Raising Entrepreneurs

Eight-year-old Nzinga Ajamu has her very own jewelry-making business.

“I discovered my passion for making jewelry during my jewelry-making class in school,” she told the Daily News in Memphis, referring to a cultural arts curriculum course she took last year. “I enjoyed making jewelry so much that I asked my parents to buy beads for me so I could make more jewelry. Also, I made a necklace, bracelet and ponytail holder to wear to school. … When I would go places people would compliment me on my jewelry and they would say, ‘Where’d you get that jewelry?’ and I’d say, ‘I made it,’ and they could not believe that I made it.”

Nzinga’s creations were so attractive that people asked her to make jewellery for them as well, and before long she has a thriving business.

Nzinga comes up with the designs for the jewelry – sometimes, she said, the ideas come at night while she sleeps. She also sets her own prices and keeps up with all the orders.

“It’s her company and she handles everything herself,” Veda said. “And we do everything we can to keep it that way.”

But school always comes first, Nzinga’s mother, Veda, told the Daily News.

Education, Nzinga’s parents are teaching her, is the foundation to achieving the high goals the girl has set for herself. Nzinga doesn’t see Queen Nzinga’s Creations as just a fly-by-night business. This is just the beginning for what she hopes to achieve as a “grown-up.”

Already, Nzinga is envisioning having her own retail space to run her business, and developing a broader market and a larger production capability.

Meanwhile, she markets her creations through her website, www.nzingascreations.com.

Rich Schefren took a step into my world last week, when he went to talk to a group of five-year-olds about business - and according to Rich, he was “Shaking In My Boots”!

It can be daunting, trying to break down complicated business ideas into terms kids can understand. Especially if you have learned business through years of experience, or at university-level academic institutions, or both. The gap between your understanding and the world of a child seems almost infinite.

The truth of the matter is that it can be done. Parents are doing it every week, using the Cash-Smart Kids program.

I left a comment on Rich’s blog post, letting him know about the program - I wonder if he will come and check it out?

At his blog post, “Shaking In My Boots” you can download the gorgeous ads he had these 5-year-olds make to convince their parents to buy them things. Imagine how much more powerful it would be if they also included a business plan as to how they would earn the money to pay their parents back for the purchase?

There is a common misconception that only certain personalities are suited to business. In fact, people of all types have become successful entrepreneurs - the trick is to know your strengths (and weaknesses), and choose the right kind of business.

As a parent, it’s good to be alert for your young entrepreneurs’ qualities, and steer him or her towards businesses which suit their personalities.

A great way to think about different types of personalities in business is provided by Roger Hamilton in his book Your Life, Your Legacy. Hamilton distinguishes eight different types of entrepreneurs, and provides biographies of over 30 famous entrepreneurs, divided into the eight types for easy comparison.

Creators move a million miles an hour, spinning ideas like a Catherine wheel. They are great at coming up with really cool idea, but tend to be weak on following through to completion. With the right team to handle the boring detail of making their vision a reality, Creators can do just about anything. For example, Richard Branson and his space tourism business.

Stars shine in the light of public attention. They love to talk about great ideas, but can quickly lose their shine if they are required to slog through masses of routine activity. Given a great product, a Star can quickly whip up a frenzy of excitement in the marketplace - think of Oprah, and the value of getting an endorsement from her.

Supporters are the leaders of teams. They care deeply about other people, and will always check in to see how everyone is feeling before committing to a course of action. Without direction, their lives can become an endless round of pleasant chats with nothing to show for it, so they need to team up with a Creator or a Mechanic to give them a direction in which to lead the team. Jack Welch of GE is a classic Supporter profile - his ability to get the best out of people is legendary.

Deal Makers put people together to create new opportunities. They are always connecting, talking, listening, remembering endless details of who is up to what, and their catch-cry is “ah, I know someone who might be able to help you with that …” Deal Makers lose out when they forget to create value out of all their wining and dining, or forget to make sure they get a piece of the action. Donald Trump is a Deal Maker.

Traders have an unerring radar for bargains. They can pick a value buy on the stock market, at a flea market, or in commercial real estate. Stuck in roles where they can’t see both sides of a deal, the buy and the sell, they can go their whole lives without ever realising their true gift, but when they have the full picture, they are masters at realising value. George Soros is a master Trader.

