Business ideas are everywhere and 69% of teens say they have a business idea but either don’t know how to start it or are afraid to start. While most are afraid of the business failing, adults and teens cite a variety of reasons for not starting that are actually myths. They have commonly held misbeliefs about entrepreneurship which are holding back so many of us from taking action on a great idea.
Let’s dispel a couple of common misconceptions about starting a business.
1. You need to invent something.
I remember growing up and thinking that starting a business meant you had to be an inventor who was bringing something totally new to the public. This is more of a rarity than the norm when it comes to new businesses.
2. It has to have a physical storefront.
There’s nothing wrong with physical storefronts, but that is not the only type of business out there. Kids can sell products or services in a variety of ways including online or in-person.
3. It takes money to make money.
You certainly can start a business by spending a lot of money and going into a ton of debt, but a) that’s a terrible idea and b) most kids are not going to have money themselves, or people lining up to give them loans, to get started. I encourage business owners to start fast and free (or as close to free as possible), and then build the business, using the profits from early sales, in response to the feedback from customers.
4. Some people are born with the entrepreneur gene.
Anyone can start a business and you will find people from all walks of life, with very different genetics and upbringing, who are business owners. I like to think of entrepreneurship as a muscle. Some of us get to work on it a little bit more in our youth based on our experiences, while others will start later and will need to work on that muscle for a while to build it up. No one is excluded from being able to start a business.
5. You have to deceive people with sneaky sales tactics.
A good business should, at its core, solve a problem for people. The easiest business idea to sell to someone else is a solution to their problems. When I coach young entrepreneurs in The Simple StartUp Challenges, I ask them to start by listing problems in their lives, in the community, in their school, or in their peer group, and then we start trying to propose solutions to those problems that could make money. I go through this in a lot more detail in my How to Come Up with A Business Idea article.
When you are truly solving a problem for people, you don’t need to trick them into buying it. You simply have to find a way to share your solution with them and transfer your enthusiasm about its value to the customer. That is sales.
6. You need a business plan.
Business plans have a place in this world, but it’s not in startups. A business plan is a long and detailed document that describes the way you will set up your business, who you will sell to, how you will do it, and what the pathway to profitability is based on your research and estimations.
People who loan businesses money like to see a business plan to feel comfortable that they will eventually get their money back, plus more. When we do a Simple StartUp, we are aiming to start as fast and as close to free as possible. No loans are needed, and instead of wasting time trying to predict how your business will turn out, we do a very basic snapshot of what you are imagining, and then we start building the super basic version of the business. From there, we try to sell it and then make adjustments based on customer feedback. We end up building the business our customers really want instead of what we think they want.
7. You need to work 60 hours per week on your business.
Not every business needs to be a full-time job or demand all of your spare time. Some businesses will if you are not thoughtful about how you set up and grow your business, but the aim should be for your business to fit into the time you decide on rather than dictating your schedule to you. This is called a lifestyle business and it’s a great way to start out. When thinking of a business idea, look for ones that can be completed on your desired schedule from the location of your choice. Don’t sign up for a business that will need a ton of time and can only be done by you unless that is what you want!
Now that we have dispelled some myths around starting a business, what step will you take today to move your business or idea forward?
If you would like more support along this journey for your child, I run a mini Idea Generator course to help young entrepreneurs find and evaluate business ideas.
Here are some tips from a teen entrepreneur who is running a multi-million dollar business.
About the author:
Rob Phelan, CFEI, is a full time high school personal finance teacher living in Frederick, Maryland with his wife and son. He is the founder of The Simple StartUp, where he guides 10 to 18-year-old entrepreneurs through starting their first businesses, and he most recently published a children’s book, M is for Money, that introduces 3-8 year olds to age-appropriate money words and normalizes conversations about money. You can connect with Rob on Facebook, Instagram, Twitter, or LinkedIn.