It’s that time of the year again – for many students, A-level results day will be met with dread and fear.
While in days gone by this nervous anticipation may have focused purely on the upcoming results, teenagers today are faced with a greater variety of questions about their futures. University, internships, apprenticeships, travelling, working, volunteering – long gone are the times when post-18 simply meant getting a job and sticking with it.
The rising cost of university fees, resulting in minimum debts of £27,000, will have further complicated the ‘what next?’ decision.
The age of the entrepreneur
In the first year that increased tuition fees came into play, the number of UK university applicants dropped significantly, with 15,000 fewer UK students applying to start university in 2012. So what were these young people doing instead? Recent research suggests that an increasing number of people are looking at entrepreneurship and self-employment as a viable alternative to joining the hoards of freshers. StartUp Britain predicted that the UK will produce as many as 500,000 new businesses by the end of 2013, up from last year’s total of 484,211.
So, if you’ve got your big business idea, why wait three years to implement it?
It is often said that true entrepreneurs are risk takers. This might be the case but there are some fundamental steps that aspiring entrepreneurs should take to help address some of the early pitfalls that come with launching your own business.
Honest business plans
So you’ve had your brainwave, you know the type of company you want to create, and you want to have a go at building it. The success of your dream will depend on significant planning and, inevitably, funding. For a young person trying to navigate the challenges of building a business the issue of seeking funding can be daunting.
The good news is that today with the growth of entrepreneurship in the UK there are an increasing number of funding options available to entrepreneurs from crowdfunding to angel investment to venture capitalists (VCs). In many respects, there has never been a better time to find seek funding. Deciding whether your business is likely to attract a VC’s attention will require a thorough introspective review of your business – VCs want to back game-changing businesses.
Be honest with yourself and if this is you – great news. If this isn’t your business just yet, then consider other options. Start-ups will often attract friends and family or angel investment, before being VC-ready.
More on entrepreneurship:
- UK’s Global Entrepreneurship Week looks to encourage start-up ventures
- Entrepreneurship a ‘more viable’ career choice
- Inquiry looks to boost entrepreneurship
The art of networking
Never underestimate the power of relationships. The first thing VCs and angels will look for in an investment opportunity is the management team – this means personality and reputation count for a lot.
Take your networking as seriously as your business idea. We have seen hubs of entrepreneurial activity pop up all across the country: Silicon Roundabout in London, Silicon Beach in Bournemouth, Silicon Docks in Dublin – this is not a London-only phenomenon.
Word of mouth is a powerful tool for the entrepreneur. Angels, investors and serial entrepreneurs all have the potential to be powerful advocates for you and your business. They might even prove to be great mentors. So seek out people you respect, learn from them and, when the time is right, don’t be embarrassed to ask for help. One of the benefits of being young is that people will want to help you out where possible.
Knowledge is power
It’s an old cliché, but when it comes to attracting investment, VCs will want to evaluate your understanding and knowledge of the market your business is operating in. Get your facts straight and do your research. Study similar businesses in your sector and make sure you have solid data to hang your hat on when potential investors ask the inevitable probing questions.
Don’t limit this research to just your competitors – swot up on your VCs as well! It’s a two-way relationship between an investor and a business so it’s important to know that your investor is the right fit for your company. Tap your new entrepreneurial contacts for information about the reputation and house style of various investors. With many VCs likening the relationship to a marriage, this is not a contract you should enter into lightly.
At Octopus, for example, we hold weekly ‘open office meetings’ where budding entrepreneurs can have a informal chat with someone from the Ventures team. Entrepreneurs can use it to discuss their business plan, ask for advice, receive feedback and, most importantly, start a business relationship.
The reality is that university isn’t the right fit for everyone, and if on this A-level results day you have decided that higher education isn’t the right path for you, and you have a business idea that you want to pursue, then go for it! Find your local community of entrepreneurs and get talking to people. The tools to plan, fund and build a great business are at your disposal – you just have to get out there and find them.