Become a Successful Young Entrepreneur

Becoming a successful, young entrepreneur can be challenging. Set a clear path to success for yourself by deciding on your goals and securing start-up capital. Grow your enterprise by working hard, surrounding yourself with great staff, and getting the word out about your product or service. Once you hit the big time, reinvest your income in other business ventures or in your original business.

Steps

Finding Your Entrepreneurial Spirit

1. Take a personal inventory. Before becoming an entrepreneur, you'll have to determine whether you have what it takes to succeed. Take a realistic view of your strengths and weaknesses. Specifically, look at areas of capability (knowledge and experience), aptitude (skills and likes), and personality (persistence, resilience). Do you have the knowledge and experience required to succeed within your chosen industry? Can you deal with failure and hardships along your path to success? Finally, assess whether or not you have the financial standing required to start a business.
2. Be a problem solver. Lots of people recognize things they wish they could do, or imagine useful products or services they wish they had. Few people actually act on those ideas, though. To be a successful young entrepreneur, you’ll need to stay open to inspiration by looking at the world around you with the eyes of a problem solver. To kick-start the process, ask yourself guiding questions like:
   • What kind of content do you wish was online?
   • What kind of games do you wish you could play?
   • Is there a product or service that could help you feed the homeless?
   • Whatever path you take to entrepreneurship, it must begin with identifying problems and dreaming of solutions. Write down all your ideas, no matter how crazy they might seem.
3. Give yourself time to be creative. Before you can get to work, you need to give yourself time to be inspired. Work some time into your schedule to decompress and allow your creative juices to flow. Take a walk in the woods, read a book in a quiet spot, or hit the road for a drive without a destination. Give yourself some quiet time to contemplate, reflect, and think about how you can best develop yourself as an entrepreneur.
   • Stay active. Don’t sit in one spot for more than an hour. Regular exercise -- at least 30 minutes each day -- is critical to both physical and mental health. Even walking can improve your thought process and make you feel more creative.
4. Learn from others. Investigate how other young entrepreneurs have found success. Think about how you can incorporate their ideas, methods, or techniques into your own entrepreneurial activity. Read their books and articles. If possible, network with other young, successful entrepreneurs. Being around these people will help you grow, learn, and see what it takes to be successful.
   • In addition to learning from other young entrepreneurs, solicit feedback from employees and coworkers.
   • Seek counsel from wise friends, associates, and successful business persons about how to best grow your enterprise.
5. Live passionately. Success will only come if you believe in and are excited about your product. Your energy will inspire potential investors and partners, and help you grow your business.
   • Your passions can inspire entrepreneurial activity. Identify a cause you feel strongly about and figure out how to fight for it. For instance, if you’re interested in saving the whales, you might invent an app that helps track whale populations or publicize whale hunts around the world.
6. Take risks. The most successful entrepreneurs didn’t get to where they are by playing it safe. As an entrepreneur, you need to take calculated risks to move your business forward.
   • For instance, you might decide to create a search engine even though there are many search engines available. If you believe that your search engine is better than the others, or offers something the others don’t, go for it.
   • Taking risks doesn’t mean jumping in blind. Do your homework before developing a new service or opening a new store.

Starting Out

1. Set your goals. Decide what you want to do, then go for it. Your goals can be noble or mundane. Do you want to help homeless children have a better life? Do you want to provide people with more food or fashion options? Whatever your goal is, identify it.
   • Short-term goals might include “Improve on last week’s sales” or “Get one new investor this quarter.” Try to set and meet at least three short-term goals each week and month.
   • Short term goals are better expressed as sub-goals, as their achievement should lead to attaining a longer term goal. Long-term success is composed of consistently meeting short- and medium-term goals.
   • Long-term goals might take the form of a mission or vision statement for your company or organization. For instance, a long-term goal might be “Ensure everyone who lives in Detroit who needs glasses can get them.”
   • Ensure your goals are realistic, clear, and actionable.
2. Target, test, and take a chance. After a concept is proven, it is time to gear up. Begin with a simple business model before scaling up. For instance, if you have a beverage business where you create your own fruit juices or sodas, begin by making them at home and selling them at the beach or at school functions. If you have a pet snack that you think is really great, start by giving them as gifts to your friends and family. Use this early stage to get feedback about your product or service, and incorporate this feedback into your design and planning process to perfect your enterprise.
3. Create a business plan. Your business plan should be a strategic document outlining where you are and where you want to be. It should describe the history, organizational framework, and goals of your business. Use your mission and vision statements as a starting point when developing a business plan. The finished plan should be used as a guide to decide how to run the business, and delivered to potential investors when seeking funding.
   • Your mission statement describes what your business or organization does on a daily basis. For instance, a lemonade business might have a mission statement that reads, “We make great lemonade.”
   • A vision statement describes what you want to do in the big picture, both now and in the future. For instance, a nonprofit vision statement might read, “We want increase literacy in Detroit to 100%.” Develop a plan for fulfilling your vision.
   • Identify the audience for your product or service. Who will buy them? Who do you want to buy them? How can you expand your business to make your goods attractive for new markets? Analyze these problems and work your conclusions into your business plan.
   • Think about your competition. Is your share of the market going to increase or decrease? How can you make it increase more? Use past data on similar businesses to determine how the market is changing.
   • Your business plan should include a section on marketing. How will you advertise your goods or services? Who are your ads aimed at?
4. Decide your business’s legal framework. As an entrepreneur, you could be the head of a corporation, a nonprofit, a sole proprietorship, or a limited-liability company. This formal structure will determine your legal and tax obligations, and must be registered with your state government.
   • A corporation is a public company with stock owned by shareholders. The corporation is guided by a board of directors. Usually only very large businesses go public as corporations because they have a complex business structure.
   • A sole proprietorship is probably the type of business you’ll start out with as an entrepreneur. This type of business is run and operated by just one person. While it offers flexibility in decision-making, it can be difficult because you will personally be responsible for the enterprise’s liabilities and losses.
   • A partnership is a business arrangement in which two or more parties join forces and have equal stakes in the business profits, decisions, and strategies. Be sure to partner only with people you trust.
   • An LLC combines elements of corporations and partnerships. It is run by members, and profits are distributed directly to each member.
   • A nonprofit is like a corporation in that they have goals and a business-style organization, but they fulfill a public service mission in exchange for tax-free status.
   • Check https://www.sba.gov/starting-business/choose-register-your-business/register-state-agencies for a list of links to state agencies where you can register your business. Choose your state and proceed with the registration process.
   • Obtain an Employer Identification Number (EIN) from the U.S. Internal Revenue Service.
   • Visit https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online to obtain an EIN.
   • Talk to a business lawyer in your area before deciding the best legal framework for your business. If you are a teen, this is especially important since you probably cannot set up most business types legally. However, the law varies from state to state, so check with an expert (preferably one with experience in your specific line of business) before making a decision.

