Harsh Lessons the Kids in My Neighborhood are Learning about Running a Home Business

Home businesses can be tough to run. Just ask some of the kids in my neighborhood.

There are a lot of kids in my neighborhood. A lot. And, of course, their parents want them to learn how to earn and save their money. This means that many children start home businesses. For the enterprising kid, there are opportunities to start a home business. They can babysit, mow lawns, sell starter plants for gardens, and even open a lemonade stand. These small home business ideas are often a way for children to learn to work for their money, and feel proud of what they are doing.

In general, encouraging a child to have a home business can be a good way to teach positive lessons about money. However, as some kids in my neighborhood are learning, there are also harsh realities that come with running a home business.

Growing up

Too Much Competition

Because there are so many kids in my neighborhood, the competition can be fierce. The sheer number of kids, ages 10 to 14, that offer to mow lawns can be overwhelming. And the kids themselves are finding that there just aren't enough lawns to go around. That means that undercutting ensues. Some kids aren't even making enough to cover the cost of the gas to mow the lawns. But that doesn't matter to the people using their services; they'll just move on to someone who will take lower pay. Maybe their parents are subsidizing by covering the cost of gas. Or maybe they're hoping that volume will make up for it. In any case, setting rates when mowing lawns in my neighborhood is a race to the bottom — and it's tough to come out ahead.

In order to make money, the kids have to stand out in some way, offering something extra, or offering something different. I'm pretty sure I'm not even going to have my son enter the fray at all. He can make 4-H ribbon money for doing a good job on projects, and I can even pay him to help me with my own home business. There are too many lemonade/Kool-Aid stands, lawn mowers, and babysitters in the neighborhood for him to succeed. The same is true of running your own home business. You need to find a way to add value, or offer something that is somewhat unique. To succeed, you can't offer the same thing everyone else is.

People Just Aren't Willing to Pay for Services

Even if you do distinguish yourself, it can still be hard to earn money with a home business. Because people have to buy what you're selling. The kids in my neighborhood are learning this the hard way as well. You might think that your lawn mowing services are worth $10 a mow, but there's not a lot you can do when people aren't willing to pay more than $5 a mow. (For the record, my college age cousin is mowing our lawn, since he needs the money. And we think his services are worth more than $5 or $10 a mow.)

In some cases, you can have a great service, and you might even be differentiating yourself, but if you can't earn what you're worth, your home business crashes and burns fairly quickly. Dealing with the difficulties associated with trying to convince people of your value — especially if you are a kid trying to earn money for camp — can be one of the harshest realities of starting a home business. And you can run into that even if you are an adult. What if people aren't willing to pay what you're charging? You have to accept less, or find an audience that is willing to pay what you're worth.

It's Really Hard Work

Starting a home business on the side is really hard work. The kids in my neighborhood go door-to-door, print up flyers, and try other ways to drum up business. It's a lot of hard work, and once they do have clients, they still have to work hard. Starting a business requires time, effort, and dedication. And sometimes the hard work doesn't pay off. Clients don't pay, or they abandon you for someone else, or make unreasonable demands in an attempt to get even more for less. Pretty soon profit margins are shrinking, and you wonder why you're still working so hard.

The kids in my neighborhood are learning these lessons, and I hope it doesn't put them off the idea of a home business. My first experience with working for myself came when I was a teenager, offering piano lessons to beginners. I liked setting my own schedule, but I did have some difficulties to deal with. However, I was in a position to succeed because there wasn't a lot of competition, and I could set competitive rates. The experience was a good one, and now I have my own business as an adult. I worry that some of these experiences can be so discouraging that some of these kids will never want to own a business again.

What do you think? Do you think some of these lessons are too harsh for children to go through?

2 thoughts on “Harsh Lessons the Kids in My Neighborhood are Learning about Running a Home Business”

  1. Adam Gottlieb @ The Frugal Entrepreneur

    These may be “harsh lessons,” but they are pretty normal when it comes to running a small or home business, and the truth is those who would be turned off from business as kids, would probably be turned off as adults. Not everyone is cut out to run their own business.

    I’m more concerned about the *adults* who are taking advantage of these kids… as well as their parents. I wouldn’t let my kids work for ridiculously low wages in the name of teaching them how to manage their money/run a business. What kind of message are you giving your children? Shouldn’t you also be encouraging them to value their efforts/skills/abilities? How will they learn to say “no” or set limits from this?

    1. Miranda Marquit

      I agree! I think it’s terrible that there are adults in the neighborhood taking advantage of the kids, and I do wish the kids’ parents would help them learn to set limits. Unfortunately, there’s a lot of “take what they give you and work harder” going on here. It’s why I don’t have my son doing any of those things at all, and have him focus on other ways to earn his own money.

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