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How to Encourage Youthful Entrepreneurship

How to Encourage Youthful Entrepreneurship

Way back when, setting up your own business generally meant going to a bank to arrange a loan, spending an inordinate amount of time networking in-person and figuring out how to find and manage a staff.

Today, however, with a wealth of online tools at the disposal of anyone with an internet connection, it’s easier than ever to start a business with very few costs. Twenty-somethings are especially poised to take advantage of this shift, given that they tend to understand these tools. What’s more, whether they ultimately wind up employed at a massive corporation or go the full way on their own, experimenting with entrepreneurialism teaches a host of skills that will be crucial in our globally competitive workspace, where just being “good enough” isn’t going to cut it.

What Entrepreneurialism Does for Youth

Entrepreneurs tend to be jacks of all trades. They must be willing to learn as they go, shift with the market and work until they drop. Encouraging twenty-something entrepreneurialism means:

1. Teaching employable skills.

Take a look at any given job description today, and you’ll see a single buzzword repeated throughout: innovation. Employers want motivated employees who are creative, willing to “disrupt paradigms” while working with little management. However, they still need those employees to possess a number of more traditional skills, like communication, organizational and time management skills. And, hey, if they also happen to be good at marketing and sales, all the better.

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Whether you like using and developing these skills or not, all entrepreneurs must master them if your business is going to get anywhere. If sales doesn’t come naturally, then the entrepreneur must either figure out a creative way to get around it (like designing an even better online sales system) or just dive in and get over that fear. Not only does doing so show potential employers that you have developed that specific skill, but it also shows a willingness to take risks in the name of personal growth. If that doesn’t make someone employable, I don’t what does.

2. Nurturing creativity and teaching youth how to fail.

There’s a reason why these two things are sandwiched together: creativity and failure go hand in hand. To be creative, you have to look beyond everyday constraints to those things no one has ever thought of before — or they have, and decided they weren’t worth the risk. Doing so will inevitably come with a lot of failure, from which the entrepreneur must pick him or herself up and move on, having evaluated the failure and gotten him or herself ready for more directed experimentation.

While schools do fail students, they’re not the best at teaching student how to fail. In fact, in the academic realm most students strive to avoid failure at all costs. That’s fine when it comes to memorizing and mastering known information, but it doesn’t promote the kind of thinking that’s going to rescue humanity from its deepest crises — or make anyone a profitable company.

Entrepreneurialism forces young adults away from their knee-jerk failure avoidance behaviors. This will have enormous benefits in the ability to think creatively and pursue new avenues, which extends beyond work and into personal lives. A true entrepreneur is someone who sees failure as an opportunity for reinvention.

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3. Teaching the young how not to settle.

Entrepreneurs don’t just settle for what they’re given. Being an entrepreneur is akin to being an artist — never fully happy with where you are. Combine dissatisfaction with curiosity and you get someone who is constantly on the hunt for new ideas — and who pursue those that are most worthy. Whether you stay in the entrepreneurial world or not, embracing a spirit of entrepreneurialism will prevent the young from simply accepting less than ideal employment situations just because “that’s the way it is.” That drive will inform a lifetime of good work.

4. Doing this all within a relatively safe framework.

The younger an entrepreneur is, the less he or she has to lose. There’s generally no house to pay for or family to support. Yes, there may be student loans, but if they get going while still in college, they may still be on the parental dole and benefiting from scholarships, or there is at least no pressing need to pay loans back instantly. Even better, more and more colleges are offering courses in entrepreneurship as well as startup funds, so there’s less to lose and more to gain than ever. Netflix CEO Reed Hastings just announced that he will be sending $14 million to a Seattle startup that encourages more entrepreneurial education.

So, How to Get Going?

All of that said, there’s no getting around one key fact about entrepreneurialism: it’s hard. Or tiring, at the very least — especially when balanced with school obligations. That budding young entrepreneur is definitely going to need as much support and advice as they can get. Here are a few tidbits to pass on.

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1. Find the Focus

One of the best things new young entrepreneurs can do is find their focus. Of course, finding that focus may very well mean experimenting first with this kind of product and then the next as they “beta test” and find the most viable audience. But that shouldn’t be taken as sanction to offer a million different things, just because the given entrepreneurs find them interesting. New entrepreneurs can start simply by writing down problems or annoyances they see as they process they world, as well as ideas for fixing them. Then they should take those ideas to family and friends to see if they seem viable, and do a little research into competitor offerings. Having narrowed down to a focus, new entrepreneurs will find it easier to test the market with various manifestations of their product and go from there.

