Why are the young people so eager to strike out on their own? For one thing, entrepreneurship may simply be more feasible for 20-somethings who don’t yet have children or mortgages, who may still have parents who can offer economic assistance, and who have the energy to handle a startup’s grueling hours. But there’s another important reason: They’ve seen the lure of startup culture.
“Younger people are more inclined to want to be entrepreneurs because of their exposure to leadership training and technology–which is now ruling the world,” says Sam Sanders, Ph.D. “That gives them that hunger to go out there.”
Role models like Mark Zuckerberg have demonstrated that you don’t need to spend decades toiling at someone else’s company and learning an industry before you can become a success in your own right. “Many young people want to start a business right away as opposed to paying their dues,” Sanders adds.
As Paul Graham recently observed, creating a start-up is becoming a socially accepted alternative to getting a job or going to grad school after college. But are these young entrepreneurs ready for prime time?
In many ways, yes, Sanders says. For instance, if you’re a 20-something entrepreneur, you may have a better sense than your older peers of how to use social media to promote and grow your business. But before you strike out on your own, make sure you have these additional elements squared away:
Learn your industry
“Young people need to conduct market research in terms of knowing who their competitors are and what the business landscape is,” Sanders says. “They have to identify a target audience and what motivates that audience to act.”
One mistake he sees young entrepreneurs make is to build a new business around themselves rather than their customers, he adds. “Let’s say I’ve been getting compliments on my cupcakes so I decide to start a bakery. I find a great place to set up that’s near where I live, but I don’t examine the market and find out that there’s another bakery near that location, or how well it’s doing. I set up where it’s convenient to me, rather than where the need is.”
Form a strategy
You may not need a formal business plan, but it’s important to have a strategy and a good idea of where you’re going, Sanders says, adding that training such as an MBA is one good way to get there. “You need to know what goes into starting a business from the financial side and human capital side. You need to understand external factors that you can’t control, such as government regulation, and internal factors that you can control such as your company’s culture. You need to research the funding options available.”
It’s essential to have thought these things through, he adds. “Businesses that don’t have a strategic plan tend to go out of business.”
Get the right people on board
“You should learn from a mentor while you’re developing your business,” Sanders advises. “Someone who’s been successful, or even someone who’s been unsuccessful will have a lot to teach you.”
Many young entrepreneurs make the mistake of hiring their friends, he adds. “Your buddies may not have the skill set to make you successful. You need a management structure than can support your success–and that’s poised for growth.”