How to Start a Business as a Teenager: The Definitive Guide

Imagine your teen years as a movie montage, and you probably picture cheering on your high school football team, getting a driver’s license, going to prom, and proudly tossing your graduation cap in the air. Did you envision yourself starting a business? Probably not, but it’s certainly worth considering!

You may not know many teen business owners, but there are many amazing benefits to developing your entrepreneurial skills early in life. And while starting a business isn’t easy, it’s not quite as challenging as you might expect.

In this guide, we’ll cover the benefits of starting a business a teenager, a few business ideas for inspiration, and eight steps to launching your very own business now!

Click above to watch a video on how to start a business.

Benefits of Starting a Business as a Teenager

So, why would you want to start a business as a teenager? There are lots of reasons, including:

• Earning extra income
• Developing your business savvy, people skills, and entrepreneurial spirit
• Gaining valuable real-world experience
• Impressing your friends, crushes, and college admissions officers
• Becoming eligible for scholarships designed specifically for entrepreneurs (e.g., NASE Future Entrepreneurs Scholarship and NFIB Young Entrepreneur Foundation Scholarship)

Of these many excellent benefits, perhaps the most important is impressing college admissions officers. We already mentioned that teen entrepreneurs are rare. That means you’ll stand out—in a good way—when college application season arrives.

Starting a business as a teen shows creativity, passion, motivation, initiative, responsibility, and leadership potential. Colleges will see you as someone who’s ready to get involved, take on the real world, and make an immediate difference on campus. Admissions officers will be especially impressed if your business is helpful to your community or the world at large.

And aside from the extra income, none of these benefits require your business to be especially successful. The experience of starting and running a business is enough to help you build valuable skills and gain the admiration of colleges. If your business does turn out well, you can learn even more useful skills and knowledge in college, then continue expanding later.

Business Ideas for Teenagers

At first, you might find it hard to come up with an idea for a business. Hopefully, these business ideas from other teen entrepreneurs will give you a burst of inspiration:

• Handmade crafts
• Tutoring
• Test prep
• Childcare
• Lawn care
• Cleaning/organizing homes
• Dog walking
• Tech support
• Technology tutor
• Freelance graphic design
• Freelance social media marketing

Another option is to start a nonprofit, such as:

• Tutoring for underprivileged schools/students
• Free music lessons for students who don’t have access to musical programs at school
• Free tech help for seniors
• STEM education for young girls
• Organization raising money or resources for a cause you consider important
• Photography services (or any other service) free of charge to the underprivileged
• Food pantry

Of course, the right idea for you is one that fits your skills and interests. If you’re torn between starting a for-profit or nonprofit business, remember that even a for-profit business can make a difference. For example, you can donate a portion of your proceeds to a cause you believe in.

You can also use a “pay it forward” model. For instance, you can earn money by tutoring, then “pay it forward” by offering free sessions to underprivileged students and families. Ultimately, the choice is yours. Both routes offer similar benefits, aside from the fact that you won’t earn money with a nonprofit.

8 Steps to Starting a Business as a Teenager

You’re probably wondering: How do I start a business as a teenager? It’s a challenging process, but these eight steps will make it easier!

1. Build Some Experience

Ideally, it’s helpful to have some previous work or volunteer experience. Gain some insight into how businesses operate behind the scenes, and learn to interact patiently and positively with customers.

If you don’t already have experience, see if you can arrange to shadow someone for a few days or a week. Or consider signing up for a public speaking, improv, or drama class. As the face of your business, it’s important that you’re able to talk to people, build relationships, and sell your product or service.

Even your classes at school can help you gain helpful experience for running a business. Pay special attention in math and English class. You need to be able to manage your finances and communicate clearly in writing.

2. Get a Mentor

Similarly, it’s a good idea to approach a local business owner and see if they’re willing to mentor you. The support and advice of a mentor is invaluable for young people starting out in the world of entrepreneurship.

If one of your parents or family members is a business owner, they can mentor you too. But you might want a completely neutral party to give you their honest feedback. Call, email, or even stop by a local business and see if someone is willing to mentor you.

Mention something you admire about the business owner or their business, then share some ideas you have. Explain that you’d like to have someone to ask for advice and answer your questions as you navigate starting your own business. You’ll be surprised how willing people are to offer their help! After all, everyone started somewhere, and many have a mentor of their own they remember fondly.

3. Pursue Your Passion + Meet a Need

Whatever business you decide to start, make sure it’s something you’re passionate about. Running a business is time-consuming. You’re already going to school, doing homework, and participating in extracurricular activities.

So, if you’re going to dedicate a lot of time to yet another thing, you want it to be something you love. If you enjoy what you’re doing and/or feel you’re making a real difference, you’ll find it much easier to put in the time and effort necessary to succeed.

You also want your business (whether for-profit or nonprofit) to fulfill a need or desire:

• What’s a problem or inconvenience in your area, and how could you solve it?
• What’s a difficulty people experience that you could make easier with a product or service?
• How could you make an existing business model faster, more convenient, or simply better? (Businesses like Uber and StitchFix have successfully used this approach.)

Once you have a general idea, do some market research. What complaints do people have about the other products or services in the market you’re planning to enter? What gaps exist that you can fill?

