Today’s teenagers may be more entrepreneurial than generations before them. A recent survey by EY Ripples and JA Worldwide found that 53% of Gen Z participants hope to run their own businesses within the next ten years. Whether it’s starting a seasonal summer business or working on a side hustle in their free time, teenagers are primed and ready to become founders, owners, and entrepreneurs.
If your teen is interested in starting a business, they may need some guidance and help to get their idea off the ground. Here are a few tips to share with your teen as they begin their business journey.
[Read more: How This Teen Entrepreneur Learned to Roll With Changes and Persevere Through Challenges]
Start with the legal requirements and permits
All businesses, regardless of the founder, face legal requirements. There are regulations pertaining to permits, taxes, and registration to which your teen will need to adhere.
Start by helping your teen get a business license, which can be procured through your local town or city hall. “To secure a permit or a license, business owners need to fill out forms and pay a fee, which starts around $50,” wrote Business News Daily. “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.”
You also need to be aware of the state’s laws on teen labor and consent. 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.
There may also be tax responsibilities for which your teen’s new business is responsible. Typically, taxes are charged after a business earns more than $400.
Gen Z is extremely digitally savvy. Key marketing activities like building a website, creating an online store, or joining an online marketplace may come naturally to today’s teens.
Teach your teen about money management
Cash flow and accounting are difficult concepts even for experienced entrepreneurs. Strong money management practices are not only key to business success, but they’re also good life lessons.
There are plenty of resources to help give your child a crash course in business financial management. Start by introducing concepts such as calculating gross profits and managing overhead. Help them set up a system for tracking income and business expenses. If you plan to give them money to start their venture, ask your teen to do some basic financial calculations demonstrating how your investment will be used.
Write a business plan
While your teen may have a great idea, they still need to work out some of the key elements. Who is their target customer? What equipment, supplies, or training does the business require? How much should they charge for their product or service?
Business plans offer a way to think through your teen’s business idea in granular detail. With sections dedicated to market analysis, organization and management, product details, marketing and sales, and financial projections, your teen will be guided through the entire process of starting a business.
[Read more: 11 Business Ideas for Teen Entrepreneurs]
Come up with a marketing campaign
Gen Z is extremely digitally savvy. Key marketing activities like building a website, creating an online store, or joining an online marketplace may come naturally to today’s teens. Even the most creative people, however, benefit from having a partner or friend with whom to brainstorm.
It’s also helpful to remind your teen that their marketing campaign will, hopefully, lead to sales. And sales lead to logistics. They will need to have the infrastructure in place to be ready to respond when a customer places an order or requests their service. Do they have the shipping materials and inventory ready to send a product to the customer? Do they have space in their schedule available to spend time with a client?
These elements may seem obvious, but teens are often juggling a lot at once. “As a teenager, you’re in some of the most transitional years of your life, as you move from high school to college — or straight into the working world,” wrote Entrepreneur. “You’ll need to put extra thought into where you want your business to go over the next couple of years.”
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