How to Start a Teen Business

From making and selling products on Etsy to starting your own YouTube channel that draws in thousands of views a week, the business opportunities for teens are endless.

Interested, but don’t know how to get started? Let our guide walk you through how to make a business plan, get your company off the ground and plan out your day-to-day operations to create a brand that’s sure to go viral.

Come up with a Teen Business Idea

There are several different types of teen businesses that you can start, from helping out your neighbors with household chores to starting a website and blogging or selling products on Etsy. When brainstorming what type of business to start, make sure it’s something that you’re passionate about so that you don’t lose steam juggling your business with your other responsibilities like school and extracurriculars. Just because it’s a teen business doesn’t mean it will be easy.

Running a business is hard work, but with the proper planning and dedication, you can create a thriving teen business very quickly. In addition to understanding what you’re passionate about and how that can become a profitable business, ask yourself the following questions:

It’s okay to say “no” to your first, second or third idea. Very few teen entrepreneurs get it right the first time. In fact, getting it wrong is often a badge of honor! Still, you don’t want to waste too much time, energy or money on the wrong initiatives, so ask and answer these questions honestly to find the right way forward.

Teen businesses that just earn you a little spending money may not need a business plan, but if you want it to become a genuine success (think, college fund) you can really benefit from one. A business plan will help you define how you’re going to run your business, market yourself, get sales, make a profit and grow.

Business plans force you to get your thinking in order and show your commitment to your teen business. Though they can vary slightly, a good business plan should all cover the following areas:

1. An executive summary with the most essential points from your business plan
   
   
2. Your goals and what you hope to achieve with your business
   
   
3. A description of your business, background information and context
   
   
4. A market analysis and likely demand
   
   
5. An overview of how your business is structures
   
   
6. Your business model
   
   
7. How you will market and sell your offerings
   
   
8. Financial projections, revenue and profitability
   
   
9. Appendices
   
   
   Looking for more help? Check out our guide to writing your business plan.

There are five main business structures you can have in the U.S., and it’s important to choose the right one. We’ve shared your options below. They are:

Once you've legally created your teen business, you’ll need to get some other things in place. This includes deciding where your business will be located, how you’ll handle finances and even your marketing plan. More on this below.

There are a lot of rules and regulations when starting a business. From how to get the proper licenses and permits to understanding how to file taxes, we can help you with every facet of your teen business. But first, let's start with the basics.

Do Teenagers Need a Parent or Guardian to Start a Business?

Teenagers that are under 18 years of age will need a parent or guardian's help when starting their own business. While teenagers tend to want to do everything themselves, this process is set up for a good reason, as minors aren’t able to form a business or apply for a loan without parental approval.

Legalities of Starting a Business as a Teen

No matter your age, there are a lot of legalities and challenges to starting a teen business. As mentioned above, minors cannot be organizers of their own corporation or LLC. However, that doesn’t mean your dream is dead. Teens can serve as a member or partner of an LLC, or they can choose to set up their company in a more business-friendly state.

Other legalities include gathering funding, opening up a bank account and filing taxes. Many of these cannot be completed by a minor on their own and must be approved by a parent or guardian (who will then take the liability). If your kid wants to start a business, do some research to determine what paperwork is required in your location.

State Regulations

There’s a reason some states are known as more “business-friendly” than others. State and local governments are allowed to set their own rules and regulations regarding small and teen businesses, meaning what you can and can’t do will vary by where you start your company.

When starting a teen business, if you’re under 18, your parents will need to speak with a local attorney to determine child labor laws in your area. They’ll also need to do research into how to file, who is responsible for contract signing and even liability risks to understand exactly what they are taking on.

According to The Motley Fool, Montana and South Dakota are the easiest states to start a small business in. In addition, states like Delaware, Nevada and Wyoming are pretty teen-friendly, making them a great option for young entrepreneurs.

Taxes

Taxes are a fact of life if you’re in business, and there are various ways you will need to file and pay them. This can include self-employment tax, state income tax and federal income tax.

Depending on where and how you’re selling products and services, you may also be liable for sales and use tax.As a rule of thumb, we recommend holding back around a third of your earnings to pay your taxes. Want to take tax prep off your plate? We can prepare and file your tax returns for you to help lighten the load.

The work doesn’t stop once you form your business. In fact, many entrepreneurs will tell you it only ramps up from here. To maintain your teen business, follow these steps.