If you can solve a problem, fulfill a desire, and pursue your passion, then you’ve truly struck gold.

4. Create a Business Plan

Once you have your golden idea, it’s time to develop your business plan. A business plan is basically a road map for how your business will grow and develop.

You can find examples of business plans and resources for creating a business plan online. This is also a great time to turn to your mentor for advice and assistance.

Typically, business plans include information like:

• Business name and summary
• The problem/need you’re addressing and how you will address it
• Strengths and weaknesses of your competitors and how your business will stand out
• Target customers and how you’ll reach these people/market your product and services to them
• Budget and plan for developing your product or service
• Plans for operating and managing your business
• Financial plan for costs you need to cover, when and how you’ll secure financing, etc.

Of course, the info you need to include in your business plan will vary based on the type of business you plan to start. If you’re running a one-person tutoring business, for instance, you don’t really need much financing. And you won’t need to make very extensive plans for managing and operating your business either.

But you will need to think about where you’ll find students to tutor, how you’ll advertise your services, where you’ll tutor your customers, etc. Think about your business plan as a way to answer all of the possible questions and challenges that might arise as you start your business. As Benjamin Franklin once said, “If you fail to plan, you are planning to fail.”

5. Consider Funding

As mentioned above, you may or may not need funding for your business. If your business is service-based, for example, you might just need yourself, a car, and a little cash for gas. But if you’re building a product, you’ll need money to create a prototype, test your prototype, and produce it. Even if you’re making handmade crafts (no fancy prototype required), you’ll still need supplies.

So, how can you fund your business? Ideas include:

• Use money you’ve saved from birthdays, previous jobs, etc. (if applicable)
• Pitch your business plan to family members and ask for donations or loans
• Hold fundraisers (e.g., bake sale, car wash, talent show)
• Try crowdfunding through websites like Kickstarter

And if your business is designed to benefit the community, you may find local entrepreneurs or charitable investors willing to pitch in and sponsor your idea.

If you find that funding is a huge obstacle, modify your idea to something less costly at first. Over time, you might earn enough money or enough interested sponsors to expand.

6. Handle the Legal Stuff

The legal aspect of running a business is probably the trickiest part, especially for a teen. While you do have to pay business taxes, you aren’t old enough to independently incorporate a business or sign a contract. For some legal and tax issues, you’ll need an adult to help you out, whether it’s your parent or a mentor.

The “legal stuff” involved in running your business may include:

• Registering your business
• Federal and state tax ID/filing taxes
• License and permits
• Trademarks/copyrights/patents
• Opening a small business checking account

Requirements vary based on the type of business you’re running and whether it’s for profit. It’s all a bit complicated, so it’s important to have someone on your team who understands the ins and outs. You may want to consult with a local accountant for help with business taxes and the self-employment tax as well.

Be sure to keep a record of all the money you spend and make, and all actions you take related to your business.

Again, this is the part that can feel a little overwhelming. But with proper guidance from your parents, a mentor, and ideally an accountant, you’ll find it’s not as difficult to navigate as you’d think. Plus, learning how to do all of this now is hugely valuable and gives you a major head start!

7. Find and Keep Customers

Every successful business needs customers. Even if your business isn’t for profit, you need to determine who will benefit from your product or services.

Before you get started, ask yourself:

• Who will need or want the product/service you’re providing?
• Why will these people love your product or service?
• Where do these people live and work? What websites do they use?
• What are their interests, and how can you appeal to this audience?

It’s important to learn about your ideal customer so you can find them, get them interested in what you’re selling (or offering for free), and continue building a positive and lasting relationship. If your customers are happy, they’ll keep coming back, and they may even recommend you to their family and friends!

8. Learn from Mistakes

Finally, be prepared for the fact that obstacles and mistakes are part of starting a business. Even your most carefully laid plans and best efforts won’t always turn out the way you hoped.

Remember that the businesses (and people) who succeed are the ones who keep trying. You can’t get down on yourself after every mistake or want to give up after one failure. Take the time to reflect on each mistake or missed opportunity. Ask yourself what you learned and what you’ll do differently next time.

In fact, making mistakes is one of the most valuable learning experiences that comes with starting a business as a teenager! Make the big mistakes now, when you’re young, and you’ll make wiser choices in the future (when you’re older and probably have more money on the line).

Once again, you’ll have a head start and be more likely to succeed on your future business ventures. Plus, making a mistake in your first business and coming back strong would make a great topic for a college application essay!

Final Thoughts: How to Start a Business as a Teenager

Starting a business as a teenager is a great way to gain valuable life experience and knowledge, stand out on college applications, and maybe earn a little cash or make a difference in the world (or both!).

It’s not easy, but some keys to success include:

• Leverage your previous experience.
• Find a mentor.
• Pursue your passion and meet a need.
• Create a business plan.
• Consider funding.
• Handle the legal stuff (with help from an adult).
• Find your target customers and build relationships.
• Know that you’ll make mistakes, and take the time to learn from them!

When you’re a teenager, it’s not about the success of your business venture. (Success would just be a really cool bonus.) It’s about getting out there, trying your best, and learning as much as possible. And when it’s time to fill out your college applications, you’ll have a unique resume and an admirable story to tell.