Raising Entrepreneurs

We want to help our kids make money for many reasons. When kids make money of their own, they grow in confidence, and usually they gain new skills. They take more care of the money they make themselves, and they learn better money management habits.

Today is New Year’s Eve, a time when we reflect on the past year’s accomplishments and disappointments, and make pledges to ourselves about the year to come.

When I think about my kids and their efforts this year, I’m very proud of them all. They have all started new ventures this year - in fact, one has started two, because the first online business model she tried didn’t really suit her personality.

As parents, we have done well in modelling the right behaviors, starting a new business of our own, buying a new investment property, as well as putting considerable time and money into supporting sick relatives.

My regrets for 2007 really come down to two things - I wish I had spent more time helping the girls with their start-ups, because start-up is the time when everyone needs support, even if it’s something they have done before, and with one particular relative I got so focused on bringing in more money to support her financially that I didn’t spend as much time as I would have liked just being with her.

So, in both cases, it comes back to time. It’s not like I “lost” some time - I spent all of my 24 hours each day. But I wasn’t happy with the way I prioritised my time.

My New Year’s Resolution is to be more efficient in the tasks I do that don’t involve being with other people, so that I have more time to spend with the people I love, and particularly helping my kids in their efforts to make money.

I haven’t made a comprehensive list of the things I will change, but I have already decided on one thing I can do - I am going to unsubscribe from at least half the people who send me 2-3 emails a week marketing stuff to me.

Some people send me good, useful information at least half the time, and I’ll probably stick with most of those. But a lot of them just send me email after email saying “watch this video”, “download this audio”, or “check out this link”, and nine times out of ten it’s a sales pitch.

I reckon I’ll save myself half an hour to an hour a day, right there!

How about you? What changes will you make so you can better help your kids make money in 2008? Kids need our support to get started making money. If you are thinking of helping your kids make money online, we have a free eBook on the Cash-Smart Kids website which will show you how to find the right niche for your kids to make money online.

A friend of mine asked me today “If you were a mega-millionaire, how would you treat your kids? How would you prevent them from becoming spoiled?”

After thinking about it carefully, I had to reply “I’d treat them just the way I do now.” We make good money now, and we could buy a lot more for our kids than we do. The reason we don’t is that we want them to learn the value of money, a work ethic, and a sense of personal power that they can achieve their goals without relying on hand-outs.

However much money we make, and however much we have in assets, we will still want them to learn the same things.

The things which might change are things like the frequency and location of family holidays - given unlimited cash, we would take the kids overseas at least a couple of times a year.

But that’s about it.

Turns out my friend was in a position of making more money this year than ever before, and only now has this particular question become relevant.

I would encourage everyone to think about it, though. At one point, I was being held back by a subconscious resentment that I was doing all this work and my kids were getting the benefits for free. Once we got our policies clear about what we do and don’t buy them, that particular resentment faded away.

If you haven’t consciously thought about it, it’s well worth a look. You might even find that a similar type of subconscious tether is holding you back.

I was thinking about a particular business issue yesterday, one I have seen in many of my offline clients’ businesses, and one which is also a problem for internet marketers.

The issue is that old chestnut that it’s five times easier (and cheaper) to sell something to someone who has already bought from you than to find a new customer from scratch.

In a retail store, that means coming up with creative ways to collect contact information from your customers, and then posting them physical letters (although these days more and more traditional retailers are collecting email addresses).

Internet marketers have so many advantages over traditional business when it comes to creating their customer database. They usually collect an email address when they make a sale, and, what’s more, people expect to be asked for their email address when they shop online. They don’t resist it in the way that they do when their local pizza delivery guys asks for contact information.

And yet, I know that many people online are only selling a single product. How can you follow up and make the five-times-easier second sale if you don’t have anything else to sell?

I was trying to think of a way to make this idea concrete, for younger kids especially, who struggle to visualise what we mean when we say “customer database”.

And it came to me.

Did you ever see that game Trac Ball, with a ball and two scoop-shaped racquets? Like plastic tennis racquets which have had the edges curled forward, so no matter where the ball hits, it is directed to the bottom centre, near the handle, into a pocket. When you make a throwing motion, the centrifugal force lifts the ball up out of the pocket, and the curve of the racquet sends it curving beautifully through the air to your partner, who just has to get theirs into the ball’s general vicinity and the shape of the racquet does the rest.

By comparison, a standard tennis racquet is really good ball-repellent. I mean, those balls just BOUNCE off that racquet, so hard that if you’re not really careful with the angle of the head the ball shoots out of the park, and you spend the rest of the afternoon hunting in the woods for it.

These two types of racquets are a great analogy for the two styles of doing business.

In the sub-optimal business, customers come along, interact once, buy or don’t buy in that instant, and then “bounce off”, never to be seen again. You can get crazy busy hitting ball after ball, but you can’t stop because when you stop there are no balls around at all - no sales in your business.

What you really want to build is a Trac-Ball business - a business which “scoops” up prospects from the general vicinity and channels them to where you want them. You can hold them as long as you like, and send them “over the net” to your product offers when you are good and ready.

