What do today’s teenagers think about entrepreneurship as a career option? And how accurate are teens’ impressions of what it really takes to succeed as a small business owner? Junior Achievement (JA) and Ernst & Young LLP (EY) recently conducted a pair of surveys to find out.
One of the surveys polled teenagers, and the other surveyed successful business owners. On average, the entrepreneurs in the survey have each started two businesses; almost one-fourth (23%) have started three or more businesses.
Here’s what teenagers get right—and wrong—about entrepreneurship:
First of all, teenagers are very interested in entrepreneurship: 41% of teens say they would be more interested in starting a business than working for someone else as a career option. In addition, 61% of teenage girls say they have considered starting a business, as do 54% of teen boys. (Overall, 6% of teenage boys in the survey and 4% of teenage girls have already started a business.)
What’s the holdup?
What’s holding teenagers back? There are several key factors keeping teens in the survey from starting a business:
- Lack of know-how—69% of teens say they have a business idea, but aren’t sure how to start the process.
- Fear—67% of teens say “fear of failure” is their biggest obstacle to starting a business.
- Lack of capital—57% believe obtaining the necessary capital is the biggest obstacle for entrepreneurs and 50% cite personal finance issues. (Successful entrepreneurs agreed that lack of capital is the top challenge small business owners face.)
Teen perception vs. reality
How accurate are these teenagers’ views of entrepreneurial challenges?
Teenagers in the survey are not alone in being worried about failure. In fact, 65% of entrepreneurs said “fear of failure” was their number-one concern when they started their businesses. (Apparently, they overcame it: 92% say their businesses are profitable.)
Starting a business in the teenage years is still pretty rare. Just 13% of the adult entrepreneurs surveyed had launched a business at age 18 or younger. On average, entrepreneurs started their businesses at age 28.
Where do entrepreneurs turn for help? The majority of teens (38%) say they would ask their parents for business advice. Other resources include reading books by business icons, asking friends for advice, or talking to a former employer.
As for successful entrepreneurs, they used very different sources of advice than the teens envisioned. Some 36% relied on current or former colleagues, and 32 percent say they were mentored by another entrepreneur. In addition, 20% got help from a business coach and 15% talked to a non-entrepreneurial mentor.
While 28% of successful business owners say they got advice from management or entrepreneurship courses, they have more faith than teenagers do in the “school of hard knocks.” A whopping 78% of entrepreneurs say work experience is more valuable than a college degree when it comes to starting a business. Just 53% of teens feel the same way.
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Characteristics of successful entrepreneurs
What does it take to become a successful entrepreneur? According to the teenagers:
- Creativity—47%
- Patience—33%
- Persistence—32%
- Productivity—28%
- Not afraid to take risks—27%
According to the entrepreneurs:
- Motivation—75%
- Passion—66%
- Flexibility—61%
- Not afraid of risk—55%
- Resilience—48%
- Being well-connected—43%
Reality check
Based on teenagers’ interest in entrepreneurship and their lack of resources for learning more, JA and EY worked together to create The JA Launch Lesson, an hour-long educational experience about entrepreneurs. Nationwide, entrepreneurs and educators delivered the program in classrooms and after-school facilities throughout National Entrepreneurship Month in November. Last year, JA Launch Lesson reached almost 80,000 high school students.