If you are passionate about business and want to experience, firsthand, what it’s like to be an entrepreneur, then you don’t need as long as you might think. You might think that you are ‘too young’ to start your own business, but entrepreneurship is a mindset more than anything else.
Starting a business as a teenager can be an exciting and rewarding endeavor. Whether you’re planning on becoming an entrepreneur, entering the corporate world, looking to add value to a non-profit, or just want to build a strong profile for your college applications, you can never go wrong with trying your hand at a business.
And if the possibility sounds intriguing but daunting, we’ve got you covered. In this guide, we'll walk you through the process of launching your own business with eight easy steps.
Why Start a Business as a Teenager?
Before starting out, make sure that you are clear on what you want to achieve from this experience. It’ll drive a lot of your decisions! Do you want to build something that scales and is used by everyone? Or do you want to build a small, but profitable business? The elements of ‘starting’ the business might be similar but your approach and decisions will be very different.
But why start a business while you are still in school?
1. You will develop valuable skills - As an entrepreneur in any field, you will be forced to don multiple hats, solve challenges in every area of your work, and think on your feet. The skills you can expect to learn running your own business include but are not at all limited to:
2. You will gain practical business experience - There is no shortage of theoretical concepts in business operations and management. But as Mike Tyson famously said, “Everyone has a plan until they get punched in the mouth”. Running your own business will bring you face-to-face with the practical challenges of implementing theory in day-to-day work. It is one thing to have an advertising plan, and another to have to modify it day by day or even hour by hour when you’re burning limited money and not getting enough eyeballs.
3. You can develop a network - Depending on what kind of business you choose to set up, it’s more than likely you will interact with a range of people, whether they be customers, suppliers, partners, or peers. Such networks, especially if maintained and nurtured over time, prove to be invaluable especially if you intend to pursue entrepreneurship long term.
4. You will understand money- Possibly the biggest and most important lesson that every business owner learns is how to manage money. You will inevitably be strapped for cash, no matter how well-funded your venture may be, and making the most out of every penny is something you will need to do in every department of your firm. Money management is a skill that can only be learnt through experience, and entrepreneurship is the best experience to teach it.
Do teenagers start businesses that become successful?
Yes! Here are some case studies.
Me & the Bees is a business that sells lemonade, which uses flaxseed and local honey as a sweetener. The lemonade is available in various retailers including Whole Foods and Wegmans. A portion of the profits from the business is donated to organizations that are working towards saving honey bees from extinction. Mikaila Ulmer started her business at the age of 11 with a mission not only to quench thirst but also to contribute towards a greater cause - saving the honeybees. Inspired by her parents' advice to "dream big" and believing that she can achieve anything she wants, Mikaila created a product that is both delicious and contributes to environmental conservation. Mikaila's journey is a great blend of entrepreneurship and activism, showcasing that business success and social responsibility can go hand in hand.
Nannies by Noa operates as a full-service childcare agency in New York City and the Hamptons. The agency facilitates the matching of nannies with families in need of caregiving services. It ensures a thorough vetting process for candidates, including background checks, and emphasizes premium customer service. Noa Mintz embarked on her entrepreneurial journey at a very young age, initially running art classes for kids and later establishing a children’s party planning business. As she matured, she identified a gap in the childcare sector and founded Nannies by Noa. Balancing her high school studies and business, she hired a CEO with 25 years of industry experience to manage the day-to-day operations. The business has grown significantly, with word-of-mouth being the primary source of referrals. Noa envisions herself continuing in a business that solves problems and offers solutions, possibly growing Nannies by Noa, which is already four years old.
Now that you know it’s totally possible, let’s get to the ‘how’!
How to Start a Business - 8 Steps to Follow
1. Research your chosen market - Instead of starting with a preset idea of what you want to do, we recommend that first you observe and research what people in your chosen market, whether physical or digital, actually need and are looking for. This could be something as simple as an app to track and encourage healthy habits, or as complex as more affordable education. Identify the pain points first, because it’s likely that people will be willing to pay to solve them. Being an entrepreneur is about having an open mind and eye for opportunities. If you find a relevant customer 'pain point’ you have a product to sell!
If you have a preset idea, don’t be too quick to throw it away, we’d say use it as a hypothesis and test whether it is ‘really’ relevant. An idea might sound great on paper and then fail to get traction from the market for a number of reasons. Testing your hypothesis through market research is a great way of seeing big gaps upfront. If you want to work on a tech project that you may want to expand upon as a standalone research project, you can consider research mentorship programs in AI such as Veritas AI.
