Millennials are changing the face of business ownership and are quickly becoming “millennialpreneurs”. Millennials make up approximately 75.4 million Americans, and nearly half of them plan to start a business in the next 3 years. In a 2017 study by America’s Small Business DevelopmentCenters (America’s SBDC), millennials were found to be the most entrepreneurial generation ever. The creation of wealth was the #1 cited reason for wanting to start their own business. Honestly, this is not surprising. Millennials lived through the Great Recession of 2007 and millions saw their parents, aunts and uncles lose their jobs overnight. It makes sense that millennials want to build their wealth and financial security for when the next recession hits. After all, the boss can’t fire you if you are the boss.
To date, nearly a third of millennials have already begun establishing their entrepreneurial roots by owning their own businesses. Compare 30% of millennials to the 19% of Boomers and 22% of Gen Xers who have started a business. Even more impressive is that 38% of millennials have been a part of a startup and 26% survive solely off of the income from their business. This new wave of millennialpreneurs is exactly what the economy needs to thrive. New businesses stimulate the economy in ways unlike Fortune 500 companies. They provide most of the jobs in the country, improve productivity, and create new industries altogether.
The fact that nearly half of millennials (49% according to the SBDC) intend on starting a business in the next three years is motivating. Yet it begs the question, why the wait? According to the SBDC study, over 54% of millennials would quit their jobs in the next six months if they had the resources to start their business. And 61% of those surveyed cited lack of knowledge and business savvy as their primary roadblock for following through. For those looking for resources to assist them on becoming a millennialpreneur, we’ve compiled a guide for how to get there.
Create a Business Plan
Failing to plan is planning to fail. Yes, the old adage is true. You must, we repeat, you must have a plan before starting any business venture. Creating a business plan sounds daunting but it’s a necessary evil that’s really not so evil. A business plan provides focus and allows you to better understand your own business and manage it more effectively. Do you want start your own real estate company? That’s fantastic, what type of real estate? Commercial or residential? Okay, residential. What type of residential real estate do you plan to invest in? There’s townhomes, single family homes, section eight housing, condominiums, duplexes… It may be difficult to know what questions to ask yourself when developing a business plan, but that’s where tip #3, below, comes in handy. Point is: when you focus your vision, your path becomes clear.
Find a Business Mentor (through Friendly Cyber Stalking)
There’s no point in re-creating the wheel if your neighbor already created it for you. In today’s millennialpreneur modern age, it is too easy to search on LinkedIn for small business owners in your area or find a small business MeetUp group for you to learn from. You can save so much time, energy and money by being resourceful and learning what others in your position did when starting their business. It doesn’t matter if the business owner you meet is in a different industry, they still had to have someone draft their formation documents and employment agreements, they still have to manage payroll, customers, and employee satisfaction – all things you will have to experience.
Not sure if lawn care services is really the business you want to start? Contact another lawn care business owner and ask to shadow them for the day or invite them to lunch so you can learn more about what it’s like in that industry. Business owners are arguably the most creative and driven individuals on the planet – especially the millennialpreneur business owner. Do a little friendly (and legal) cyber stalking, find the right mentor for you, and treat them to coffee while you pick their brain. It may take a few meetings before you find the right one, but you’ll learn something new every time. Best of all: it’s absolutely free.
Engage a Professional Early and Often
Not hiring help when you need it is easily one of the biggest rookie mistakes. Contrary to popular belief, you need professional help before you actually launch your business. It is much easier to implement structure and processes into a business when it is first starting up. Sure, you could create a free or low-cost website on your own, but is it worth losing business over? Your potential customers will probably move on to your competitors because your website looks cheap, are you okay with that?
At Bryant Taylor Law we’ve lost track of the number of clients who come to our offices that would have saved thousands had they consulted us at their business formation stage, rather than waiting until they had a problem. A common issue is they didn’t have employment agreements or non-competes and now someone they fired is profiting from their trade secrets. Other clients faced hefty fines from the Department of Revenue because their business was subject to the Reemployment Tax, when it shouldn’t have been. Although we will certainly help our clients fix any problems, we prefer to prevent the problems altogether. All in all, your new business is an investment. It requires proper planning and consulting with experts who can help put you in the best position possible to succeed. You don’t necessarily have to spend a fortune, but you shouldn’t pinch pennies either.
Partnership Agreements Aren’t Sexy, But They’re Necessary
Nobody gets married expecting to divorce, and nobody enters into a partnership expecting for it to fall apart. You may not believe in prenuptial marital agreements, but you certainly better believe in prenuptial business agreements (a.k.a. partnership agreements). According to the Bureau of Labor Statistics’ Business Employment Dynamics, 20% of small businesses fail in their first year and 50% fail by their fifth year. Although the report doesn’t explain why businesses fail, the fact remains that they fail. The reasons could be anything from poor business management (likely someone who didn’t have a business plan!) to disagreements amongst partners who don’t have a partnership agreement to settle the dispute.
The partnership agreement addresses how responsibilities will be shared, who has what authority, and what happens when the business closes. It is much easier to calmly discuss these issues at the beginning rather than wait until emotions are high.
A proper partnership agreement should also address what happens when the unthinkable happens. What happens when your business partner gets divorced, and her spouse is awarded her interest in the business? Now suddenly you’re “in business” with someone you never agreed to partner with – yes, this can happen! What happens when your thriving business brings in millions, and suddenly your business partner shuts you out of the business? A proper partnership agreement drafted by a professional can prevent this and so many other unexpected headaches.
Build Credit for Your Small Business ASAP
Another old adage that still rings true, is that you have to spend money to make money. Well, not many millennials have a heap of cash laying around to start a business. The easiest way around this is to open a credit card and bank account in your business’s name (because by this time the attorney you hired has advised you to register your proper entity and obtain an EIN). Initially, you can use personal credit to open a business credit card (do your research – some are better than others).
An open line of business credit protects your personal liability and allows you to begin making necessary business purchases. Once you have an established credit history in your business name, you’ll be able to leverage it to rent a business space or expand to a larger market.
With that in mind, law firms like Bryant Taylor Law, are on standby to help millennials accomplish their goals of being business owners. Our firm was established by millennialpreneurs and a large part of our client-base are millennialpreneurs. A movement is on the rise amongst millennials and Bryant Taylor Law is leading this wave of new business owners towards Entrepreneur Land. If you need any legal advice or help, feel free to give us a call at 954-282-9331 or contact us online for a consultation.
Bryant Taylor Law
333 Las Olas Way
Fort Lauderdale, FL 33301