Why We Are Creating a Business Incubator for Our Kids (And How)

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I’ve mentioned several times on my podcast that my husband and I have created a business incubator of sorts for our children. It’s a mini Shark Tank model that we will use to teach them business skills and life lessons during their high-school years.

It’s easier to do this since we homeschool, and they’ll finish most traditional bookwork by age 14 and start this business program. They’ll still take the SAT and ACT and get a regular high school diploma in case they decide to go to college, but entrepreneurship is such a part of our life that we want to equip them with the skills to pursue their own business endeavors if they want to.

If our children decide to go to college, we will fully support that, but inspired by the Thiel Fellowship, we’ve decided to give them the space and support to pursue their big ideas early.

Since we are both entrepreneurs, this is also a way for us to spend time with them while passing along lessons we’ve learned in our own business journeys.

Why a Business Incubator?

My husband and I both felt like we went through this process accidentally as adults when we started businesses and learned many lessons the hard way. Despite the struggles that come with running a business (and often through them), we’ve learned so many valuable life lessons.

Yet, for us, these lessons were learned as adults when the stakes were higher. We have kids to provide for and monthly expenses to cover. We wouldn’t trade these hard-learned lessons for the world, but we want our kids to have a chance to learn similar lessons while the stakes are a bit lower.

Our Deal With Our Kids

The business incubator led to a deal (a contract of sorts) that we have with our children. Specifically that:

Our kids must run a profitable business for one year before we will sign off for them to get their drivers license or have their own cell phone.

We chose those specific things because they are highly motivating for teenagers, but also because these are two things that require a degree of responsibility that they can demonstrate through the consistency of running a business.

Learning Life Lessons & Financial Skills

When we sat down and thought about all the values and skills we wanted to pass on to our children, we realized how many of them can be learned just from starting and running a business. To run a business (even one as simple as a pet sitting, lawn care, or a health blog!), a person would need to:

1. Find a Problem and Solve It

We’ve always explained to our children that an entrepreneur is someone who finds a problem and solves it. Or, to use the definition from Howard Stevenson, a longtime professor at Harvard Business School:

Entrepreneurship is the pursuit of opportunity beyond resources controlled.

Both of these definitions take into account the problem-solving and risk-taking skills associated with entrepreneurship. We especially want to help our children learn the value of finding a problem and solving it. Or put even more simply, how they could benefit from helping others in a meaningful and positive way.

2. Learn Self-Discipline and Motivation

It’s often said that an entrepreneur is someone who works 80 hours a week for him or herself rather than work 40 hours a week for someone else. This has been true for us much of the time over the last 13 years. But it speaks to another important point of being a business owner… the need to be self-motivated and self-disciplined.

Types of businesses vary greatly, but often there is no boss telling a business owner what to do, or giving set hours. While this has many benefits, it also means that the person has to be disciplined enough to work when needed.

We try to stay as hands-off as possible. Once our kids have an idea and are working toward it, we don’t remind them what they need to do or what hours they need to work. They’re responsible for keeping up with their own responsibilities and schedule related to their business.

3. Be Consistent

My husband often says that being successful requires three things:

Doing the right things, long enough, consistently.

Running any type of business is also a great lesson in consistency. It teaches our kids (and has taught us) that success is not about showing up once, or being good at something one time. Rather, it is about the consistency of doing the things necessary for success over the long term. And, we remind them about finding a way to help others and solve a problem consistently.

4. Learn Interpersonal Skills

There are exceptions, but most businesses require some type of interaction with people from all walks of life. I remember pet sitting and baby sitting businesses as a kid and how I had to interact with the pet owners and parents. Through this, I learned skills like negotiation and customer service (as well as many of the other skills listed here). Even something as simple as a lemonade stand requires interpersonal activity and interaction.

At a time when texting and email dominate conversation, we wanted to find something that would challenge our kids to interact face to face with other people, especially adults.