2. Sort Out Pricing

Competitor and audience research is also key for determining the price of the product or service. Many budding young entrepreneurs are idealistic about how little they can charge, especially for a web-based product, but competitor prices often reflect real world realities, like just how much it costs to host a popular website each month. It’s also important to consider other factors, like building in room for growth and just how price-sensitive any given audience of consumers will be.

Again, this is a place where entrepreneurs should really be encouraged to experiment, not fear failure, and be ready to shift course.

3. Set Up an Online Store

Whether this specific new startup will operate solely in the online space or not, having an online store will be crucial for most businesses. Today’s consumers expect to be able to get whatever they want online, and they’ll simply go elsewhere if they can’t get it from that budding entrepreneur. However, consumers will also turn away if an ecommerce store doesn’t feel trustworthy or easy to use. As such, from both a design and a sales perspective, it’s usually easiest for a time-limited entrepreneur to build their shop on a third party platform Check out Amazon webstore’s small business spotlights for some great examples. Platforms like this will integrate easily with their site, and will also handle all of the tricky shopping cart and credit card processing for them. What’s more, with a service like Amazon, products will automatically become searchable on the Amazon site, gaining the product even more exposure.

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4. Market Via Email and Social Media

Even the best product or service won’t sell if no one knows about it. Thankfully for busy young entrepreneurs, marketing is easier than ever with tools they already use every single day: email and social media. Email marketing begins with a newsletter signup list on the company website. From there, entrepreneurs should put together an editorial calendar to help them regularly brainstorm ideas for content they can post on their blog and email out to their list, as well as any accompanying promotions. This should of course accompany regular activity on social media platforms, as well as attendance at any campus or local events to let target customers know all about the product.

5. Think Hard About Time Management

Being an entrepreneur requires juggling many different balls at once. That means time management is key, especially for enrolled students. Entrepreneurs should take time every week to plan out the week’s schedule, making sure to build in time just to relax and do something other than relentlessly pursue their business goals. In general, it’s best to focus on one thing at a time, rather than trying to multi-task. For some entrepreneurs, outsourcing basic labor like data entry or even higher level tasks like accounting will go a long way towards lightening that load.

The Takeaway

Whether that startup becomes a billion dollar behemoth or fails after just a few months, entrepreneurialism has a wealth of lessons to teach our nation’s youth, from financial literacy to creativity. Encouraging entrepreneurialism is good for the economy and even better for the young. So what will you do to encourage a young person into entrepreneurialism today?

Featured photo credit: Shutterstock via Shutterstock

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Last Updated on August 20, 2019

How to Set Financial Goals and Actually Meet Them

How to Set Financial Goals and Actually Meet Them

Finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. And that’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways on how to set financial goals and then actually meet them with ease.

5 Steps to Set Financial Goals

Though setting financial goals might seem to be a daunting task but if one has the will and clarity of thought, it is rather easy. Try using these steps:

1. Be Clear About the Objectives

Any goal (let alone financial) without a clear objective is nothing more than a pipe dream. And this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore if you are saving today, then you should be crystal clear about what it is for. It could be anything like kid’s education, retirement, marriage, that dream vacation, fancy car etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives, however small they may be, that you foresee in the future and put a value to it.

2. Keep Them Realistic

It’s good to be an optimistic person but being a pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going out of the line will definitely hurt your chances of achieving them.

It’s important that you keep your goals realistic in nature for it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said – “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman”. And this quote sums up the best what inflation could do your financial goals.

Therefore account for inflation whenever you are putting a monetary value to a financial objective that is far away in the future.

For example, if one of your financial goal is your son’s college education, which is 15 years hence, then inflation would increase the monetary burden by more than 50% if inflation is mere 3%. So always account for inflation.

4. Short Term vs Long Term

Just like every calorie is not the same, the approach towards achieving every financial goal will not be the same. It is important to bifurcate goals in short term and long term.

As a rule of thumb, any financial goal, which is due in next 3 years should be termed as short term goal. Any longer duration goals are to be classified as long term goals. This bifurcation of goals into short term vs long term will help in choosing the right investment instrument to achieve them.

More on this later when we talk about how to achieve financial goals.

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5. To Each to His Own

The journey of setting financial goals is an individualistic affair i.e. your goals are your own goals and are determined by your want to achieve them. A lot of times we get on the bandwagon of goal setting only to realize later on that it was not meant for us.

It is important that your goals are actually your goals and not inspired by someone else. Take a hard look at this step at all the goals you’ve set for after this step, you will be on the way to achieve them.

By now, you would be ready with your financial goals, now it’s time to go all out and achieve them.

