10 Advantages and 10 disadvantages of young entrepreneurs
I don’t have any statistics to argument, but I’m under the impression that young entrepreneurs might be less affected by the crisis and in fact I have the feeling that young entrepreneurs did start up a lot of businesses during this period. But I won’t be writing about how young entrepreneurs do better in the crisis. I will write about advantages and disadvantages of starting young.
I can’t say I’ve started young – I think I took the entrepreneurial path at 26-27 years old, but I had the chance to interview a lot of young entrepreneurs in the last 2 years, – I think the youngest was 16 at the interview time. So let me write down some advantages and disadvantaged of starting a business before let’s say 30. Damn I feel old at 32…
Later edit: I found out that it was harder to fill in the 10 disadvantages than the 10 advantages.
Top advantages of starting young
- Risks is lower.
You don’t have a mortgage to pay or a family to provide to. And even if you do bad for a while, family is there to help you (see point 2) and your living costs are lower (see point 5). And even if you’re messing up big time, it’s not like you’re going to loose your lifelong savings (or maybe you do, but we are not talking about huge amounts yet)
- Family and friends support.
While in some cases if you are married (with children) might raise demands from your family to spend more time with them and might not be so supportive with you running a business, I think in most cases, being young gets you more support from your parents and friends. If you get it wrong (see point 1) you still have a place to sleep and something to eat. Besides, because of the point 2 at the disadvantages list, you might need to get some financing from the 3F – Friends, Family and Fouls. Being younger makes things easier then.
- Easier to allocate time resources.
Because you are probably not married yet, nor having children, chances are that there is nobody to complain if you stay late at the office. And you might have less duties at home (even if you have to take the trash out) and much more resistance at spending nights working.
- Hiring young employees.
As stated in my post here, start-ups do better with young employees. Being young yourself, it wouldn’t be a problem working with these young employees, and it might cost you less (see point 5). You will get to learn together with them how to make the business work, and on the long run it might get you some life-long friends and business partners.
- Lower costs.
Maybe you are still living at your parents, or even if you don’t, you might settle for a small condo. And you don’t need to drive a Merc. And your employees are costing you less because you’re hiring young (see point 4). You can live with just some pocket change for a while!
- Business innocence.
That’s both a benefit and a disadvantage (see point 1 at the disadvantages list). But basically, assuming that you have never worked before (or just did it for a short time) it might be that you were protected from the business adversities. You are less afraid of things, more innovative (because you just have to learn everything from nothing) and not afraid of things. You get to do things your own way because you don’t have the pre-conceptions on how things should be done because you worked before that way.
- Learning is easier.
That’s both a scientific factor that young people learn faster and an outcome of point 7. Your brain acts like a sponge, because there is so much to learn and partially because of point 9.
- Failure effects are easier.
First, it’s not like you’re going to loose your house (or maybe it does, but it’s outside of the thinking for this list), and even if shit hits the fan, you have the excuse that you are young and inexperienced. Besides, being young gives you more time to try again and do things better.
Easy to understand this one. Remember when you were little, you enjoyed your little toys for much more time. Go out and buy yourself a towing truck (or barbie doll) like you had when were little – your enjoyment will last less than in your childhood. It’s the way things go, if you are older and already been employed for a while, or had your own company for a few years, and let me tell you something: nothing gives you more enthusiasm than starting your first business and being young.
- Easier to stay up to date.
This is a result of point 7. Think about your parents. How easy is for yourself to get around with the iPhone, and how long it takes them to use it fully? It’s so easy nowadays to have your brain bombarded with information that it becomes a problem – it get’s worse with time, because you get to know a bit of everything.
And some disadvantages of starting young
- No experience in running a business.
Ok, that’s quite easy to explain, you simply don’t know anything. You don’t know how to make a contract, you don’t know how to rent office space, you don’t know how to talk with customers. Maybe you learned something in school, but nothing compares to a few years of real life experience.
- Hard to get financing.
You have no credit history, no money put aside, no relevant experience. You can’t even put a your house as a collateral (because you don’t own one)
- No Business connections.
Sometimes is not a matter of what you do, or how you do it. Sometimes is a matter of who do you know. It opens doors, it get’s you customers and might get some help in for you.
- Less trust from the customers.
Let’s say you’re running a hosting business and you’re 18. How do you feel your customers will react to letting their corporate sites on your hands? Or how would you negotiate with your customers face to face? How do they find references about your previous work, experience and testimonials?
- Dropping school.
You might need to drop school (ok you might say that there are some people out there that did damn well being dropouts). Yeah, might not be a problem, but if things don’t turn out that well, this might just be another things you failed at.
- Harder to get big contracts.
This is the result of point 4. You need to have credentials, good standing financial power, or simply years of experience. Hell, you might not even know what you’re doing well enough to respond to the demands of a big contract.
- People management problems.
Ok. let’s say you do well enough to hire more people. But would you hire a 50 years old accountant because you need an experienced man for your bookkeeping? Will you be able to manage a man that is almost double your age and inspire him confidence and will he do what you ask him to do? Can you even impose yourself as a manager amongst your young employees or they think about you as their buddy?
- Even trivial tasks might be difficult.
This comes from point 1. Let’s say you need to draft a contract. How do you start? Or you need to hire and pay taxes. Do you know how to pay taxes? Legal requirements anyone?
- Less self-discipline.
If you are a bit older, and maybe already had a job, then it’s easier to self impose rules. Like getting up in the morning and go to work. But if you’re young, and had a dancing and partying night, are you driven enough to get up next morning and head to the office no matter what?
- Less time to live your life.
Sure, your business is your life now, and you have set your own personal goal to make it work no matter what. But you know what? Your buddies might have a 9 to 5 job, and are free to do what they want in the evening. Going to concerts on the weekends. Stay out long. And you might not be able to do this until is too late. And you know what? Nobody will give your time and life back.
I don’t know what to say. But I wish I knew earlier what I know now about life, running a business and life in general. And start my own business sooner. If you’re not convinced, read my article How does it feel to be 20 years late on entrepreneurship.