Generation Y entrepreneurs have a few advantages here: They’re seen as tech-savvy, enthusiastic risk takers with fresh perspectives. But they also tend to lack money, credit histories and managerial experience.
Some pointers if you’re under 30 and starting a business:
Ask for advice. You may know your "great idea" inside and out, but you might not know as much about writing a business plan, incorporating a company, or managing employees. Reach out to more established business owners by tapping your college-alumni network or finding a support group such as Score, a group of about 11,000 volunteer business executives who counsel entrepreneurs in person or online at Score.org.
"I think the first challenge that I had was wondering where to start," says Joel Erb, who started a Web design company at age 15 and has since expanded it to offer new-media marketing and communications services. Mr. Erb, now 25, taught himself computer coding but learned how to incorporate, finance and expand his company, named INM United, from his mentors.
Be realistic on funding. Finding capital for a start-up today is difficult regardless of your age, but you might be set back further by a weak credit history and lack of business experience. To show that you’re serious, write a business plan and have a prototype before you approach a bank or investor.
When Miles Lasater founded a financial-services firm tailored to colleges with two fellow undergraduates at Yale University, they set measurable goals for growth and followed up with possible investors after achieving their aims.
"We were able to show how we progressed," says the 31-year-old Mr. Lasater, who was 22 when he started Higher One, which streamlines the transfer of money between financial-aid offices and students for more than 210 colleges. "So we raised money from people later who said no the first time."
Not having a lot of money at first could actually be good, as "it forces you to be frugal," says Donna Fenn, the author of a coming book about young entrepreneurs and a contributing editor at Inc. magazine.
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