Your opt-in list is the key to your Trac Ball business.

If you’re in the part of the world that’s heading into gift-giving season at a frightening pace, you’ll probably be thinking about gifts for your young entrepreneurs.

If you don’t want to give them yet another time-wasting computer or Play Station game, here’s an assortment of business-related gifts that I’ve come across in the past couple of weeks.

Teach them how to manage all that money they are earning with a four-compartment money box. One compartment for spending, one for saving, one for investing, and one for giving.

Upgrade them to a full version of a piece of software they have been using, like Dreamweaver, Wordtracker, or NicheBot.

Get them their very own web site, all set up and ready to go - SiteBuildIt! is having a 2-for1 Christmas sale.

Subscribe them to a Private Label Rights website to help them build content faster - some of these subscriptions are even free! Have a look at all the giveaways at Resell Rights For Newbies, for example.

Purchase them tickets to a seminar about their chosen business.

Buy a DVD set about their chosen business (one of my 11-year-olds has an eBay store, and she will actually watch a talking head for 25 minutes at a stretch, but only if it’s talking about eBay! Her favorite is Derek Gehl’s “Insider Secrets to Selling on eBay”.)

The most important gift you can give as a parent, though, is the gift of your time and attention.

Give a gift voucher for a weekly one-on-one get together, or a fortnightly one, good for the whole of 2008. Spend that time learning more about what makes your young entrepreneur tick. What are their likes and dislikes, their ambitions and their fears? Where do they need help dealing with the challenges of growing up?

In years to come, whether they are hugely financially successful or simply muddling through, those times will be the times they remember.

In our busy, ever-changing, competitive, interrupt-driven, attention-starved culture, the act of carving out time specifically to spend with one other person is the single greatest demonstration of love one can make.

And at the end of the day, that’s what your young entrepreneurs need most from you - to know that you love them enough to make them a priority in your life.

I was chuckling yesterday - it’s so nice when your kids come to a conclusion all on their own, a conclusion you have been waiting for them to reach.

The backstory to this one is this. A couple of years ago, my daughters started a business breeding pet rats. They borrowed the start-up capital from us, and paid interest out of their pocket money. After a while, two of them wanted to pay down the principal out of their pocket money, too, to get rid of the debt earlier. (We decided not to intervene with a good-debt-bad-debt conversation at that point!)

One of the twins didn’t want to pay extra, and there were words exchanged.

In the end, we reached a compromise - the one who didn’t want to pay extra would become an employee. She would be paid each time she helped with the cage-cleaning, but she would not be entitled to a share of any profits which came down the track.

This smoothed things over, and some time later the debt was all paid and the profits were being distributed between the other two. We discussed the difference between being paid for what you do at the time you do it, vs taking a risk and possibly getting a bigger payday later.

They wound the rat business up after a couple of years, and a couple of months later, the oldest was finally old enough to apply for a job a McDonalds. The younger two, about the same time, started internet businesses. I talked to the oldest about having an internet business, too, but she was so dazzled by the enormous size of her first fortnight’s pay from McDonalds that she wasn’t interested.

She said she wanted to repeat the employee-vs-business experiment they had done with the rat business, with her as the employee this time. She was very confident that she could make more as an employee than the others would online.

Over the past few months, she has started to notice the problems with being an employee. She was sick, and had to reduce her hours. She was rostered to work while her friends were out at parties. She learned how everything worked within a few weeks, and boredom set in.

The final clincher was when she started rethinking her career choices. The years of study to become an anaesthetist started to look like a bit of a drag.

“But,” she said, “if I’m not going to be an anaesthetist, what will I be?”

I pointed out that there’s not a huge hurry to decide (she’s only fourteen after all), and then I dropped in a mention that if she had a bit of money coming in from an internet business, she wouldn’t have to make a final decision about her career for quite a few more years.

She thought about it. Then she said “If I was making enough money from the internet business, I wouldn’t ever need a job, would I?”

“Not unless you wanted to do something that you have to do as an employee,” I said, “like being an astronaut.”

Wheels turned almost audibly.

“I want a website,” she said.

And so endeth the experiment!

Don’t get me wrong - I’m not opposed to people having jobs. There have been times in my career that I have been, at least on paper, on someone’s payroll.

But I am opposed to people being raised with an employee mindset. I am proud of my McDonalds employee daughter, not just for having the gumption to apply the very first day their website would let her in to do so, but also for going out and getting a trade certificate as a barista before she applied, to make herself more appealing as an applicant, and for almost immediately becoming one of their fastest front-counter operators.

The way she explains it, she sets herself challenges to see how fast she can get the orders together, because it makes the work more interesting and rewarding. She never just shows up in “time serving mode” with the sole aim of surviving her hours and collecting her pay. Even at a job as apparently menial as working at Maccas, she is thinking all the time about how to add value, for herself and for her employer.

If everybody approached their work with that kind of attitude, what a wonderful world it would be!