This post by Douglas Ingram is exceptional:
It came up on my Google Alerts, and, wow, it's got to be one of the coolest things I've seen this year. And I've seen a lot of cool this year, so that's saying something.
Douglas's whole approach is really, really cool. Some excerpts:
We use the Dave Ramsey school of thought with our daughter. Each week she gets a small allowance that she allocates (her choice) to four different envelopes (a) spend (b) save (c) invest (d) donate.
I let Mackenzie use her “investment” envelope to buy the supplies. She counted out the money, she knew how much she was investing & I let her decide what she wanted to purchase (with a bit of guidance). Her total investment was $6.50 – including bottled water, ice, lemonade mix, fresh lemons, etc.
We discussed our marketing, how would we get people to purchase her lemonade. The concept of competition, marketing, sales tactics … you get the idea – some great concepts here. This was particularly funny part of our endeavour in that Mackenzie decided one of the best tactics for drawing in customers was dancing around, smiling big and waving while shouting “Ice Cold Lemonade”.
During our selling I encouraged her with some ways she could interact with her customers (selling) and attracting the crowds (marketing). This also resulted in a funny outcome. One particular patron who was perusing earlier said “dusty junk” was not in the mood for lemonade. However, after four very convincing sales pitches from the 5 year old she folded like proverbial cheap suit.
We then payed her investment envelope back (the whopping $6.50) and were left with her profit. We talked a bit about profit and the idea that in those 4 hours she made $15 in profit. Normally her allowance is $5 per week. The point she got very quickly was in a few hours of work she made “ALOT” (her words) more than what she normally does. …This was the best realization – she labored, she applied her ingenuity and her talents (ADDED VALUE) and then got to pocket the profit (GETTING A SHARE OF THE VALUE SHE CREATED).
It's inspiring. I hope I'm that good of a dad someday.
And also, if a five year old can make $15 in profit, what's stopping you? No excuses now! Cheers to Douglas and family, this is such a cool and inspiring thing.
I remember reading your post on entrepreneurship (the one that inspired the lemonade stand) and thinking how nice and concise it was. You should feel awesome for your role in Mackenzie's upbringing :) Kudos to Doug Ingram too; I'm definitely doing this with a kid I hope to have in the distant future.
Great lesson. I went and grabbed some numbers for minimum wage in Georgia and did a quick comparison below.
Running the numbers:
$15/4 hours = $5.40/hour
Minimum wage (normal job, company revenue > $500,000) Federal : $7.25/hour
Minimum wage (company revenue < $500,000) Georgia: $5.15/hour
Minimum wage (tipped staff) Georgia: $2.13
Minimum wage (company revenue < $500,000, people < 6) Georgia: no minimum
5 years old and already doing better than the minimum: Priceless.
Although she does have a few unfair advantages compared to her competitors...
Minimum wage info from:
Minimum wage: http://en.wikipedia.org/wiki/List_of_U.S._minimum_wages
Learning about negotiation is one of those culture-shocking things. You start seeing underlying patterns and trends in life.
It can be painful for a while, when you see all the things that went poorly, that you did wrong, or techniques and tactics that were used against you in the past.
It can also be pretty damn exciting, because then you start to feel armed and equipped. A lot of things in life are negotiable, far more than most people think. And the vast majority of negotiation gives you options to have pleasant interactions that both sides walk away feeling good from, especially if you're savvy about it.
But some negotiation techniques that work effectively aren't really honorable under most conceptions of honor, aren't good to the other side, and... yet can be highly effective.
One of those that goes by many different names is the "nibble" or the "chisel" -- as soon as you have agreement in principle, or even a contract signed already, they'll push to get a bit more, and more, and more.
I've been trying to make money ever since I was 7 years old. Some of my ideas have been more successful than others. But all in all, the ventures I pursued in my younger years panned out and I made some (relatively) great money. The experiences I had, and the ventures themselves, taught me a lot about how to be a successful entrepreneur and provided me with a solid foundation going forward.
This post is a recap of some of the businesses I did. Get with your kid and try one!
Age 7: Sodas at City League Baseball/Softball Games
My hometown of Rocklin, CA has a great baseball and softball city league scene. My dad at the time played on one of the teams. So every Friday night I went to his games. But I was always thirsty. And their drink selection was horrible. I had found an opportunity.
With the help of my mother I went to Costco every Friday before the games and purchased sodas and bottled water in bulk. We also got some ice. I filled two coolers full of drinks, grabbed my big cardboard sign I made, and we headed to the park.