Six Ways to Raise and Nurture a Young Entrepreneur: A Guest Post

 

By John Hope Bryant

Children are natural-born entrepreneurs. When they're toddlers, they make homemade mud pies and "sell" them to Mom or Dad. As they get older, they start to understand that adults will pay them small amounts of real money in exchange for goods or services, such as a cup of iced lemonade or walking their dog after school.  
 

In 2013, Operation HOPE launched a pilot program in four cities -- Atlanta, Denver, L.A., and Oakland -- to help schoolchildren in underprivileged communities learn the basics of financial literacy and entrepreneurship. In a competition, kids pitch their entrepreneurial ideas to a committee of business leaders, and the winners are given a $500 grant and help in launching their startup businesses.

 

As a result of this "Shark Tank for Kids," Princess, a 6th grader from Oakland, created Sweet Tooth Bakery, which sells homemade cakes and cookies to local shops. Froylan, a senior at Montbello High School in Denver, got funding for Froy's PCs, a computer repair business he runs out of his home. 

 

Their stories, and many others like them, show that kids, when given the education, opportunity, and guidance, can be entrepreneurial successes.

 

Since many schools don't teach financial literacy courses or offer similar opportunities, here are some ways parents can teach kids about money, financial responsibility, and entrepreneurship.

 

Show them how money grows. 

Show your kids why investing in two shares of Nike stock will benefit them more than buying one pair of Nike Air Zoom Flight basketball sneakers. Both cost around $160, but only one of those choices will be worth anything five years from now.

 

Support their natural entrepreneurship. 

A hot dog stand at the school football game, a car-care service, or a lawn mowing job teaches so much more than spending allowance money. When kids start small enterprises, they learn about earning, saving, budgeting, and so much more.
 

Teach them how credit works. 

Kids need to know about credit because it helps them understand how to plan for large purchases responsibly. A kid with little or no money can acquire something she or he really wants. For example, it might involve borrowing money from a parent and then paying off the loan each week with chores after school. 

 

Help them make a budget. 

Teaching kids how to budget gives them a realistic notion of the relationship between work and money, and how budgeting relates so many everyday outcomes, such as having enough for food; school supplies; clothes and shoes; birthday presents;  sports, music, and entertainment; tech toys and devices; and other important parts of kids' lifestyles.

 

Teach them to think big. 

In the most recent Gallup-HOPE Index, more than 87% of youth surveyed believed there was a correlation between how much education they completed and the amount of money they could be expected to earn. Help kids see that the harder they work at doing well in school, the more income and opportunities they'll have later on. 

 

Give them financial dignity. 

Kids who grow up in households where parents live under the constant threat of having their car repossessed or their utilities turned off intuitively see the relationship between finances and dignity. No one should have to make a choice between buying food and paying the rent. Help them understand that check-cashing joints or pawn shops take advantage of people who don't or can't belong to traditional banks or neighborhood credit unions. Help them start a youth savings account, where they sock away $5 a month.

* * * * * 

John Hope Bryant (www.johnhopebryant.com) is founder, chairman, and CEO of Operation HOPE, a nonprofit banker for the working poor and struggling middle class, which provides financial literacy for youth, financial capability for communities, and financial dignity for all. His bestselling book, How the Poor Can Save Capitalism: Rebuilding the Path to the Middle Class (Berrett-Koehler, 2014) builds a compelling economic argument for investing in America's least wealthy consumers--and presents practical, positive solutions, with case examples of individuals and companies doing it successfully.

Interview with Brigitte Thompson, Author of "Bookkeeping Basics for Freelance Writers"

Today I have the pleasure of interviewing Brigitte A. Thompson about her wonderful guide Bookkeeping Basics for Freelance Writers. Brigitte is the founder and President of Datamaster Accounting Services, LLC. She has been active in the field of accounting since 1986 and is a member of the American Institute of Professional Bookkeepers and the Vermont Tax Practitioners Association.

A prolific writer, Brigitte is the author of several business books, contributing author and freelance writer specializing in accounting topics. Her business has been featured in a best-selling book by Paul & Sarah Edwards, The Entrepreneurial Parent, and in Mompreneurs Online by Patricia Cobe & Ellen Parlapiano.

Brigitte lives in the Green Mountains of Vermont with her husband and three children.

Tell us about Bookkeeping Basics for Freelance Writers.

Writers have many important questions to ask about income and expenses, but no single source for answers. I created this book to be that source. It is an easy-to-understand guide to organizing a writer’s financial life.

