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 supermarket and then sold candy separately at a fairly large premium.
Within a week we had dozens of kids spending their lunch money on our candy. As you can imagine, that didn’t sit well with the teachers who had to calm down their students after they indulged in sweets instead of lunch. And apparently some of our not-so-loyal customers have clicked to their parents.
Everything came to an end when our director called us to his office. He complimented us on our creativity and then banned us from selling candy on school grounds.
Most adult entrepreneurs have a similar story. As a young child, they sold candy, mowed, babysit; pretty much anything a kid can do to make money. From an early age, they were empowered to generate income on their own terms and that lesson can be carried into adulthood.
So that begs the question: Why aren’t more kids starting businesses?
I think they are missing at least one of the following:
I’ll tell you another short story.
When I was a kid, my dad and I would take broken bikes out of the trash, fix them, and sell them in our front yard. My father helped us every step of the way and let me share the profits with my siblings.
Through this he gave me the vision, motivation and support needed to run a business.
Unfortunately, not every child has this opportunity. Here’s why Daymond John’s latest book, Little Daymond is learning how to earn, if necessary. Through stories and examples, he provides the perfect guide for any parent seeking to raise entrepreneurial, financially literate children.
I recently had the 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 age.
I’ve shared a few key takeaways below.
Why Daymond wrote a book that encourages children to pursue entrepreneurship
“I realized I had read my daughter too many princess and pony books,” Daymond said.
As a father of two girls (Elena and Bree), I’ve been guilty of that too. 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 that the most common common thread of all the people who have had to grow their business or even start a business is that they didn’t know how money works. So they had a passion, they may have a skill, a great idea, a great invention, but it all came down to the basics of not knowing how money works.
So if you want to start or grow a business, you need to know how money works. Daymond gives many lessons on that in the book, which are useful for entrepreneurs of all ages.
How do you raise enterprising 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 someone or it brings joy to someone. And when you solve a problem, you guarantee that you will bring joy to someone.”
She was able to start a business doing something she loved (collecting shells) and bringing joy to others as well (selling bottles with hand-picked shells and sand in them).
At first, though, she wanted to give the bottles away, so Daymond had to save her from a common entrepreneurial mistake: undervaluing your talent. He explained that when children first start their businesses, we need to help them understand that they should not give their time or services away, but earn them so that they can ultimately give.
This message also applies to adults. You can’t help those around you if you don’t make enough money to support yourself.
Daymond John’s method of investing versus spending
During our conversation, Daymond also gave a valuable financial lesson by explaining it the same way his daughter did. She recently received $300 and needed help deciding how best to spend it. Daymond then shared his rule of thirds, which can be applied by any australiabusinessblog.com.
As your money comes in, Daymond recommends dividing it up as follows:
- A third – What you have to pay
- One third – Investment
- A 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:
- A third – Pay bills and save for taxes
- A third – Invest in your education or company
- A third – Whatever you want (enjoy yourself!)
And this is what his daughter did with her money.
- A third – Gave it to her parents for safekeeping
- A third – Started a business selling sea shells in a bottle
- A third – Bought a Betta fish
When Daymond’s daughter brought home her new fish, the lesson continued, which I’ll share next.
The lasting impact of raising entrepreneurial children
“We’re at home watching 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 by freedom?’ I said, ‘You didn’t have to wait for Christmas. You didn’t have to wait until your birthday. You didn’t have to let Dad pick it up and you guess the color. You went to get that fish yourself on your terms. That fish is yours. And that’s what money buys, freedom.’
And freedom can be time with your family, giving to those in need. And then she started to understand what money made her.”
This is just one of the many lessons learned in the book, and as you’ve noticed, entrepreneurs of all ages can benefit from it.
Do you want to learn more from Daymond and how to raise enterprising children? First listen to the full interview below.
Check out his new book, Little Daymond is learning how to earn. I’ve already ordered it for my kids and I’ll share their updates in the coming months!