Setting Up Your Business

1. Obtain start-up funding. The easiest way to start your entrepreneurial activity is to get a personal loan. The Business Plan should provide an investment reason for family or friends to put up funds. Don't encourage investments solely due to personal relationships as failure will lead to schisms and estrangement. Explain your idea and get them excited about why they should invest in it.
   • Alternately, you could try to crowdfund your startup with help from sites like GoFundMe or Kickstarter.
2. Get a business loan. If your business is especially cash-intensive, you might need to look to financial institutions and investors for funding. Look for venture capitalists (investors willing to take a chance on new, untested ideas or businesses) and talk to your local financial institutions -- banks and credit unions -- about getting financed.
   • The U.S. Small Business Administration is a great resource for young entrepreneurs who want to be successful. They have lots of resources for entrepreneurs and small business owners, including generous loan and grant programs. Check them out at www.sba.gov/loans-grants/.
   • Another useful resource for young entrepreneurs is Google Ventures. Check their portfolio of startups at www.gv.com/portfolio/ and reach out to an investor who is interested in a product or service similar to yours. If they like your idea, they’ll help you get funding.
   • While outside funding can provide larger amounts of cash than personal loans or self-funding, you will need to pay interest. Ensure you get a low interest rate and a low minimum monthly payment.
   • As a teen, you might have trouble getting a business loan. Your best bet is to stick to personal loans from friends or family. If you really need a business loan, ask a parent or guardian to co-sign the loan with you. Build credit once you are 18 by getting a credit card and paying the balance off regularly.
3. Choose a location. Your business should be located in a location with enough space for your needs. If you have a small tech startup that makes cool apps, you’ll need a modest office. If you’re manufacturing clothing, however, you’ll probably need a large warehouse to produce and store garments, cloth, and raw materials.
   • Check local zoning regulations with your city or county planning agency. Certain types of businesses cannot be located near housing or other types of commercial property.
   • Give yourself room to grow. Think about your long-term strategic plans to ensure the location you’re in can support growth.
   • Consider the Needs of your business as far as safety, proximity, exposure, etc.
   • If you are a teen, be sure to ask ahead of time if the real estate agency from which you’ll be renting has a policy about renting to minors. Some agencies might not want to risk renting to a minor, since contracts with minors can be risky for them. If you cannot rent space from one real estate agency, contact another. Alternately, get your parent or guardian to rent the space on your behalf, and pay them rent as your proxy.
4. Hire a staff. With your business effectively ready to launch, you might need staff to help you meet your goals. Consider taking out ads in local newspapers and employment websites like Indeed and Monster to advertise who you’re looking for. Ask interested parties to submit a resume and statement of interest describing why they would be a good choice for the position you’re offering.
   • Conduct multiple interviews. Don’t hire the first person who seems to fit the criteria you’re looking for. If you’re hiring for two positions, you should try to interview at least 15 people.
   • If you are a teen entrepreneur, you might have trouble getting staff to join your company. Because of your youth, people might be skeptical about your ability to manage a business. Plus, contracts with minors occupy a questionable legal territory, and potential staff might be wary of entering into an employment relationship with you. In order to give yourself the best opportunity to attract competent staff, have a strong business plan and a number of smaller wins under your belt (like local awards, a growing market share, or a high profit margin) before contracting with staff.
5. Get equipment. Depending on your needs, you might need a lot of equipment, or you might have everything you need already. If you need equipment, you could lease it, buy it new, or buy it used.
   • You could lease equipment -- including desks, machinery, or vehicles -- to reduce your company’s initial investment costs. However, if your business continues to grow, you should buy your own equipment, or you’ll end up paying more in loan fees than you would if you just bought it outright. Alternately, look for lease contracts with an option to buy at the end of the contract, using your lease payments toward the purchase price.
   • You could buy secondhand equipment. When companies go under or invest in new equipment, their old equipment goes up for sale. Depending on your business, you might consider picking up government surplus equipment.
   • You could buy new equipment. This is the most expensive option, but you will then have everything you need and not need to worry about paying extra costs on leased equipment later.
   • If you are a teen, you might need a parent or guardian to help you lease equipment. If you have trouble leasing equipment from one place, try another.
6. Get the materials you need. Depending on your business, you might need a lot of materials or just a few. Think about the kinds of materials you’ll need both immediately and in the long term. Identify major manufacturers of those materials and shop around for the manufacturer that offers the best balance of price and quality.
   • For instance, if you’re making a salad shop, you’ll need to identify distributors for lettuce, carrots, and the other veggies you’ll need a steady supply of. Contact local farmers and find out how you can order the materials you need.
7. Implement your marketing and sales plan. Once you're up and running, begin to use the marketing and sales plan that you described in your business plan. Purchase advertising space, network with local business owners, and work towards winning over your target audience as planned. Then, monitor your marketing efforts to gauge which ones are successful. Look for rises, or lacks of rises, in sales that coincidence with your marketing efforts. Ask customers how they heard of your business and record their responses. Then, you can use what you've learned to refocus your marketing strategies.
   • More than anything, focus on delivering a good product or service. Word-of-mouth referrals are free and stand as one of the best ways to gain more business.

