How to help your child start his or her own business
Mowing lawns or a lemonade stand are some of the most common ways for kids to make a little money, but are there any legal problems because of your child's entrepreneurial activities?
A kid's business is still a business, so it has to have some permits.
Owning your own business is great for teaching your child a good attitude about money and responsibility.
Make sure your child's business is legal
This article is for parents who want their child to start his or her first legal small business.
Kids want to be kids, but at some point they start to look at adult life and want to take something from us. That's why you shouldn't forbid them to trade with lemonade, hold backyard sales, or mow the lawn for money - it's a great way to learn how valuable a dollar can be, and to understand the responsibilities of being a businessman.
However, if the kids are running a business that isn't exactly legitimate - there can be problems. Neighbors can really start complaining about having the business shut down if they don't have the right paperwork and permits.
All states have laws that require businesses to obtain special permits in order to operate a business. These rules apply to almost all businesses and businesses, and even to children.
States are trying to make the process easier so that young entrepreneurs have more opportunities to make money, but you still can't forget about all the necessary paperwork - so that everything is legal. Depending on what age your child is - help will have to be provided by the parent.
If your child wants to open a small lemonade stand, or make money by shoveling snow or mowing the lawn - they need to contact their local governing body to determine all the necessary legal compliance requirements.
Can children own businesses?
Absolutely, children can have their own businesses. A business is a great way to put your child's energy to good use. Instead of just sitting at home, let your child do something he or she enjoys, especially if it can bring in money.
In addition to filling out paperwork, you have to pay taxes on the money your child will earn from the business. Especially if the children will make more than $400 from their business.
Do I need a business license?
Any business needs a license, even if the business is run by a child. Age doesn't matter at all in this business. Make sure the business meets all the legal requirements, because otherwise anyone can tell the authorities.
The first step is that you will need more information. You can find this on your county or city website, or you can just go to city hall and find the people in charge. These officials (most likely from the Department of Revenue or the Department of Finance) will explain the requirements to you intelligently. To get the required license, you will have to fill out a document and pay a fee of $50. County and city officials in your jurisdiction will outline all of the necessary requirements and explain possible penalties if you do not comply and submit all necessary documents.
You asking "Really? All of this just for lemonade stand?"
Sometimes the neighbors start to have certain inconveniences, because of the business on their street. Even a lemonade stand can cause some problems. For example, blocking a driveway, or increased noise on a street that was previously quiet. Also, passersby are not very trusting of children who hand out flyers on the street. Perhaps people think that someone is forcing children to do it.
Competitors will also try to denounce the children's business. For example, if your child is mowing lawns, some landscaping company might denounce to the authorities that some regulations are not being followed. No one wants competition.
It is important to be aware of all the responsibilities and the risks involved if you have been able to take care that the business complies with the law.
If a child runs a business without licenses or certain permits, he or she could face fines or closure of his or her business. Clashing with regulators is never a pleasant situation, especially if your child is just starting out as an entrepreneur and dreams of building something bigger.
Fear not: If you want to help your child, there are many ways to help you know that you are doing the right thing. For example, the Small Business Administration can give you links to information about permits and licenses - it will describe everything specifically, step-by-step, and provide resources to help you with your business.
How to get a license
Each state has its own specific requirements for getting a license. Most states require the child to have their own business plan which shows they have some understanding of the legal requirements, financial parameters, and some slightest competence. This, too, is good practice for young entrepreneurs. They have to learn not only how to trade, but also how to do paperwork. This is useful in large enterprises.
When applying for such a license, kids need to know the laws about age of consent and teen labor in the state. Most states do not allow legal contracting without the approval of an adult guardian. Depending on how large the business is, it may need some funding - no one under age 21 can get a loan without a responsible adult who will be over 21.
Since getting a license for your own business may not be such a quick process, it's best to get started as soon as possible.If your child wants to clear snow in the winter or sell baked goods in the summer, it's best to start the license process a few months before the season starts so that you get there in time.
What kind of business is right for a child?
To decide what kind of business is right for your child - get to know your child better. Talk to them and let them tell you what kind of business appeals to them.
When parents want to help their child with a business, they think of booths, or lawn care, but there are other professions that your child might really like.
For example, someone is very good at baking. If they're not interested in doing it themselves, they might be able to find someone to bake cakes and your child could do dessert decorating. Maybe your child loves animals - and then a good job for them would be a dog walker or pet sitter. Also, people almost always need to wash their cars, so such a business will never be without customers. Your children can also record their own videos on Youtube, this is a great opportunity to develop speech and communication skills.
Here are some of the most interesting business ideas that you can start with your child (even at home):
If your child is older and great at school - tutoring is a great way to start a small business. A teenager can find another young student who needs help with understanding a subject, or concept, or with homework. You can find clients at your local library, school, or online. Not only will your child make money and help others, but he or she will also develop his or her own thinking and academic mindset.
2. Social Media Services
Young people are growing up on social media, which is why it's a second home for many. Some small business owners don't feel as good about social media, and they may have some business problems because of it. Teens can offer their social media services. That way your child will attract more customers and learn a business approach to communicating with them himself.
3. Handmade goods seller
Perhaps your child likes to make some handicrafts of his own, then he can start selling them at some specialized fairs, or on the Internet. Many people love homemade things, it can also be a great gift, especially if it is made by a child.
Was this article helpful?3 Posted by: 👨 Diane H. Wright