Every Kid an Entrepreneur
The only way today's youth are going to learn about the free market is to participate.
Entrepreneurship is a lonely affair these days. People owning their own businesses make up only 5 percent of the population, and 60 percent of that small fraction consists of farmers. Our civilization depends on its entrepreneurs, but it is very tough to get a nation, led by politicians to whom so small and rich a target is a challenge, to understand that.
We know that being in business is tried by millions, and seven out of eight fail in the first year—some surviving, but by what means we do not know. The problem of teaching how to be enterprising seems insuperable. It is not even imparted in the Harvard Business Schools of the world, where they teach, instead, "management"—how to fit into someone else's business (or government) that is already built and operative. Apparently business building is one of the activities that can be learned only by doing, with auxiliary help from books and organized sources.
If entrepreneurs are important to the scheme of things, however, it would seem wise to start learning "how to do it" at a tender age. Youngsters, in fact, are inventive, energetic, and quick to learn—ideal entrepreneurs. This potential could be capitalized upon by those who understand the value of enterprise. We could in our own towns, clubs, etc., initiate what I propose to call a Youth Enterprise Association! © The idea is to encourage youngsters to find products and services that can be sold if they go into business for themselves. The newspaper route is the classic example, although it is not often looked at in this light.
YEA! IS UNIQUE
But we already have Junior Achievement, you may say. JA will have to be supplanted by YEA!, for it has several bad faults.
JA starts after school does and ends before the school year. Business, on the other hand, once begun, is a continuing thing. Anyone learning about business needs to be dedicated to being effective for days into years, unless he fails or sells out.
JA sets up corporations, yet no individual business starts that way. When JA splits up corporate functions, some of which are foreign to the needs of an individual business, it trains individuals to be specialists, denying them the whole training that is essential to self-employment. It shows them how to be good employees, but that is not our aim. Later our self-employed youngsters will want to hire good employees, but first they have to get a business going.
JA begs from business to keep offices and managers paid. This is not a good business operation but a private charity. It makes businessmen feel good to help the children with their projects, but this won't do if the youngsters are to learn the enterprising arts. Profit must be emphasized because profit gives life and permanence to good ideas. And part of being in business for profit is paying those who provide services. So any overall office function, for example, that is supplied by businesses in the community should be paid for.
Finally, the JA program is thoroughly tied in with the public schools, which are part of government and staffed by teachers who can increase their take of the tax dollar by demanding that we have more and more government and less and less private initiative. It is time to take the education of our future entrepreneurs out of the reach of government in any form.
Here, then, are some preliminary ideas about how to get it started. You are already convinced of the value of YEA! and you get some others to go along. You and your committee identify products and services that young people could handle as independent contractors, self-employed. If any company wants to use this development to enhance its own marketing, that is a valid approach. The need will be to find, one by one, youngsters who will take the risks and expend the energies needed to build a business in one field or another, with advice, but with their own capital (perhaps borrowed) and their own methods and personal application. It isn't an easy assignment, but some things will work out.
Perhaps the first step would be an investment club, to which young and old will be invited. They'll invest fixed amounts each week, but unlike the stock-investing club, each investor will control his own choices, taking a piece of whatever opportunity seems to him to be worthwhile. Those who want to borrow or find partners in their enterprises (and partners don't have to be limited to your young people) make their presentations and get support or not as investors see fit.
It may be that some young enterprisers can get family financing or loan guarantees, which can cut their interest expenses, but since risks are high, payment for capital will tend to be high. Having to make an effective presentation of one's plans induces the newcomer to plan well and make superior presentations of plans.
Of course, many will go into business on the capital of their time, having to invest or borrow little at first, until growth requires it and they have a successful operation to speak for them to bankers.
Probably the most splendid thing about YEA! is that those who are self-employed, no matter how young they are, are exempt from child labor laws and minimum wage laws, for themselves. They can't duck Social Security and income taxes if they are successful, but that will teach them how to handle those problems in future years.
And YEA! will allow failure for those who don't make it. Junior Achievement doesn't, yet failure is by far one of the most effective tutors in business. We need to let these beginners know that we're going to try to get them started where their chances of success are perhaps better than in real life—that this is real life with a boost. If the young entrepreneur fails once, he or she will learn tremendously. Failure is affordable in youth, when one is not dependent on one's own earnings. And if some of them learn that being their own bosses won't work for them, they'll be mighty fine employees for some other business later on.
With any kind of support from local businesses, you may even make some effort to have restrictive city laws reduced for all businesses, not just because the owner is under 17. Youngsters don't want special treatment, and their enthusiasms can be a strong factor in developing alternatives to heavy control of business by city authorities. When a youngster presents such an idea to a city council, he garners a lot of attention from the media that an older person wouldn't.