5. Understand Basic Accounting

In order to show that their businesses are profitable, our children have to track their financials. I’m grateful to my own parents for teaching my brother and me personal finance from a young age. We managed our own checkbooks that we used to pay for school activities and any expensive clothing or any expenses my parents considered unnecessary.

That background in personal finance made it relatively easy for me to learn business accounting as we started a business, but we wanted to give our kids this skill from an early age. We teach them how to use accounting software to track expenses and income, and how to create a profit and loss statement.

6. Set and Measure Goals

We talk about goal setting often in our family. Our kids often set personal goals in their own activities (like reaching a certain height in pole vaulting or a gymnastics or music milestone). In business, goals are just as important and necessary for a business to succeed.

Yet, a goal without a plan is just a dream.

In starting a business, we help our kids map out monthly and yearly goals and then work backward to create a plan to achieve them.

7. Think Outside the Box

In his fascinating podcast episode, Opher Bayer explained that those who succeed in a world that is increasingly automated and controlled by technology will be those who do things robots can’t do. Specifically, those who connect the dots where others don’t. People who see patterns where other people can’t. And those who maintain creativity and critical thinking.

We’ve found that starting and running a business is one of the best teachers of problem solving and thinking outside the box. New problems constantly pop up, and there isn’t an instruction manual. Solving them requires creative and critical thinking, often on the fly.

8. Learn Through Struggles and Adversity

One of our family mottos is that:

You were made to do hard things.

But the real value is the lessons learned and character that is achieved doing those difficult things. Or, as Marcus Aurelius said in the quote that became the inspiration for Ryan Holiday’s book The Obstacle Is the Way:

The impediment to action advances action. What stands in the way becomes the way.

Entrepreneurship and parenting have been my best teachers in this lesson.

9. Work Through Failure

Teaching my kids a high tolerance for risk and failure is very important to me. It’s something I had to learn as an adult and it was extremely uncomfortable at times. I loved school and it came pretty easy to me, so I never had to face failure there. Until I started running a business, I didn’t have to face any really uncomfortable situations involving risk and failure.

As Henry Ford said:

Failure is simply the opportunity to begin again, this time more intelligently.

10. Research

Starting a business requires solving a problem or “pursuing opportunity beyond resources controlled.” As such, there’s often no clear path or checklist to follow. In most cases, starting something new requires researching and understanding a problem and figuring out how to solve it.

Depending on their age, we provide some help at this stage to point them in the right direction and then let them take it from there. We also encourage them to test their ideas through in-person conversations with people who experience the problem they are trying to solve.

11. Take Advice and Ask for Help

In my own work, I’ve occasionally run into roadblocks that I wasn’t able to solve through my own effort or research. At these times, I reached out to others who had encountered similar struggles and asked for advice. I also found business mentors who were ahead of me in their businesses and who I could ask for advice.

For most of my life, I’d been fiercely independent and these times taught me the value of asking for advice and accepting help from others when needed.

12. Be Involved in Community

In many cases, especially for small businesses our kids are starting, there is an element of having to work within a community or build a community. I’ve talked about this so many times on the podcast, because I strongly believe that fostering solid community is one of the most important things we can do.

As an adult, some of my closest friends have come from my business community, and I want to give our children the same opportunity to build community at a young age. As an example, our oldest son is writing a kids’ cookbook with some of his friends (who are children of business friends of ours).

Our world is increasingly digital, so this community is even more important but often even harder to find. In my own experience, I’ve had to create the community at times when it wasn’t naturally there, and business can be a great shared interest as a starting point.

How the Business Incubator Works

Now that I’ve explained all the reasons we wanted to have a business incubator for our kids, here’s a basic overview of how it works:


We work with the kids to come up with a viable idea. We won’t think of ideas for them, but help them think of things they are interested in, problems they see and can solve, and ways they could do something in a new or unique way.

They don’t have to have a business that makes a lot of money, just one that is profitable, so it could be something small to start with. So far, even though they aren’t at the ages to have to start businesses yet, they’ve started local businesses, blogs, and even written the cookbook I mentioned above (coming soon!).

