Are you considering how to guide your little one toward a career in entrepreneurship? Have they already shown interest in the idea of being a business owner? Perhaps they already have the faintest idea about what they want to do but they need an extra push?
Well, this calls for a kids business plan, one that shows them how to take an idea and turn it into a fully functioning business.
In this article, I’ll give you the foundation for a great business plan for young children. So, let’s get started!
Define the Business
Assuming you already have the business idea down, the next step is defining the business idea on a more general level. A good company description goes a long way to help your child develop a small business.
But that’s far from everything. Let’s go through a couple of things you can ask your child about his business idea.
1. What Does the Business Do?
The first step is establishing what the business does. What products and services will it provide? This could be anything from a lemonade stand to an eCommerce business or a pet-sitting business.
Ask your child what they want to do and why. Do they have any particular skills or interests that would translate to a successful business venture?
At the end of this stage, you should settle on one main product and/or service that the business provides.
A good strategy is to ask your kid to draw out the product that they want to sell if it’s a physical product. This helps them visualize their business better.
2. Why Would People Buy Your Product?
After settling on a niche for the business and a product/service to sell, ask your kid why they want to sell that particular product.
The idea here is to guide them to a better understanding of what makes a good and competitive product.
If it’s a lemonade stand, will the lemonade be made with special spices that enhance its taste, perhaps?
Let them know that a good product should always aspire to be greater than the competition and to have a competitive advantage. That it should offer something more than what others are offering.
At the end of this stage, your kid should know what product they want to sell and why people would want to buy it over others.
3. Why Do You Want to Sell This Product?
Establishing your kid’s personal motivations for selling a particular product will help them better identify themselves with the business idea.
If they’re particularly passionate about the product, they’ll put much more effort into making it, marketing it, and selling it.
They could be interested in this product because they want to help people who have a particular problem. Let them know that’s a noble purpose and they should feel proud!
Or they could be in it just to make money. That’s not a bad motivation, either. It’s normal to seek a profit by selling a product.
4. What Is the Name of the Business?
After settling on a product to sell, it’s time to come up with a good name for the business. The name needs to be:
- Easy-to-read
- Easy-to-remember
- Short and suggestive
- Relevant to the product
Ask them to offer suggestions, note them down, and then help them settle on the best one. This doesn’t have to be set in stone but it’s good to have an idea before moving forward.
This is the third step because your kid will have a much easier time naming his business if he knows what the business does and why it’s unique from others.
5. Who Will Buy Your Product?
Next, your kid should understand his target audience or target market. Who will he sell his products to? Depending on the product, the potential customers could be:
- People looking for trendy clothes
- Foodies looking for great food
- Parents who need a babysitter
- Other business owners who need design services
- Women who want jewelry
This is when you help your child build a customer profile, which should include things like age, occupation, gender, interests, problems they’re facing, and needs.
This step is essential for when you’ll talk about the marketing strategy for the business. Without a target audience to market the product to, the business will fall flat.
6. How Will You Make the Product?
Whether it’s a physical or digital product, it needs to exist before being sold. Ask your child for details about the manufacturing process:
- What materials do they need to make the product?
- Can they make the product alone or do they need a team?
- How many materials do they need and where can they get them?
- How will they get the products at home?
The manufacturing process is essential to building a budget, planning for a positive cash flow, and making a profit later on.
So, they should provide definitive answers to these questions. Once you settle on the product manufacturing details, it’s time for a marketing plan.
7. How Will People Know You Have a Product to Sell?
Once they have the product, business name, target audience, and manufacturing process narrowed down, how will they promote the product?
People need to know that they have a product or service that they’re selling. They also need to know what makes their product better than the competition’s product.
Here are some questions you can ask your kid:
- How will people find out about your product?
- Will you promote the product online or with physical billboards?
- Will you pay for ads on social media?
- Will you use word-of-mouth to spread awareness about the product?
Take the time to guide your child through these questions and settle on definitive answers. It’s no hurry, so they can take all the time to think about it!
8. What Is the Business Location?
Depending on the business idea, this answer might already be obvious but if it’s not, take the time to ask them about it.
If they plan on selling T-shirts, for instance, will they sell them online through a website or will they have a physical store location? Both options are just as viable these days.
If they want to offer web design services, on the other hand, there won’t be a physical location for the business, most likely. It would be a strictly-online business.
The location is a very important detail because it determines a large part of the financial strategy.
9. Who Will Own the Business?
Last but not least, ask your kid whether they want to be the sole owner of the business (sole proprietorship) or if they want to co-own it with someone else.