You'll get some static from established businesses, who don't like the idea of any competition. Play fair with them. A youngster whose business overhead is paid by his family's house shouldn't undercut prices because he can. There are three elements on which one can compete—price, service, and quality of goods. You can't be best in more than two. So where fixed companies have to charge enough to pay overheads, but rarely deliver, a competitive youngster can sell at market prices, thus to maximize his own returns, but give personal delivery, since he isn't paying someone else to deliver for him. Concentrate on service and quality and don't wreck a local company on a price basis. Our aim is to build and support the business community, to some extent at least, and if a new business competes on price, it will have to go under as soon as it gets big enough to incur the overhead of a bigger firm. Let your teams know these things and direct their energies to filling needs that are not more commonly met by established companies, in order to get the latter's help and avoid frictions that lead to restrictive laws on everyone.
There are limitations in selling, such as from house to house, so plan accordingly. Those laws are made by local businesses who don't like outside competition and citizens who don't like to be pestered to buy by phone or at their doors. A successful personal sales program develops from personal contacts rather than broadcast advertising and promotion. It is highly annoying, for example, to drive off from a parking lot and find a piece of advertising paper stuck under the windshield wiper. Think these things out. Don't clomp down too much on enthusiasm, but see to it that they understand the effects of any actions they take.
Some of you should be able to develop franchises that let a lot of young businesses spring up. Most such businesses can be run without help from a franchiser, once the idea spreads. If you can supply specialty items at a good price, there should be some growing markets once young people take hold of enterprising.
The local chapter of YEA! should be run by the business owners themselves, accepting counsel from the rest of us. They learn to conduct meetings, to maintain discipline, set up standards of performance that can keep hostility from the rest of the community down. The young are often suspected of the worst, and it is up to them to maintain their standards so they are respected in the community, as young people rarely are under other circumstances.
There is need for classes in operating different kinds of businesses, as well as in specific areas that are common to each business. Since we learn the most by teaching, work out courses that they can teach to each other. The youngster who reports on income tax reporting, for example, will become an expert in that activity. He'll have to study ahead of time so he'll put on a good show, and he'll have to answer questions he may not have faced before, going and getting and coming back with answers. He can solicit counsel from a CPA, but he should handle the affair himself, as much as possible. Our whole principle is one of learning by doing.
Finding meeting space if an Association grows large can be a problem, but don't hesitate to turn to a church to which a member belongs. This is their kind of thing, and it's better to stay out of school-houses and city halls if possible, since we are concerned with freedom, not space. Again, each business youth will learn from his peers as he cannot from a book, and meeting regularly, in specialized groups or together, will let them mature in a fashion that a teacher-centered system cannot match.
As noted, many can expect to fail, and that should be part of the program. They should continue to be welcome, since many of them will try again once they are bitten by the bug of being their own bosses. They will be in a group in which others succeed and thus can see what they'd like to handle next. They could be prospects for buying a successful venture when the owner decides it's time to go off to college, for instance. One aim should be that no successful business ever just fades away. It is too valuable, both as a source of income and as a teaching tool.
If a business prospers and grows—and a few will—the owner will need to hire others, and since presumably those who have tried and failed know more about his problems and are more realistic about their expectations, growth by hiring other members should be an effective way to hold the interest of those who didn't make it themselves.
Perhaps more than that, established (adult) business should find this group a profitable source of motivated, industrious employees. This aspect probably shouldn't be publicized, because it would tend to attract members looking for jobs rather than for success in their own firms.
Some may eventually want to incorporate. You'll have a local lawyer on your advisory team, but the firm should pay the regular costs, and the case can be used to teach other Association members who haven't reached that point.
When you get into operation, remember to reach out, for example, to minority groups. It is easy to work with your own kids and those of friends, but if you can show some less-advantaged children how to enterprise effectively, it will swing whole families over into the hopes of liberty.
By this time, your own ideas have started rolling around, and you are probably way ahead of me in many respects. Brainstorm with me. Write to me at 6755 W. Broward, #201, Plantation, FL 33317, with your ideas and to get permission to use the copyrighted name YEA! There are other groups with the initials YEA, but ours differs in the exclamation mark, a part of the logo. We'll want to start a master file of specific cases. We'll want to collect case histories of failures as well as successes and statistics on the kinds of businesses that fail and succeed, or the proportion thereof. If you can get clippings on youngsters who have gotten into business successfully or you know of product lines that others should know about, send me the facts. As references are built up, we'll get a reporting network started. Advise, also, of magazines and books that should be included in a YEA! branch's library. If you write to me at the above address, we'll know who is trying, and we can get together in a more formal grouping. Eventually, perhaps, there will be a national organization, but that isn't as important as what the individual does.
The point of it all is that if you and I don't raise a generation dedicated to free enterprise, they'll be dedicated to its destruction.
Mr. Booz has been bitten by the entrepreneurial bug and has thus far failed in business twice.