With the holidays quickly approaching, kids may be ramping up their entrepreneurial efforts to afford the same gadgets and apps that their friends are fiddling with all day.
But, while snow shoveling businesses and homemade baked good enterprises have been popular money-earning ventures for generations of U.S. kids, that’s not stopped government authorities from shutting them down for not having the correct licenses and permits.
What’s rarely discussed is who is complaining about these kids and why. It’s not always strapped local and state regulators and enforcement officers, who seldom have the resources to patrol for unlicensed lemonade stands. It’s often neighbors, who have the time and proximity, and potential competitors, who consider reporting others for non-compliance as a business strategy.
Every year brings another story of kids facing stiff fines or penalties for trying to earn some cash. In July in London, a five-year-old girl was slapped with a nearly $200 fine, which was later revoked, for trying to hawk lemonade on her corner. Her story made international headlines.
Here are other cases in the United States:
- A lawn care company in Alabama threatened to call city hall after learning that a teenager was mowing lawns without a business license
- In New Jersey, two teens had to stop handing out fliers about their snow shoveling business without the proper permit after a neighbor called the police
- A neighbor’s complaints about illegally parked cars shut down a lemonade stand in New York that was run by none other than comedian Jerry Seinfeld’s son
Government to the rescue
Some governments are reacting, passing laws that make it easier for kids to make a little pocket money. This year, for instance, Utah passed a law that says minors across the state don’t need to get a permit or license to run a temporary business.
New Jersey legislators passed a law, inspired by those two teens trying to drum up some snow shoveling business, that allows anybody (kids, teens and adults) to offer their shoveling services 24 hours ahead of a predicted snowstorm.
In June, the city council in Gardendale, Ala., prompted by the lawn care company’s concerns about a teen-run lawn mowing business, passed an amendment that says students aren’t required to get a business license for part-time work for hire.
“We took action because I needed to get something in the books so that (teenager) didn’t have to look over her shoulder,” the town’s mayor told AI.com.
Tips to help kidpreneurs
In many jurisdictions, kids can still face closure and other penalties as they attempt to unleash their entrepreneurial spirit. How can parents help their kids steer clear of disappointment and dive into their entrepreneurial pursuits? Here are four tips.
Check the laws in your community
Your child’s business may face both permitting and tax implications. Check with the office that issues business permits or licenses in the community where you live to find out what the rules are for your child’s dream business.
The office is often part of a city or county’s finance department or privilege license division. Your state’s Secretary of State Office also can guide you to the officials who can give you a complete answer on what’s required.
Some jurisdictions, such as the entire state of Utah and the small town of Gardendale, Ala., do exempt kid-run businesses from securing an official business license or health permit. They are not alone. Elsewhere, for instance, in Mecklenburg County, N.C., a temporary business that sells “non-potentially hazardous drinks, such as fresh-squeezed lemonade,” does not need to get a health department permit.
Talk to your neighbors
In most cases, neighbors will not only be happy to see your child’s entrepreneurial pursuits, but will be the first in line to support her leaf blowing business or cookie stand. But, before your child sets up shop, check in with them to see if they have any particular concerns and address them ahead of time.
Look for other opportunities to sell
These days, more groups are working to spark an entrepreneurial spirit in kids, offering new kinds of places for them to sell their products and wares beyond their street or neighborhood. Schools, churches, farmers’ markets and other venues across the country are organizing special sales featuring “kidpreneurs.”
Acton Children’s Business Fairs, the philanthropic arm of Acton Academy and Acton MBA, for instance, are now held in more than four dozen locations around the country and world. Another two dozen are in the planning stages. At the farmers’ market-like fairs, kids age 6 to 14 sell their products and services to the public.
Involve your child every step of the way
This is your child’s business, not your own. Make sure he’s part of the creation of the business from day one. Have him put together a business plan. Make sure he understands the need for startup capital. Bring him along as you talk to officials about permits and licenses. Have him talk to the neighbors about his business plans. Require him to put together a marketing plan. Encourage him to look for other opportunities to showcase his business.
After all, his venture is about more than making a little pocket money. That occasional lemonade stand or winter snow shoveling can be a formative experience for children, setting them on the right track toward a life of entrepreneurship.