With jobs still scarce, more recent college grads are starting up. These 3 young entrepreneurs offer tips on the risks and rewards of running your own business.
The recession is taking a toll on recent college graduates. Unemployment is high, graduates are shackled with student loan debt and droves have found safety moving back in with their parents.
Recently, I answered a question on Business on Main that a growing number of young professionals are starting to ask themselves: Should I start my own company?
The answer, it turns out, is “it depends.” So, to get a more satisfying response, I interviewed three young entrepreneurs to get their input on what it takes to start a successful business in today’s economy.
- Megan Hunt: This Omaha, Nebraska-based 26-year-old has started three companies — a bridal gown design company, a co-working space and Hello Holiday, an e-commerce site for women’s wear.
- Lincoln Stephens: Social entrepreneur Stephens founded the Dallas-based Marcus Graham Project when he was 27 years old. The nonprofit works toward developing a diverse new generation of talent in the advertising industry.
- Jamie Wong: Wong is the 31-year-old founder and CEO of Vayable. The San Francisco-based company is a social marketplace that helps travelers connect with trusted local experts to find things to do on their vacations.
To start or not to start, that is the question
Starting and running a sustainable business is no small feat. All of the entrepreneurs above agree that it’s imperative to determine if you’re built to be an entrepreneur.
“Starting your own company is like taking a leap of faith that you have to take [again] every day,” according to Stephens. “If you start your own business right out of school, be prepared to go right back into school,” he says, addressing the steep learning curve that comes with being a first-time business owner.
For Vayable CEO Wong, whose business is less than two years old, her company is not just her job — it’s her life.
“One of the risks is romanticizing entrepreneurship,” Wong says. “Don’t treat entrepreneurship like law school. [Law school] is the expectation when you don’t know what you want to do with your life.”
All of these business owners agree that entrepreneurship is not for everyone.
“You have to decide what level of commitment you’re going to make in your life,” Hello Holiday’s Hunt says. “If you’re not self-motivated, willing to learn on your own time, and you’re someone who looks at the clock waiting for 5 p.m., you need to question if this is for you.”
If you do take the plunge, what to do first
If you decide to take the entrepreneurial leap, here are some suggestions for what to do before you legally start a company.
“Before you do anything, research your business idea with other people and see if it’s a viable idea,” says Wong. “Is there a demand for your product or service? Are people excited about it? You don’t need to be incorporated, have a payroll and a bank account until you find out if people want it and are excited about it.”
Stephens suggests talking to business owners and getting their perspective.
“Talk to someone who failed at running a company and talk to someone who has been successful at it,” says Stephens. “This is invaluable insight that you can’t get elsewhere. And you might be able to find mentors that support you and your new endeavor.”
While some say that when you’re an entrepreneur, it’s all-in or nothing, Hunt disagrees. Prior to starting her first company, Hunt saved money to prepare.
“Before you go all-in, you need to have a safety net,” says Hunt. “It’s important for people to maybe have a day job or live at home for free for when they get started. It would be foolish not to take advantage of that.”
Stephens didn’t take this advice when he began the Marcus Graham Project, though.
“I started my company in debt,” says Stephens. “I wish I would’ve had money saved up.”
Don’t do it for the glory
Another thing all three entrepreneurs agree upon is that being an entrepreneur takes a firm commitment and a willingness to be honest with yourself.
“My life is the opposite of sexy,” says Wong, who works every day and averages less than five hours of sleep a night. “If you’re not absolutely committed to what you’re doing, you won’t be able to physically, emotionally or psychologically make it through.”
And things don’t always go exactly according to plan.
“It’s really hard to admit when things don’t go the way you want them to,” says Hunt, who had to close her co-working space earlier this year. “It’s just as important to know when to stop as it is when to start.”
Lastly, entrepreneurs must be willing to embrace delayed gratification. This means little or no pay, reinvesting any earnings, and, at times, not having health benefits.
“After five years of doing this, I’m just on the brink of being able to pay myself,” says Stephens.
He quickly followed that he wouldn’t change a thing.