Accumulators make their money from buying well and holding assets for the long term. If Accumulators fail, it is because they wait too long to take action, or keep their knowledge to themselves instead of building a team around them. The most famous Accumulator of recent times is Warren Buffet.

Lords love the detail, unlike the flashy Creators and Stars, and may even be accused of being “stingy”. Lords excel st squeezing every last percentage point of performance out of an asset. They don’t even need to own the assets to collect cash flow from them - they are happy merely to control the revenues. They love control and hate risk, and their tendency to micro-manage makes them poor leaders of organisations. Given the right team to compensate for those weaknesses, Lords can make money consistently in any niche, regardless of the conditions around them, capitalising on difficult times to acquire their competitors and eventually dominate entire markets. Rockefeller, Carnegie, and J. Paul Getty were all Lords.

Mechanics tinker with businesses the way that some folks tinker with car engines. They can always see a way to improve a system! Many Mechanics find it hard to get going, because they can’t decide what business to start. A Mechanic needs a Creator to start something, and a Deal Maker to get the money rolling, before they can truly shine in their role as the person who takes the one small outlet and builds a system which will spread that little business all over the globe. Sam Walton, Ray Kroc (founder of McDonalds), and Henry Ford were all Mechanics.

Study your young entrepreneur carefully, and you will start to get clues about their individual Wealth Profile. Do they have a new passion every week? Are they always preening in front of the mirror? Can they talk to just about anyone? Are they always coming up with suggestions for people to contact? Do they love a bargain? Do they save money naturally? Do they like to take things slowly and minimise risk? Or do they always complain that they way things are done is “stupid”, and want to change the system?

Work with your child’s natural strengths, and you will not only help them create a business today, you will also give them vital clues as to their most enjoyable and easiest lifetime path to wealth.

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When my three girls were aged between nine and twelve, they started a rat-breeding business. They borrowed the start-up capital from us, paid interest out of their pocket money, and bought their breeding stock of rats.

After a few months, there were baby rats rolling off the production line, about one litter every 6-12 weeks. In less than 12 months, they had repaid the initial loan, and the business was turning a profit. After another 12 months they were tired of cleaning cages every weekend, so they decided to let their remaining rats retire from active breeding duty without being replaced. Eight or nine months later, the last rat died of old age, and the young directors met one last time to liquidate the business.

I think it’s a cute story, and I tell it regularly (probably more often than I should, but, hey, they’re only cute for such a short time).

When I told this story, I found that people got very interested. They wanted to know how we taught our kids to run a business. How we got our kids to want to run a business. How we got our kids interested in earning money at all, for that matter, at such a young age.

I think that these are the wrong questions to be asking, actually.

We should be asking questions like - why aren’t all kids doing this? What stops the vast majority of kids from turning their creative minds to the question of how to earn the money they need to buy the things that they want? Why is it so strange, in this day and age, to see a 12-year-old negotiating to be paid for their services?

There was a time, not so long ago, when 95% or more of the population were self-employed, either on farms, in retail, or in cottage industries. Kids grew up surrounded by commerce, watching the exchange of valuable services for money, seeing the process of trading for profit, ingesting the principles of customer service with their mother’s milk.

These days, the majority of people depend on someone else’s entrepreneurial spirit to generate revenue into a business to pay them a wage, either directly, by working for a company in the private sector, or indirectly, by working for a government funded by taxing the private sector and its employees.

With this shift from business ownership, however small-scale, wide-scale employment, has come a corresponding shift from self-reliance to dependence. We have almost lost the ability to take care of ourselves financially. Most people are expecting an employer or the government to take care of them when they can no longer work. Or, worse, they aren’t even thinking about how they might survive financially beyond this year, this month, or even this week.

Basic entrepreneurship should be part of every child’s education. But we can’t expect the employees who teach in schools to step up to the plate and pass on skills they don’t have. Just like the other crucial life skills like brushing their teeth, eating right, and maintaining relationships, teaching the skills of money and business is very much the parent’s responsibility.

It’s not too late. Programs like Cash Smart Kids (www.cash-smart-kids.com) give parents the tools they need to make their kids financially self-reliant.

Just about every entrepreneur who achieves financial independence immediately starts teaching others how to do likewise.

Make sure your child is one of those teachers. Give them the basic skills they need, even if that means going out and learning them late in life yourself!

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.