Get Creative With Allowance And Raise Entrepreneurs
I ran the machine for about 4 years from the time I was 7 or 8. At first, my only agency was inventory management. We drove to Costco in his big van and I decided what to buy. Stocking an empty soda machine is easy: you buy four cases of each soda you want to carry.
But then the Coca-Cola runs out first and the Sunkist is half empty and nobody has bought even a single Grape Soda and should I cut my margins paying more per-unit for individual cans or do I buy full cases and find somewhere to store the extras and why am I doing algebra on the weekend!?
Looking back on it, I’m certain this whole endeavour operated at a loss. Dad subsidised it like crazy so I would have a safebut realenvironment to learn in.
The post goes into a lot more detail about what the author learned about cash flow and other facts of economic life, which he now says have enhanced his understanding as an adult businessman. It’s well worth reading the whole thing. I did find this story interesting because, as it so happens, one of the most entrepreneurial people I know had a gumball machine business with his father when he was younger. He spent weekends as a teenager driving around Western Michigan extracting money from machines in the entryways of Arby’s restaurants. It doesn’t seem like the ideal way for a teenager to spend his weekends, but the experience obviously imparted some good business sense.
I don’t suppose we can all afford to rent our kids their own vending machines, but this story makes a compelling argument in favor of finding creative ways to make allowance a learning experience rather than a handout.