To understand how to support and empower young entrepreneurs, we must look at statistics and theoretical knowledge but have a strong emphasis on practical experience.
- Entrepreneurship motivation seems to begin between 20 – 40 and peaks at 42 (Fraser).
- Self-employment rises dramatically with age (I4J).
- The Per Capita rate of new businesses is actually falling (I4J)
- The majority of entrepreneurs continue to be white males, despite a closing gap (Study.com).
This guide aims to equip the global youth with psychological tools and practical resources so they can confidently build wealth without buying into all of the drama. Saying this, the correct method through which to teach the youth psychological success principles remains a little uncertain and is most definitely not actively fostered in the schooling system.
What’s a ‘Young’ Entrepreneur Anyway?
A ‘young’ entrepreneur is aimed between 18 – 24 for statistical purposes. However, we will take a look at how child and teenage encouragement can assist the youth get set up for success at a later phase of their development. 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, as the entrepreneurial spirit seems to be going strong. Most of the students surveyed did not have a credit union account and only half agreed that the school teaches them well about banking and finance. More statistics on global entrepreneurship are given below (on younger entrepreneurs as opposed to kids).
Key Statistics – Young Entrepreneurs & the Global Economy
The following statistics were taken from a wide variety of resources to demonstrate the current status of young entrepreneurs (aged between 18 – 24) in a number of different jurisdictions. However, note that in the EU a youth entrepreneur is one aged between 15 – 29, and such studies cast a much larger net for statistical purposes. Some relevant statistics include:
- 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 and are ‘guaranteed’ a high paying job (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 practically all jurisdictions, the key reasons for entering the world of entrepreneurship are ‘freedom’, ‘independence’, and the ‘ability to work for themselves’. These are indicative of psychological traits, and 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. There is a belief that the youth are responsible for most successful businesses out there. However, 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. Statistics about entrepreneurs tell us business owners who start their companies and hire at least one employee are 42 years old on average. The dataset consisted of over 2.7 million people and the blog title is ‘The 20-year-old entrepreneur is a lie’ (MIT Sloan).
What Are the Best Ways to Train and Mentor Young Entrepreneurs?
It goes without saying that young entrepreneurs are the lifeblood of the economy. Because they eventually grow up and become adult entrepreneurs who really bolster the economy. But training young entrepreneurs is not such a cut and dry process.
How can you train somebody in 2015 for an economy in 2020? Not even the most brilliant investor in the world such as Warren Buffet or George Soros could predict such events as COVID 19. Of course, they can diversify across sectors, but this is because they have such huge levels of wealth. Young entrepreneurs need to take more risks, as their wealth will compound with time. This is a basic tenet of investing.
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.
Training an entrepreneur to be antifragile, however, is an entirely different story. The short version of training and mentoring entrepreneurs centers around 3 core principles:
- The reading of high-quality entrepreneurial books at an early age (more on this below).
- An attitude of creative experimentation and consistency from an early age.
- Close association with successful entrepreneurs and like-minded individuals at an early age.
More details on why these 3 principles are so essential are explained in detail below. Needless to say, the younger an entrepreneur starts on his or her journey, the better. And few, if any, entrepreneurs succeed without failing on multiple occasions. It is better to fail early and try again than to try late and give up.
8 Best Tips for Millennial Entrepreneurs
The following are some of the best tips for young entrepreneurs and business people looking to build wealth quickly, and then hold it for a long time horizon where it can grow steadily. Younger entrepreneurs can afford to take more risks and can look to get creative, while older entrepreneurs will look for diversification and consolidation.
#1 – Choose Your Friends Wisely
As the well-known adage goes, 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, an area where lots of millennial entrepreneurs will be looking towards. 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
This is related to the first point. 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.
This could be a generational tendency with a do it yourself at all costs attitude. But it is not just millennials that are guilty of this, but the entire social class of entrepreneurs. And this is an excellent characteristic to have for an entrepreneur. It is better to be bold and assertive and learn through failure to use mentors than never to try at all.
#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. The very best entrepreneurs started early, sometimes with lemonade stands. It is the quickest way to learn good business principles. 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.
Related to this point is that you need to become a self-starter and take 100% accountability for your own actions. Your results need to be tied to your effort. Entrepreneurs need to learn to turn $1 into $2. Just being fed stimulus and grant programs can lead to incompetence if it is not used correctly. Learn to succeed in any environment and to make do with what you have now and again. Positive psychology, competence, and active work will make you a better human and a better business person.
