To start and grow a business you need huge amounts of energy. You need to be quick and flexible in your thinking, and you need to be able to learn constantly. It also helps to be unencumbered by family responsibilities and financial commitments. On the face of it, therefore, it seems that entrepreneurship is suited for young people.
Yet most entrepreneurs start their own businesses in their late thirties and forties. One reason is that it takes a while to save up the capital needed to start a business, although a lack of money and resources can be overcome by starting small, hustling, and growing organically.
A much bigger obstacle for young entrepreneurs, however, is their lack of experience. Working as an employee for several years, especially if you move up through the ranks, teaches you not only the technical aspects of an industry, but also how teams and organisations work, how to manage people, how organisations interact, the formal and informal rules of business – in short, it teaches you how the world really works.
Young entrepreneurs must learn all of this on the trot. Many do so by trying, failing, and starting over. There are, however, several ways in which you can limit the number of errors and failures that will stem from your lack of experience (For experienced business owners, this is the advice you can share with young entrepreneurs around you.):
- Keep your day job for a year or two longer: When starting their own business as a weekend or evening side-hustle, most entrepreneurs use revenue as the main indicator of when to step out of formal employment. As soon as it looks like the business can sustain them, they resign and become full-time entrepreneurs. Or the prompt might be reaching a certain level of savings that will become their start-up capital. Another consideration, often overlooked, is to aim to reach a certain level of competence. It is difficult to measure, and there is also the danger of becoming trapped in employment if you stay too long, but work experience must be part of your decision making. Where possible, set a clear goal – like twelve months in a new position or the completion of a work project – before you resign. Work experience is good capital.
- Study part-time and do your assignments on your business: Book learning and course work can only teach you so much about the world, but it can certainly fill in some of the gaps related to a lack of experience. As difficult as it is, many successful business owners have done business-management courses at night. They invariably find it most useful when they can base their course assignments on their own business.
- Recruit experience: Many successful entrepreneurs are not intimidated by people who know more than they do and seek out experienced workers in fields where they lack knowledge. A well-known example is Mark Zuckerberg of Facebook, who appointed the vastly more experienced Sheryl Sandberg as his chief operating officer. Together, they oversaw the fastest growth in the history of Facebook, and of any company ever. Experienced workers are expensive, though, so make sure they have very clear performance targets that fit in with the revenue growth of your business.
- Partner with experience: One way to overcome the problem of the high cost of recruiting experienced managers is to partner with someone with lots of experience, especially in the field about which you know least. Obviously, it is not a decision to make lightly. All the factors of a good business partnership must be present – a shared vision, shared values, good chemistry, and the ability to communicate well.
- Seek out mentors: You can tap the wisdom of experience without having to employ or partner with someone if you actively seek out mentors. Mentorship relationships can range from formal paid-for consultations to informal chats over coffee or beer. Informal mentorship sessions can lead to formal ones or vice versa. Don’t be shy to approach experienced people for advice. Many retired business people enjoy being the expert, and derive great satisfaction in seeing their ideas make a difference. But be willing to pay for it where appropriate – it can be a great investment.
- Read widely, travel widely and network widely: When you start a business, you are most probably not going to have much time for anything else, and your focus is likely to narrow down on your business and its immediate surroundings. Make an effort, however, to keep a view on the wider world. Scan reliable sources of news regularly to stay informed and build your general knowledge. Look for opportunities to travel for your business, or for pleasure if you can. And make time to meet people. Lots of helpful ideas and information can come from far outside of your business and your industry.
Don’t be afraid to start over: Accept the fact that you might fail because of your lack of experience. A statistic often quoted is that the average business owner in the US has failed four times before becoming successful. Even if the number may not be completely accurate, the general principle is true: failure happens often when you start a business, and it can be an important part of your success story when you start over again