From Playtime to Pitch Time: How Parents Can Raise Entrepreneurial Kids

Making the right financial choices in today’s fast-paced, global economy is a challenge for most families.

Decisions about investments, interest rates and loan consolidation can be overwhelming. This lack of financial confidence often stems from childhood. Children who are not encouraged to develop an entrepreneurial spirit often turn into financially illiterate adults. From there, the cycle of stress and poverty continues. 

If you’re reading this article, you’ve realized the importance of developing your children’s financial acumen. However, most children balk at the idea of completing extra math homework or learning about the stock exchange. So, how do we cultivate this keen business sense in the young? Professional Investor Kapish Haldia credits the time he spent working at his family’s jewelry business as a child for his entrepreneurial skills and values. However, even parents who don’t run businesses can expose their kids to entrepreneurship through targeted play and conversions around the value of a dollar. 

Here are a few simple steps you can take to ignite that entrepreneurial spark in your household. 

1. Goal Setting

In a recent blog, billionaire airline mogul Richard Branson told followers, “…ever since I was a young boy, I have made lists of goals and resolutions. It’s how I make sense of the ideas in my head, the suggestions I receive, and the progress we are making.” 

Research has shown that individuals who write down their goals are 42% more likely to achieve their targets than those who do not. So, teaching children how to set goals effectively will underpin their future entrepreneurial success.  

It’s not enough to let your children create abstract goals, like “I want to get better at sports.” Teach your kids the S.M.A.R.T goal-setting method, which requires goals to be specific, measurable, achievable, relevant, and timed. Work together to create a list of five goals your child would like to achieve for the month, school semester or year. Next, pin these goals somewhere central in the house, like the refrigerator or above the bed. 

Revisit your child’s goals regularly to discuss what small steps they are taking to reach their targets. Reward movement with stickers or similar to promote tangible awareness and excitement around progress. 

2. Discovering Opportunities 

A school trip or event that requires an increase in your child’s allowance presents a perfect opportunity to discuss entrepreneurship. 

Ask your child to consider ways that they might be able to earn extra money within a short time-period. It's important not to give your son or daughter the answers outright. Entrepreneurs are experts at identifying gaps in the market. Teach this skill by carefully guiding your child toward suitable business opportunities. Ask questions such as: 

• What is something you are good at? 

• Do you think that you could sell this skill? Why? Why not? 

• Is there a problem in the neighborhood you could solve? How? 

Options might include taking on additional household chores, like washing clothes or dishes. For slightly older children, setting up a lemonade stand, babysitting, raking up leaves and other community activities are also great beginner-friendly business ventures.  

3. Pitching Practice

Entrepreneurs excel at closing difficult deals and convincing stakeholders to invest. Learning soft interpersonal skills, like resilience, problem solving and effective communication as a child is as important as learning about the economy. 

Develop your children’s communication and problem-solving skills by giving them opportunities to pitch to you. If your child is asking for a sleepover on a school night and you would normally decline, let your child try to convince you. Set parameters to guide them in this process. For example, give your son or daughter 15 minutes to produce five good reasons the sleepover should go ahead. Once your child has pitched, acknowledge the points they made and present your rebuttal. Finally, allow your child the chance to present a counter argument. 

The exchange might go something like this: 

Child: An article I saw online says that sleepovers are good for teaching us about other cultures and lifestyles. 

Parent: That’s true, but research also shows that doing your homework is an important part of achieving academic success. If you have a sleepover on a school night, you might neglect your homework. You might also skip sleep and not be able to concentrate in class tomorrow.

Here, you can introduce your children to the power of negotiation, another vital skill for seasoned entrepreneurs. Through negotiation, both parties should be able to reach an agreeable resolution, as below:

Child: I’ve already done my homework, so that won’t be an issue! 

Parent: What about your sleep? 

Child: I promise we’ll go to bed at 10.30 pm. 

Parent: Make it 9.00 pm. 

Child: What about 10.00 pm? 

Parent: You’ve got a deal. 

Through this playful and interactive exchange, you’ve taught your child the power and responsibility of both pitching an idea and negotiating terms of a contract. 

4. Budgeting

While children shouldn’t be privy to information about household finances that might worry or overwhelm them, it’s important to teach our kids about budgeting from an early age. One way you can do this is by giving your child an allowance.  

An allowance, especially kept in a visible place, will give your child a clear visualization of how much money they have saved. The physical act of emptying a piggy bank is more profound than making a bank transaction and will cement the impact of choosing to withdraw funds. 

Work with your child to develop a budget on allowance day. For example, stipulate that 30% of the money must go into long-term savings, while the other 70% can be attributed as your child desires. If there is a particular toy or game they are pining for, encourage your child to create a new saving fund for this item and put away a percentage of their allowance each week.  

Explain the pros and cons behind the amount they allocate. For instance, if your child allocates 50% of their allowance to the game, they will be able to buy it in three weeks but won’t have any money aside for candy. Alternatively, they can opt to put 25% percent of their money aside, which will result in a longer wait but let them invest their money in other areas. This will act as an introduction to portfolio diversification. 

5. Books & Games

Another straightforward way to teach kids entrepreneurial skills is through reading and gameplay. 

Created by the author of “Rich Dad, Poor Dad” by Robert Kiyosaki, “Cashflow for Kids” is designed especially for children. It’s a perfect choice for parents wanting to teach kids about money and investing. It touches upon concepts such as income, expenses, and assets in an accessible way.

Board games, such as “The Game of Life” and “Monopoly,” are also effective at teaching money management in an engaging way. These games promote resilience and expose children to the experience of loss and risk in a safe environment.  

The way you raise your children can have a profound impact on their success as adults. By introducing your children to goal setting, budgeting, and pitching at a young age, you can help them develop the skills required to succeed as entrepreneurs in adulthood.