Have you ever dreamed of being your own boss, working on your own terms, or having unlimited earning potential?
I’m sure that the answer is yes for most of us, but we usually don’t consider it for all too long.
Today, I’m unpacking the question in detail for those of you still wondering whether maybe – in fact – entrepreneurship could be a good fit for you.
But before you ditch the traditional four-year degree or quit your steady nine-to-five, make sure you have a realistic idea of what it takes to be a successful entrepreneur.
What’s Ahead:
What is an entrepreneur?
In the simplest terms, an entrepreneur is someone who creates a business and takes on the majority of the risk when starting a new venture. Of course, an entrepreneur is also the person who will take in most of the reward if their business is a success.
What kind of people make the best entrepreneurs?
Here’s the great news, there is no one particular prototype when it comes to who can be a successful entrepreneur!
As Adora Svitak, who wrote her first book at the ripe age of seven and delivered her TED talk at the age of 12, says:
“There’s no committee that says, ‘This is the type of person who can change the world and you can’t.’ Realizing that anyone can do it is the first step. The next step is figuring out how you’re going to do it.”
With all that being said, there are traits that many successful entrepreneurs share. Some of these include:
- Openness to new experiences.
- Extroverted.
- Innovative.
- Achievement seeking.
- Self-motivated.
- Optimistic.
- Calculated risk-taker.
How to become an entrepreneur
Becoming an entrepreneur and figure out the ‘how of it’ can boil down to this:
Think it. Research it. Test it. Plan it. Do it, and then Improve it.
Here’s more about each of those parts.
Think it
Often the hardest part of starting a business is coming up with a good idea.
Try not to put too much pressure on yourself to come up with the “right” idea on your first try. It will take time and a lot of iterations to find your winning idea.
If you’re trying to come up with your million dollar idea start by thinking about what you enjoy doing. You’ve likely heard the “follow your passion” advice and that can work for many, however, it’s not the only ingredient in the recipe for success.
Spend some time thinking about what you can offer
If your passion is knitting tiny, adorable socks for hedgehogs, good for you! But, this might not be a super lucrative business.
The trick to finding a winning idea is combining something you like to do with something you’re good at, while also ensuring that it’s something that other people need or want.
Consult your friends and family
Sometimes the people closest to you can be really insightful when it comes to providing advice on where you excel (or don’t)!
So don’t be afraid to think aloud with your family and friends. What can they imagine would be something you can offer others in the truest entrepreneurial sense?
This is another way to collect data and add to your idea inventory.
Do you need additional qualifications?
Once you’ve brainstormed some viable ideas consider if you will need any additional education, certificates, or experiences to start your business.
For instance, if you want to own your own plumbing business you can bet that most of your potential clients will want to know that you’ve got some plumbing credentials under your belt! No one wants to deal with an amateur when their toilet is overflowing.
Find a mentor
If you know someone who you look up to, who has done what you want to do, then reach out to them and ask them how they did it. A good mentor can motivate, inspire, connect and guide you.
They can also help you to avoid a ton of unnecessary mistakes.
Research it
You’ve thought up a great business idea, now it’s time to ask yourself some hard, but very important questions…
Is this a viable business opportunity?
Is there a market for the product or service that you’re offering? What problem will your business solve? What value are you adding? Are there too many other people doing it?
Or, if no one else is doing it, why? Is it because you’re the very first person to come up with the idea (sorry to say but, I doubt it) or, is it because it’s a bad idea?
If your research tells you it’s the latter then, no problem, and then it’s time to go back to the drawing board!
How much will it cost to get your business going?
To get an estimate of how much it will cost to get started, you’ve really got to calculate your startup costs to breakdown with as much specificity as you can – to generate what your actual real numbers are going to look like.
If you’re looking for one way to pay less for your business – make sure you’re taking advantage of free business banking options. One of the best banks for businesses out there right now is Novo.
Novo makes banking simple and, more importantly, it’s free to use. You can apply in just a few minutes, you won’t pay any fees, you can transfer money easily, and you’ll get refunds at all ATMs.
How will you fund your business?
How are you going to afford to get your business up and running? Below is a list of possible ways you can fund your new venture:
- The bank of YOU – Maybe you’ve been dreaming of your entrepreneurial adventures for years and you’ve socked away some cash, time to dip in! If not, you’re young, you have boundless energy – if you can manage it, get a job, or two, or three to help you fund your dreams.
- Hit up family and friends – Honestly, this one makes me uncomfortable because relationships can go sideways over money, however, if you have family members or friends who are very well to do, or at least have some disposable income to play with, then ask them if they’re interested in investing in you. Just make sure everyone is on the same page when it comes to the terms (when will the money be repaid, are they charging interest, etc.)
