Businesses your child can start and run.

More youngsters are accepting the challenge of "kidpreneurship." Here's how your kids can do it, too.

Teaching entrepreneurship to children is an idea whose time has come. No one knows for sure how many of the nation's teens are in business for themselves, but interest in workshops, books and groups teaching entrepreneurship to young people are booming. One such group, Junior Achievement Inc. (JA) in Colorado Springs, Colo., offers in-school programs designed to teach elementary, junior high and senior high school students the basics of business and entrepreneurship. JA also sponsors after-school programs, where students form and operate their own small companies. Each year JA, which has 225 chapters across the country, reaches more than 250,000 minority students, most of them African-Americans and Hispanics. "We want kids to start thinking of themselves as potential business owners, and not just as potential employees," says James Sullivan, JA's director of marketing. "We want them to ask themselves, |Why can't I own my own business?'"

Many young people across the nation have been doing just that. Take for example, Kim McCombs, 16, an eleventh grader at Berkeley High School in Berkeley, Calif., who formed her own company, Kim's T-shirts, in April. Kim, who designs and prints many of the T-shirts herself, sells her wares for $5 to $13 each, and pockets more than $150 monthly. Kim, who plans to go to college and major in business while continuing her entrepreneurial endeavors, declares: "Having my own company gives me a sense of financial freedom. I really like making my own money."

Besides earning extra money for new clothes or to finance college, kidpreneurs are learning fundamentals of business that will enable many of them to become the owners of companies that can provide employment and generate wealth in the black community. Even if your child does not ultimately take aim at the BLACK ENTERPRISE 100s, developing a hands-on understanding of business principals can prove invaluable. Nothing drives home the importance of reading, writing and math--not to mention such skills as organization, planning and negotiation--like owning a business can. And the child can learn other life-affirming values, such as honesty, integrity, self-sufficiency and hard work, that are prerequisites for success. "Not to teach kids entrepreneurial skills, is to cripple them intellectually," asserts Steve Mariotti, president of the New York-based National Foundation For Teaching Entrepreneurship, which teaches handicapped and economically disadvantaged youth in the New York metropolitan area how to set up and run businesses. "It's a very serious deficiency."

While there are more programs and books being devoted to correcting this deficiency, there is no substitute for parents and other adults playing a direct role in helping young African-Americans to experience business ownership first hand. For example, 19-year-old Dow-Volean Haynes says without the teaching and mentorship of her father, Volvi Haynes, she would not have started her 2-year-old photography business. "I named my company A Wing & A Prayer," she explains, "because my dad always told us you can do anything you want with a wing and a prayer."

Last year, the article "These Kids Mean Business" (December 1990) focused on the importance of educating young African-Americans about entrepreneurship, detailing how parents and other sponsoring adults are making a difference. The article received an overwhelmingly response from BE readers, and prompted calls for examinations of specific types of businesses run by young people.

Starting With The Basics

"We need many more African-American corporations," says Emmanuel Modu, founder of the New York-based Center for Teen Entrepreneurs and author of The Lemonade Stand: A Guide To Encouraging The Entrepreneur In Your Child. "The incidence of entrepreneurial endeavor among African-Americans is one-fourth that of whites and one-seventh that of Asians." A good way to close this gap, say proponents of entrepreneurial programs for young people, is by teaching the next generation the risks, rewards, skills and responsibilities of business ownership.

Proponents of entrepreneurial education say it's not difficult for young people to start their own companies--all they may really need from you is some support and encouragement. However, it's important that a child doesn't feel forced to take on the responsibilities of business ownership before he is ready. The likelihood of the endeavor being a positive learning experience correlates directly with the young entrepreneur's personal enthusiasm and commitment to the business, even if it struggles or fails. Meanwhile, until he is ready to take the plunge, concentrate on teaching the basics of business and money management--a process which you can begin during your child's preschool years (see "Teaching Your Children The Financial Facts Of Life," December 1989).

