Working as a derivatives trader on Wall Street right after graduating college in 2005, Maia Josebachvili missed the outdoor activities of her undergraduate years at Dartmouth College. So the then-21-year-old started organizing weekend trips with friends by email to go whitewater rafting, hiking or camping. Soon, hundreds of friends-of-friends-of-friends were attending the trips she planned.
In 2008, Ms. Josebachvili decided to turn her weekend hobby into a full-time gig by launching her own company, Urban Escapes, which plans outdoor trips for young professionals. Last year, it was acquired by online coupon site LivingSocial.
Starting a business is an enticing idea for many young professionals. After all, you’ll be able to work at something you’re passionate about, exercise your creativity and be your own boss. And your twenties are a good time to take career risks since younger workers typically don’t have commitments like a family or a mortgage.
But success like Ms. Josebachvili’s isn’t the norm, experts say. It’s often a hard climb, and many small businesses fail — especially if a young entrepreneur lacks a business plan that suits his or her limited expertise and isn’t willing to sacrifice time and money.
With limited business expertise and knowledge, twentysomething entrepreneurs should capitalize on what they do know. For instance, you could turn a hobby into a business, like Ms. Josebachvili, or invent something you’ve seen a need for.
Web or mobile-application businesses are good ideas for young people because they don’t require much capital to start, says Gregg Fairbrothers, an adjunct professor at Dartmouth’s Tuck School of Business in Hanover, N.H., and director of the Dartmouth Entrepreneurial Network. So are restaurants and other service businesses because they’re labor intensive but don’t require much experience.
And when it comes to picking a market, it may be best to go with the demographic you know best — your own. When Austin Lavin was 23, he started Myfirstpaycheck.com, a teen-job-board website, with his teen sister. The site thrived in part because the two entrepreneurs knew, from their own experiences, what would attract their target customers: local job listings, combined with a r[eacute]sum[eacute]-building tool and employment advice.
Since younger entrepreneurs typically don’t have a family to care and provide for, they can devote more time to getting a business off the ground and are often more willing to take a salary cut than older entrepreneurs. Ms. Josebachvili estimates she made 2% of her former salary and was working three times as many hours when launching Urban Escapes.
But with school loans and other expenses and limited savings, many younger entrepreneurs can’t afford to focus on a venture full time. You can use that to your advantage, however, by finding a job in the industry in which you want to launch your business. Even something that may seem like grunt work can give you a better understanding of how the industry works. And you’ll meet people who may be able to help you later on.
Spencer Rubin, who wanted to run his own restaurant, took a job with a restaurant-development firm after graduating from college in 2008. He met his future business partners there and learned what it takes to build a restaurant that attracts customers and turns a profit. In April, Mr. Rubin, 25, opened up Melt Shop, a grilled-cheese take-out restaurant in Manhattan.