- Personal business loan – If you have a decent credit score you can look into a personal loan to fund your business. Companies such as Prosper offer fixed rate, fully amortizing, unsecured loans from $2,000 to $40,000. If your business takes off immediately and you start raking in the dough there are no penalties for paying off your Prosper loan early or for making partial prepayments.
- Credit – If you’re looking to gain access to money quickly, then consider a business credit card. Similar to a loan, access to a business credit card is dependent on your personal credit. If you decide to use a credit card to help fund your start-up make sure you check out the interest fees to avoid a hefty and unexpected bill!
- Crowdfunding – If you have an amazing idea that is going to add tons of value to the public, then why not ask them for donations. Crowdfunding has become popular over the last decade and has helped many entrepreneurs bring their business ideas to fruition.
- Government grants – Depending on the type of business you’re hoping to open you might qualify for a government grant. A grant provides free money, which is amazing, but they generally have strict criteria and the application process can be tedious.
Test it
Congratulations, you’ve come up with a business idea, you’ve asked yourself some tough questions, and you’ve even come up with a budget.
Now, it’s time to test your idea with real potential customers.
And no, your mom and best friend don’t count.
Network
Go beyond your friends and family and ask strangers (a.k.a potential clients) if they would purchase your product. If you have a tangible product, take it to a tradeshow. In order to meet people in your particular field of interest, attend a convention or conference.
Join a mastermind
Get involved with a group of like-minded individuals and help each other brainstorm ideas, navigate challenges and share expertise. Entrepreneurship can be lonely, so take some time to find and build your tribe.
Plan it
The path to becoming an entrepreneur is not linear, there are tons of unexpected twists and turns and you need to be flexible. However, it’s still important to have some sort of plan.
Create an action plan for your business
This can be as simple as jotting down your goals for the next year or as complicated as an all-out MBA style business plan. The choice is yours.
Whatever you decide, make sure you refer to your plan regularly and update as needed.
Do it
You have a plan – now it’s time to take action. Take the first step, whatever this looks like for you. This will be different for everyone and will depend on your unique entrepreneurial venture.
Make a sale
Do whatever it takes to get your first sale. Go door to door, cold call potential clients, construct individualized emails that can’t be ignored.
Market yourself
Build it and they will come…
Ummm, not so much. It’s up to you to get the word out, so tune up your elevator pitch and start selling. Educate yourself on the art of persuasion.
Keep networking
Research conferences, tradeshows and local meet-ups related to your business. There is nothing more valuable than meeting potential clients, partners or possible employees in person. Also, stay active on social media.
Improve it
As I discussed, failure and criticism are inevitable, so use it to your advantage.
Embrace criticism
Take all critiques and feedback as an opportunity to learn and get better.
Iterate
If at first you don’t succeed, iterate, iterate, iterate. Your first kick at the can probably won’t result in the “final product/service.”
You will need to tweak and improve as you go.
Grow
Always be thinking of ways to grow and improve.
- Keep your beginner’s mind.
- Seek advice, or hire people with different points of view.
- Value creativity and embrace change.
- Continue to look for opportunities to grow.
- Find new mentors, take classes to learn the skills necessary to make your business a success.
Tips for young entrepreneurs
Who better to provide tips for the young entrepreneur then some fellow young entrepreneurs.
These five young people share their stories about how they made the leap (or gradual shift) into successful entrepreneurship and impart some of their best advice for those who are just getting started.
Don’t quit your day job
Michelle Schroeder-Gardner is a writer, freelancer, and blogger.
She started her hugely successful website, Making Sense of Cents at age 22. Here’s what she has to say.
“I started my website completely on a whim one day. I didn’t know much about blogging, or that websites could even make money. It was all just for fun in the beginning.
My aim of creating my business was simply to journal my personal finance journey after reading a magazine that featured a personal finance website in one of their articles. I became extremely interested in that website and my interest in blogging just grew from there. I grew my business on the side for about two years before I decided to leave my day job as an analyst to write full-time online.
My path to entrepreneurship involved a lot of self-doubt and hard work, but also a lot of enjoyment and knowing that this was the path that I should take. My business has allowed me to now travel full-time via RV and sailboat and become a digital nomad, which is something that I am extremely passionate about.
My top tip for those just getting started is to start your business on the side, if you are able to.
This will allow you to build your business while still having an income from your day job.
Taking this path will require a lot more hours of working out of you, as you will have to manage both a day job and building your business, but there will be many positives as well. Positives include determining if the business is for you before going all in, having the stability and benefits of earning income from your day job, and more.”
