To help kids learn to develop good financial (and life) habits, Buffett partnered with Amy and Andy Heyward to create the Secret Millionaires Club, which has a new book out: How to Start Your Very First Business. Authors Sarah Parvis and Julie Merberg use Buffett's business philosophy and his insightful quotations to provide kids 9 and up with guidance for coming up with an idea they love, making it stand out, calculating their costs and profit, and even marketing their business. And the book is full of real-life examples of successful young businesspeople who've found success selling everything from flip-flops and bow ties to snow cones and sports reels.
So what advice does Warren Buffett's Secret Millionaires Club's new book have to offer young people who want to take their lemonade stand to the next level? Text taken from How to Start Your Very First Business.
1. Don't be afraid to speak up and ask for what you want. If you need something to start your business--equipment, advice, supplies, a place to set up a table--start talking to people. You may find someone who has the equipment you need and no longer wants it. Someone else may know of the perfect venue for your event or sale. Identify people who can help you and then make the strongest case you can about why they should lend a hand. You may not always get what you ask for. In fact, the best businesspeople in the world are used to not getting what they want every time they ask. But speaking up is an absolutely essential skill.
2. Do your best to anticipate your customers' needs. Buffett says, "If your service is outstanding, you'll always stand out." So listen to your customers. If you are running a snow-shoveling business, watch the weather forecast. If snow is on the horizon, you can reach out to your customers and make a plan before they are buried under a foot of snow.
3. Start a starter business. There's no substitute for getting out there and trying things. But if you have a big idea, you may need to start small to raise the money you need for a more costly business. You'll learn a ton from your initial business so you'll be better prepared for the big one. If landscaping is your dream business, you may have to weed a few small gardens first.
4. If you don't know all of the skills you need to succeed in your field, that's OK. You just need to be willing to figure them out. Take a class, read a book, ask lots of questions. Start out slowly and grow your business as you learn more skills. As Warren Buffett says, "The more you learn, the more you earn!"
5. "Failure isn't falling down, it's staying down." Starting a business isn't easy. There are going to be bad days, rejected pitches, and unexpected hiccups along the way. Adapt and come up with creative solutions to the problems you encounter. Try a new location, do a clever promotion, or tweak your product to improve your sales.
6. Be honest and fair. Being a person of integrity is invaluable in business and in life. Be honest about what you can deliver. Be reliable. If you've made a mistake, apologize and do your best to quickly make up for it. When you treat people with kindness and respect, they want to spend more time with you--and that goes for clients, business partners, and friends. Buffett is fond of saying, "You can't make a good deal with a bad person."
7. Give back. Creating a successful business isn't just about making money. It is about contributing to the world around you. Many of the young entrepreneurs featured in How to Start Your Very First Business incorporate philanthropy into their business models. "There are an unlimited number of good things to be done in the world," says Buffett. Be creative, think about what is important to you, to your community, or to the world, and you'll find a way to contribute. And remember, sharing your time can be just as valuable as donating money.
8. Enlist a mentor. A mentor may be able to walk you through a process that's new to you. Or maybe together you can brainstorm a smart solution to a tough problem. Sometimes just knowing that someone else has gone through what you are going through can make all the difference for your outlook.
9. "Do not save what is left after spending, spend what is left after saving." Buffett believes that one of the most beneficial lessons a kid can learn is that saving is a habit. If you make saving a habit early on, it will be ingrained in you for life, which can help you avoid countless unpleasant situations later.
In addition to this book (which comes with a Square reader, so kids can take credit card payments as well as cash), the Secret Millionaires Club also hosts an annual contest: the Grow Your Own Business Challenge, launching soon. Kids compete (for bragging rights and prize money) to create the best original business concept. For more info on the contest, visit smckids.com/learnandearn/contest.
Just a side note
My toy company had a chance to get involved with this project a few years ago and we decided it wouldn't work. I'll put that on the mistakes list now.