How to start a business as a kid or teen: A guide for young entrepreneurs
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Key takeaways
Starting a business as a kid used to just mean a lemonade stand or paper route. Today, a smartphone and a few dollars can launch an Etsy shop, lawn care route, or growing YouTube channel, with no big capital or connections required. Managing cash, talking to customers, and solving problems builds skills that last well beyond the business itself. Learn how to find an idea, handle the legal basics, get customers, and manage your earnings.
1. Find your business idea
How do you choose a business idea that fits your skills and interests? The best business ideas for kids and teens come from something they're already doing. It could be baking, drawing, fixing things, playing video games, or being a good listener.
Make a list of the following:
What you're good at
What you enjoy
What people already ask you for help with
The overlap is where you'll find your business idea. Most young entrepreneurs land in one of a few categories.
None of these require much startup capital, which makes them realistic starting points.
Reselling: Thrifted clothes, sneakers, trading cards
Local services: Lawn care, pet sitting, babysitting, tutoring
Handmade goods: Jewelry, crafts, baked goods sold at markets or online
Digital ventures: Social media content, simple apps, print-on-demand merchandise
2. Fund your business
Some businesses need almost nothing to start, while others need start-up money for supplies, tools, or inventory before you make a single sale. Figuring out your funding source early keeps you from stalling out mid-launch.
Estimate startup costs
Before spending anything, it helps to write out exactly what you'll need. Let's say you want to sell handmade candles at a weekend market. Your list might look like this:
Supply | Cost |
|---|---|
Wax, wicks, and fragrance oil | $40 |
Jars and labels | $25 |
Market table fee | $20 |
Packaging and ribbon | $10 |
Miscellaneous/buffer | $15 |
Total: | $110 to break even |
Funding sources
#1 family finance and safety app.
Most kids and teens fund a first business one of three ways:
Personal savings. This may be money from allowance, birthday gifts, a summer job, or chores.
A loan or advance from a parent. Some parents just give the money, while others treat it as a real loan to be paid back once sales come in. Even if a parent offers to hand over the cash, having kids pay it back is a low-stakes way to practice borrowing and repaying.
Grants or scholarships. For bigger ideas, youth entrepreneurship grants exist through schools, local chambers of commerce, and organizations built specifically to fund young founders.
3. Create a business plan
A business plan doesn't need to be long or formal. For a kid or teen business, it's really just a one- or two-page roadmap that forces you to think through the details before you launch. Here's what to include.
Mission statement
This should be a sentence or two explaining why the business exists and what it stands for. This isn't just a formality, it's what you'll come back to when deciding what to sell, how to price it, or whether an opportunity fits.
Products and services
Make a clear list of exactly what you're selling and what it costs. Being specific makes every later decision, like sourcing, pricing, and marketing, easier.
Marketing plan
A marketing plan says how you'll get customers. For most young entrepreneurs, this will be social media posts, word of mouth, flyers, or a table at a local market.
Financial plan
This can be a short summary covering:
Startup costs (what you calculated earlier)
Where the funding is coming from
Expected revenue
Ongoing expenses
4. Get your parent or guardian involved
A parent has to step in for anything official, such as co-signing agreements, opening financial accounts, and creating or monitoring social media or e-commerce accounts if the platform requires an adult.
Setting expectations and dividing responsibilities
Before launching the business, it's worth having a short conversation about who handles what. A natural split may look like this:
The kid/teen handles product, pricing, customer interaction, marketing content, day-to-day sales
The parent handles contracts, bank account, tax filing, any legal paperwork
Co-signing and managing financial accounts
Most banks require an adult to open or co-sign a custodial or joint account for a minor. This is also where a parent's guidance is useful for basic decisions, including how much to keep in the account, how to track expenses, and when it's time to separate business money from personal spending money entirely.
Opening a bank account
Most banks require an adult to open a custodial or joint account for a minor, with the parent and kid/teen typically having access. Keeping business money in this separate account makes it much easier to track what the business is earning and spending.
A debit card or money management app like Greenlight¹ can be useful for the spending side of the business, including buying supplies, paying for expenses, or accessing money quickly, while parents keep visibility into what's being spent.
5. Set up the business
At this point, you should have a business plan and startup funding. Now it's time for logistics:
Apply for a business license or food handler's permit from your local city or county government if needed
Open a business bank account
Create a website or social media accounts for the business
Order initial marketing materials
Practice making the product or performing the service
Parents, you'll probably need to help with a few of these, like opening a bank account or securing a business license.