When deciding what type of business to start, focus on areas that the young person enjoys and will not become easily bored with. Any fledgling entrepreneur, child or adult, needs to develop a business plan, which should include a market survey to determine if there is a need for the product or service, as well as who is most likely to patronize the business. If the child cannot finance the start-up costs of the enterprise on his own, such a plan will also be useful in convincing family members, friends and others to invest in the business. (See "A Good Plan Is Key To Business Success," November 1991. While a kidpreneurial business plan is not likely to require the degree of sophistication as for larger businesses, the article--particularly the sidebar, "How To Write A Winning Plan"--provides valuable, easy to understand guidelines for developing a solid plan.)

The characteristics common to most businesses run by young people include minimal start-up capital requirements, low overhead costs and a target market of consumers within easy reach. In almost all cases, such businesses can be operated before or after school, on weekends and during school vacations without interfering with the child's academic, family and social activities and responsibilities.

Following are profiles of three businesses--a candy store, a photography enterprise and a tutorial-services concern--that are among the many entrepreneurial endeavors suitable for young people.

For Sweet Profits, Sell Candy

William Johnson, a 20-year veteran police officer in Washington, D.C., was fed up with the wave of violence that was claiming the lives of hundreds of young African-Americans in his city. Shortly after his retirement in 1989, Johnson dedicated himself to doing something to get young people off the streets and into something constructive.

After raising $10,000 in donations, Johnson built the Connor-Harris Mini-Mall, named for two students who died violent deaths, in the District's Woodson Junior High School. The mall is run by children, who learn entrepreneurial skills by managing their own stores.

The mini-mall houses seven small stores. One of them, Warren's Candy Store, is owned and operated by 10-year-old Gordon Tibbs and Johnson's daughters, Crystal and Michelle, both 12. Johnson's daughters were taught basic business principles through a program on entrepreneurship at the Howard University Small Business Development Center. "We sell sodas, pickles, chips and lots of candy," says Crystal, an eighth grader.

Warren's Candy Store is open five days a week from 4:00 p.m. to 9:00 p.m. The three work an average of two hours a day, and at the end of the month, split an average of $600 in profits. Experts say children as young as 8 years old can own and operate a candy-sales operation, as long as they understand basic mathematics. If properly planned, such an enterprise can be launched for as little as $50.

First, an aspiring kidpreneur will need to define a target market. Who does she plan to sell candy to? At school, the child has pretty much a captive audience--hundreds of kids who probably already spend lots of money on candy.

Have your child set up a meeting with school officials to see if there are any rules prohibiting him from selling candy on the campus. If there are rules against running such a business on school property, he may have to sell his wares before or after school, just outside the grounds.

Have your child conduct a survey of some of the students at her school, to see what types of candies they eat, how much money they spend weekly on candy, and if they'd be willing to purchase from your youngster. "Talk to at least 30 children," suggests Nancy Flake, director of Howard's Small Business Development Center. "Talk to boys and girls, across a range of grade levels. Would they prefer to buy candy before school, after school or during lunch breaks? If out of the 30 surveyed, 20 say they spend at least one dollar on candy every week, you can probably assume that of the students in your class or school, at least two-thirds of them spend at least one dollar a week on candy."

Once the survey is complete, go with the child to stores and other competing outlets, which sell candy in the vicinity of the school. Check the prices of the products and observe what types of candies the students are buying. At this point, your child should be able to determine how much and what types of candy she can sell each week.

Candy sales, like most retail businesses, usually require some sort of operating license or permit. Parents can check with their local retail sales tax office to find out what licenses are necessary. Your child might be required to get a retail sales tax registration document for a minimal fee. This document will allow your child to purchase inventory from wholesalers, who sell products at prices low enough to ensure a healthy retail sales profit. The sales tax registration document also requires that taxes be paid on the products you sell. Contact the IRS to find out what documents you'll need for reporting taxes.

