Editor’s note: The MY JOB Gen Z book soon will provide hundreds of tips and tools to help young adults land their first job and advance toward their dream job. — However, we won’t stop sharing other resources that come our way!
Finimpact, a software and finance company based in Israel that supports small businesses, reached out to MY JOB asking us to share their ideas on how to support young entrepreneurs. I’ve excerpted the highlights; the full original article can be found here.
What Statistics Show
Gen Zers Want to Be Their Own Boss
While many believe that the entrepreneurial spirit is dying, consider that a Gallup poll revealed that:
- 77% of kids want to be their own boss.
- 40% want their own business.
- 42% say they will invent something that changes the world.
- 91% say they are not afraid to take risks.
The issue may be that they are not getting enough support from their wider environment.
Entrepreneurship and the Global Economy
The following statistics derived from a wide variety of resources demonstrate the current status of young entrepreneurs (ages 18–24 in the U.S. and 15–29 in the European Union/E.U.).
- Higher education decreases entrepreneurial motivation. As countries get more developed with niche service-based roles, people have less of a need to become truly entrepreneurial. This is because education more or less guarantees a steady paying job, and graduates do not feel they have to work as hard (Gem Report).
- The UK has low levels of youth entrepreneurialism. Only 1.1% of small business owners in the UK are aged between 18 – 24. Similar economies have a 7.6% rate for the same age bracket. 75% of UK youth entrepreneurs make a profit in 2016. (UK.Gov)
- Only 33% of US entrepreneurs have a high school diploma. 35% indicate that educational qualifications were not necessary or even helpful. 21% said educational qualifications help a little (Finimpact SMB Survey 2019).
- Across most industries, the key reasons for entering the world of entrepreneurship are ‘freedom’, ‘independence’, and the ‘ability to work for themselves’. These psychological traits may also indicate a personality disposition that cannot simply be instilled in a person, regardless of how intelligent or well-intentioned the program may be. Only a small percentage enter entrepreneurialism because they have no other option (Keele University).
- Middle-aged men (42 – 50) have the highest business success rates. Studies have shown that middle-aged men have a much better chance of succeeding in their enterprises, especially if they already have experience in the area, according to a study reported in “The 20-year-old entrepreneur is a lie” (MIT Sloan).
What Entrepreneurs Need Now
How can you train somebody for an economy in 2021+? Not even the most brilliant investor in the world such as Warren Buffet or George Soros could predict such events as COVID 19.
The single best way to train a young entrepreneur is to make them antifragile, a term initially coined by options trader Nassim Taleb. Essentially, you make them able to thrive and adapt to an environment where you cannot rely on static principles. An antifragile entrepreneur actually thrives in chaotic environments, where there is less certainty on the outcome.
A determination to succeed and an assertive ‘shark’ mentality are what makes for real success. This kind of attitude can be fostered to a degree but is largely a function of the character of the individual.
However, this is certainly not the whole story, even if it is an essential building block. According to JBCNS School, the ten characteristics of a successful entrepreneur are:
- Social Skills
- Open-mindedness towards learning, people, and even failure
- The customer is everything
Linked to the psychology of entrepreneurship is positive psychology: actively achieving goals steadily, being focused in your application, making effective use of your time, networking, and being active, dynamic, and collaborative.
8 Ways to Prepare to Launch
1. Choose Your Friends Wisely
You are the sum of your closest five friends. Young entrepreneurs need to associate with like-minded individuals. This principle applies across fields. If you want to become an American Football player, you need to associate with friends who are obsessed with succeeding at football. Their influence will rub off.
Setting up businesses with other people is correlated with increased success, especially for startups. But setting up a business with an irresponsible person will lead to issues down the line. Make sure to set up with someone you really trust. Starting a business as a co-founder can give you a much-needed psychological boost as you are not simply doing it alone, and it will foster teamwork and collaboration skills.
2. Find a Mentor
A mentor can really serve to point you in the right direction. They have been through everything that you have, multiple times. They will also be a valuable network partner who can hook you up. Many new entrepreneurs make the dreadful mistake of ignoring this tip.
3. Get Comfortable With Failure
The fact of the matter is that you cannot predict the market. You cannot know if your business is going to succeed. In fact, it is likely to not succeed. You learn more from failure than you do from your success. Failures are the stepping stone to success. So if a business fails in your twenties, as many do, then dust yourself off and start again.
4. Use Indirect Success Techniques
Success is more than merely the ‘technicals‘. Consider affirmations, visualization, and meditation as integral techniques to succeed. Have a vision of where you are going and contemplate it often. Do not fall into the habit of pushing forward at all costs until you make it.
The business world does not care how much effort you put in if you are not wise in how you spend your resources. Many entrepreneurs have fallen foul of entrepreneurial burnout in their thirties and late twenties. Take at least one full day off and ensure you are getting enough sleep and wholesome nutrition. This will pay off in the long run – do not trade success for health.
