How old do you have to be to start a business? I get these questions a lot, sometimes from parents, but mostly from teenagers that have a startup in mind or want to become financially independent. To be honest, I love being asked this question, because no matter who asks it is on the right business path. In my perspective, this question is important to consider from two major sides. What are those sides and why two? Let’s dig deeper.
As I mentioned above, there are at least two independent angles that we need to consider answering “how old do you have to be to start a business?”, they are:
- Legal possibility to start a business (register a company, open a business bank account, register to pay taxes, etc.)
- Practical action part (providing services, selling products, etc.)
Being a serial entrepreneur (yes, my dad is a business owner as well), with over 14 years of business experience under my belt, I do believe that starting, running, and growing a business is a skill. And as you might know, the earlier you start to train any skill – the better you will be at this skill. The same goes for the business. That is why I always tell my customers that have kids: the earlier your child starts to play a game of business and entrepreneurship – the better. Even BusinessNewsDaily agrees with me that kids starting their own business is a great idea. And there are a number of reasons for this:
- It’s fun. I’ve never said that it’s easy, but it’s definitely fun to start and run a business. To try our different strategies and technics, learn more about existing technologies, and put your guesses to the test.
- It’s better than sitting the whole day and playing video games. Nowadays I see most kids sitting in front of a computer or tablet and playing computer games all day long. I do know that you can make money steaming and becoming a professional gamer. But the ugly truth is that only a very small percentage will actually become the first or the second. All others will fail and just lose precious time. At the same time starting own business has a much higher chance of success. Not to mention that the gaming industry is evolving rapidly and now it’s much harder to make money in it, compared to even 5 years ago.
- Running your own business will shape the best in your kid’s character. If you are a business owner yourself, you know firsthand how hard it is to start, run and grow a business, especially in the beginning. In order to succeed your child will become more self-reliant, attentive to details, and hardworking. Such qualities will greatly help him in later life, regardless of which path he decides to move on.
- He will learn to earn and value money. I do in fact know that most children nowadays have a very frivolous attitude towards money. Of course, a lot depends on upbringing. But it’s very hard to explain to a child or a teenager where money appears and why you can’t buy him everything that his friends have. Business is all about making and properly using money. There is nothing in this world that could better teach a culture of making and valuing money than starting and running your own business.
- A win-only decision. If your child decides to follow starting own business pass, there is only positive outcome possible. If he succeeds – you are a financially independent child that can not only take care of himself but also help his parents if needed. If he fails, he still gets a valuable and important business experience that will stay with him throughout his entire life. Also, in my experience, those who once tried to start their own business but failed will inevitably try again.
- Business environment and friends. While building a successful business your child will be doomed to meet like-minded people like him. Most business owners are optimists who believe that they can succeed in this life and that their business will help other people in this world. Some of them will fail, but some will reach their goal or even overshoot it. In any case, while traveling on the journey of starting, running, and growing your own business your kid will meet and make friends with amazing people. And those connections and networking will stay with him forever.
- Shapes one future. Another trend that I’ve noticed, is that most teenagers after school go to college or university without even the slightest idea of whom they want to become or what skills they need to learn. I truly believe that every child after school should try to start their own business or go try to work for different companies. By doing so, he or she will understand who they love doing and whatnot. This will shape their understanding of what skills they need and where to take them. And instead of coming to college or university just to waste time, they will come there one or two years later but with real-life questions and need in skill or knowledge. This will save them from a situation that I found myself in – spending 5 years learning how to be a lawyer to understand in 5 years that I will never be working as a lawyer because I hate this job.
Are there downsides to starting a business as young as possible age? To be honest, I can’t think of any.
The hardest part of this is to properly motivate your teenager to try to start a business. And to create an environment in which he would believe that starting your own business is a cool idea. I do believe that you can force anyone to start a business. Because starting, running, and growing a business requires an enormous amount of energy and self-motivation on its own. And even if you force someone to start, they will always have an easy answer – my business failed. That is why it’s important that your child would be eager to start a business on his own.
How old do you have to be to start a business – legal component?
Another issue that will appear on your way – legal restrictions on the age at which you can register a company, open a bank account, register to pay taxes, and get permits and licenses. As a general rule, you need to be at least 18 years old to register a company in most states according to Entrepreneur. I do recommend you consult with your lawyer on this part as he would know better local requirements and regulations.
But those legal obstacles shouldn’t stop you. There are many ways how to legally go around those limitations. The easiest one is to register a company in your own name and let your child run it. This way you will have control over what’s going on. Another way around is providing services for donations. I see this every day on Waikiki when entrapments are providing services for donations and don’t have any company at all.
But please, make sure to consult with a lawyer before taking any action. All answers in this article are general in nature, are not legal advice, and are not warranted or guaranteed.
But if you need free business consultation, I will be happy to assist you. I do have an excessive amount of business experience in different spheres, such as automotive, tourism, construction, retail, and many others.
I hope my article was helpful and I would really like to hear your opinion and experiences. In the comment below, please share my answer to the next questions:
- How old was your child when he tried to start his own business? Did he succeed? What were the positive and negative sides of this attempt?
- How old do you have to be to start a business? Do you believe that starting a business at a young age is a good idea? Why?
I read and reply to all comments. Please, let me know what you think, it’s important for me. And I will see you on the pages of my next article.
Sincerely, Borys Rasin