I’ve been talking about business with my oldest kid off and on for a few months.

As promised, I left the subject alone for a while. But a few days after visiting Chuck E. Cheese’s, I got into a conversation again. This time about what value a business has aside from its material goods. My memory is a little rougher on this conversation than on previous installments.

So what if we owned our pancake restaurant and we wanted to sell it? What would someone buy if they bought it from us?
The tables and the chairs and the pancake mix and the building...

That's right. And whatever money the restaurant owned. There's one more thing that they would get, too. The name.

When your restaurant has a name people know about, even if someone else owns the name, people still go because they know that name.

Imagine you wanted to open a place just like Chuck E. Cheese's. You'd have to buy a building and stuff to make pizza and a lot of video games. And then you'd have to figure out how to make sure people know about your place.

But if you just bought a Chuck E. Cheese's restaurant, it already has all those things. And all the people who already go to Chuck E. Cheese's would still go. You wouldn't need to do anything to make them go. So you might pay extra for the business because people know about it already.

So more than just the stuff that goes into a business, the name of the business is very valuable, too.

In real life the conversation was not so one-sided. She was following along. But it was still brief, so I didn’t lose her interest.

Then she asked about how you can get money in the first place if you need to have money to buy a business or get a job. I explained that you don’t need money to get a job. And I described how McDonald’s will hire people who don’t even know anything about what they do and then teach them and pay them.

But I think I should revisit what the difference is between a job and business ownership. At least I know she was paying attention.

Business for 6 Year Olds

Part 1 is about what a business is.

Part 2 is about what a business has.

Part 3 is about how businesses are not jobs.

Part 4 is about concrete examples.

Part 5 is about brand loyalty.