11 Ways to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a 2 step process –

  • Ensuring healthy savings
  • Making smart investments

You will need to save enough; and invest those savings wisely so that they grow over a period of time to help you achieve goals. So let’s get down to ensuring healthy savings.

Ensuring Healthy Savings

Self realization is the best form of realisation and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your monthly expenses. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you would be surprised to see how small expenses add up to a sizeable amount.

Also categorize those expenses into different bucket so that you know which bucket is eating the most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pump up your savings rate.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classical mistake which almost everyone of us do. We pay ourselves last!

Ideally, this should be planned upside down. We should be paying ourselves first and then to the world i.e. we should be taking out the planned saving amount first and then manage all the expenses from the rest.

The best way to actually implement is to put the savings on automatic mode i.e. money flowing automatically into different financial instruments (for example – mutual funds, retirement corpus etc) every month.

Taking the automatic route will make us lose control of our money and hence will compel us to manage in what’s left with us thereby increasing the savings rate.

3. Make a Plan and Vow to Stick with It

Budgeting is the best to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be made.

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Nowadays, several money management apps and wallets can help you do this automatically. It’s easy and who knows, you may just end up doing what people fail to do.

At first, you may not be able to stick to your plans completely but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Rise Again Even If You Fall

Let’s be realistic. It’s not like the world will come to an end if you made one mistake. This isn’t called leniency but discipline.

If you fail to meet your budget for a month, don’t give up the entire effort just like that. Instead, start again.

Remember that flexible plans are the most realistic plans. So go forward and try to follow your financial goals as planned but if for some reason, the plan gets out of hand for you, do not give up on it just yet. This has a lot to do with your psychology rather than any material commitment.

All you have to do is to stay on the road and vow to stay on it, no matter how much you fall down.

5. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make Savings a habit rather than a goal. While it might seem to be counter intuitive to many but there are some deft ways of doing it. For example:

Always eat out (if at all) during weekdays rather than weekends. Usually weekends are expensive. Make it a habit and you would in turn be saving a great deal.

If you are travelling buff, try to travel during off season. Your outlay will be much less.

If you go out for shopping, always look out for coupons and see where can you get the best deal.

So the key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice which will be harder to sustain over a period of time.

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6. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission. And it would be rather easy to lose the grip over your discipline.

Therefore in order to stay the course, it is advisable that you keep yourself surrounded with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

7. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

So if you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

Use this journal to write down all essential points such as your short term, mid term and long term goals, your current sources of income, your regular expenses which you are aware of and any committed expenses which are of recurring nature.

When you have a written commitment on paper, you are going to feel more energised to follow the plan and stick to it. Moreover, it is going to be a lot more easier for you to follow you and track your progress.

At this point, you should be ready with your financial goals and would be doing brilliantly with savings; now it’s time to talk about the big daddy – Investments.

Making Smart Investments

Savings by themselves don’t take anyone too far. However savings when invested wisely can do wonders and we are at that stage where we will talk about making smart investments.

8. Consult a Financial Advisor

Investments doesn’t come naturally to most of us therefore rather than dabbling with it ourselves, it is wise to consult a financial advisor.

Talk to him/her about your financial goals and savings and then seek advice for the best investment instruments to achieve your goals.

9. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about them.

Just like “no one is born a criminal”, no investment instrument is bad or good. It is the application of that instrument that makes all the difference.

Do you remember we talked about bifurcating financial goals in short term and long term?

It is here where that classification will help.

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So as a general rule, for all your short term financial goals, choose an investment instrument that has debt nature for example fixed deposits, debt mutual funds etc. The reason for going for debt instruments is that chances of capital loss is less as compared to equity instruments.

10. Compounding Is the Eighth Wonder

Einstein once remarked about compounding,

Compound Interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.

So make friends with this wonder kid. And sooner you become friends with it, quicker you will reach closer to your financial goals.

Start investing early so that time is on your side to help you bear the fruits of compounding.

11. Measure, Measure, Measure

All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments; taking stock of how our investments are doing.

If there is one single step where everything (so far) can go wrong, it is at this step – Measuring the Progress.

If we don’t measure the progress timely, then we would be shooting in the dark. We wouldn’t know if our saving rate is appropriate or not; whether financial advisor is doing a decent job; whether we are moving closer to our target or not.

Do measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

The Bottom Line

This completes the list of tips for you to set financial goals and actually achieve them with not so great difficulty.

As you can see, all it requires is discipline. But guess that’s the most difficult part!

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Featured photo credit: rawpixel via unsplash.com

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