This book addresses issues writers face daily such as how to deduct travel expenses, determine taxable writing income, and claim home office deductions. Navigating through the record keeping required for a small business owner can be difficult. This book is written exclusively for those of us who earn money by writing.

Readers will also find that each part of this book works together to assist in forming an overall business plan. The chapters take the writer through a comprehensive process that works as a building block towards a successful writing business.


Have you found that freelance writers require a different set of bookkeeping rules?

Many bookkeeping rules are universal such as the requirement to record income, but there are some areas of the tax law that are of more interest to freelance writers. This includes dealing with royalty payments, bartering, personal property and agent fees. My book addresses the universal tax rules as well as the infrequently discussed rules that apply specifically to freelance writers.

Learning how to document expenses and how to track income will give writers the best chance at overall business success.


What are some tax deductions that freelance writers might not be aware of?

There are many tax deductions available to writers. Some expenses are common, such as the cost of purchasing a case of paper or paying for a computer software upgrade. Other costs incurred in the operation of your writing business may not jump out at you as expenses when they could be. For example, consider the following accounts.

Mileage: Trips made in your vehicle to pick up office supplies can be counted as a business deduction if you record the proper information to support it.

Meals: Treating your agent to a restaurant meal with the discussion focusing on your next book can also generate a tax deduction when properly documented.

Shipping: UPS charges and postage used to mail a query or review copy of your book can be a small expense, but it should still be tracked. Those small deductions add up and every penny spent as a qualified business expense will reduce the amount of income tax you owe. 

Bookkeeping Basics for Freelance Writers devotes an entire chapter to expenses, including a comprehensive listing of expenses and detailed information regarding what documentation is required to support each one.


I'm sure you've observed other freelance writers making accounting missteps that cost them time and money. What are some of the most common issues and how can we avoid them?

The most common misstep I’ve seen with writers is not taking themselves seriously as business owners. This can lead to financial pitfalls. Many writers have been honing their craft for years so it’s hard to identify an official starting date for their self-employment. Without this point to mark the beginning, it is easy to put off tracking income and expenses. This can be an unfortunate mistake.

The IRS will consider you to be in business when you are actively pursuing projects intended to generate income and expenses. This means they will expect you to file a tax return to report those transactions. Keeping track of your income and expenses from day one will enable you to pay the least amount of income taxes on the money you earn.


Many people find numbers, especially when related to bookkeeping and taxes, intimidating. Will this book make these things easier to understand?

Yes, my book breaks down complicated number crunching into easy to follow steps. By reading the book, readers will understand why it's important to keep certain receipts and how those pieces of paper factor into the overall success of their writing business. Sometimes knowing the reasoning behind a task makes it easier to complete.

Writers can take advantage of some wonderful tax deductions, but only when they are aware of the possibility and know how to accurately document the expenses. My book explains it all in a reader friendly format.


Why is it important for writers to understand bookkeeping?

Writers are earning money and this money needs to be reported as income on their income tax return. If writers do not have any expenses to claim, their taxable income will be higher and they will owe more income tax.

Understanding what can be claimed as business expenses when you are a writer and how to properly document these expenses will help ensure the success of your business.

The most important thing you can do as a writer is to become organized. There are many books available on how to organize your writing, but this is the best book available about how to organize the financial side of your writing business.


Obviously, your book is a great place for writers to get information on bookkeeping. Are there are any other resources you recommend?

Yes, I recommend writers visit the IRS web site (www.irs.gov) to research specific tax issues and the Small Business Administration (www.sbaonline.sba.gov) for general business information.

I also recommend joining professional associations for writers such as American Society of Journalists and Authors (www.asja.org), The Authors Guild (www.authorsguild.org) and National Writers Union (www.nwu.org). There are many groups to choose from so consider the benefits of membership before joining.

I was interviewed recently by Freelance Success (http://www.FreelanceSuccess.com) which offers an insightful newsletter for their members. There are also online groups for writers such as MomWriters (http://www.MomWriters.com) offering networking opportunities as well as camaraderie.


How can we purchase your book?

Bookkeeping Basics for Freelance Writers is available through Amazon.com and my publisher (www.CrystalPress.org). Any local bookstore can order my book by ISBN-10: 0963212389 or ISBN-13: 978-0963212382. List price is $17.95.


Thank you so much Brigitte for joining us today!

Visit Brigitte's "Writers in Business" blog: http://www.writersinbusiness.blogspot.com

Her website, Bookkeeping for Writers, is: http://www.bookkeepingforwriters.com


Tomorrow, June 17th, the VBT-Writers On The Move June Tour continues with Maggie Ball featuring Mayra Calvani!