The concept of startups has been around us with an increased frequency for some time now to describe new aspiring business ventures. Their rise in popularity has led to an increase in the number of established startup ecosystems that support and foster their development.
Moreover, the existing support system in place has reduced startup risks and increased their chance of success. Consequently, more and more people create their startup businesses or join others. With all these in mind, we need to answer the following questions. What is a startup? And why are startups ideal for young people?
What are Startup Businesses
When it comes to defining startups, it seems that there are some blurred lines. Typically, a startup is a company that is at an early stage of its operations. However, there are startup businesses that characterize themselves as such despite being operational for some years.
Startups are founded by one or more entrepreneurs based on an identified need or opportunity in the market. The first and foremost task that the founders need to address is creating a good business plan. A sound business plan is key to attracting the necessary funding that will allow the startup to kick off initially.
With little to no funding at an early stage, startups require financing that they can only acquire through investors or the existing startup support system in place. Potential funding sources are European funding, small business loans and grants, incubators, venture capitalists, and angel investors.
However, investing in startups is known to be a high-risk, high-return business. The failure rate of startup businesses is high, and thus the importance of a good business plan. With a good business plan in place, there are higher chances to convince investors of the startup’s success and inspire trust.
Another thing you should consider is giving a great name to your startup. Carefully choosing a name for the company that you are working so hard for can help you build your brand, stand out from the competition, and inspire the trust of investors. To find a strong name and meaningful name, there are various online business name generators that you can use.
The Potential of Startup Businesses to Young People
For many people, the idea of starting a business has indeed crossed their minds at some point in life. Irrespectively of the type of business, while being a huge responsibility, having your own business allows you to have more control over your work and can potentially lead to a significant increase in someone’s income.
But what is the best time to engage with startup businesses? While the average age of startuppers is significantly higher, engaging with startups at an early age comes with many benefits for young people. Here is why:
- Long-term benefits. Creating a successful business in terms of profitability is not an easy task. A business requires lots of thought and effort on behalf of the founder, and numerous failed companies indeed precede a successful one. Therefore, engaging with startups from an early age helps you reach your goal earlier. Time spent in business is a learning process that supports developing the necessary skills and knowledge needed to lead a company.
- Risk tolerance. Expanding on the above, not all startup businesses are going to make it. Starting your business is not only risky but also stressful as things easy to go sideways. For this reason, it is always wise to have a backup plan. The younger people tend to be more risk-tolerant as they have fewer responsibilities than what happens later in life.
- Motivation. It is said that motivation and passion declines as the years pass by. Someone can quickly identify motivation and enthusiasm in a young professional who is hungry to learn and succeed. Also, in the unfortunate event of failure, motivation is what makes you keep going. Aren’t these qualities ideal for startup businesses?
- Adaptability. Being a young professional is easy to adapt to new situations. Being young with limited working experience means that you have not been exposed to and adopted specific working rules. It is also important to note that young people follow the current technological trends easier than older professionals. That is especially important when it comes to tech startups.
Starting your own business is quite a struggle, but the payoff in the case of success makes it worthwhile. Besides, it is never too late or early to start a business.
Experienced professionals may seem to be more suitable to engage with startup businesses as they possess the experience and decision-making abilities that young people lack. Nevertheless, young professionals have specific qualities that are ideal to have as a startup founder. But most importantly, they have time on their side as building a successful business is time-consuming and often requires many failed trials beforehand.
Institute of Entrepreneurship Development (iED) remains a firm ally to all startup businesses. Through our services, we provide mentorship, funding opportunities, and networking to all interested startups.