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Joel Luyt, owner of Outpost Imports in Abbotsford, B.C., puts his son, Isaac, to work at the company's warehouse. (LAURA LUYT/COURTESY OF JOEL LUYT)
Joel Luyt, owner of Outpost Imports in Abbotsford, B.C., puts his son, Isaac, to work at the company's warehouse. (LAURA LUYT/COURTESY OF JOEL LUYT)

LESSONS IN ENTREPRENEURSHIP

Summer fun for kids: working in the family business Add to ...

For a lot of kids, summer holidays herald a reprieve - sleeping in, relaxing by the pool and playing video games.

For the children of some small-business owners, however, summer time can be productive time. They might work for the company, and that can bring plenty of benefits, learning about the family business and entrepreneurship while earning pocket money and getting lessons in how to budget their finances.

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Sandra Murre, chief executive officer of Beamsville, Ont.-based Jordan Engineering Inc., doesn't think her children have any long-term aspirations to join her engineering business, but she wants to impress the entrepreneurial spirit on them.

She hired her son Jon, 14, to clean the office at her company twice a week for $400 a month. Her daughter Rosie, 12, earns $100 a month helping her dad with odd jobs around the business, including minor maintenance and entering expenses for her mother.

"He [Jon]gets great exposure to the office and what it takes to run a business," Ms. Murre says. "We have a small logbook where the other employees can leave notes for him, like 'good job on that,' or 'this could have been done better' ... he's learning good customer service skills."

Joel Luyt, owner of Abbotsford, B.C.-based Outpost Imports, which sells power tools at trade shows, has hired his 11-year-old son, Isaac, and nine-year-old daughter, Egan, to do inventory checks and work the till at trade shows. It's a way for them to learn about the family business, Mr. Luyt says, adding he pays them $5 an hour.

"It teaches them the value of money. Before, they could easily say, 'Dad, I need to buy that nerve gun' and I would do it, but they would just play with it twice," Mr. Luyt says. "Now they are learning that 30 bucks actually takes some time to save up, and they are thinking about what they want to buy."

The money Jon earns is put to good use, Ms. Murre says, because her son donates about 10 per cent of his monthly earnings to a charity of his choice and 18 per cent to an RRSP account in his name, with the rest to spend on himself. Ms. Murre says her son paid $500 to repair his laptop, and he put aside money to buy a new bike for a triathlon.

"We pay him about 20 per cent less than we were paying the cleaning service ... he makes great money for a 14-year-old," Ms. Murre explains. "He is learning how to be responsible."

To some parents it might seem counterintuitive, but teaching children to work hard is more nurturing than providing them with a life of leisure, says Matthew Toren, co-author of Kidpreneurs: Young Entrepreneurs with Big Ideas.

"That doesn't mean we should be hard on them or overwork them by any means," he writes in an e-mail. "It just comes back to the fact that the real world requires focus, work, and determination to experience success. The sooner you instill those characteristics in your kids, the better chance they'll have of living the life they want."

Skills such as customer service, budgeting, and a strong worth ethic will hold children in good stead as they prepare for their future careers, says Rick Harcourt., president of Edmonton-based Harcourt Recruiting Specialists. He used to work at the company, which his parents owned, when he was a child.

"I filed resumes when I was 12, and then started working as an industrial temp when I was 16," he says. Now, as the one running the family business, Mr. Harcourt adds he appreciates and understands what the experience taught him. "I hadn't ever planned to join the business, but working up the ranks has taught me a lot about how the business runs."

Chartered accountant David Logan, a partner at Logan Katz LLP in Ottawa, says hiring your kids for the summer can also mean potential tax savings, especially if a small-business owner is in the top marginal tax bracket. Splitting the income can help out the family during tax time.

"If the owners were to use some of their after-tax income to help their children with living expenses, such as summer camps, and the child is doing work for the company, then the child would be taxed at a lower tax rate," Mr. Logan says. "There would be almost no income tax on that with the personal tax credit."

Being a boss and a father at the same time can be challenging, Mr. Luyt says, but his kids are open to working at his warehouse. "There's not so much fighting or resistance, like when we ask them to do chores, because they know they are getting paid to do this.

"And it's great because it's a chance for them to learn about the family business and see what their dad does."

HIRING HELP

Here's some advice on hiring your kids for your business from Matthew Toren, co-author of Kidpreneurs:

Pay them fairly

Paying your kids fair wages teaches them that they'll be fairly compensated for work they perform. If, because of their age or experience level, they are not able to complete all the tasks that an adult would, it's fair to pay them less; if they're doing the same, pay them equally.

Safety first

Don't have your children perform any task that could put them in danger of getting hurt.

Have reasonable expectations

Expect your kids to work fewer hours than an adult would. Expect diligence and quality work, but remember they're kids and need kid time, too. Refrain from expecting them to take over the family business; being an entrepreneur includes freedom of choice to consider starting their own business one day. Also, keep your expectations about learning to the short term, focusing on responsibility, importance of work and earning money; you will see the long-term payoffs when they're much older.



 

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