Many parents want their children to become entrepreneurs. The surest path to this goal is to instill in them at an early age an entrepreneurial mindset. It’s this mindset that’s important and will serve them well no matter what they do in life, whether they elect to start their own businesses or not.
Here are 3 things parents can do to help their children develop an entrepreneurial mindset.
1. Say yes more than no. Parents, like investors, must do their due diligence. But if you find that “no” is the most common word in your vocabulary, remember that the most powerful word for entrepreneurs is “yes.” Now, this is not for the faint of heart. No parent wants to see their children struggle or, worse, fail. And certainly the first rule for parents is to keep their kids safe. But if we cannot tolerate the idea of our children failing, we are depriving them of a skill that is the key requirement of an entrepreneur. Think of parenting as “do” diligence and find ways of supporting your children even if you think their reach exceeds their grasp.
Even better, have the kids come up with a business plan and pitch it to you. I talked to one serial entrepreneur who actually challenged his kids to launch their own startups by the time they were in their mid-20s. “I won’t leave you any money,” the father lovingly told the kids, “but I will invest in you.” His children described it as “heir conditioning.” They knew what to do because their father had shown them great pitches. He challenged the kids to think about small problems that they or their friends faced in daily life. Then they were to come up with innovative ideas to solve them. The pitches had to be short, to the point, and in writing. And then the kids had to be prepared to answer questions and objections. It’s not easy to hear no, but that’s what children have to learn to hear. The first few pitches were strikeouts. But eventually each of the children introduced a business idea that the father could legitimately regard as worthy of investment.
Or better yet, parent for resiliency. Developing a thick skin—critical to any entrepreneur—is not an inherited trait. It has to be earned one adversity at a time. So let them earn it. When they are younger, give them choices. Peas or carrots. Skating or movies. Setting the table or helping with the dishes. As they get older, they get to make bigger decisions, some of which they will regret. Parents know that pain, failure and disappointment helped make us who we are. However much we may want to, we can’t shield our children from life. So let’s encourage our children to reach for the stars and if they come crashing down they will know their parents’ unconditional love will cushion their fall.
2. Welcome questions about money. In many families, discussions about money are taboo. The details of the family finances are hidden and if there is a conversation about money, it’s about its shortage. Kids learn to associate money with worry. If you want your kids to take smart risks, worrying about money does not serve them well. Kids are at a disadvantage in budgeting, negotiating, and taking charge of their financial lives. My wife and I made an intentional decision to be more transparent about money. At our family dinners, each person shared something positive that happened that day. I sometimes mentioned when I received a check for writing an article or speech. We talked about how that fee supported the family and its expenses (the food on the table, the mortgage for the house, the school field trips, etc.)
Better yet, have family business meetings. The family is an economic unit. Why not, every once in awhile, convene the family specifically to discuss and make decisions about the big issues facing the family? The point is that every member has a stake in the family’s economic well-being. This is the time to brief children in an age-appropriate way on the resources of the family and allow them to ask questions. Almost every family confronts limits. This is a perfect time to consider such issues as competing claims on the family’s resources, allowances, family purchases, family vacations, etc. The benefit is children emerge as active participants in economic decisions instead of passive consumers.
Even better, let them earn money. In our household, Dan and Rachel always negotiated for allowances. We decided not to link allowances to chores. Each child had chores by virtue of being a member of the family. The allowance was designed to teach them good money habits involving spending and saving. They could earn more money by taking on special jobs. As they got older, I actually paid them to help with my business. Small business owners can hire their own children and reap significant tax benefits. Dan and Rachel helped me stuff envelopes, affix labels and stamps, and take mail to the post office. I always explained how the tasks connected to the family’s prosperity.
3. Make problem-solving fun.Families that treat problems as obstacles or, worse, calamities for parents alone to fix are missing an opportunity to help children exercise some important muscles. When possible, why not give children a voice in the issues? It’s all in the attitude. What’s lost by treating problems as a series of smaller challenges that can be deconstructed, approached logically, and resolved one by one? It spells the difference between kids who are overwhelmed by adversity and those who say bring it on. It’s important for kids to follow rules, but it’s just as important for kids to be rewarded for constructively challenging norms. Indeed, questioning the status quo is a key prerequisite of being a successful entrepreneur.
Better yet, make puzzle-solving a game. At our family dinners I introduced a daily puzzle or brain teaser. I had an intuitive sense that the skills required to solve puzzles (listening carefully, checking assumptions, thinking outside the box) are useful. Some puzzles frustrated the kids and they begged for the solution. I suggested they sleep on it. Eventually they got it and the look of accomplishment when they did was priceless. It taught them that hard things take work to understand and to have confidence in their own problem-solving skills. And when we went out to eat, the kids always calculated the tip.
Even better, encourage the “why?”. Kids are full of why questions. We tried to reflect the question back to them. “Why do you think?” We wanted to reinforce the insight that almost everything happens for a reason and those reasons may not be obvious, but with a little thought and maybe additional information, the why always reveals itself. For example, parking meters. When Dan was about four years old, he saw me feeding a parking meter and asked what it was. I invited him to ask questions and think about it. Over the next few days he asked questions and offered theories until he got it.
Parents, let me leave you with one piece of advice: Let kids make decisions… and occasionally fail. Don’t bash traditional jobs. Even if, like me, you think working for yourself is objectively better than working for someone else, your kids are better off when you let them weigh the trade-offs for themselves. Not every child wants to run their own business, even if they have the chops for it. But to realize their own dreams, every entrepreneur needs a pool of talented workers who find satisfaction in being part of a team that pulls together in the heady service of the entrepreneur’s vision.