Millons of children yearn for summer work, but some young entrepreneurs have skipped the middleman and formed their own businesses.
Just like their adult counterparts, these children are independent self-starters, creative, hard-working and risk-taking, say Debbie Pierce and Ellen Evancheck of the Young Americans Bank in Cherry Creek, which offers a class for young entrepreneurs, plus ongoing business advice and support.
Melissa Gollick of Denver, a 10-year-old student at St. Anne’s Episcopal School and the YAB’s Entrepreneur of the Year, began playing with computers at the age of 3. When she turned 8, she put her considerable skills to work.
“I overheard a conversation between my dad (real estate consultant Robert Gollick) and one of his clients” concerning their need for a map, she said. “I could do a map,” she told him, and so MelMaps took form. The company offers computer-generated vicinity, location and floor-plan maps that cater to banks, real estate agents, brokers and appraisers.
Melissa charges $5 for a location map, $15 to $20 for a vicinity map and $50 for a floor plan – a third to half of market rates, according to her father.
Although shy about revealing how much money she has squirreled away, Melissa did say she plans to use some of it for a laser printer. She manages just fine on an allowance of $4 a week.
Like Melissa, 15-year-old East High freshman Bryan Chavez pursued his passion – art – first.
“I’ve always been fascinated with art, but two summers ago, I wanted a way to make money,” said Bryan, who airbrushes designs on T-shirts. “I just thought that was a way to show my abilities and make some money at it.”
Bryan bought an airbrush, then took lessons. Basically, “whatever I can draw, I can airbrush,” Bryan said.
“I made a little bit of money at first, then the summer before my freshman year at East, my business just took off.” Bryan worked with a silk-screening company at the Colorado State Fair, airbrushing T-shirts with customer-requested designs, charging $12 and making $7 a shirt.
“In about three weeks’ time, I made $600, and that was only working on weekends.”
At East, kids would ask Bryan where they could get shirts like the ones he wore, and his business flourished.
One of Bryan’s next big purchases will be a heat press machine so he doesn’t have to set his painted designs into the T-shirt with an iron.
According to literature distributed by the YAB, as much as 15 percent of profits should be reinvested into the business.
Eight-year-old Suzanne Switzer noticed graffiti on the garage door across the alley from her Congress Park home and saw a window of opportunity.
“I said, “Mom, I think for a job I’d like to paint out graffiti.’ I’d seen people on TV doing it.”
So with the Switzers keeping track of their whereabouts, Suzanne and her buddy Minda Johnson walk the neighborhood and note new graffiti on garage doors. Then they inquire if the owners would like the marks painted out.
Their fee varies, depending on the size of the job, said Minda, 8, a student at Graland Country Day. Added Suzanne, “If they already have the paint, it’s $2 less.”
Suzanne and Minda let profits accrue so they have enough for change and new brushes. At the end of the month, they split the profits.
Besides the class in how to choose and start a business, the YAB offers young entrepreneurs business loans.
The default rate on YAB loans is 2 percent, said loan officer Susan Cline, lower than at adult banks. Besides borrowing for start-up business costs, youngsters take out loans of $200 to $10,000 for Nintendo products, bicycles, school trips, first cars and college tuition. Parents cosign, but the loan application has to specify how the child will pay back the money.
Looking at children who’ve borrowed for businesses, it’s hard to say whether entrepreneurial spirit is inborn, Cline said, but some kids give that impression. “With some children it really shows: They have a high attention level, they get excited. You can tell by the questions they ask.”
If it doesn’t come naturally, “You can nurture (them) along,” Cline said. “You can help them learn about finances.”
Young Americans Bank staffers are in a unique position to know. No other institution like it exists in the world; more than 17,000 children have accounts there, including many from other countries.
Nor are financial programs set up only for well-to-do children. Young Ameritown, the bank’s interactive civics experience, is booked virtually every day for use by schools in the 2011-12 school year. And Pierce and Evancheck intend to take their Young Entrepreneurs class and support program to kids who live in group homes.
Entrepreneurs need the support and information the Young Americans Bank offers because – despite their age – youthful business owners still must comply with state and federal child labor laws and tax regulations.
In Colorado, anyone under 18 is considered a minor unless they’ve graduated from high school or have a GED, said Chester Burry, labor relations officer at the Colorado Department of Labor. Minors as young as 9 can be employed, Burry said, but the work has to be safe: delivering handbills, shining shoes – “they can do lawn care, but not with a power mower.”
At 12, it’s legal to babysit, do some retail sales, deliver goods and care for lawns with power tools. At age 14 to 15, kids are allowed to do retail sales, some food preparation and office work.
At the Colorado Department of Revenue, Dorothy Dalquist said, “Basically the IRS sets the rules and we follow them.” For example, the IRS isn’t concerned how much money a child makes until he or she hits $3,700. If a child earns more than that, parents aren’t allowed to claim the child as a standard deduction.
Also, Dalquist said kids need to consider if they’re hawking goods or services. Selling goods – tangible objects – means the seller has to pay a sales tax; dealers in services don’t have to pay sales tax.
The state does not pursue lemonade-stand sales taxes, but if kids are making big money – and some are – laws apply.
To most kids, merely multiplying their allowances six or seven times amounts to big money. LaTasha Johnson, 14, who makes and sells crispy rice treats for small coffee shops, only started cooking a month ago and already makes up to $50 a week.
Kelly Hayden and Kylie Dohman, 12-year-olds with a card, bookmark and gift-bag business, especially enjoy their partnership. “It’s fun to come to her house after school and go down to our office,” Kylie said. “On Saturday, we went out for a business lunch.”
“We went to the Village Inn,” said Kelly. “It was really neat – we were there all by ourselves.”