BusinessReport.com

Starting a new business is difficult enough, but young entrepreneurs face a much tougher set of challenges along the way.

Financing is either a distinct advantage or a stumbling block for young entrepreneurs, says Kim Carter Evans, an associate business development coach with the Urban Entrepreneur Partnership Gulf Coast, which is a program of the Kauffman Foundation.

“On one hand, young entrepreneurs haven’t had a chance to mess up their credit. On the other, because of their age, they haven’t necessarily established collateral to secure financing.”

One way young entrepreneurs with no collateral can secure financing, Evans says, is by exploring the options available in their market. In some fields, such as industrial technology, programs exist that will net young startup companies the initial investors to cover initial costs. Otherwise, Evans says, they will be relying upon the goodwill of family and friends to bring in those first crucial investments.

Evans says the key to any business model is researching the market to determine whether there is a need for a specific product or service. That research should consume the entire first six months to a year of startup, she says—long before a new business is ready to open its doors.

“Spend that first six months to a year before the reality of a business determining your market and making sure there’s a need before you put money into it,” Evans says. “It’s much better than being open for a year and then realizing you’re not in the right market.”

Age isn’t necessarily a factor in marketing, Evans says, if there is a need for a product or service. With the advent of social networking, there might not be a need for customers to know an entrepreneur is young at all.

“Look at Raising Cane’s,” Evans says. “In my mind, the owners of Cane’s are very young, but most of the people that buy chicken don’t realize that.”

Here are 10 tips Evans says every young entrepreneur should know:

1. Understand the responsibilities of being an entrepreneur, and be very aware of your personal strengths and weaknesses.

2. Seek out organizations that can assist you.

3. Become students of your competitors: know how to identify your competitors, and understand what their strengths and weaknesses are. This helps in carving out a niche for your business, in order to service the unmet need.

4. Know what the legal requirements are to operate in your parish, city and state and all necessary licensing that is needed for your industry.

5. Determine the cost to deliver your product or service and have a plan outlined to secure funding.

6. Understand that as a new business owner, your personal credit is your business credit. Manage it wisely.

7. Select an accounting system and learn how to prepare and interpret financial statements for increased profitability.

8. Understand that you are always a student.  Continue to be open to learning and stay abreast of trends and new business principles and practices

9. Planning is key. Failing to plan is planning to fail.

10. Have a written business plan—and implement it.

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