Pricing your product or service
Check what similar products or services already sell for on Etsy, local listings, or what others in your community charge for the same service. From there, factor in:
Variable costs: Expenses that change with how much you make or sell, such as materials, packaging, and shipping.
Fixed costs: Expenses that stay the same regardless of sales, such as a market table fee, or monthly app subscription.
Profit margin: Decide how much you want to actually earn on top of costs. If a candle costs $4 in materials and you want a $6 profit, it needs to sell for $10.
What money records should a teen keep for income and expenses?
Use a basic spreadsheet or notebook to capture every sale, expense, and refund. This record is also what you'll need at tax time to calculate profit.
6. Launch your business
If you're running a product-based business, start creating or sourcing your products. This could mean ordering supplies, practicing skills or recipes, and packaging goods.
If you're running a service-based business, practice what you're offering. If you offer freelance design services, for instance, start by designing your unique business logo. If it's landscaping, start by cleaning up your own yard. Take photos to share examples of your work.
Depending on your business, you might:
Sell at local farmers' markets, events, or craft fairs
Post items on online marketplaces like Etsy and eBay
Share your business on social media, and don't forget to post consistently and reply to comments and messages
Go door-to-door to sell goods, with your parent's supervision
Reach out to friends and family to explain your business and pitch your offerings
Post a flyer on a community board
Hand out business cards at a festival or craft fair
Create and promote a basic, one-page website
7. Manage the money you make
A simple split works well for most young entrepreneurs. Deciding these percentages upfront removes the guesswork every time money comes in.
Reinvest: money that goes back into supplies, materials, or growing the business
Save: set aside for bigger goals or a rainy day
Spend: a portion that's fair to keep as personal money
Give: optional, but many young entrepreneurs choose to donate a small share
Keeping up with bookkeeping makes it obvious when spending is outpacing what's actually selling.
What about the legal and tax considerations for minor-owned businesses?
Most legal and financial steps require a parent or guardian's involvement. Here's what to know before you launch.
Business licenses and permits: Whether you need one depends on what you're selling and where. A quick call to the local city or county clerk's office (or a search of their website) will confirm what applies.
Taxes for minors: Kids can owe taxes on business income. The IRS requires a tax return if the business nets a profit of $400 or more in a year, even if it's a minor-owned venture.
Work permits and child labor laws: Federal child labor laws regulate employees working for an employer, not minors running their own businesses.
Can kids really be business owners?
Absolutely! Just look at a few of these examples:
Kierra, Kandles by Kierra. At 15, Kierra turned a homemade Father's Day candle into a business.
Grant, Woodford Pop. After loving a teacher's popcorn recipe in 7th grade, 13-year-old Grant grew it into a dozen-flavor business.
Brynn, B Creates. At 12, Brynn sewed face masks during the pandemic and sold 569 in seven weeks.
Henry, Henry's Famous Cookie Company. At 8, Henry turned a family cookie recipe into a business.
Ready to get going?
Starting a business as a kid or teen doesn't require a perfect idea or a big budget, just curiosity, a parent willing to help with the legal and financial pieces, and a willingness to learn as you go.
A tool like Greenlight can make the money side easier from day one by giving kids a place to track earnings, split them into spend, save, share, and reinvest, and build real financial confidence while parents keep visibility into it all. Try Greenlight today and help your young entrepreneur turn their idea into something real.
FAQs
What age limits do online selling platforms have for minors?
Most platforms require account holders to be 18, including Etsy, Shopify, PayPal, and most social apps. Kids and teens can sell, the account just needs to be in a parent's name.
What permits or local rules might apply to a lemonade stand?
Some cities require a food or vendor permit for anything sold to the public, others exempt small kid-run stands entirely. A check with the local city or county clerk's office clears it up fast.
Do minors need a parent or guardian to run certain businesses?
Yes, for anything involving contracts, bank accounts, or platforms with an 18+ age minimum. A minor can do the work, but a parent has to handle the paperwork.
How can kids and teens advertise locally and on social media safely?
Start with flyers, word of mouth, and a parent-monitored social account. Never share a home address or personal contact info publicly. Use a business or parent's email.
¹The Greenlight® prepaid card is issued by Community Federal Savings Bank, member FDIC, pursuant to license by Mastercard International.
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