Posted on: Monday, May 24, 2004

Guidance for kids on starting a business

By Marshall Loeb
CBS MarketWatch

NEW YORK — While employment opportunities for kids age 16 and younger are often restricted, that's no reason they can't go out and start their own business and hire themselves.

If you are a young person hoping to start your own business, you might follow some advice given in the recently republished "The Totally Awesome Business Book for Kids," by Adriane G. Berg and her son, Arthur Berg Bochner, who was 13 when the book was originally published in 1995.

You'll need to have contact information for all your customers and suppliers. You should also keep track of what customers have paid or owe you, and what you have paid or owe other people.

You may want to make an agreement in writing with repeat customers so you and they know what to expect.

Make a weekly business budget. You should keep track of expenses, income, profit and hours worked. A budget can tell you if you're earning or losing money. And you'll know whether you need to spend less, work more, or expand if you're already doing well.

Bonnie Drew, vice president of YoungBiz.com and author of several books on business for children, says you'll also need to learn how to price things. Using your budget, figure out how much you're spending per item if you're selling things (total expenses divided by number of items) or how much you earn per hour if you're performing a service (profit divided by number of hours you worked). Then find out what other people charge for similar items or services.