Financial Lessons from Shark Tank and Uber: Teaching Your Teens (and Maybe Yourself) About Business
By Michael J. Searcy
All the time, I hear people say, “I just don’t understand all that business stuff” and “I’m no good at business, how am I qualified to teach my children about it?” I tell them the answer could be as simple as watching some television, reading and just plain observing your surroundings. If you become more aware of business around you, you should start noticing trends and asking more questions. This is helpful for teenagers, young adults, and yourself to start THINKING about business. I am not talking about accounting statements, banking or business structure here, just a practical understanding of how things work.
Inspiration from Television
I suggest you watch two television programs: Shark Tank and The Profit.
Shark Tank is about new inventors or entrepreneurs who are looking for financing and help to take their business to the next level. It is amazing how many people have great ideas, start businesses, and develop mediocre success due to certain limitations. It could be knowledge, capital, or contacts or it could be a combination of all these things and other circumstances. You can learn a lot about how investors think, how businesses are valued, and what to watch for in production processes, marketing, cash flow, inventory problems and expense management. You can also learn about financial traps and the weight of debt and royalties.
The Profit is about a man who uses his own money to fix established businesses that have become “broken” over time. Most of these businesses were once successful but have experienced significant problems due to poor management. In the process of “fixing” the business, you learn many principles of how to run a business successfully.
If you watch both of these shows often with your teenage and young adult children and discuss what’s happening, it gives the entire family the opportunity to learn about business, both the gold mines and the mine fields, and encourages discussion about how things work.
Inspiration from Everyday Observations
Be observant in your daily life. Take your teens and young adults out and observe businesses. Note the problem, need or desire they fulfill for the public and how they do it. Then, take apart the process. You may see service companies, companies who produce products or companies who produce parts for companies who produce the finished goods. There are thousands of examples right outside your front door.
A great example for discussion is two newer companies, Uber and Lift. If you don’t know about these companies, don’t worry, the young adults in your life certainly will. These companies observed a problem: people need to get around and can’t always do so on their own. They may not have a car, they may need a ride on vacation or after a celebration, and so creating a transportation company to serve that need may be a great idea. They also saw that many people need jobs but can’t always work a 9-5 job and need more flexibility. They combined those two needs, the consumers need for convenient, affordable transportation and the potential employees need to have a flexible job and set up a technology leveraged transportation company. Now anyone with a smartphone can locate a driver close to them and drivers can work on their own schedule to earn extra money.
Uber and Lift have no investment in vehicles nor do they have to hire the employees. However, they do need to do many things for this to work…bookings, notifications, mapping for both parties, seamless and safe payment, screening the drivers, advertising and dealing with local governments and competitors to name a few. Have a conversation about every working part of this business strategy with your teens and young adults and let the business concepts and issues come to light.
Inspiration from Reading
There are two books that have been around a while that I suggest you read:
The Richest Man in Babylon gives you some practical ways to think about financial matters. These ideas certainly carry over into how you view business.
The Rich Dad, Poor Dad series is a set of books that will help you understand basic principles of creating wealth. It was written during a period where someone could get pretty wealthy owning real estate, so remember that as time passes, things change and cycles flow in and out of favor. Make sure to read this series with the intent to glean the principles and NOT walk away thinking that the only way to wealth is real estate.
Read the books, watch the programs, be observant and talk about what’s involved in the businesses you discover. You will be well on your way to really understanding how business works. Enjoy the adventure.
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The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.
Originally published on July 21, 2015 by Searcy Financial Services, your Overland Park, Kansas Financial Planner and Investment Manager.