The next step is to find a wholesaler. You'll also need to find out what minimum volume of candy your child will have to purchase in order to do business with each wholesaler. If a wholesaler sells only cases of 100 chocolate candy bars, and she needs only 20, she may have to shop around for smaller quantities or be responsible for properly storing 80 candy bars until they can be sold--hopefully before the expiration date for sale stamped on the candies' wrappers. Of course, the latter alternative may be worth her while if she can negotiate a volume discount. Gordon, Crystal and Michelle visit their wholesaler about once a week, purchasing about $125 worth of candy. "We know the hot-selling items," says Crystal, "and that's what we buy a lot of."

If initially, you have problems finding a wholesaler willing to sell small quantities, your child may have to buy inventory from other retailers, mark it up and sell it. This is not the ideal situation, however, as his profit margin will be lower, and his prices may be equal to or higher than other places his customers could buy candy.

Now is the time for your child to develop a budget to determine start-up and operating costs for the business. How much inventory will she purchase initially? How much should be spent on advertising? What prices will be set for the candies? If it is purchased wholesale, the price can usually be doubled for retail sale.

Your child must also decide how he will store and carry his wares. Nobody wants to purchase melted candy bars. Security must also be considered. "It's very important to secure your product," Flake avers. "Protect against theft and shoplifting. Lost inventory means no profit."

Now it's time to advertise to get customers. Word-of-mouth can be effective and flyers are also a good idea. Perhaps she can get an ad in the school paper. Once the customers start coming, your child must be prepared. She should carry enough money to make change--about five dollars in quarters, nickels, dimes and pennies should do. She should refrain from literally eating up her profits--and she should never offer credit. "Cash and carry--absolutely," Flake says. "The bottom line is you make money on sales, not on promises to pay."

Have Camera, Will Travel

When she was 12, Dow-Volean Haynes' father, Volvie Haynes, gave her a small camera so she could take pictures of her brothers, while they competed in sports activities. Dow-Volean immediately fell in love with the camera and has never stopped clicking. Now a 19-year-old freshman at Southern University in Baton Rouge, La., Dow-Volean has her own business, A Wing & A Prayer Photography. As a senior in high school, she earned $1,700 taking pictures.

"When I was in junior high school," says Dow-Volean, a graduate of Curtis High School in Staten Island, N.Y., "I took pictures at sporting events, such as basketball games, meetings and school events, and I was always taking pictures, of my friends. I used my little allowance to develop the pictures, and I'd give them to my friends."

Her father, a supervisor with the Federal Reserve Bank, also encouraged his daughter--to no avail--to charge a couple of bucks for the pictures she freely gave away. "I tried to get her to understand the value of her work," he says, speculating that, over the years, she probably let several thousand dollars slip through her fingers. Says Dow-Volean: "I just couldn't charge my friends for the pictures."

All of that changed in July 1990, when Dow-Volean enrolled in Columbia University Business School's Young Entrepreneurs Program (YEP), a two-week program aimed at helping minority youngsters start and successfully operate a small business. Participants can also compete for venture capital and cash grants based on the quality of their business plans. Dow-Volean's plan for A Wing & A Prayer garnered her a $350 award, which she used to launch her business. "I bought a new camera, a tripod, flashes and lenses," says Dow-Volean. She proceeded to drum up business, shooting weddings, football games and even portraits of her fellow students, for which she charged $25 each.

Later, the marketing student, who wants to someday own her own advertising agency, invested $56 in a portfolio of her work to take to meetings with prospective clients. In addition to still photography, Dow-Volean also uses a video camera for events such as weddings. The college freshman, who expects her company to generate $2,500 this year, is already working hard to establish her business on campus. "When I got to Southern, I xeroxed one of my business cards and placed it on the elevator in my dorm," she says. "I've already gotten lots of customers because of that flyer."

