When it comes to entrepreneurship, millennials have big dreams to be their own boss. In a new national study on millennials from America’s SBDC, 62% of millennials know exactly what kind of business they’d like to start. 68% have already owned or been a part of a startup and nearly half of millennials are planning to launch a startup in the next three years.
However, the path to entrepreneurship is riddled with three major roadblocks for this generation.
1) Finances. 46% of millennials want to be financially stable before starting a business — no easy feat when juggling student loans, rent, and other personal debt like credit cards.
2) Access to capital. Anyone want to fund my startup? 45% of millennials say that they’re unable to start a business because they’re unable to access capital.
3) The right resources. With the right resources, 59% of millennials say that they would start their business within the next year. An alarming 13 million millennials don’t though because they have no idea where to go for help to set up and run a business.
Never fear, young entrepreneurs. We see your hurdles and are here to help out with advice on how to get over them to get your dream business up and running.
About the roadblock: In a study on millennial small business owners from Wells Fargo, only 48% of millennials would describe themselves as “somewhat” knowledgeable about their business’s finances. When it comes to business financial success, 82% rely on family and friends for feedback on what to do next.
The solution: Millennials seeking financial stability before getting their business started likely already know the best step to take is to get rid of any existing debt. Pay off any credit cards you may have and tackle student loans next. One of the simplest ways to go about doing this is make loan payments on time (to benefit your credit history) and take on better repayment plans or refinancing to lower and eventually pay off student debt.
Access to capital
About the roadblock: Want to take out a loan for your business? According to Wells Fargo, millennials see banking as more of an obstacle than an opportunity. Some of the chief issues preventing this generation from getting the capital they need include their age, size of business and overall revenue.
The solution: Now more than ever before, millennials are turning to personal credit to get their startup launched. 14% use their cards to open their business while 27% carry a balance on their existing credit cards. Because of this, it’s crucial that millennials pay attention to their credit especially if they plan on one day returning to a bank to seek out a loan. Pay off or pay down debt on time as much as possible to keep your credit in positive shape.
The right resources
About the roadblock: Perhaps the saddest hurdle on this list, America’s SDBC reports 75% of millennials would be encouraged to start a small business — if they just knew where to go for help.
The solution: Depending on the industry they’re going into, this will be an ongoing journey for most entrepreneurs to determine which websites offer the right resources for their business. Here are a handful of our personal favorites to get you started.
U.S. Small Business Administration: Everything on small business can be found here with the SBA dedicated to assisting small businesses throughout the nation with loans, contracts and more forms of assistance.
The Minority Business Development Agency (MBDA): Part of the U.S. Department of Commerce, this agency works to grow minority-owned businesses by working to link them to necessary capital, contracts, and market opportunities throughout the nation.
SCORE: With 300 chapters throughout the United States, SCORE is a nonprofit dedicated to providing small businesses with the guidance they need to get started including mentoring, business workshops and webinars, and free tools, templates, and tips online.
About the Author
Deborah Sweeney is the CEO of MyCorporation.com, which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation and Deborah at @deborahsweeney.