Stop me if you’ve heard this one before.
I started my first business when I was ten years old. My friend Matt Bellitera and I sold candy during lunch break at school. We bought it in bulk at a grocery store then sold candy individually with a rather large upcharge.
Within a week we had dozens of kids spending their lunch money on our candy. As you can imagine, that didn’t go over too well with the teachers who had to calm their students down after they splurged on sweets instead of lunch. And apparently, some of our not-so-loyal customers snitched to their parents.
Everything came to an end when our principal called us into his office. He complimented us on our creativity, then banned us from selling candy on school grounds.
Most adult entrepreneurs have a similar story. As a young child they sold candy, cut yards, babysat; pretty much anything a kid can do to make money. From a young age they were empowered to generate revenue on their own terms and that lesson can carry into adulthood.
So that brings up the question: why don’t more kids start a business?
I believe they’re missing at least one of the following:
I’ll tell you another quick story.
When I was a kid my father and I would dig broken bicycles out of the trash, repair them, then sell them in our front yard. My dad helped us every step of the way and let me split the profit with my siblings.
By doing so he provided me with the vision, motivation, and support needed to run a business.
Unfortunately, not every kid has this opportunity. This is why Daymond John’s latest book, Little Daymond Learns to Earn, is so necessary. Through storytelling and examples he provides the perfect guide for any parent who wants to raise entrepreneurial, financially literate children.
I recently had a chance to connect with Daymond for the Launch Your Business podcast. He shared more information about his book and provided valuable lessons for all entrepreneurs, regardless of their age.
I’ve shared a few key takeaways below.
Why Daymond wrote a book that encourages children to pursue entrepreneurship
“I realized that I had read my daughter one too many princesses and pony books,” Daymond stated.
As the father of two girls (Elena and Bree), I’ve been guilty of that as well. But that’s not the only reason he decided to write the book.
He continued, “I also realized after all these years on Shark Tank the most common thread of all the people that needed to grow their company or even start a company, is they didn’t know how money works. So they could have had a passion, they could have a skillset, great idea, great invention, but it all went down to the basic fundamentals of not knowing how money works.”
So if you want to start or grow a business, you need to know how money works. Daymond provides plenty of lessons on that in the book, which are useful for entrepreneurs of any age.
How can you raise entrepreneurial children?
Daymond says it’s less about starting a business and more about developing a mindset.
When his own daughter asked what business she should start he told her, “A business solves a problem for somebody or it brings somebody joy. And if you solve a problem, you guarantee you’re gonna bring somebody joy.”
She was able to start a company doing something she enjoyed (collecting seashells) and would bring others joy as well (selling bottles with hand-picked seashells and sand inside).
However, she initially wanted to give away the bottles, so Daymond had to stop her from a very common mistake for entrepreneurs: undervaluing your talent. He explained that when children first start their business we must help them understand not to give away their time or services – but to earn, so they can eventually give.
This message rings true for adults as well. You can’t help those around you if you don’t make enough money to sustain yourself.
Daymond John’s method for investing vs. spending
During our chat Daymond also provided a valuable financial lesson by explaining it the same way he did to his daughter. She recently received $300 and needed help determining how to best spend it. Daymond then shared his rule of thirds, which can be applied by any entrepreneur.
When your money comes in, here’s how Daymond recommends divvying it up:
- One third – What you have to pay
- One third – Investment
- One third – What you would like to have (but don’t have to have)
Here’s a quick example of how you could apply that to your business:
- One third – Pay bills and save for taxes
- One third – Invest in your education or business
- One third – Whatever you want (enjoy yo self!)
And, here’s what his daughter did with her money.
- One third – Gave it to her parents for safekeeping
- One third – Started a business selling sea shells in a bottle
- One third – Bought a Betta fish
Once Daymond’s daughter brought her new fish home the lesson continued, which I’ll share next.
The lasting impact of raising entrepreneurial children
“We’re at home looking at the fish and I said to her ‘Baby, that’s from the money you made, that brought you freedom.’
And she said, ‘What? What do you mean freedom?’ I said, ‘You didn’t have to wait for Christmas. You didn’t have to wait for your birthday. You didn’t have to have daddy pick it up and you guess the color. You went and got that fish yourself on your terms. That fish is yours. And that’s what money buys, freedom.’
And freedom could be time with your family, giving to those in need. And that’s when she started to understand what money got her.”
This is just one of the many lessons taught in the book and as you’ve noticed, they can benefit entrepreneurs of all ages.
Want to learn more from Daymond and how you can raise entrepreneurial kids? First, listen to the full interview below.
Then, check out his new book, Little Daymond Learns to Earn. I’ve already ordered it for my kids and I’ll share their updates over the coming months!