The job market for young people is pretty dire at the moment. Graduates are struggling to find meaningful employment. Working for free for months on end has now become a standard requirement for many entry level jobs. For those already saddled with student debts this is often simply not an option. For many young people these are fairly desperate times.
People from all over the political spectrum are coming up with the same solution. Young people should not invest their energy in getting a traditional corporate job. They should start their own business and create their own job instead. People on the political right see this as an exciting new era of individual capitalism. People on the left tend to see it as the only viable option and as a way of building new communities.
At the same time that the political debate is agreeing on the need for young people to start their own businesses they are being incentivised in this direction more than ever. The Princes Trust have been funding businesses for young people for years. They have now been joined by prizes sponsored by Shell, initiatives from Virgin and a range of government loans.
So while there is increasing consensus that young people should start businesses, and increasing funding if they want to do it, should they?
3 reasons why young people should not start a business
- You are likely to fail. Even on conservative estimates 30-40% of start-ups are unsuccessful, over 50% of companies don’t make it past 5 years.
- You probably already have thousands of pounds of debt to repay. Can you really afford to take on more, especially if you fail?
- If you do fail, and need to get a job, you will not have the relevant experience and internships with blue-chip companies that box ticking HR drones will be looking for. You could end up in a worse place than where you started.
If you have come out of school or university and there are no jobs to be had then starting your own business may be worth investigating. With the various competitions and loans currently available you are even likely to be able to raise some funding. But if you are going to go down this route than you need to do so with your eyes open and be aware of the risks.