"If you want to start your own photography business," says Olger E. Twyer, director of Columbia Business School's University Outreach Program, which runs YEP, "it would help if you know how to take good pictures. Take some photography classes. Your business will fail if word gets out that you don't take good pictures."

Of course, a business plan, which includes market research, a cost analysis of the photography services your child plans to offer and estimates of fixed costs, such as advertising, film and developing, is a must. Check to see if any special licenses or permits are required to operate a photography business in your city. "Do as much research as you can on the business," says Twyer. "You need to know what other photography services exist in your community. Size up the competition. Call up photography studios listed in the business-to-business directory and find out what services they offer and what their rates are."

Next, target a market of potential customers. Your child should talk to her classmates at school and the churches in your area. Contact nonprofit organizations and local black newspapers, both of which look for good photography at reasonable rates.

Decide what supplies your child might need and how much she'll have to pay to get them. It's best to try to buy wholesale, because prices are much lower. Once your child determines the costs of the inventory and equipment she'll need, she can better determine what prices she should charge customers.

Start-up costs for a small photography business can be as little as $25--for film, batteries and some flyers to advertise the company's services--if your child already has a camera. Ultimately, the photographs--and the references satisfied customers are likely to generate--will be the most effective form of advertising. The young free-lance photographer should probably plan to reinvest profits from the business into better cameras and other equipment that can improve the quality of her services. Initially, it might be wise to suffer the expense of a film-developing service until she generates enough business to finance the building and maintenance of her own darkroom. Or perhaps she can pay an hourly rate to use someone else's darkroom. Dow-Volean Haynes, who spends about 10 hours a week shooting pictures, takes her film to a developer and adds the cost onto the price of her photos. She is now taking classes to learn how to develop her own pictures.

Needless to say, Volvie Haynes is proud of his daughter. "She has great ability as a photographer, and she'll continue to get better," he says. "She's a charming young lady with an overwhelming personality and that will help her go far in the business world."

For This Tutor, Knowledge Is Money

When he was 12, Anthony Shannon, an "A" student in math, began tutoring his sisters, Nicole and Deana, in general math, pre-algebra, algebra and trigonometry. Three years later, recognizing that other students shared his sisters' difficulty with math, he decided to open his own business, Shannon's Tutorial Services. Today, the 16-year-old honor roll student at Oakland's Skyline High School pockets anywhere from $75 to $120 a month from his business. And with a new advertising campaign in the works, Anthony plans to make even more money.

"I've always been interested in numbers," Anthony, who also tutors students in Spanish, explains. "Math just comes naturally for me."

Experts say one of the easiest and least expensive businesses for a kidpreneur to launch is a tutorial services enterprise such as Anthony's. Other than the cost of advertising the tutor's skill, price and availability, there are practically no expenses to speak of. The primary prerequisite is that the child be proficient in the subject, whether it be math, biology, or English. "It would be great for the student to have developed a reputation for being a |brain' or being smart in a given area," says Jeannette Valentine, the director of the Oakland's East Bay Outreach Project, which offers a YEP linked to the University of California at Berkeley School of Business. "The student must have credibility among his or her clients."

With a 3.5 grade point average and a number of academic awards to his credit, Anthony, has developed such a reputation among many of the 3,500 students of Skyline High. He plans to study accounting in college and hopes to one day own an accounting firm.

Once the aspiring kidpreneur has established her proficiency in a given subject matter, she must decide if she's really cut out to tutor students. Tutors must be patients, realizing that it may take some students longer than others to catch on to complex mathematical problems or learn a second language. A good tutor makes her students feel comfortable and confident that they can learn a subject that may seem difficult to them. If not, says Valentine, "they're not going to come back. You have to be a cheerleader, a motivator and a counselor."

The next step is to conduct market research. Are there students having problems in the subject matters the youngster is proficient in? Do they want to be tutored? How much are they willing to pay for the service? What kind of results would they expect? What would be the best hours to offer his services? Where do they prefer to be tutored?

