Your child comes to you, eyes shining with excitement. “I have a business idea!” Maybe they want to sell handmade bracelets, tutor younger kids, or even bake and sell cupcakes in their area or church. You’re thrilled because — let’s be honest — it’s impressive when a child shows that level of drive.
But making money is one thing; managing it wisely is another. Just like adult entrepreneurs, kids make financial mistakes — sometimes big ones. As a parent, your role isn’t to make everything perfect for them. Instead, it is to help them learn from these mistakes so they don’t repeat them again.
So in today’s post, we will be highlighting five mistakes entrepreneurs make (the fourth one is the most brutal) and how you can help them do better.
1. Spending Everything They Make
Imagine your child runs a small business selling handmade bracelets and perhaps art work too. After a successful weekend at a local event, they count their earnings — ₦10,000! The next thing you know, they’ve blown it all on video games, snacks, and new sneakers. Now, they have no money left to restock supplies for their next sales.
This is one of the most common mistakes kids make — they see money as something to be spent immediately.
How You Can Help:
- Introduce the “Spend and Invest” Rule
Help your child split their earnings into two categories:
Spend: Money for fun or personal use.
Invest: Money put back into their business to buy supplies or improve their work.
For example, if they make ₦10,000, they could spend ₦2,000 and reinvest ₦8,000. This way, they can have fun while still ensuring the business is growing.
- Set a Savings Goal
As the business grows and they make more profit, you can help them create a third category for savings. Kids are always asking you to buy stuff for them, whether it’s a new video game or toy.
Now that they are earning money, it’s a great opportunity to buy some of these things themselves, as it would teach them to value them more and also help them gain independence. Instead of just saying, “Save your money,” ask them, “What’s something big you want to buy later?”
If they want a bicycle, help them track how much they need to save every week to achieve this goal at the set period.
2. Under-pricing Their Products or Services
Let’s say your child starts a small baking business, selling homemade cupcakes. They’re thrilled when a friend at school offers to buy one, but when asked how much it costs, they hesitate. “Umm… ₦200?” They’re afraid that charging too much will scare people away. But what they don’t realize is that ₦200 barely covers the ingredients, let alone their time and effort.
This is a common mistake — many young entrepreneurs set their prices too low because they:
- Feel guilty charging too much.
- Worry that no one will buy if the price is too high.
- Haven’t calculated how much their product or service actually costs them.
The result? They work hard but barely make any profit — or even lose money.
How You Can Help:
- Teach Them to Calculate Costs
Sit down with them and list everything that goes into their product or service. For example, for a cupcake business:
- Flour, sugar, eggs = ₦5,000 per batch
- Packaging = ₦300
- Gas for baking = ₦1000
- Total cost for 30 cupcakes = ₦6,300 (₦390 per cupcake)
If they sell each cupcake for ₦400, they’re only making ₦10 per sale — not enough to grow their business! Show them how to factor in profit so they can reinvest in their business. A simple rule: Price = Cost + Profit.
- Help Them Find a Fair Price
Encourage them to check what others are charging for similar products. If cupcakes in their area sell for ₦500 each, they shouldn’t charge ₦200 just because they’re new. Help them test different prices. Maybe start at ₦450 and see if customers are willing to pay.
Once they understand their worth and learn to price correctly, they’ll not only make more money but also take pride in their efforts.
3. Not Keeping Track of Money
Your child comes home excited after selling ten handmade bracelets. You ask, “How much did you make?” and they say, “I don’t know… but I have a lot of money!” Then, a few weeks later, they’re asking you for money to buy more supplies — because they spent all their earnings without realizing it.
This happens when kids don’t track their money. They mix their earnings with pocket money, forget how much they spent, or assume they have more than they actually do. Even small businesses need simple record-keeping!
How You Can Help:
- Introduce a Simple Money-Tracking System
No need for fancy spreadsheets — start with a notebook or an app. Create three simple columns:
Money In: How much they earned.
Money Out: How much they spent (supplies, packaging, etc.).
Profit: What’s left after expenses. - Make Record-Keeping a Habit
Encourage them to write down every sale and expense at the end of each day. Set a “business meeting” once a week where they check how much they made and spent. - Show Them Why It Matters
Explain that tracking money helps them know when they need more supplies, whether they’re making a profit, and if their prices are right. If they see their profit shrinking, they’ll learn to adjust prices or cut unnecessary expenses.
When kids learn to track their money, they feel more in control of their business — and that’s a skill they’ll use for life.
4. Saying Yes to Every Customer (Even When It’s a Bad Idea)
For instance, if your child sells art work and a customer asks if they can make fifty art works in five days. Excited, they say yes — only to realize later that they don’t have enough time, supplies, or energy to complete the order. They stay up late, rush through the work, and end up delivering something they’re not proud of. Worse, they feel completely overwhelmed and exhausted.
Many young entrepreneurs struggle to say no, fearing that turning down a request will disappoint customers or hurt their business. But agreeing to every order, no matter how unrealistic, can lead to burnout, poor-quality work, and a bad reputation.
How You Can Help:
- Teach Them to Know Their Limits
Have an honest conversation: “How long does it take you to make one art work? How much time do you actually have this week?” Help them set realistic limits — maybe they can take on 20 art orders per week, not 50. - Encourage Them to Be Honest with Customers
Role-play a polite way to say no or adjust expectations. For example, instead of saying, “I can’t do that,” they could say, “I’d love to, but I can only finish 20 art works by Friday. Then I can complete the rest next week Sunday. Would that work for you?” This way, they learn to set boundaries while keeping customers happy.
5. Giving Up Too Soon
Starting a business is exciting, but the moment things get tough, many kids feel like quitting. Maybe they don’t get as many customers as they expected, their first event doesn’t go well, or they face negative feedback.
This is one of the biggest lessons young entrepreneurs need to learn: success doesn’t happen overnight. Every business has ups and downs, and setbacks don’t mean failure.
How You Can Help:
- Share Stories of Famous Entrepreneurs Who Failed First
Tell them about Walt Disney, who was once told he “lacked imagination,” or about the first iPhone, which many people doubted. Let them know that mistakes and slow starts are normal — even for the most successful businesses. - Help Them See Setbacks as Learning Opportunities
If they didn’t sell as many cupcakes as they hoped. Instead of saying, “Don’t worry about it,” ask, “What do you think went wrong? What can we do differently next time? Was the price too high? Did we need better packaging?” Questions like this get them to reflect and learn from their business experiences. - Celebrate Small Wins
Remind them that success isn’t just about making a huge profit — it’s about progress. Even selling their first five products or getting positive feedback from one customer is worth celebrating.
If their first business idea doesn’t work, that’s okay! Help them tweak it or explore new ideas. Remind them that persistence is key, and many successful entrepreneurs didn’t get it right the first time.
Starting a business is a huge learning experience for kids. Mistakes are bound to happen, but each one is an opportunity to grow — especially with the right guidance.
Your job isn’t to fix every mistake but to help them think through their decisions, learn from setbacks, and build confidence.
So when your child comes to you with a business idea, support them, ask questions, and let them take the lead. Who knows? That little business they start today might just be the beginning of something incredible.
What mistakes have you noticed your child make in business, and how did you help them navigate it? Comment below and let us know.