#4 – Use Indirect Success Techniques
There are many tools and strategies you can use to succeed. But 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
Writing a business plan is an excellent tool as it will familiarize aspiring entrepreneurs with all many aspects of the establishment of a business. 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. It is also important to understand the difference between being an employee and an entrepreneur. Not everybody has the characteristics to become an entrepreneur. But it is still useful to understand savings and investments to a degree. 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.
The mindset should be to have a lifestyle that is engaging and dynamic, and this can be done with an understanding of how money works, and how you can get money to work for you – not the other way around. This is why many investors are so adamant about building real estate and rental wealth, as it is 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. This follows the golden principle of investing 10% and saving 10% of income. Over time, it will result in the accumulation of great wealth.
Other than this, there are many things you can do, just get started. Write a business plan, start an online business, look for creative ways to make money, brainstorm, pool resources with friends, etc. if you look at the autobiographies of most Ivy League entrepreneurs, you will see they started business programs while in high school and university. Do not wait to start
The Psychology of Entrepreneurship
What is often overlooked in terms of successful entrepreneurs is their initial mindset. Many of them knew what they wanted to do and went for it. In the overall scheme of things, 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 10 characteristics of a successful entrepreneur are:
7) Social Skills
8) Open-mindedness towards learning, people, and even failure
10) The customer is everything
Clearly, what goes into the ‘mix’ of entrepreneurial success is quite diverse! For a young entrepreneur, it is possibly best to emphasize teamwork, collaboration, and networking. If they do not contain all of the necessary ingredients, then they can acquire them through shared characteristics. This is the best way forward, as it is too much to ask for a young entrepreneur to have truly honed these skills with little business experience. Slow and steady wins the race. History is rife with tales of people who acquired wealth quickly and lost it even more swiftly.
Linked to the psychology of entrepreneurship is positive psychology. This does not have any connection with the common idea of simply thinking happy thoughts while your business flounders. But it is to do with actively achieving goals steadily, being focused in your application, making effective use of your time, networking, and being active, dynamic, and collaborative.
You will then see your business income increase, and know that it was because you did it. This is why people who win the lottery lose all of their winnings shortly after. It was not tied to their individual effort, merely luck, and chance. No individual skills or attributes were developed, and so the wealth was not sustained.
Documents, Business Plans, and Legal Lingo
As an exercise, it can be very useful to get teenagers and students familiar with all of the business documents associated with running a company. As mentioned previously, the business plan is the most useful for an education perspective, as it is the written definition of opening a new business. Other than that, it can be informative to learn and fill out key forms including 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. The most embarrassing entries on Dragons Den and other shows are those who cannot differentiate the net from the gross profit from a given year, or who do not understand cost accounting or other basic metrics.
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.
Is the Education System Detrimental to the Growth of Wealth?
It is a sad fact that the education system does almost nothing to teach children about wealth. Perhaps the most pronounced proponent of this fact is Robert Kiyosaki, author of “Rich Dad Poor Dad”. He outlined that the purpose of school is to get a job as a means to earn money, but teaches nothing about money management, making the entire process somewhat futile.
And he makes a strong point. Children should not have to spend nearly 2 decades in school without any knowledge of financial management in the end. It teaches people to be useful employees as opposed to successful entrepreneurs. 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.
A balance could potentially be struck, but it is wiser for parents to play a more active role in teaching their children about money. There are many ways to foster such understandings.
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 and the relationship between the degree and the business results have yet to be substantiated. A mix of business and theory is arguably the most efficient.
How Can Parents Nurture Entrepreneurialism in Their Kids?
This subject can be a little tricky, not to mention personal. On one hand, do you really want to teach your kid heavy entrepreneurial principles at the age of 10? Perhaps not, but 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, you can pay them for chores completed. If they do not complete their chores, then do not pay them. That is teaching them they can get paid to do nothing and will have the opposite effect. 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.
There are many applications and online initiatives that you can also use to your advantage when it comes to encouraging savings and entrepreneurialism. An ‘Acorns’ feature on many financial applications will let kids and students put away the spare change from retail purchases towards a specified goal, such as a vacation, camp, or product.
Top 4 Financial Options for Aspiring Entrepreneurs
As teenagers start to lean into their twenties, it is useful for them to become aware of the numerous financing options that are available to them. Because good businesses do need capital to succeed. Saving this young is simply not a viable mechanism for a new business that needs a sharp influx of capital to get off the ground. The most common financial options are:
- Online Loans – This is potentially the most straightforward option for new entrepreneurs. It provides a no-hassle loan with low minimum requirements. It also provides applications and software that is very appealing to the millennial population, with charts and graphs.