"Gain the confidence of teachers of the subject you plan to tutor in, as well as that of other school officials," Valentine advises. "Ask for their support as you survey the students." It's also a good idea to survey parents, who might be more agreeable to paying for tutoring services for their kids than the students themselves.

Once a need for your child's services has been established, she can begin to set up a structure for doing business. How many students will be tutored at a time? If she takes on too many students, it can not only effect the quality of her instruction, which would discourage potential customers, but her own studies could also suffer.

Anthony tutors students one at a time, usually at school and occasionally at their homes. He charges $5 an hour, which experts agree is a fair price. Anthony also collects his fee up front, which Valentine says is a good idea. "I wouldn't want anyone running a tutorial service to get into the habit of giving credit," she says. "Once they've acquired the knowledge, you can't go and repossess it."

Your child should set aside some money for business cards, as well as flyers or an ad in the school newspaper promoting his tutorial services. Once your child is ready to sign up clients, he must be prepared to specify exactly what the student will gain as a result of patronizing his service. Also specify expectations of the student; for example, your child will not want to be held liable for a student's failing grade if that student routinely skips class. If the parents are paying, be sure they are aware of the terms.

Whatever your young entrepreneur decides, be sure he or she does not set unrealistic expectations. As Anthony, who tutors six hours weekly, explains: "I didn't tell the students their grades would jump from, say, a failing grade to an |A.' I told them tutoring would certainly help them do better on their next test, and I haven't failed them yet."

INFORMATION FOR KIDPRENEURS

The following publications are aimed at young people and those who want to encourage them to go into businesses: * Fast Cash For Kids ($9.95) by Bonnie and Noel Drew and 101 Activities To Teach Your Child About Money (due out in Jan. '92 for $9.95), by Bonnie Drew, offers ideas that help prepare young people to develop money-making ventures. To order, call Career Press at 800-CAREER-1. A PC software package called Kids Business (which is based on Fast Cash For Kids) is available at software stores ($24.95 or less) or can be ordered from Homeland Publications, 2615 Calder, League City, TX 77573. * The Teenagers Entrepreneur's Guide ($10.95), by Sarah L. Riehm, offers practical advice, including business plans, to older teens who want to start a small business. Surrey Books, 230 E. Ohio, Suite 120, Chicago, IL 60611; to order, call 800-326-4430. * Capitalism For Kids (hardcover, $12.95; softcover, $9.95), by Karl Hess, examines the free-enterprise system and discusses the advantages of going into business at an early age. Enterprise Publishing, 725 Market St., Wilmington, DE 19801; 302-654-0110. * The Lemonade Stand: A Guide To Encouraging The Entrepreneur In Your Child (softcover, $12.95), by Emmanuel Modu, is a new entry to the kidpreneurial library. Bob Adams Inc., 260 Centre, Holbrook, MA 02343; to order, call 800-872-5627. * Kids Mean Business is a quarterly newsletter described as a "kid-to-kid" networking tool for young entrepreneurs. If you send a self-addressed, stamped envelope, you will receive one free issue. A one-year subscription is $8.00. To order, write Homeland Publications, 2615 Calder, League City, TX 77573. * Businesship: The Art Of Being A Successful Entrepreneur is a quarterly newsletter published by Lemonade Kids Inc., a researcher, developer and marketer of products designed to encourage and support youth entrepreneurship. A one-year subscription is included in the membership dues ($9.65) for Busines$ Kids, a nationwide association of young entrepreneurs. To order, write Lemonade Kids Inc., 301 Almeria Ave., Suite 330, Coral Gables, FL 33134; or call 800-852-4544. * Teen Business, a newsletter for kidpreneurs between the ages of 10 and 17, features stories about young entrepreneurs and provides ideas for kids who want to start their own companies. To order, write Center For Teen Entrepreneurs, P.O. Box 7198, New York, NY 10163; or call 800-438-TEEN.