Launching an ambitious new venture is challenging even at the very best of times.
But for young entrepreneurs, especially those in Gen Z (born after the year 2000), running a business can have even more complications that make it difficult to get basic tasks done.
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Whether it’s credit card age limitations or simply not being taken seriously by employees or vendors, young entrepreneurs must find ways to overcome these business challenges.
Identifying the Pitfalls
Today’s infographic comes to us from Insurance Quotes, and it identifies the pitfalls encountered by young entrepreneurs as well as some of youth’s most important advantages.
Millennials, in comparison to the generation before them, have been less entrepreneurial as a whole. In fact, only 24% of 20-34 year olds today are new entrepreneurs, compared to a 34% rate from two decades ago.
Gen Z, however, is looking to take the reins – and now, 72% of high schoolers say they want to start a business someday.
Pitfalls for Young Entrepreneurs
Despite this increased interest in entrepreneurship, Gen Z faces significant pitfalls that must be overcome:
Many small businesses use credit cards or bank loans for day-to-day purposes, whether they are for picking up small expenses, growth capital, or as cash flow buffers.
However, in the United States, you must be 21 years old to get a credit card without a cosigner or proof of regular income. For bank loans, that age requirement drops to 18, but even then a cosigner or good credit is usually required.
In the same vein, age restrictions can also make it hard for young people to network, since many conferences or events take place in licensed establishments like bars or casinos.
Vendors, colleagues, and employees may not take young entrepreneurs seriously. Sometimes stereotypes of young people being a certain way may persist, as well.
Young entrepreneurs must divide time between business and school, creating competing priorities.
Inexperience can also be an early enemy for young entrepreneurs – hiring friends (instead of qualified people), micromanaging, being overprotective of new ideas, or mixing business and personal finances can be just some mistakes made from a lack of experience.
Advantages of Youth
Despite the list of potential pitfalls, it’s also clear that youth can provide big benefits to an up-and-coming business owner.
Firstly, the barriers to entry of business today are lower than ever before. It’s now possible to sell almost anything online for next to nothing, and Gen Z is inherently knowledgeable when it comes to exploiting any new technologies.
Next, without families to provide for or mortgages to pay, young people also typically have fewer responsibilities. This sets them up to take on risks that might steer away more seasoned businesspeople.
Lastly, a lack of experience can also be a massive advantage if used correctly. Young people have no preconceptions of “how things should be”, and can use that to pull off new ideas that others simply couldn’t imagine. This naiveté is arguably a big part of how today’s modern giants like Airbnb and Facebook came to be.
Article by Jeff Desjardins, Visual Capitalist