- Grants – There are multiple grant options available for young entrepreneurs. And this class does have a lot of social leverage. People like to see young people doing well and are open to helping out. But grant writing is an art that has to be honed like all others. The pros and cons need to be weighed before application.
- Bank Loans – This is something of a ‘classical’ financial option most frequently reserved for larger business models with established revenue flows. As such, it is not the most direct option for aspiring entrepreneurs. Applications are also long and tedious.
- Venture Capital – This is a very competitive way to acquire money for a new business. Venture Capital is a shark tank, and the sharks do not lend money easily! Still, it can be an excellent experience for a young entrepreneur to pitch in front of famous business people. If they get a deal of any kind, the experience will be invaluable.
As useful as all of these options are, an emphasis needs to be placed on the creation of money in potentially hostile environments, rather than relying on credit. It is essential for growth, but there are many ways to create wealth, and 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.
10 Best Training Resources For Young Entrepreneurs
Below is a list of helpful resources for young entrepreneurs. This is not a definitive list, as there are too many resources to write about in detail, including grants, mentorship, funding, networking, startup loans, venture capital and so much more. These are some of the most well-recognized resources that can serve for further inspiration.
#1 – Founders Workbench
The Founders Workbench has a variety of tools to help you get your startup off the ground. From financial calculators to startup checklists, there’s a whole host of helpful resources on the site. You can actually use this one as an entire startup resources hub, including protecting your profit, scaling the business, and hiring new employees. There are a lot of areas that need attention in a new business, and it is good to have an organized framework in place. This is one of the best entries on the list and an ideal place for an aspiring entrepreneur to get started.
Launcher is a unique new business startup finance program for entrepreneurs. A business plan must be submitted for a successful application. They offer new business owners aged 18 and over access to world-class teaching, a supportive community, and regular mentoring. The Launcher program (offered by School for Startups) combines government-backed startup business finance from the Start-Up Loans Company, in tandem with a School For Startups one-day Bootcamp. It offers all of this, along with online community and mentoring, at zero cost.
#3 – UnLtd
The leading provider of support to social entrepreneurs in the UK and offers the largest such network in the world. This resource assists hundreds of individuals each year through their core Awards program. UnLtd invests directly into individuals offering awards of funding, ongoing advice, networking, and practical support.
#4 – O2 Think Big
Provides training and funding for young people with great ideas and helps them get going to make their ideas work. Due to COVID 19, O2 Think Big is not currently offering work experience to young entrepreneurs. In addition, this organization is aimed more towards corporate roles than real entrepreneurial freedom.
#5 – Buzz
A crowdfunding website which enables social entrepreneurs and social ventures to raise funds and build a crowd of supporters. There are multiple other crowdfunding websites that young entrepreneurs can take advantage of to make things happen (though it is by no means an easy route to success).
#6 – Newable
Newable Offers Start-Up Loans of over £500, in increments of £500. Successful applicants can receive free support to prepare your application and mentoring support once you start trading. You must be aged 18 and over and want to start a business in the UK.
#7 – Get Started / SFEDI
Provide access to finance, mentor support, and learning to make sure you have the best chance to get started and grow your business. This is a government-backed project aimed at self-starters and is one of the most well-recognized programs in England. Only UK-based businesses can apply.
#8 – vInspired Cashpoint
For 14 to 25-year-olds who have an idea that will solve a given issue within their locality, vinspired Cashpoint is offering grants of up to £500 to those who can turn ideas into reality, and get their projects off the ground. Once the funding’s signed off young people are given the autonomy to run your project their way. A very fun initiative that gives a lot of freedom for the new generation of entrepreneurs. A balance of structure and spontaneity/freedom is always nice to see, as many programs are too rigid with the rules and regulations.
#9 – Prince’s Trust
Provides practical and financial support to young people, helping them to develop key skills, confidence, and motivation, enabling them to move into work, education, or training. The Enterprise programme provides money and support to help young people start-up in business. They have a ‘Young Person Action Plan’ which outlines key goals and aspirations in s step by step process for success. A young person is defined as one aged between 11 – 30 on the Prince’s Trust website.
#10 – Rockstar Youth
Rockstar Youth is a part of the Rockstar Group. This is the UK’s largest entrepreneurial mentoring organization. Rockstar Youth has produced a market-leading programme for young entrepreneurs that are aged between 18 to 30 years old. The aim is to support them through principle ideation to enterprise creation and furthermore accelerated growth and investment. This is a platinum opportunity for UK based entrepreneurs.
