10 tips for young entrepreneurs

If you're launching a business, check out these lessons and insights.

Imagine if you could pass on what you know now to the younger version of yourself. All the life lessons, experiences and insights gained over decades of work given to the twentysomething version of you who launched a business.

I would offer 10 suggestions.

1. Start early

Nothing constrains new venture dreams more than a mortgage, school fees and family responsibilities. Yes, it's possible to have it all: a shiny new venture and busy family life. But risk taking is easier when there are fewer commitments.

Aim to start the venture in your mid-20s, ideally after a few years in the workforce. Give it everything you've got before the pressures (and joys) of a young family eat into your time and you need a secure job to pay the bills.

2. It takes one to tango

Learn to work with yourself before rushing into a business partnership. Too many ventures come unstuck because young founders choose the wrong partners. Unless there is a compelling reason, launch your first venture on your own. Form a partnership when you are ready and be picky about who you choose. Don't undersell yourself.

3. All for one (venture)

New ventures are all or nothing. You're all in, or out. Don't hedge your bets by working several part-time jobs or running the venture on the side. I'm yet to see a new venture take off and sustain growth when the founder is not fully committed.

Focus achieves results. There's nothing like risking your capital or time – and needing income to survive – to drive venture growth. If you're unwilling to put all your effort into the business, chances are you don't believe enough in its potential.

4. Ask for help

Smart entrepreneurs excel at asking others for help. They tap their networks for free advice, labour, introductions, recommendations and capital. They have a knack of getting people to believe in their vision and help them, without payment.

Be humble. Lots of people are eager to help young people in their first business, if only asked. Arrogance and a know-it-all approach are damaging attitudes when trying to get a venture off the ground.

5. Manage expectations

A young entrepreneur I know is battling to build a business and manage a relationship. His girlfriend understandably wants to spend weekends with him. He wants to build his venture. His parents expect him to attend family events; he's too busy.

It's all about expectations. Explain what your venture entails and why you have a different lifestyle compared to people with regular jobs. You need family and friends to support your new venture dreams, not get in the way with unrealistic demands. Get the balance right.

6. Learn to sell

I've never met a successful entrepreneur who cannot sell. Even the quiet types know how to sell themselves and their venture at the start, and often do so at every opportunity.

Every entrepreneur, at some point, must ask people to back an unknown venture. Often, investors, customers, employees and other stakeholders are backing the founder. You need a certain level of extraversion to get a start-up off the ground.

7. Stick to what you know

My first mistake in business was going into an unfamiliar industry. The venture had a great idea, but selling in an industry where you have few contacts and a low profile is hard work. Everything takes longer when building relationships from scratch.

That does not mean sticking only to one industry. Still, it helps to focus on the product and market you know best, at least for your first venture, before expanding the reach.

8. Start fast, start cheap

Like many, I over-planned my first venture. There was too much desktop research and not enough market validation. There was too much capital invested in an idea before proof of concept and everything took longer than expected.

Although it depends on the business, starting fast and cheap, and adapting in the market, is best. Discover your customers and best business model in real time, and learn to change direction quickly (or pivot), as per lean entrepreneurship theory.

9. Learn how to manage

Lots of Australian entrepreneurs successfully launch ventures. Far fewer know how to grow them consistently over many years and build much larger businesses. Great entrepreneurs know how to manage ventures as they rapidly scale an opportunity.

Learn how to manage others early in your career. You'll never grow a big business on your own and will end up working 'in' rather than 'on' the venture. Learn about basic business policy and procedures, so you can lay the foundations for rapid venture growth.

10. Know when to fold

Have a cut-off point when to kill the venture. Don't persevere too long with a bad idea out of pride or a mistaken belief that success is around the corner. Jealously guard your capital and know when to reallocate to a higher-potential idea.

Don't give up after the first failure. See failure as an opportunity to learn and improve, and a part of the entrepreneurship process. Try at least a few ventures, within reason, before giving up on entrepreneurship and pursuing that safer corporate job. Starting early (see point one), means more recovery time.

 

This article was originally published by the Sydney Morning Herald on 30 March 2017. It represents the views of the author only and does not necessarily reflect the views of AMP.

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© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.