Age is just a number, but are young entrepreneurs struggling with the figures? Raj Sond, general manager at First Data Merchant Solutions, takes a look.
Although a surge of young entrepreneurs setting up a business is a great step for Britain in the post-recession business landscape, it is of paramount importance that these budding business brains have a good grasp of the challenges that are lurking around the corner.
People decide to set up their own business for a host of different reasons. These can range from the desire to have a better work-life balance, to turn a life-long hobby into a career or to take control and be your own boss. A YouGov study, carried out by First Data Merchant Solutions, recently found that for 59 per cent of young business owners the main appeal is the draw of doing something more "exciting" than the normal day job.
The flexibility that comes with running a business is also a major attraction for many young entrepreneurs. Being able to leave work in time to make a friend's birthday party, attend family events or take the afternoon off for some much needed R&R, all while running a company that you love is definitely appealing.
However, the hopes that these young entrepreneurs have often don't match up to the reality. Instead, they frequently find their time being taken up with laborious admin tasks and are not quite prepared for some of the responsibilities that running a business involves.
All work and no play?
The results from the study highlighted that there is a significant difference in the understanding of challenges faced when setting up a business between those in the age bracket 18 to 24 and those choosing to go into business at a later point in their life.
Almost half (49 per cent) of 35-44 year olds found running a business "as challenging as expected", as opposed to 59 per cent of 18 to 24 year olds, who found the process "more challenging than expected".
From the results, the question then remains - do young entrepreneurs have a sufficient understanding of what running a business involves or do these fresh young minds require more support before setting off on the road to entrepreneurship?
Although administrative tasks are a key part of any business, the challenge that these tasks can amount to are often underestimated by young entrepreneurs. The survey revealed that 40 per cent of young entrepreneurs found daily tasks, such as managing staff, accounting and stocktaking, more challenging than expected and overwhelming. In many cases this has led to them having less time to focus on business growth and building lasting customer relationships.
Inventory management and monitoring transactions are two of the activities that have been recognised as an unexpected challenge. Keeping a precise log of transactions, and even tracking these in real time, can give a small business a massive helping hand. Not being able to do so could result in missing the need to restock popular items or failing to notice an opportunity to implement a promotion that would be popular with customers.
This year, we have seen a record number of young people starting businesses with 247,049 entrepreneurs aged under 35 opening a business, according to Duedil. In order to see these businesses last, it is important that young people understand the areas where support could be provided. By seeking out the necessary support for the admin tasks that can often prove a challenge, young business owners are less likely to be faced with a shock when starting out and more able to realise those initial attractive benefits they visualised at the outset.