Kid start-ups; the new age of kidpreneurs
You’ve probably haven’t heard of Ben Pasternak, but this Australian kidpreneur, at the ripe old age of 19, lives alone in his own New York high-rise apartment.
Kidpreneurs are everyday kids with an eye for an opportunity and the entrepreneurial drive to make it happen.
Ben’s fortune grew from the tech business he set up to develop social media apps for teens. After recently selling it, he’s now turning his attention to the burgeoning plant-based food industry.
While we grown-ups are sometimes wary of starting from scratch, kids are fearless and motivated by their imaginations.
In our day, entrepreneurial kids sold lemonade or veggie seedlings sprouted in Dad’s shed. But today’s online connectivity means that kids no longer sit outside awaiting passing traffic. They’ve moved indoors, extending fibre-optic fingers directly into global customers’ inboxes, and utilising online sales platforms, social media marketplaces and eCommerce tools.
Naturally, the financial rewards are motivating, but there are other benefits for children pursuing their business ideas. Kidpreneurs master skills it often takes a lifetime to learn (probably why they’re called life-skills) such as:
- communication,
- prioritising,
- organising,
- money handling and budgeting,
- resilience.
Of course, taking a business idea from conception to realisation is not as easy as mowing a neighbour’s lawn for pocket money. As technology has enabled wider markets, it has left businesses exposed to new, and previously unconsidered, risks.
Before supporting your children into business consider the following:
- Costs: Nothing is free – we could leave it at that, but in the interests of parental sanity we suggest you research everything from equipment, materials and suppliers, to insurance, accountants and government by-laws.
- Qualifications: Whether your teen is selling cupcakes or offering baby-sitting services, make sure they, and you, are across any regulations, e.g., do the budding bakers need food-handling certificates and allergen labelling knowledge?
- Legalities: All industries have legal requirements. Even online sales platforms may require the seller/service provider to be insured, provide return/refund procedures and customer privacy policies. Failure to meet legal requirements may result in exposure to financial or legal risk!
The Australian Government recommends all businesses conduct a 3-step risk assessment:
- Identify where you’re at risk,
- Analyse the level of risk,
- Evaluate the nature of risk and decide what to do.
Did you know that if space in the family home is used for business your residence may be subject to capital gains tax when you sell?
The government may assess that part of your home as commercial property, so ensure you seek legal, and financial advice to understand your obligations. Fully explore all issues around business ownership and structure, including responsibility in the event of bankruptcy. Then there’s tax – the federal treasurer is interested in your kids’ affairs too!
With everything else to consider, don’t overlook cyber-safety. Though every business is vulnerable to scams and crooks, kids are additionally at risk from online bullying and predators.
Take all necessary precautions, including paying for, and keeping up to date, anti-virus software and include anti-SPAM technology when building websites, online stores, etc.
Don’t let the negatives outweigh the benefits, though. Supporting your kidpreneur can set them up for a future where they tread their own path and allow their imaginations to run free.
Thinking about imaginations running free – perhaps kids make the best entrepreneurs!
For guidance and support to help set up your kidpreneurs’s latest endeavor, speak with our accounting and taxation specialist Stella Xiao.
This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.