Automation and Entrepreneurship
An area that is not often covered in entrepreneurship is robots and automation. All of the historically difficult tasks can now be done by qualified third parties at a low cost. Getting incorporated, filing for payroll, online legal service, accounting, and scheduling are no longer things that new entrepreneurs need to do manually, though it is still a good idea to get familiar with these areas.
Unfortunately, the role of automation is not covered extensively in universities and is hard to pin down (it is an area that moves rapidly). But all of the greatest and most profitable innovations of the 21st century are a mix of technology with a simple solution. Consider the impact of Tinder, Facebook, Airbnb, Uber, Instagram, and numerous other services that have changed the world.
Tech startups are high risk, high reward, but it is certainly good to get business students familiar with the possibilities. On a micro level, new entrepreneurs should look to leverage automation services for the common business tasks, from business formation to tax filing.
At present, there happens to be an opportunity to reach a higher level of efficiency through the careful use of automation. At the very basic level, automation can take care of mundane, everyday tasks as well as repetitive processes. This means top talents can focus on more advanced tasks and additional resources can be freed up. Practically all of human evolution has involved the use of tools that made life easier.
The one who uses the tools the best wins the game in a survival of the fittest world (though we want to encourage a more all-encompassing, diverse, and pleasant social environment for the youth of today to grow into).
How to Deploy Automation Technology
Automation in business can be very simple. Instead of manually filing purchase orders, for instance, an automated system can handle the task easily. All customer orders are processed and analyzed to determine the right purchase orders (i.e. for raw materials) to issue. Thanks to machine learning, this process can be optimized further.
The employees that were normally handling this task can then move on to more important challenges, such as boosting sales and drawing the attention of more potential customers. As a result, the business can grow and capitalize on market growth without having to expand structurally. With clever use of automation, you can exert enormous leverage. It’s how there are many business people who can run an entire business on a single computer, such as drop shippers and business consultants.
As long as you are focused and efficient, automation via robots can do a whole lot for you. Automation can be a double-edged sword, but it is well worth it to outline the benefits to the global youth. And they are going to naturally gravitate to automation anyway, as the world is becoming more digital. The danger lies in trying to use too many applications and tools without really understanding their use value and how they fit in. The human touch is always required for creative and innovative purposes.
Machines, computers, and robotics are advancing such that they are beginning to perform jobs previously reserved for humans who can think and move on their feet. Humans can problem-solve, execute non-routine manual tasks, and use their brains to analyze, create, and decide. Thanks to technologies such as artificial intelligence, machine learning, and robotics, computers and machines are now better at performing tasks that we as humans currently perform: they make fewer errors, they can work 24/7, and they are more efficient.
While many are contending that robots will ‘steal’ all of the jobs, this is largely a lazy and traditional mindset. What will happen is that robots will be doing all of the mundane work and will free people to do what they are truly good at. They are a new means of empowerment for all classes of people.
Best Books for Millennial Entrepreneurs
There are many, many, many books on how to become successful as an entrepreneur. But the best recommendations have to be based on principles, not technicalities. This is because all the details of the successful investing change, but the principles never do. 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. It also established the fundamental principle that if you invest 10% and save 10% of your earnings, you will steadily get rich while not feeling poorer. What most fail to recognize is that expenditure rises with an increase in wealth, often automatically. With this mind, set 20% aside and work with the remainder. Otherwise, it will be spent on silly things.
- 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! Real estate investing is emphasized as it teaches people to look towards passive income and not to have an employee mindset. Focus on being an entrepreneur, and never a worker, on getting returns from investments, not a paycheck from a boss. The difference from a psychological standpoint could not be more pronounced.
- Antifragile – This is a little more controversial and ‘technical’. Nassim Taleb made a fortune on options trading by shorting highly volatile assets. During 2008, 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.
Other notable mentions include ‘The Lean Startup’(Eric Ries), ‘Purple Cow’ (Sreth Godin), and ‘The Art of Start’ (Guy Kawasaki). But these books are not ‘timeless’ in nature. They are based on current trends and will soon be irrelevant.
In contrast, the 3 bulleted books will provide a young entrepreneur with the essential success principles independently of the specific market they are in or the wider macroeconomic conditions. By teaching the technicalities of a given economic era, you are limiting the entrepreneur to a short time period before the data is rendered redundant. By teaching them fundamental principles, you are equipping them with a wealth mindset for life.
Young entrepreneurs are the foundation in a thriving global economy. They need to be given the necessary mental and practical resources to foster an entrepreneurial mindset, from an early age.
Empowering and supporting young entrepreneurs is essential, as they are the ones that reinvent society for the betterment of all.
Let us know if we missed out on anything and what you think are the best ways to support and empower the next generation of global entrepreneurs.