Perhaps they want to start a business with a friend or family member. This will be important for the legal foundation of the company.
Moreover, this is also when you should teach your kid about business management. Small business administration is a complex process that involves many moving parts.
Set Specific Goals
After settling all the details and finding out the who, what, when, why, and how of the business, it’s time for more detailed planning.
At this stage, your kid needs to define the goals of the business and the products it sells. Here’s how this would look as a questionnaire:
Financial Goals:
- How much money do you want to make with this product?
- What will you do with the money?
- Will you save some of the money to improve your business?
- Do you want to donate some of the money to charity or support fundraising activities?
Every business, and every business owner, has to have clear goals that they follow. Financial goals need to be established early on so that your kid has something tangible to strive toward.
Personal Goals:
- How do you think you will improve if you start this business?
- What do you want to improve about yourself by having this business?
- What skills do you need to do this?
- What can you do to improve the skills necessary for this business?
Your kid should create a journal to keep track of these personal goals and check them out once achieved.
They’ll act as a key motivator to get things done and assess the progress they’ve achieved.
Business Goals:
- How many products will you need to start?
- How long does it take to make one?
- How many products do you want to sell in the first year?
- How much money do you want to make in your first year?
- Can you improve the product later on?
Create a few professional milestones for your kid to achieve, like products sold, money made, and potential improvements to the product/service.
These goals are aimed more at the business side of things, looking at how the company and its products are performing.
Learning Goals:
- What should you learn in order to create the business plan and the product?
- Who is your competition and what are their products?
- How will you perform a competitive analysis?
- Are there any market trends you should know to maximize your business performance?
- Where can you find your target audience quickly and easily?
- What’s the best platform to place online ads on?
At this stage, they need to make a list of everything they should research about their business. These are things they need to learn, whether it’s about the product, target customers, competition, or market (market research and industry analysis).
Guide your kid to seek advice from industry leaders, and entrepreneurs, attend workshops, and go to other learning experiences.
Time Management Goals:
- How much time do you have to work on your business?
- How long does it take to make one product?
- Will you do this after school or during weekends?
- How much time do you have after finishing homework?
- How long does it take to get the necessary materials for every product?
Task prioritization and time management are the name of the game here. They need to know what to do, when to do it, and how much time they have to do it.
Since they also have school and homework to consider, it’ll be harder to juggle every responsibility and take care of the business side of things at the same time.
They need a clear time management plan if this is going to work.
Customer Satisfaction Goals:
- How can you ensure that the customer is satisfied with your product?
- What if a customer doesn’t like your product?
- What if a customer decides to return a product or asks for a refund?
- Will you offer discounts, seasonal offers, and other benefits?
- Will you offer exclusive benefits to returning customers?
- How many satisfied customers do you want to have in your first year?
Customer satisfaction is the lifeline of every business, and your kid needs to understand this thoroughly.
They need to plan ahead in case some customers don’t like the product. They should also consider special benefits for loyal customers, discounts, seasonal offers, and so on.
Lastly, they should set a goal with the number of satisfied customers they want to have. It’ll help them visualize their goals better and motivate them to try their best!
Plan the Budget & Financial Projections
This stage talks about the financial plan or the money-phase. It teaches your kid about business revenue, profit, ongoing expenses, financial projections, and more.
Teaching them the difference between revenue and profit is especially important so that they have realistic expectations about the success of the business.
You need to help them establish how much the product will cost to make, shipping costs, marketing costs, and how much they should charge for the product to make a profit.
In terms of expenses, businesses often have:
- Startup costs
- Expenses with supplies
- Expenses with marketing
- Expenses with equipment
- Expenses with labor (hiring people to make the product)
- Taxes
- Unexpected expenses
The profit only comes after accounting for all the expenses, and the little one needs to understand this.
This is also the time for an income statement, introducing the concept of cash flow projection, startup costs, balance sheet, and more.
Review, Adapt, Monitor, and Learn
We’ve reached the end of this child care business plan template. Next, you should teach your child that:
- Business planning is not set in stone. It can be changed and adapted based on new things they learn. A business that does not adapt will never grow
- Feedback is necessary to improve the business and the product. Criticism, whether it’s good or bad, is a necessary step for growth
- You are there to help them at every step of the way but that independence is a necessary skill for evolution
- Running a business is a constant process of learning, adapting, and using new information to grow and evolve
Remember to celebrate their success with every achievement. Personal satisfaction is an important step in developing a successful business.
If your child has big entrepreneurial dreams, let this business plan for kids be his guide on the path to becoming a young entrepreneur!