The research confirms it: millennial entrepreneurs are incredibly passionate about starting businesses and embracing their entrepreneurial spirit, moreso than older generations.
According to a BNP Paribas report from 2016, millennial entrepreneurs under the age of 35 years old have started 7.7 businesses on average in comparison to the 3.5 businesses that have been started by the Baby Boomer generation.
This enthusiasm for business is present all over the world too with 63.4% of German millennial entrepreneurs being the first in their family to found a business. Given that Germany is the third most attractive place to start a business, after the United States and China (first and second place, respectively), that may come as a little surprise, but it shows that younger people are really into that whole self-employment thing.
The reasons for wanting to create a business may look different for everyone. Some people may feel disappointed by the potential salaries for a graduate in their industry. Others may be frustrated with the lack of innovation in an industry. Many will have just seen a problem, created a solution and founded a business to get their idea out into the world.
Whatever the reason, these young business owners all have one thing in common: they’ve experienced hard work.
While creating your own business is always going to be difficult, you’ll want to set off on the right foot. So, if you’re a millennial hoping to get on the business ladder yourself, here are some things that you’ll need to know before you get started.
Running a Business Costs Way More Than You Think It Does
Millennials are not naive people. Both studies and anecdotes of money woes confirm that millennials are poorer than ever, due to low wages. ResolutionFoundation.org reveals that millennials who have reached their early 30s have experienced no income growth when compared to their parents’ generation of Generation X (those born between 1966 and 1980).
As such, many will have gone into business planning to bootstrap their business, by using what little savings they have, as well as emerging business funding methods such as crowdfunding or the traditional method of asking the bank of mom and dad to get their startups off the ground.
But still, running a business is likely to cost even more than you think it does. There’s a lot to think about and factor into your budget; factors that you may not have expected. If you’re renting business premises, for example, you won’t just have to think about the cost of the lease itself, you may also have to think of your gas and electricity bills as all of the energy and resources used by you and your employees in your new office space will add up.
Emirabiz notes that, in the UK, a micro business will spend on £1,518 for their energy bill. Though this will differ based on your chosen supplier, it is something you also have to think about. You also have to consider the costs of furnishing your office including desks, chairs and electronics, paying for amenities like the internet, and even the cost of refreshments for your employees. Will you have a snack bar? Or will that literally eat into your budget too much? Make sure to factor that into your budget.
Be Prepared to Make Tough Business Decisions
Think that figuring out what to stock that staff snack bar with is hard work? Then, you may not be cut out for being a business owner, because being a founder will see you making a lot of tough decisions; decisions that you really don’t want to make.
As your company grows, you may be able to delegate certain tasks to other employees but, even if you have a co-founder, many big decisions will fall to you. And this includes decisions on who to hire (and fire), whether someone deserves a raise or not, what business deals to pursue and whether you should cut ties with a difficult client.
AmericanExpress.com does offer some top tips if you’re known for being indecisive. For starters, you can try to use different perspectives to see both sides, to gather as much data about a decision as possible before making it, and to take a breather and a step back to approach an idea with a clear head. You’re also advised not to make any last minute decisions because this isn’t college essay crunch time and you don’t want to procrastinate and rush!
Prepare to Keep Learning
Speaking of college, while you may have long since graduated from school, starting a business will plop you straight back into the educational cooking pot.
This means that you need to be prepared to learn, and sometimes fail, and sometimes give yourself kudos for how great you did with that report. There are no grades and notes from lecturers here, but there will be employees, executives, and partners ready to assess you.
Your most effective learning process may look like the cold-hard study that you used to do in your college days. Pen in hand, paper under palm, scribbling out notes on every new business process, investment method and sales and marketing technique that you can find.
Or, it may look like taking classes and seminars by business advisors and experts in your field. For many new entrepreneurs who have found a mentor within the industry, it may even look like just asking for advice and taking those helpful words on-board.
The bottom line is, you should expect to learn and open your mind; just because you know a lot, it doesn’t mean that you can’t learn more.
Even after reading this, creating a business will still be tough going. There will still be times when you second-guess your business idea and wonder if your business can really make a splash in the market. But, with these suggestions, you can at least move forward knowing that whatever adversity comes your way as a young entrepreneur, you’ll be a little more prepared to face it.