Study your competition
Logan Allec is a certified professional accountant (CPA) and owner of Money Done Right. He started his business at age 28.
“For years I searched for a way to escape my corporate existence as an accountant – with each passing year, the long hours surrounding tax season as well as the mind-numbing calculations, became more and more unbearable.
So I tried many “hustles” – from real estate to my own tax preparation business – in an attempt to escape the corporate world.
Somewhere along the way I had heard about affiliate marketing and blogging.
Within a year of launching my blog, it was netting me about 2/3 of what I was making as an accountant, and at that point my wife and I decided that it would be the smart move for me to quit my job and pursue my business full-time.
I have been at it full-time for two years now and now have an editorial team as well as other support staff to take my business to the next level.
My number one piece of advice for those just getting started with entrepreneurship is to closely study your competition and reverse engineer their success.
When I first started my business – and I was still working my full-time job at the time – I spent at least an hour or two every day studying those who had established businesses in my field.
I made copious notes on how they got started, how they made money, how they got exposure for their business, how they set up their social media, where they were advertising, and more.
While this won’t guarantee your success, it will give you something of a roadmap as you grow your own business.
Keep in mind that some of your competitors may have a first- or second-to-market advantage, so the best thing to do is to look for patterns among your competitors.
Don’t focus on the outliers – focus on the patterns.”
Stick it out – there’s no such thing as overnight success
Here are some words of encouragement from Ryan Scribner, co-owner of Investing Simple. He started his YouTube channel at age 21.
“Like many people, my interest in entrepreneurship started at a very young age. I started my first business at 14, where I went door to door advertising a lawn mowing business. During my summer vacation, I would make about $50 a week with this business.
Over the next few years, I had many failed business ventures. I tried starting a lightbulb swapping business called “Light Swap,” I tried creating a kitchen gadget that slowed the ripening of bananas and I even created a YouTube channel where I shared coupon clipping deals.
The main issue I ran into as a young entrepreneur is that I was a serial “start stopper.” I would start a new project and lose interest a few weeks later, then move on to something else.
My first big success came in 2016, when I launched my YouTube channel. I was working a nine to five job at my local power utility company and I was investing a lot of my surplus income in the stock market.
I decided to start a channel where I documented my investments and shared the different strategies I was learning. The key difference between this venture and the previous ones is that I stuck it out. Even when I was not seeing success early on, I kept at it.
Fast forward to today, I have a successful channel with over 500,000 subscribers and a growing personal finance blog called Investing Simple. Between the blog and the channel, these businesses did over $501,000 in revenue in 2019.
Now I am not sharing this to brag, this is instead just an example of what is actually possible when you commit yourself to one thing for many years.”
Know your worth
Audrey M is a virtual assistant and owner at Mommy Enlightened. She started her first business at age 26.
“Once I started raising my kids, I decided that I wanted to start working from home so that I could be with them more often. I was 26, and without a college degree or any kind of online business experience.
I read about blogging on a whim, and decided I would go for it. I learned everything I could and jumped into the world of blogging. I spent a lot of time engaging in Facebook groups with other bloggers.
To try and boost my blog traffic I ended up hiring a search engine optimization (SEO) expert for a cheap consult. We really hit it off on our initial phone call and after that we kept in touch.
Within a few months, she offered me a virtual assistant position, and I made sure I over-delivered on every project she gave me. This is when I started my second business as a virtual assistant.
The biggest hurdle I overcame during my first year doing virtual assistant work was understanding and accepting my worth as a person and a professional.
I’ve always struggled with feeling inadequate, and while this wasn’t a big deal in my personal life, it had detrimental effects on my business. I really struggled with charging my clients a FAIR amount of money for the work I was doing (there was a job or two that I ended up getting paid 0.50 cents an hour. I wish I was joking).
It’s important to price out your services or products, and critically examine the reasoning for your pricing. Are you pricing based on feelings of self-worth, or on the true value of what you’re offering.
I’ve had to spend a lot of time really examining myself. I had to challenge the beliefs I have that my work was not worthy, and I’ve learned to believe that I do provide quality work for my clients. I deserve to be paid fairly for the work that I do.”
There’s never a “good time” to start, so start now
Alli Williams is a money coach and owner of financiALLI focused. She launched her website at age 25.
“My company started as a blog in 2017. I wanted to share what I’ve learned through my own journey to financial freedom, what has worked for me, what did not work for me, and my thoughts on hot financial topics. My friend told me to start a blog to share my tips, resources, and advice.