Create a Business Plan

Once the kids think of an idea, they have to work on a business plan. It’s a short summary of what they plan to do and how they plan to do it.

This includes the mission and purpose of the business, who the customer is, how the business will serve the customer, the costs and projected income, the marketing plan, and the goals of the business.

Talk Investing (If Needed)

If their business idea has a start-up cost that they can’t fund on their own, we then talk about investing. We have guidelines for how we will invest in our kids’ businesses and how much. Though hopefully much less stressful, they get to “pitch” us for their business much like a company would on Shark Tank.

Learn Legal and Tax Implications

At this point, we work with them to research the legal and tax implications of their business idea. Do they need a corporate structure of some kind? How much will they need to set aside for taxes when they start making a profit? What do they need to track to make this easier?

They get to attend and ask questions at meetings with our lawyers, bankers, and accountants to learn the ropes as they go. In fact, even before they start their own businesses, we let them tag along to our meetings with these professionals so they can start to understand these systems (since we had to learn much of them as adults).

Tracking the Business

At this point, we help the kids learn how to track the business income and expenses though simple spreadsheets or Quickbooks. This is a crash course in accounting, and I’ve found that actually managing a business taught me so much more than any class about businesses ever did.

Through this, we help them generate profit and loss statements and determine if their business is profitable.

Responsible Saving, Giving, and Investing With Profit

At the point at which the kids start generating a profit, we also start to teach them our own personal systems for saving, giving, and investing. We set up extra accounts so money automatically flows into them to save, give, and invest each month. This automates our own personal savings and also makes sure that we are setting aside money for these things before it ever hits our own personal accounts.

How We Lead Up to It

This isn’t just something we introduce for the first time when they are teenagers. Learning about business, finances, accounting, economics, and entrepreneurship has been a part of their childhood, and we’ve found a few things especially helpful in teaching these lessons:

  • TED Talks: Most mornings, we watch several TED talks with our kids, upon the advice of podcast guest Naveen Jain.
  • Access to continuing education and resources: Education isn’t something that just happens in school. We value life-long learning, so giving our children access to continuous educational resources is a priority. We use everything from Code Academy so they can learn to code, Udemy for all kinds of new skills, and courses on how to start a blog if they so desire.
  • Free time and boredom: We believe that children are born natural learners and we try to make sure our kids have lots of time to explore their own interests, try projects, and be creative long before they start a business.
  • Prioritize reading & learning: Over the years there have been many books and podcasts that have influenced our way of thinking, so we encourage our children to read and listen to similar things which can help expand their outlook and world view. A few of these books are Rich Dad, Poor Dad, and The Four Hour Work Week, podcasts Smart Passive Income, and Akimbo.

Our End Goal

While they’re children now, our goal of parenthood is to raise healthy, balanced, kind, creative, and successful adults who can adapt to whatever life throws at them. The type of learning environment we’re fostering works very well for us and our kids, but it may not be for everyone. Personalities, experience, skill sets, and financial means can all dictate how someone implements it in their own life, and mileage will vary.

What do you think? What important skills do you work to pass on to your kids?

Katie Wells Avatar

About Katie Wells

Katie Wells, CTNC, MCHC, Founder of Wellness Mama and Co-founder of Wellnesse, has a background in research, journalism, and nutrition. As a mom of six, she turned to research and took health into her own hands to find answers to her health problems. WellnessMama.com is the culmination of her thousands of hours of research and all posts are medically reviewed and verified by the Wellness Mama research team. Katie is also the author of the bestselling books The Wellness Mama Cookbook and The Wellness Mama 5-Step Lifestyle Detox.


23 responses to “Why We Are Creating a Business Incubator for Our Kids (And How)”

  1. Jeanene Avatar

    Katie thank you!! Would you ever consider putting together a more detailed process/package that would be a step by step that we could purchase. I want to do this with my kids but my brain goes to mush when trying to figure out all the steps. We are a little late to the game 12 and 14 so I don’t have tons of time left to figure it out. We home school so have flexibility. Would love to support you and purchase any type of guide you would be willing to put together. Thank you!

