he last decade hasn’t been kind to the Millennials. Those 18-29 year-olds that struggled to get an after school job are now some of the most highly educated and underemployed or unemployed Americans this country has ever seen. Staying in college beyond the four-year bachelor’s degree to obtain master’s and even doctoral level educations, these college graduates aren’t hitting the pavement looking for work – no, they’re far more industrious – they’re starting their own companies. Companies like Facebook and Snapchat started in college dormitories and grew into multi-billion dollar enterprises in the time it took most of us to venture into the world, settle down and buy our first house. Unemployment numbers trailing in the mid-7 percent realm and staggering student loan debts of an average $26,000 per student, have driven these young Americans to think about employment and earning a living differently.
College entrepreneurial education is on the rise to meet this need. According to The Ewing Marion Kauffman Foundation there are some 5,000 entrepreneurship courses offered last year at graduate institutions across the country. “35 percent of employed Millennials have started their own business on the side, and 72 percent want to quit their jobs to become entirely independent,” says a study conducted by freelance job marketplace oDesk and Millennial Branding. Additionally, Millennials are starting businesses while they are still in school. A report by Business Insider found that “36 percent of recent college graduated started businesses while getting their degrees and 21 percent started a business right after school because they couldn’t find a job.”
If you’re feeling the entrepreneurial bug, how can you start a business, too?
- Be prepared. Research, due diligence and homework are not new concepts for Millennials. Having spent much or nearly all of their lives in school, these fundamentals to learning are like second nature for them. That means digging into the library, researching your enterprise’s specific industry and watching for trends in growth, manufacturing and distribution.
- Consider internships and work-to-learn opportunities as part of your research path. Inside tracks in large corporations can provide invaluable experience and knowledge about what works well and what doesn’t.
- Crowdfunding is one of the most popular sources for small business start-up funding. Sites like Kickstarter provide a venue for entrepreneurs to post a description of a project and outline the resources needed and then allows any individual to contribute up to a maximum threshold dollar amount. Most contributions are less than $150.
- Networking – Today’s college graduates understand the need for networking better than any prior generation. A shift in educational paradigms has focused energy and training on team work, collaborative problem-solving and networking. In business it is often knowing the right person that opens a door and provides a gateway to greater opportunities. These insights are what make for successful entrepreneurs and what makes this generation so darn engaging and successful.
- Pooled resources. It’s easier today to publicize, market and be seen. Millennials understand and live inside social media channels and know how to best use them to get noticed. Compared to advertising a decade ago, it’s possible today to have a negligible marketing budget and still be the talk of the town, if the resources used are brought together in a tight and well-honed pitch and plan. Millennials are also willing and see the benefits of partnerships with other small businesses than their older counterparts.
- Manage your debts. Unlike older entrepreneurs who often have families, mortgages and other responsibilities, Millennials only have student loan debt as their largest commitment and many have the convenience and financial freedom to live with parents, further reducing their debt load. If the student loan debt is overwhelming, there are programs available such as the SBA’s Student Start Up Plan for Income Based Repayment that can help infuse cash into a new venture. There are also student loan forgiveness programs that can help reduce your total debt by working part time or full time in federally designated zones. Income Based Repayment allows you to pay a percentage of your income (usually 15% of your maximum monthly earnings) and Income-Contingent Repayment programs that adjust your monthly payments based on income and family size, forgiving any remaining debt after 25 years (or 10 years with public service repayment options).
- If you cannot manage the debt right now, start smaller by working a salaried gig days and gearing up your business on the side. Once your business can sustain some profitability and assure you a salary, then switch to full time status. Remember that many a successful start-up began in someone’s garage, basement or parent’s back room. Learn from these great organizations and use what worked best for them to propel your own business forward.
- Talk with experts – constantly. Seek their guidance, advice and mentorship. Accountants, tax experts, business incubator leaders, chambers of commerce and other business leaders can be a tremendous resource to guide your enterprise and help you make the most of your ideas.
PASBA member accountants bring the collective resources of a nationwide network of Certified Public Accountants, Public Accountants, Enrolled Agents and other practitioners available to answer your tax and financial questions and streamline your business accounting, bookkeeping, and payroll operations.
To find a trusted accountant in your area, visit www.SmallBizAccountants.com. Please be advised that, based on current IRS rules and standards, any advice contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty that the IRS may assess related to this matter. Any information contained in this article, whether viewed or subsequently printed, cannot be relied upon as qualified tax and accounting advice. Any information contained in this article does not fall under the guidelines of IRS Circular 230.
Copyright 2014 Professional Association of Small Business Accountants