2. Ideate - Why does this seemingly obvious step deserve its own section? Because it can be easy to get carried away by a good idea without letting it marinade and evolve through an ideation process. This initial work will make sure your efforts down the line aren’t wasted. Ideation can take a few different forms. Of course, you can pick a safe option like selling designed apparel or content streaming, or pick something novel and innovative. Here are two sample tools that can make the ideation process easier:
Mind Map - Mind mapping is a visual technique that helps you establish connections between the issue you're trying to address and potential solutions. You start by placing your problem statement or a key keyword related to the problem in the center of a sheet of paper or whiteboard. Then, in the surrounding area, note down any solutions or ideas you come up with and link them to the central theme using lines. Next, create another layer where you outline how you intend to implement those proposed solutions, connecting them back to the previous layer. This method can assist you in organizing your thoughts and finding innovative solutions to problems. Mindmup is a good website to play around with mind maps.
Storyboarding - Storyboarding enables you to create a visual narrative that illustrates your concepts and the potential outcomes they might yield, giving you insight into what's effective and where improvements are needed. Visualize your customer's journey throughout the process, encompassing the effects of your proposed solutions. Think of a storyboard as a comic strip, employing squares filled with text or images to depict each process step and connect them using arrows. As you scrutinize each step, consider the emotions and interactions you intend for your users, and then identify the solutions or ideas required to achieve those objectives. You can try storyboarding your ideas on Miro or FigJam on Figma.
3. Find a Mentor - While this step is optional from the point of view of actually starting up, however, from the point of getting guidance and avoiding pitfalls it is crucial. If you’re able to find a teacher, a business owner, or someone in your family whom you can bounce ideas off of or guidance from experienced entrepreneurs or business professionals. A mentor can provide valuable insights, advice, and support as you navigate the challenges of starting and running a business. If you are considering pursuing research in business strategy, entrepreneurship, or strategy under the guidance of a mentor, you can apply to programs like the Lumiere Research Scholar Program.
4. Develop a Business Plan - Now that you’ve researched the market and have an idea of what people want, and have bounced your ideas off with your mentor and shortlisted, the next step is to create a comprehensive business plan outlining your goals, strategies, and especially financial projections. This plan should be a blend of your step-by-step idea of progress, and should also have some elements of the strategy that you intend to follow with your business. While no plan fully survives contact with the market, it will still serve as an important map for your progress. You should aim to include at least the following:
Competitive Analysis - An examination of your competitors, their strengths and weaknesses, and how your business will differentiate itself. An easy way to do this is a SWOT analysis.
Marketing and Sales Strategy - A plan for promoting and selling your products or services, including pricing, distribution, and advertising strategies. This can be as simple as having an early bird sign-up discount, social media posts, or a promoted video. Shopify and Hootsuite both have excellent blogs to get you started on options for your marketing strategy. Just make sure you are clear on how much you can spend, and how much money you intend to make for your efforts. And for that, you need the next thing.
Financial Projections - This typically refers to financial statements, including income statements, balance sheets, and cash flow statements, along with revenue forecasts, expenses, and break-even analysis. Now if all that sounds complicated (and it can be), just work on it like this: how many products (or subscriptions) do you plan on selling, for what price, factor in your expenses, and see what it will take to cover your expenses and how soon. You don’t even need a specialized tool for this, Google Sheets or Microsoft Excel will suit your purposes just fine.
Operations Plan - Details on how your business will operate, including processes, equipment, suppliers, and location (if applicable). While this is more important for product sales, it’s still important for you to be clear on where bottlenecks can occur, what you need to monitor daily, and what can go a week without your direction.
Risk Analysis - Identification and assessment of potential risks and contingency plans to mitigate them. If you’ve gotten this far, think of it as a plan for when things go belly up. While you may not need it, having one will be an enormous help if you do.
Milestones and Timelines - A timeline outlining major milestones and goals for your business over the next few weeks, months, and years. This is both to keep track, keep you on vision, and also to celebrate your achievements.
5. Register Your Business - Choose a legal structure for your business (e.g., sole proprietorship, LLC) and register it with the appropriate authorities. While this step is essential for ensuring your business operates legally, it can also be incredibly beneficial for you. Registered businesses have access to low-cost loans and tax credits. This means that you can mitigate a lot of the costs you will incur in running your business. While business registration and taxation is a lot of paperwork, it will teach you the practical skill of navigating the government taxation process while providing you with monetary benefits for your business. If you are under 18, you cannot register your own business in the US (and most parts of the world, for that matter), but your parents can register it for you!