  2. Lucy Avatar

    I love this idea! I’m just curious how it works without them having their own phone, especially for the older teens. If they have clients, do they call your house phone? Do they still use social media to build an audience, etc? Of course a person can build and run a successful business without a cell phone, but as a business owner myself I have found so many ways to enhance my business through the use of a cell phone (beyond just having a portable phone/computer – just the apps, etc.).

  3. Lilly Avatar

    Katie, what an inspiring post! And also, congratulations to you and your husband for doing these for your family. I was always curious when you mention this on your podcasts, so this clears many questions I had. Thanks!

  4. Jeanette Avatar

    Curious to know what accounting software you use to teach them to track expenses and income.

  5. Matthew Avatar

    “they’ll finish most traditional bookwork by age 14”

    Does this mean they would finish a high school degree by age 14? If so, how do you do that? And if not, then what do you mean?

    1. Katie Wells Avatar

      Yes, the book work for a high school diploma by that age. Though we won’t consider them officially done until they get through the business incubator.

  6. Katherine Avatar

    I like this idea in theory but it depends on the execution, I guess. I’m not sure why exposing kids to the concept of running a business would be a higher priority than exposing them to other forms of learning (art, literature, the sciences, sports, or humanitarian work, for example). So when I say execution matters, I think the emphasis given to the idea, and the amount of time that is devoted to the object of starting a business matters. Being independent and successful at something is a great learning experience regardless of the area of focus. But running a business isn’t for everybody, particularly for kids who may not have much of an interest in doing that at that stage of life.

    Having said all that, I’m all for tying getting a cellphone and even a drivers license to being a responsible person!

    1. Katie Wells Avatar

      The other things you mentioned are all part of their educational curriculum, as our goal is to create well rounded, competent, kind, and successful adults.

    2. Alyssa Beard Avatar
      Alyssa Beard

      I see the biggest difference in the “profitable” part. Hopefully we are all impacted in some way by art, sports and humanitarian work, but at the end of the day, we all need to eat. While a few are able to support themselves on their artistic or athletic skill, with the right training and support, just about anyone can start and run a successful business.

    3. Charis Avatar

      Being a small business owner requires far more than independence-it requires the more than dozen skills the author listed in the blog above. Katie and her husband decided those traits were worth cultivating in their children. If you decide those skills are not as valuable, you are free to abstain from teaching them to your children. Katie seems to be sharing her methodology so others can learn if they would like, not so random (childless?) individuals who have never tried what she’s describing can offer a half-hearted “eh, I don’t know about that”. Running a business may not be for everybody, but if you read the blogpost, you can see the traits she wants to instill in her children ARE for everybody; and she probably knows her children better than a stranger on the Internet (one with no prior experience training their own children in business) does. If you’ve never attempted something, your contemptuous evaluations re that topic are ignorant and irrelevant.

  7. Fleur Avatar

    Katie, this is brilliant. I love that you have written about this, thank you for sharing. My husband and I both run separate businesses but come from hard working, “status quo” , working – class backgrounds where owning your own business and your future were just dreams. Thankfully we escaped that, but only as adults and like you, we’ve learned all our business lessons the harder way! We are in the UK and find it sad and frustrating that school doesn’t teach kids life lessons or encourage entrepreneurship, only how to be a cog in a wheel. We definitely plan to implement practices like you’ve mentioned here as our kids get older. Thank you for such inspiration, I hope it impacts many more families!

