A lot of people wants to start a business in order to pursue their dreams and life plans. There are some who comes from a family of business-minded individuals so it is second nature for them to put up a business of their own. There are those that wants to own a business because they do not want to work for others.
There are various reasons why a lot of people desires to own a business but it sounds easier than it looks. It might sound glamorous to some because they get to be their own boss it needs a lot of hard work and dedication. There are some consumers who went ahead and established a business of their own who did not get anything in the initial stages and had to work 60 to 80 hours a week to make sure the business, even if it is an online business is running smoothly.
The people who pursued their calling and went ahead to start a business will tell you that it is particularly challenging at beginning but it does get easier over time. But easier does not mean you can kick back and relax because as your market changes and evolves, so should your business be to stay relevant and profitable.
All these can be too much for people to take into that is why not everyone follow their dreams of pursuing a business of their own. Add the fact that Statisticbrain.com shares that one out of four businesses fail during the first year. But imagine the young consumers or those that just graduated from college who wants to put up and start their own kind of business venture. They are in for quite a challenging endeavor.
What is in the way of starting a business of their own
These young consumers has a lot against them if they wish to start a business at their age. But this does not mean that they should not pursue it. It is challenging but not at all impossible. There are some who has followed their dreams at a young age and are now doing good for themselves. Here are some of the most common challenges facing these young group of consumers.
- Too much student loans. This is one of the biggest challenges of young consumers especially those that are coming out fresh from college as CNBC.com explains that the overall student loan is at $1.3 trillion. The cost of attendance for a lot of colleges and universities across the country has been increasing in parallel to the financial aid being given by the government. As they go through the years in college and take out loans every school year, they leave the school with degree on one hand and a huge student loan bill on another. This is a prohibitive cost that prevents young consumers who want to start a business of their own.
- Not enough cash on hand. Being young usually means being broke except for the top 1% who has more money than they can handle. The idea of student loans, living expenses, car or house payments can easily put their net worth in the negative. This is enough to discourage anyone who wants to get into a business venture where it is a common practice that you need to have a capital upfront to bankroll the business.
- Lacks experience. This is a problem that can only be solved by going into the business itself. Although there are some young consumers whose experience comes from their family background of business-minded people, majority would have no experience in putting up and maintaining a business of their own.
- Low credit score. When you want to start a business, one of the major considerations you have to factor in is money. Since young consumers rarely have the savings to bankroll the business on their own, the next logical step is to try and borrow from lending institutions. But there are not a lot of young people who has taken the time and effort to ensure a high credit score because their focus were their grades and graduating on time.
- Wrong motives. If you just want to look slim for that upcoming trip to the beach, you might try that crash diet that will make you lose 20 pounds in a matter of weeks. It might work but the danger is that after the trip and once the diet is done, you just go back to your regular eating habit. But if you want to eat healthy because you want to take care of your body, you will look past fad diets and stick to a program that works. The same for when you want to start a business. You need to have the right goals in mind and not just to impress the neighbors and even your relatives for that upcoming gathering.
What can you do to pursue that business idea
After you have taken a look into the common obstacles that are in your way of pursuing that entrepreneurial spirit, the question in your mind is how do you proceed? With all the problems in your way, will you be able to finally open that business? Here are some of the things that you might want to look into to increase the chances of having your own business.
- Be mindful of your payments even while in school. If you have a credit card and you use it in college, make sure that you pay the bill on time every time. If you have other payments, do the same thing. This helps build up your financial credibility and increases your credit score. The higher your score , the better your chances of being approved for a business loan and it is possible that you get a low interest rate. This is because your score lets them know that you are not a risky investment. This helps you start a business with less interest payments to worry about.
- Check and monitor your credit score. Even while you are still in college, it wouldn’t hurt to check your credit scores especially when you are planning to start a business in the near future. Apart from making sure that there are no mistakes on your credit report, this is also one way of preventing identity fraud. This causes havoc on your finances and can cost you that business loan if not corrected early.
- Put together a business plan. One way to analyze and project if the business will succeed is to put together a well-thought out business plan as Investopedia.com shared that this is the main purpose of the document. This can help you look at your endeavor from the smallest to the biggest detail like financing, ROI and market studies. Having this document and being truthful about the findings will help you decide if you can really start a business or if you need to make changes along the way.
- Test your idea. Once you have the plan, it is best to try and test the idea first before you open your business to the public. If it involves selling an item, check with family and friends first and see how they react to it before opening it to the public. If it is a service, do the same thing and measure how receptive your target market is. This can help you gauge better where you need to make changes to improve your business model.
It is not easy for young consumers to start a business right out of college but not totally impossible. Some do it to follow their dreams while some are in it because they do not want to be employees all their life. For those who wish to be successful in this endeavor, it is important to take note of the challenges ahead and what they can do to address these obstacles.