I didn’t know much about blogging but I created my site and started an Instagram account. When I was sharing my blog posts on social media, I would get a ton of DMs from people asking follow up questions or telling me what they were struggling with. People could relate to my journey and loved the advice I was sharing.
In 2019, I launched my money coaching business and I had 6 1:1 clients within two months of launching. I now have a group coaching program in addition to my 1:1 coaching. I absolutely love what I do. My company is my passion and helping my clients reduce financial anxiety, increase their income, and dream big has been so rewarding for both my clients and myself.
It is not easy and I am constantly learning, but I love it.
There is never a good time to start so start now. Life will always be hectic. Your week will always be busy. You need to stop making excuses and invest in yourself and your future.”
Specific challenges young entrepreneurs face
While every entrepreneur is guaranteed to encounter many challenges, some are unique to the young entrepreneur.
Ageism
If you look like you just graduated from grade school, there’s a good chance some people won’t take you seriously. Trust me, I’ve been there. But don’t let this deter you. Being young is not a negative, especially today.
In the past, success was largely based on age and seniority and not necessarily hard work and innovation. Thankfully, times have changed.
Today, if you can generate great ideas and hustle, then it doesn’t matter how many years you’ve put in, you can find success at any age.
Imposter syndrome
Have you ever doubted your abilities or felt like someone was going to call you out for being a fraud? That’s imposter syndrome, and it’s surprisingly common! It typically occurs when you feel like you’re holding a position or title that you might not be qualified for.
The antidote? Acknowledge it and remember that everyone starts somewhere. No one is born an expert.
Then…fake it until you make it, baby!
Lack of experience
So, this might seem like a barrier when it comes to starting a business. However, a lack of experience can be a valuable asset.
Have you heard of the “beginner’s mind”? It’s a concept that comes from Zen Buddhism and it refers to the ability to approach a subject with openness, excitement, and a lack of preconceived notions (like a beginner).
What’s great about the beginner’s mind is that it brings the potential for limitless possibilities and ideas.
An expert mind, on the other hand, can be more closed off and fixed in the traditional ways of doing things.
Financial barriers
People who start a business when they’re older are likely to have more money. However, not every business needs a ton of capital to get going.
If you do require a substantial amount of money, there are strategies that can be used to fund your business – I’ll touch on that more below.
The benefits of being a young entrepreneur
Now that I’ve covered some of the challenges associated with being a young entrepreneur, let’s get into the fun stuff.
The personal benefits
- You get to be your own boss – This means you aren’t accountable to anyone but yourself!
- Flexibility – Are you most creative in the wee hours of the morning? No problem. As an entrepreneur, you can decide to work at any time and from anywhere!
- Unlimited earning potential – You may have heard the saying, “you’ll never get rich working for someone else.” It’s true, working for someone else generally means there is a cap to your salary. Entrepreneurship offers the potential for unlimited earnings.
- Freedom – As a young entrepreneur this may be as free as you’ll ever be! Meaning, you aren’t tied down by a hefty mortgage or kids. This makes it easier to put in the time, travel, or whatever else is required to make your business a success.
- Energy – You’re young, you still have tons of energy to hustle. I can assure you, this doesn’t last forever!
- Time – Time is on your side. You can F-up ten, twenty, even one-hundred times and it won’t really matter. You’ve got loads of time to recover, learn, grow and ultimately succeed.
- Tax benefits – I know, no one wants to think about taxes. It’s not fun and for that reason, I won’t get into the nitty-gritty details.
The tax benefits
However, as an entrepreneur, there are also several tax breaks that you can take advantage of. So make sure you familiarize yourself with them or hire a good accountant.
Here are a few of the tax benefits you can look out for:
- Creating a business – Deduct the cost of conducting market research, surveys, analyzing products.
- Preparing to open – This includes costs incurred before opening (training employees, advertising, consultant fees), costs associated with researching your business (market research, surveys), and getting it going (advertising, employee training).
- Organizational cost – If you set up your business as a partnership or corporation within the first year of business, you can deduct these costs (legal fees, accounting costs).
- Home office – If you use part of your home exclusively as a home office you might be able to deduct some of your expenses including utilities, repairs and mortgage interest.
- Day to day expenses – If you have to travel for work you can claim some of your expenses including vehicle costs, some of your food costs as well as plane tickets.
For more information on all things tax-related (or for some light evening reading!), check out the IRS Publication 535.
Summary
The life of an entrepreneur is not easy, but it is rewarding. As a young entrepreneur, the best thing you have on your side is time. Time to try things, mess up, continue to learn, and ultimately succeed!
So, stop sitting on the sideline dreaming about becoming an entrepreneur and take the first step to achieve the life you’ve always wanted.
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