  8. Nada Beainy Avatar
    Nada Beainy

    Hello Katie, this is such an important topic and i happen to train kids in Lebanon (the country) aged 8-18 years old on design thinking so that they can identify challenges around them, understand the root causes (empathy), find creative solutions, prototype it and then implementing it.
    This framework is called FIDS: feel-imagine-do-share.
    It has been developed by a brilliant architect who started her own school in India based on these 4 steps. Now there is a large movement with over 60 countries that have joined her. The international NGO is called Design For Change: http://www.dfcworld.com (you’ll find open source resources to start it on your own).
    I encourage all of you to check it out… i fell in love with the approach and the results are amazing! Kids are amazing once you give them simple tools they can come up with the most innovative, cost-effective and direct solution to a problem that deeply touches them … i can talk for hours about the program but i’ll stop here and let you check the website. The USA are part of the movement, you’ll find contact details if you have any question.
    All the best in your endeavor!
    Would love to know if you end up adopting it and how it goes.

  9. Jennifer Avatar

    This is an amazing idea and so good for a child to understand for long term success in life. I have had some sort of business of my own since I was about 6 or 7. My parents were entrepreneurs and I was just drawn to it. My daughter wants the same thing and she is now 6. She loves Shark Tank and always says, “I want to do that too.”

  10. Pamela Avatar

    We homeschooled our children on our suburban homestead (back when that was a radical notion) straight through high school and raised them in a “business incubator” (it wasn’t called that at the time) and taught them well about managing money.

    They are both grown (23 and 24 years old), independent, have their own businesses (multiple income streams), manage their money carefully, and are resilient individuals. As their peers get battered around in today’s environment they are thankful we showed and encouraged a different path that gives them more control over lives.

  11. Tamara Avatar

    My husband and I do something similar with our children. We noticed an entrepreneurship desire in both our children at a very young age.(at around age five) Since we homeschool we knew we had the ideal situation to provide them with what they needed to pursue their “owning their own business” dreams. Our son is fifteen and has his own lawn care business. Our daughter just turned ten and aspires to have her own home-based baking business. She has already had a few people offer to pay her to make cakes for small parties. As she matures we plan to allow her to dive in deeper with advertising her skills on a very small scale to create her own little baking business.

  12. Juliet Avatar

    Thank you for your great post, Katie! I come from a family line of entrepreneurs and have been self employed for my whole life. Nonetheless, I felt like you that I had to learn many of the lessons myself as a grownup. I have two children, ages 2 and 10, and they have already spent a fair bit of time in my office… So far, I have focused on giving my children the right mindset for entrepreneurship, such as challenging them to think of business ideas and solutions to problems, as well as how to use failure to create something better and how to view and manage risk. You mention that your children start the incubators as teenagers but what do you think is an appropriate level of innvolvment for a 10 year old? Also, I am very interested in your investment and savings flow. Do you have a blog post on this? Thank you again for the inspiration.

    1. Katie Wells Avatar

      Great questions! Until they start the business incubator, we focus more on personal and family finances and teaching them the basics. When they ask questions about business before that we give them detailed answers and share numbers so they can start to understand it. I haven’t written about our investment and savings flow but I have developed systems for these that I will share in a post soon.

    2. Fiona Avatar

      I usually agree with everything you say but I’m not sure about this one. Not every person has an entrepreneurial spirit and there’s nothing wrong with working for someone else. My two children are happy, well adjusted professionals but would never have responded well to your idea.
      I like the idea of them having to work for privileges but every child is different.

      1. Katie Wells Avatar

        Of course every child is different and I’m not saying our system is right for everyone, but it’s what works for us. We’re never going to force our children down a path they don’t want to go, but we’re going to encourage them to think through and make choices that will benefit them in the long run. Being an entrepreneur or a business owner doesn’t necessarily mean never working for someone else, but it does entail hard work, self discipline, and creativity, which are all things we value and want to foster in our kids…

  13. Lindsay Souers Avatar
    Lindsay Souers

    Katie, this is an incredible idea. I remember that having my parents give me little tidbits of insight into business really sparked my interest and I felt empowered knowing things like how to code and how accounting works prior to being taught them in college. It’s very freeing to know that you have the ability to be an entrepreneur! I can’t wait to follow in your footsteps with this when I have my own children!

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