Growing Your Enterprise

1. Hype your business. Take advantage of both local and online media to promote your business. Make a YouTube channel devoted to talking about your business, including new developments. Overall, your goal should be to build up your business's brand, which is the way that your business is perceived by customers. Your brand needs to link you and your customers within the same shared set of values.
   • You can build a brand by working to extend your interactions with customers beyond the storefront or direct, business interaction. For example, adding in community involvement or philanthropy can help build your brand.
   • For instance, if you have a snack food business and are about to release a new kind of snack, you could make a quick YouTube video about what the new snack is, how it tastes, what people think about it, and where interested people can buy it.
   • Stay active on social media like Facebook and Twitter, too. Advertise promotions, new items, and discounts on your goods and services.
   • Additionally, you could call your local newspaper or TV station and let them know about your entrepreneurial career.
   • As your business grows, you could add a marketing staff to help you develop proper advertising.
2. Scale up gradually. As you gain more success and begin to perfect your recipes, scale your business up. If you have a beverage business, cut deals with local businesses to carry your bottled drinks. If you have a clothing line, bring samples of your work to local clothing shops to see if any would be interested in carrying your clothes. The way you scale up depends on the type of entrepreneurial activity you’re engaged in. As you grow, think about:
   • hiring employees or volunteers
   • opening dedicated stores
   • getting additional funding
   • advertising
   • expanding your distribution network
   • including new, related services
3. Continue investing. Don’t stop looking for new ways to improve your business, and don’t let yourself get trapped into doing things just one way. Take the initial income you earn and put it back into your business in the form of advertising, better equipment, or more raw materials.
   • Alternately, re-invest your earned income into other ventures or businesses.
   • Whatever you do, don’t blow your earnings on toys, games, cars, and other goods. Manage your money carefully.
4. Work hard. Starting a new business requires hours of dedication and sacrifice. Depending on how young you are, you might be juggling school as well as your entrepreneurial activity. No matter what field you’re in, though, you should establish a regular work schedule and stick to it.
   • For instance, maybe you’ll set aside time each day between 6:00 and 8:00 in the evening to build your enterprise.
5. Plan for the future. Think about both your own life and the future of your entrepreneurial activity. Ask yourself each day if you’re running your business and living your life in the best way. If every day was like today, what would the cumulative effect be? Would you be happy? Would your actions have a positive impact on others and on the environment in the long term?
   • If you find that your business or your personal life are missing something, be proactive and make positive changes. Remember, success doesn’t just mean having a lot of money. It also means having personal fulfillment and satisfaction with who you are.
6. Be ready to shift gears. If your initial business idea or organization doesn’t pan out, don’t be afraid to pull the plug. Alternately, if you find that another business sector or a related industry holds more promise, pursue a new enterprise in that sector.
   • If your business model needs revision, work with your team to shift focus from, for instance, soda to fruit juices.
   • If your business grows too quickly, you might need to downsize by cutting staff, closing unproductive stores, or discontinuing poor products.
   • Stay nimble and always look for new opportunities.

Tips

• Keep accurate records of your employment taxes for at least four years. You will need them when calculating your business’ federal income tax withholding, federal wage and tax statements, and state taxes.

Sources and Citations

See also

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• Find Information on a Business That No Longer Exists
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• Invent a Product
• Calculate FTE
• Write a Business Profile

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