5. Write a Business Plan
A business plan is typically a document between 8 and 15 pages outlining the core values of the business, how it hopes to acquire funding, the experience of the founders, the target market, and so forth.
A mock business plan can be created if you currently do not have a business. As you start to write the business plan, you will come to spot certain blind spots in your ideas and you can refine it until it is a pure gem.
6. Get Comfortable Speaking
Like the business plan, public speaking will help you to clarify who you are and what your business is all about. It will also bolster your confidence and rhetoric skills. Most people find public speaking to be incredibly nerve-wracking, but it is a very powerful self-development tool if you stick with it. To succeed in the realm of business, you will need to get used to speaking with people (not to mention arguing and negotiating with them). All people, not just potential investors, respond well to power and confidence.
7. Understand Money, Not Just Work
It is vital to understand the very basic tenets of money. Why you want it, what you can do with it, and how it grows and compounds with time. Time is always the greatest investment, and if money is saved from an early age, the benefits can be enormous. Start saving and compounding wealth today.
Learn how you can get money to work for you – not the other way around. This is why many investors are so adamant about building passive income that generates for them week by week, month by month, and year by year.
8. Start Right Now, but Slowly
Many new entrepreneurs make the mistake of ‘waiting’ to become an entrepreneur. But the process does not start when you are finished college! You spend money every single day! Every time you purchase something, you engage in a business transaction!
If you start saving and investing from an early age, even with small amounts, it will become a trend. You will form automatic success habits that last a lifetime. If you earn $150 a week, get into the habit of saving $15 and investing $15.
How Parents and Teachers Can Support You
Our Education System Undercuts Wealth
It is a sad fact that the education system does almost nothing to teach children about wealth.
Children should not have to spend nearly two decades in school without any knowledge of financial management in the end.
And from a purely financial perspective, sending children to university is an investment that is no longer profitable, especially given that most of them do not even end up in professions relevant to their degrees. But they still end up with a mountain of debt.
All this aside, the majority of business people do believe that a university degree is useful. It’s just that certain attributes could be fostered from an earlier age. A mix of business and theory is arguably the most efficient.
Ways Parents Can Nurture Entrepreneurship
You can show them the basics in a very down-to-earth manner. Create a savings account for them and encourage them to put away 10% every week.
As they become teenagers, pay them for chores completed. If they do not complete their chores, then do not pay them. You can also encourage them to get a job with another person, or go a step further and part-finance any creative ambitions they might have. The idea is to foster and encourage, not to restrict, and reprimand.
A mindset of infinite possibility and wealth generation, as opposed to borrowing, must be created. This is also what it will take for the next generation to be removed from the wheel of eternal debt. America is a case study for global debt, as loans and credit seem to be heavily entrenched within the culture from an early age.
Exposure to Business Plans and Documents
It can be very useful to get teenagers and students familiar with all of the business documents associated with running a company: the business plan, Form W4, Form I9s, Form 1099s, Form W2, Forms 941, etc.
A good exercise would be to give students a random assortment of employees and have them figure out how they should file for each one and what tax they must pay. Accounting theory is also incredibly useful as every new business owner will have to know the numbers inside and out.
Practice beats theory every single time. An internship at a good company can really set students down the right path, as the experience will stay with them for life. It also teaches them timekeeping and social skills which are relevant regardless of whether they decide to become entrepreneurs or not.
Training Resources For Young Entrepreneurs
The Finimpact website offers a Business Model Generation Handbook, a downloadable worksheet called a business model canvas that helps you think through your business idea, as well as online courses about business models and value propositions.
The Founders Workbench has a variety of tools to help you get your startup off the ground, from financial calculators to startup checklists. You can use this as an entire startup-resources hub, including protecting your profit, scaling the business, and hiring new employees.
We also host “Launcher,” a free school for startups run by business owners 18 years and up, along with links to many other resources for grants, loans, federal funding, and crowdfunding.
Being successful as an entrepreneur mainly relies on successful habits with a persistent attitude. And governing the two of these is a strong mindset built on solid psychological fundamentals. With this in mind, the best entrepreneurial books are:
- The Richest Man in Babylon – Quite likely the oldest and most influential book on investing ever written. It consists of a series of parables where numerous individuals slowly learn the secrets of wealth.
- Rich Dad Poor Dad – One of the most influential investment books of the modern era. Robert Kiyosaki tells the story of how his poor father was an employee while his real mentor (“Rich Dad”) educated him on the secret of financial success. And he did this, in part by teaching him to play monopoly!
- Antifragile – This is a little more controversial and ‘technical’. Nassim Taleb made a fortune on options trading by shorting highly volatile assets. During the Great Recession, he made a killing. This book will teach aspiring entrepreneurs to think independently from the herd.You cannot get rich by following the standard advice found online. You need to understand risk and make your own decisions.