There are many young generations who own small businesses today. In fact, CGK reported that 30 percent of millennials have already started their own small business and 49 percent others have plans to start a business within 3 years.
Businesses owned by young generation, however, are likely to not stay longer than businesses built by middle-aged individuals. The most common reasons why younger generations often fail is due to a lack of confidence. According to Financial Times report, millennials do suffer from a lack of confidence, thus, making it no easy for building a business. This also explains why overcoming fear of failure tops the list of young-generation-founder-to-be.
Other reasons for the failures are, said Jason Albanese, young generations often have no financial resources or don’t know how to get the funding. 42 percent of them cited that lack of money as the primary obstacle to starting their own startup. Lack of experience is also top of the list that contributes to business failure in young generations.
If you are among those young individuals who are keen to start a business right after graduation but facing above hurdles, make sure to read these useful tips.
Step #1 Know what business you are building
There are various types of entrepreneurship and business. The most common types of business are as follows:
- service – it focuses on providing services to customers than giving tangible products.
- merchandising – it is a buy and sell business. For example, you buy products at wholesale price then sell them as is at retail price.
- manufacturing - a business that focuses on turning raw materials to final products, then you sell them.
- hybrid - business like restaurants and hospitality fall into this category.
Meanwhile, there are 9 common types of entrepreneurship, including:
- big business entrepreneur aims to make profitable and new revenue every day.
- social entrepreneur with the ultimate goal to improve the environment and to make the world a better place to stay.
- buyable business entrepreneur aims to create products or something new with the aim to sell the business to a bigger tech company.
- scalable startup entrepreneur is also called tech startups as your goal is to establish a company that obtains financing from inventors.
- SME entrepreneur is the idea of gaining revenue by gathering potential people to join the startup.
- joint entrepreneur is when you own a profit from private and government businesses.
- private entrepreneur is an individual who sets up a business enterprise alone.
- state entrepreneur means building a business in government of the public sector for public welfare.
- lifestyle entrepreneur is hobbyists who work on their real passion and generate money from in.
Each type focus on different things. You might able to pursue all of them but the rate of failure is higher as you might not be able to focus on scaling one business. Therefore, it is advisable to focus on one type first, then, make is scalable and profitable. When you have succeeded in one business, you can consider running other businesses. But always remember that the more you own a business, the riskier it is for you.
Step #2 Launching your business
After you know your true business niche, it is time for you to go get some funding. Before that, you should launch your business to prove and showcase to investors that your business is promising. In launching your business you should have due diligence and strong motivation. Often times, entrepreneurs are associated with lonely feeling because they should leave everything behind to pursue their career. While this can be true, you can have some tricks to make the loneliness fun, such as making a documentary video, gathering with like-minded people, and getting in touch with nature.
Launching your business also need plan and ideas to make the business works, thus, create your plan based on the business niche you are building. Recruit a friend or family to help you if you need to. You might also need to use your current finance to back-up your business before getting in touch with investors. Join a competition to know the market value about your business. Once you are able to showcase how valuable your business is, you can start presenting it to investors to get a fund to scale your business.
Step #3 Focus on clients
Project Manager advised that customer development is more than essential to your business plan – without loyal customers, your business might no longer run. So, of course, after you get the step 1 and 2 done, make sure to focus on your clients, especially in your early business. The manual to successful customer developments are, as follows:
- There are no facts inside the building, so go outside – speak to real people and prospective customers.
- Pair customer development with agile development
- Failure is an integral part of the search
- Make continuous iterations and pivots
- No business plan survives first contact with customers, so use a business model canvas to ease your job
- Design experiments and test to validate your hypothesis
- Agree on market type, it changes everything.
- Startup metrics differ from those in existing companies
- Ensure fast decision-making, cycle time, speed and tempo. Customer’s today demand more speed and transparency.
- Preserve all cash until needed, then spend
- Communicate and share learning
- Customer development success begins with buy-in
- Have passion, it is all about passion.
Step #4 Don’t forget your network
Last but not least, you should always remember what you learn and implement what you are learning. No knowledge can go into waste. You can also target all those friends you have back in college to be your first customer. All the connection you have is valuable in your approach to success.