6. Secure Funding - This isn’t strictly necessary for all types of businesses. For instance, a lot of tech businesses are built on close to zero investment (except the time you put into product development), whereas some other businesses need an upfront capital investment. Determine how you'll finance your business. This doesn’t mean that you need to go to venture capitalist funds. Some simpler options include using your savings, seeking investment from family and friends, or applying for grants and small business loans. But you will need money to make money.
7. Sell, then Brand - One mistake a lot of people and businesses make is spending their time, money, and effort on branding rather than the product or service they offer. Excellence speaks for itself. If you ship a good product or service, continuously engage with your users, take feedback, and make your offering better, you’ll build a far better and more loyal base even though the process is less glamorous. More importantly, your best branding will be your customers, who will freely recommend you to their circle.
8. Monitor and Adapt - The market never stays still, and neither should you. An entrepreneur is never on holiday (we mean, their minds are never on holiday!). Although, we don’t recommend burning yourself out. Monitor your chosen market at regular intervals for new trends, opportunities, feedback, and competition. Similarly, keep track of your marketing spend, and make adjustments where necessary. The biggest skill an entrepreneur can learn is adaptability, and you’ll only learn by doing.
A Few Ideas to Get You Started
If you’re rearing to go, here are some business ideas to get you started:
Tutoring - A tried and true classic, and probably the most accessible option. If you’re good at a subject (or more than one) or for example music, then you can start a simple but profitable tutoring service in your local community or even online. There is no worry about supply, you are already aware of what you can and cannot teach, and you can focus all your efforts on creating solid lesson plans, reaching out to potential customers, and soliciting feedback and vouches from happy customers to build your personal brand.
Content Creation services - This is a catch-all term for what are actually multiple options you could pursue. Whether you’re a pro gamer and see a future for yourself in professional video game streaming, or you’re a brilliant videographer itching to make the most creative TikToks, content creation is a thriving and profitable field to step into. It’s also highly competitive with millions if not billions vying for limited attention spans, so we highly recommend you spend a lot of your time ideating and identifying an intriguing niche that can draw audiences.
Apparel design & sale - Another classic option that has only become easier with the power of the internet. If you’re even slightly artistically inclined, you can use a host of image editing tools and software like Canva or Visme to make jaw-dropping designs. Then, you need to find an apparel manufacturer willing to print your designs at a competitive rate, and start selling! The bigger challenge, surprisingly, will not be the designs or finding a manufacturer, but the logistics of storage, shipping, delivery, and managing your Amazon or Shopify store if you ship online. We recommend you spend a lot of time working on an operations plan and find a mentor with experience in selling online if you choose this option.
Expertise-based services - Again, this is a catch-all term for a host of different options. Depending on your talents, you could become a professional photographer, videographer, graphic designer, website designer, etc. Essentially, you have to identify your skill and monetize it.
Handmade product sale - This is a good niche for people who like and are good at making things themselves. There is a lot of demand for products like handmade bath bombs, gift cards, or chocolates, for example. If this sounds like you, then this can be a very lucrative idea for you to invest in. The best part is that the product you offer can be uniquely “you”, making it less susceptible to competition or pricing. The challenge is that again, you’ll need to have your operations sorted while also managing your “supply” yourself. If you want to experience this product lifecycle, but don’t have a concrete idea that you can work on, you can consider work-learn internships like Ladder Internships! These internships offer an immersive experience with companies across various sectors, and can prove to be a beneficial starting point for future research!
Starting a business as a teenager may come with its challenges, but the experience and skills you gain will be invaluable. With determination, creativity, and a solid plan, you can turn your entrepreneurial dreams into reality. So, why wait? Take the first step toward building your own business today!
If you’re looking for the opportunity to do in-depth research in business and strategy, you could also consider applying to one of the Lumiere Research Scholar Programs, selective online high school programs for students I founded with researchers at Harvard and Oxford. Last year, we had over 4000 students apply for 500 spots in the program! You can find the application form here.
Stephen is one of the founders of Lumiere and a Harvard College graduate. He founded Lumiere as a PhD student at Harvard Business School. Lumiere is a selective research program where students work 1-1 with a research mentor to develop an independent research paper.
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