The first thing I want to do is make clear that I am genuinely part of the team to help Junior succeed. Some kids do just need a boost and some of their businesses do work. Everyone wins when that happens and I point that out.

The next thing I want to discuss with my client, is their capacity to take on the risk of a business start up. I approach the matter from this perspective; it doesn’t matter why the business fails, when a small business fails, the funders lose everything they invested. I want my client to consider their financial condition should there be a complete failure. Hopefully, this will lead to a limit on the potential funding.

This is a huge issue because additional funding requests are common and need to be discussed with the parents. “If I can just keep it going another couple of months, we’ll make it,” the kid will say. The parents want to believe this and don’t want to feel they pulled the plug on the dying business so they pour more good money into a bad situation.

Importantly at this point in the discussion, I try to stay away from the viability of the business in question. The client and child will make that judgment. More on that in a bit.

For now, I try to get my client to think of good local businesses that closed down. There are always many examples. If I am lucky, one of these extinct entities will have been in the same business being considered by Junior.

If they can recall that these places had nice people working within the business providing good products or service, it can be a reminder that bad things can happen to good people.

I have had little success speaking with the kids about the parent’s capacity. They are often too overconfident to think they will fail. 

If the kid is going to pull it off, he or she has to be committed to becoming a hands-on business owner. Not a hobbyist or a passive owner. Being an owner doesn’t mean you don’t work.

Almost every time, the budding entrepreneur will say they have such a commitment. They can easily prove it by tangibly demonstrating that commitment. One of the easiest ways to do this is for the funding parent to say they will provide the funding once Junior provides a good business plan and proper documentation is in place.

It is rare to find anyone that will argue having a good business plan is a waste of time. If Junior is truly ready to be a business owner, he’ll do the work to produce a good plan.