By Raj Sond, General Manager at First Data Merchant Solutions
Record numbers of young people are now starting their own businesses, reflecting the big drive across the UK to encourage young people to consider this bold move as a possible career choice. Since 2006, the number of under 35s starting their own business has risen by over 70% according to a report by Duedil and Enterprise Nation.
A study by the Princes Trust also recently found that 30% of young people believe that they will be self-employed in the future. There is an obvious sense of entrepreneurial spirit amongst young people, but are we giving these enthusiastic business stars the complete picture?
Starting off on the right foot
A recent YouGov study carried out by First Data Merchant Solutions found that many young entrepreneurs are often unaware of the realities that running a small business can involve. If these young business go-getters are to become the business stars of the future, it is imperative that they are made aware of the real challenges that running a small business can involve and that support is on hand during their entrepreneurial journey.
It was found that 59% of young business owners aged 18-24 began their company because they longed for something more “exciting” than a normal day job. However, this couldn’t be said to be the same for older business owners, whose main drive behind starting a business was the control that they would acquire.
The excitement that these young entrepreneurs are hoping for is a tempting prospect, but there are a number of essential, yet rather mundane, tasks that are vital to ensure smooth running of any business. The study revealed that 18-24 year old entrepreneurs were the most unprepared for these tasks, with a whopping 60% of those questioned finding the daily running of the business more challenging than expected.
So what do young entrepreneurs need to be aware of to avoid any nasty surprises?
The word ‘accounting’ is often one that is feared by those without a business or mathematical background, but equally, a task that is absolutely vital for making sure that a business runs smoothly. Young entrepreneurs can often struggle with this task when starting out, with 40% of 18-25 year olds finding this a task more challenging than expected. To counteract this impending challenge, it is important that business owners have an accurate idea of what figures they need to keep track of and how this could be best managed from the outset. By preparing in advance, small business owners can avoid being caught out when tax deadline day creeps up on them. Having a good understanding of the technologies that can help manage these tasks will save panic at the last minute!
• Managing staff
Keeping track of employee’s work, managing the rotas and calculating wages are all tasks that fall to the hands of the business owner. This can often become a more challenging prospect when they are also trying to concentrate on growing the business and promoting their services. Therefore, the right tools must be in place prior to setting up shop so that the attentions of the business owner are equally shared between essential business tasks and other, more exciting aspects of running and growing a company.
• Inventory management
For businesses that are product-based, making sure that there is enough stock of each item is vital in providing a good customer experience and maximising turnover. Running out of a popular item could result in a huge loss of potential sales, and could also create bad customer relations. Tracking sales in real-time through a software platform means that this is a worry that needn’t play on the mind of the business owner. Armed with knowledge of what sells and when, business owners will be able to make smart decisions on when to restock and avoid making costly mistakes.
With starting a business becoming a real opportunity for young people, hopeful entrepreneurs need to be aware of all that starting up entails to ensure success. If we are to truly support the youth of today to become the business brains of tomorrow, we cannot simply gloss over the less glamourous aspects of running a business. Worryingly, only 10% of young entrepreneurs find running their business “fun”, which was the lowest figure across every demographic. There is a real danger that disappointed would-be-entrepreneurs could fail before their business has even got off the ground. Preparing these young business brains for every aspect of running a business will allow them to put the best systems and technology in place to ensure the mundane tasks are taken care of - enabling them to focus their attentions on making their business an ongoing success, rather than falling at the first hurdle.