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Teaching Entrepreneurship to Your Children

My children are many years away from graduating from high school. I have no idea what interests they will have at that time or what direction they will want their lives to go. I do not know if they will want to go to college or to work straight from high school. I do not know if they will be doctors, computer programmers, politicians, construction workers, or theologians. No matter which direction they choose, I want them to know the basics of how businesses operate.

Why is this so important?

Businesses are the lifeblood of both economies and societies. If my children want to make a unique contribution to society, they will probably have to operate their own business to do so. If my children want to work for someone else, they need to know what it is that makes the company work successfully so that they can properly contribute to its success. If my children want to become a societal leader—whether it be through politics, theology, or teaching—they need to know how businesses work so that they can have wisdom on how rules, laws, and ideas affect the operation of businesses.

Most importantly, I want my kids to always be able to provide for themselves. No matter what the economic condition, I do not want them to say, “I can’t work because there are no jobs available.” I want them to know how to provide for themselves and their families under any condition.

So, what does a business do? Many people might say that a business makes money. This is incorrect. Making money is essential to a functioning business, but it is not really what businesses do. Businesses, at their core, improve the world around them for the benefit of others. In my own work as a software engineer, I have helped to build software for maintenance workers. I am improving the way reality works by adding software to machines so that maintenance workers can do their jobs better. Farmers take a field of weeds and improve them so that they generate food for families. It is important to instill an others-focus in children about business. The point of the farmer is not for the farmer to make money, though that is a natural result of a good business. The point is to improve the land for the benefit of society.

One of the best ways of learning is by doing. Therefore, I decided to help my children learn entrepreneurial skills by helping them start a business that they could operate themselves. I wanted it to be as real of a business as possible—selling real, quality items that people can use and want to buy. I also wanted it to be very measurable so we could easily calculate the cost of production and how much money we were making.

What we settled on was a lotion business. We can make great lotion in a saucepan with just a few ingredients and about twenty to thirty minutes of time. I divided the tasks into three parts: investment, production, and sales. I prepurchased all of the pieces myself, but I kept track of the per-jar price of everything we use. Therefore, when the kids want to make lotion, someone has to invest in it (they have to buy the materials from me), someone has to make it, and someone has to sell it.

The investor, the producer, and the sales person each get a share of the profit from each jar. However, as is often true in real life, the sales person receives the greatest share in the profits because neither the investor nor the producer is paid without sales. If you do not have money or selling skills, you can always make money by making jars. However, once you have extra money, you can make more of it by investing it in the production of more jars.

After we make a few sales, I have them all sit down at the table, I count out the money each of them made, and I review the tasks they performed in order to make it. That way, if someone is slacking, they can see what the results of effort looks like. Usually, whoever made the least amount of money asks if they can invest in and make a new batch of lotion.

As they see how their efforts can produce profits, they become more and more excited about doing the work. My middle child decided to load his wagon with lotion and go into the neighborhood to sell it (I went along, too). He made quite a bit of money that day!

By adopting a microbusiness for your kids, you can teach them lessons about money, work, and entrepreneurship that will help them throughout their lives. They will never be dependent on someone “providing” a job to them; they will always have the skills to generate income by improving the world, no matter the economic condition.

CATEGORIES: Big Ideas: Truth, Beauty, Goodness and more!

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