond the money they may earn.

Business Understanding Benefits Consumers and Employees, As Well As Entrepreneurs

Even as a consumer, if you understand how business works, you are much less likely to be conned, overcharged, or exploited. As an employee, your understanding of the business model your employer uses will make you more valuable, help you to make the right choices when using your discretion, and enable you to choose the right time and the right supporting arguments to ask for that raise.

Business Experience Develops Character

Quite apart from any financial benefit, running a business develops your child across a range of personal qualities. A business has been described as “one of the best personal development programs available”.

Whether it is dealing with unhappy customers, trying to make sales, managing contractors, or managing their own emotions of excitement, apprehension or disappointment, doing business will put your child in learning situations which develop his or her character and attitude. Business provides the best possible feedback - immediate and accurate. If you get your marketing message right, customers show up. If you treat your customers badly, they go elsewhere.

We have devoted ourselves to shielding kids from the “harsh realities” of the world, but a little controlled exposure to reality is very important preparation for real life!

Business Experience Builds Confidence

Doing business enables a child to negotiate with adults on an equal footing, as a professional supplier of good or services. The experience of being taken seriously is incredibly important, particularly in the tween and early teen years, when our culture really doesn’t offer kids much opportunity to interact with adults as peers.

I cannot stress enough how important it is for kids to have the sense that they can provide something of value, which adults will take seriously. Kids are not stupid - they know when adults are cooing “oh, that’s lovely” about a painting or poem, but don’t really mean it. They won’t treject condescending praise - any praise is better than no praise - but they hunger for real, valid affirmation. They yearn to be able to do something worthwhile, and be appreciated for their contribution with no allowances required for their age or cuteness.

Once a child knows their accomplishments are genuinely impressive at an adult level, it relieves a primal anxiety about how they will make their own way in the world as adults.

Too many of our kids never get this sense of their own capability, and become children in adult bodies, still uncertain and anxious about their ability to function in the adult world. Early business experience can provide that vital sense of competence and self-sufficiency, even when the actual business earnings are no more than a few dollars.

Business Experience Teaches The Real Value Of Money

When a child is too young to have a regular job, the only way they will learn the connection between providing something of value and receiving money in return is to have a business.

As we all know, the “something for nothing” mentality is at plague proportions in our culture, and it causes a lot of misery. Early business experience, coupled with parents who are responsible about allowances, will give kids a good, solid foundation of visceral knowledge that money comes as a result of providing value - and that they have something of value to offer.

What better attitude to instil in your kids?

Of course, it is also important to teach them how to manage their money responsibly - to save, invest, give, and to make wise spending decisions. Business experience is not the be-all and end-all of financial education.

Business education, however, makes an important contribution to financial understanding, which cannot be replicated using allowances alone.

This is why we created the Cash-Smart Kids program, to provide an integrated approach to financial education - one that covers all the bases.

Jenny Ford is a financial educator, holder of a B.A.(Hons) in Psychology, a Diploma in Training And Assessment Systems, and an Advanced Diploma in Business Management, and mother of three girls, all of whom started businesses aged between nine and twelve. Jenny’s blog can be seen at Raising Entrepreneurs.