What to Know if Your Teen Wants to Start a Business?
Teenagers of today may be more likely to start their own businesses than teenagers of the past. A recent EY Ripples and JA Worldwide survey found that 53% of Gen Z participants want to run their own businesses within the next ten years.
Teenagers are ready to become founders, owners, and entrepreneurs, whether they want to start a summer business or work on a side job in their free time.
If your teen wants to start a business, they might need some advice and help to get things going. Here are some things you can tell your teen as they start out in business.
Start With the Legal Requirements and Permits
No matter who started the business, the law has rules that must be followed. Your teen will have to follow rules about getting a license, paying taxes, and getting registered.
Start by helping your teen get a business license from the town or city hall in your area. “To get a permit or license, business owners have to fill out forms and pay a fee, which starts at around $50,” Business News Daily wrote.
“City and county officials in the area where the business is located can list the requirements, explain the penalties for not following them, and give the right paperwork to get the process started.”
You also need to know the state’s rules about teens working and giving permission. Most states don’t let minors sign contracts without the permission of an adult.
If the business plan is ambitious enough to need a loan, an adult will have to cosign: No one under 21 can get a loan without the help of an adult.
Your teen’s new business may also have tax responsibilities. Most of the time, taxes are due when a business makes more than $400.
Teach Your Teen About Money Management
Even for experienced business owners, cash flow and accounting are hard to understand. Strong money management skills aren’t just important for running a business, they’re also good lessons for life.
There are a lot of ways to give your child a crash course in managing money for a business. Start by explaining things like how to figure out gross profits and how to handle overhead costs.
Help them set up a way to keep track of their business income and expenses. If you plan to give them money to start their business, have your teen do some simple math to show how your money will be used.
Write a Business Plan
Even if your teen has a good idea, they still need to figure out some key parts. Who do they want to sell to? What tools, supplies, or training are needed for the business? What price should they put on their goods or services?
Business plans can help you and your teen think through their business idea in more detail. Your teen will be led through the whole process of starting a business.
There are sections on market analysis, organization and management, product details, marketing and sales, and financial projections.
Come Up With a Marketing Campaign
Gen Z is very good with technology. Today’s teens may find it easy to do important marketing tasks like building a website, making an online store, or joining an online marketplace. Even the most creative people can benefit from brainstorming with a partner or friend.
Reminding your teen that their marketing campaign will hopefully lead to sales is also helpful. And logistics come from sales.
They will need to have everything set up so that they are ready to help customers when they place an order or ask for their service.
Do they have the packaging and stock needed to send a product to a customer? Do they have enough time in their schedule to meet with a client? Even though these things may seem obvious, teens often have a lot going on at once.
“When you’re a teenager, you’re in some of the most transitional years of your life,” wrote Entrepreneur. “You’re moving from high school to college or right into the working world.” “You’ll have to think more about where you want your business to go in the next few years.”
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