How to Teach Children About Business Planning
- 1). Help them choose an idea for their own small business. Classic examples include car washes, bake sales and lemonade stands, but allow them to choose an idea that matches their interests and capabilities. For example, older children might be able to handle a dog-walking or baby-sitting service.
- 2). Create an imaginary business together if your children aren't old enough to start an actual business. To develop their sales and customer skills, ask them to try selling the imaginary product or service to you by explaining its various benefits. To develop marketing skills, have them draw advertisements or act out a commercial for you.
- 3). Explain how businesses often take out loans to raise capital for advertising and supplies. Help them set up a payment plan to reimburse you for whatever supplies or money you loan them.
- 4). Teach them how to create a basic budget for their business. For example, take them shopping for lemonade stand supplies and show them how inexpensive supplies mean higher profits on one hand but lower product quality on the other. Ask them to set prices that will generate a profit without dissuading customers.
- 5). Discuss suitable marketing techniques. Depending on the type of business, your children could advertise their services with flyers, handmade signs or postcards delivered to neighbors. Show them professional advertisements from similar businesses for inspiration.
- 6). Explain smart customer-service practices, from ensuring customers are satisfied to establishing a rapport. Friendliness and an ability to foster customer goodwill are essential aspects of any successful business.
- 7). Ask them to tally their sales at the end of the day. If the business was profitable, ask how they could improve its performance. If the business lost money, help them identify where the problem lies. For example, maybe they need to find cheaper supplies or increase their advertising budget to reach more customers.
- 8). Encourage them to reinvest some of their profits into the business. While they might want to spend their earnings on something fun, show them how reinvesting profits can lead to greater future earnings.
