How to start a business as a kid or teen: A guide for young entrepreneurs

Ever dreamed of starting your own business? That dream can become a reality—this guide is the perfect place to start.

Whether you’re a teen looking to start your first business or a parent of younger kids interested in entrepreneurship, here are the basics of how to start a business as a kid.

Can kids be business owners?

Absolutely! Just look at a few of these examples:

• Kierra started a successful candle-making business at 15 years old.

• Grant launched a fun popcorn business at 13 years old.

• Brynn began sewing and selling face masks at 12 years old.

• Henry started a cookie dough company at 8 years old.

Typically, you need to be 18 years old to open a bank account or get a business license. Young business owners can start and run operations, but usually need help from family to handle anything legal. 

How to start a business as a kid

We’ll talk details soon, but these are the basic steps you’ll need to tackle:

• Choose a business idea.

• Make a business plan.

• Save for startup costs (or find an investor).

• Set up the business.

• Start creating your product or offering your service.

• Find potential customers and start selling.

• Handle bookkeeping and learn to manage your money.

. Now let’s dive into the details!

1. Choose a business idea

The first step in how to start a business as a kid is deciding the type of business you want to run. These are just a few good small business ideas:

• Babysitting or pet sitting

• Lawn care or shoveling snow

• Running a lemonade stand

• Selling crafts in person or on Etsy

• Baking and selling food 

• Running an e-commerce business on Amazon or eBay

• Starting a YouTube channel or podcast

• Designing and selling T-shirts

• Freelance design, writing, or photography

To help nail down the right business idea, think about your personal interests and skills. What kind of business do you want to run?

Then think about your target customers. Are there people out there who will buy your products or services? How can you find those potential customers?

2. Make a business plan

A business plan outlines what your business does, how it’ll make money, and who your customers are.

Every good business starts with a good plan, but it doesn’t have to be super detailed. It can be helpful for parents and kids to plan it together. Start with questions like:

• What will you name your business?

• What will your business sell (products or services)?

• How much will those products or services cost?

• What will your business’s startup costs be?

• What will your business’s ongoing costs be?

• How will your business find customers?

• What are some of your business’s local competitors, and how can your business do things better?

• How will you manage finances, save for expenses, and pay taxes?

You can come up with your own plan or start out with a business plan template. 

3. Save for startup costs

How much money would you need to get your business started? Here’s an example for a teen starting a lawn care business:

• Equipment (lawn mower, rake, etc.): $600

• Supplies (gasoline, trash bags, etc.): $100

• Initial marketing (fliers, business cards, etc.): $100

• Business license: $100

• Miscellaneous: $50

• Total: $950

In this case, they’d need almost $1,000 to get the business started. That money could come from chores and allowances, a side hustle, a part-time job, or all the above (parent-approved, of course).

The amount you need depends on the business. Some startup costs are very low (a lemonade stand, for example). Others may require investment from a parent or guardian to get their business going. 

4. 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 from your local city or county government.

• Open a business bank account.

• Create a website or social media accounts for the business.

• Order initial marketing materials (fliers, business cards, etc.).

• Practice making the product.

Parents, you’ll probably need to help with a few of these, like opening a bank account or securing a business license. 

5. Start creating your product (or offering your service)

If you’re running a product-based business, it’s time to start creating or sourcing your products. Depending on what you sell, 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 pics to share examples of your work! 

6. Start selling

Now the fun part: earning money. You’ll need to locate potential customers and close deals. Depending on your business, you might:

• Sell at local farmers’ markets, events, or craft fairs.

• Post items on online marketplaces (Etsy, eBay, Amazon, etc.).

• Share your business on social media.

• Go door-to-door to sell goods (with your parents’ help!).

• Reach out to friends and family to explain your business and pitch your offerings

Stay flexible. As your business grows, you’ll likely have to make changes. One of the exciting parts of running a business is thinking on your feet and adapting to unexpected situations as they happen. So don’t be afraid to experiment and try new things!

7. Keep records and manage your money

Good record keeping and money management skills are critical to a successful business. Track every dollar you earn and every expense your business has. You’ll need this to calculate your profits and to file taxes (if necessary). 

Ready to launch your business?

Whatever your dream business is, we hope you give it a go! Running a business can be an exciting adventure and a valuable learning experience. If you’re just starting out, talk to your parents about how to move forward — share this article as inspiration!

FAQs

What is the best age for a child to start a business?

There’s no magic number. It depends on the child. Many kids start as young as 8 or 9 with help from a parent. Teens may be ready to take on more responsibility on their own.

Does my child need a business license or permit to start a small business?

Not always. It depends on your state, city, and the type of business. Some may require a license or permit (especially food businesses), while others do not.

How can my child manage the money they earn from their business?

They can track income and expenses manually, or use a tool like Greenlight to budget, save, and even invest their earnings. Parents can oversee and support them along the way.

Do kids have to pay taxes on the money they earn from a business?

Yes, in most cases. If your child earns more than the IRS threshold for self-employment, they may need to file taxes. Talk to a tax professional for specifics.

What's the difference between earning money from a business and receiving an allowance?

An allowance is typically money given by parents, while business income is earned through providing a product or service. Running a business (or doing chores to earn an allowance!) can help teach real-world financial skills and responsibility.

Budget and business plan together. Automate allowance and chores, set spend controls, savings goals, and advanced safety options. Try Greenlight, the #1 family finance and safety app, one month risk-free.†