Millennials at the Helm?
Can younger people with relatively little business experience or money learn to manage a successful franchise operation?
As South Africa celebrates Youth Month in June, there is a lot of inspiration to be taken from glamorous role models at Microsoft, Google, Twitter, Facebook – which were all started by entrepreneurs younger than 35. In South Africa, the reality is that most youth would typically establish their own business only because with youth unemployment standing at 50%, they have little other option.
Most university graduates and twenty-somethings don’t have the capital for a franchise fee or opening costs. They lack the business experience, or the people and life management skills required to succeed in business. However, instead of feeling defeatist at this prospect, consider that this is the precise reason why a young person should choose franchising over starting out in business for themselves. That’s because what they do have in spades, is energy, enthusiasm, an eagerness to learn, fresh ideas, and perhaps most important, parents and relatives willing to finance their entry into a franchised business.
Youth should be investing in themselves at that age, whether it be education or life experiences, and one way to achieve all that is to gain experience in managing a franchise. With all the support available, it is a challenge well within their reach – provided they can find the finance.
Route to entry
- Mom and dad: This hardly warrants mentioning, as it will be every kid’s first option. One of the easiest ways to enter the field, if they are in the fortunate position of having parents already running a franchise, is to simply work in the family business. Once experience is gained, mom and dad may also be able to help launch their own first venture.
- A job: For many, getting into business is an alternative to getting a job. However, if entrepreneurship is in their blood it is worth considering finding a (preferably well-paying) job which can be the platform to save, acquire experience and ultimately finance a franchise.
- Start with what you have: Acquiring a franchise with limited capital certainly requires a shift in mindset. Therefore begin by examining those resources and relationships that you do have and over which you have some influence. At the outset take stock of what you have at your disposal. Consider your:
- Skills – what can you do?
- Experience – what have you done in the past?
- Knowledge – what do you know?
- Tangible resources – what do you own and what do you have access to? Go beyond what instantly comes to mind and ponder a little more deeply as to what you have at your disposal. Write down your responses to these questions.
Check out sectors which are not capital intensive. Education or live performance for instance fall into this category. Anyone with skills and insights that others wish to learn, and a passion for helping others develop could move into education.
Youth can use their recent experience in learning to set up a business that provides extra lessons to school-going children; or their sports experience to set up a coaching business; or school acting experience to become a public speaker or performer.
Think of pulling in other kids from school or university who can enhance the business, and learn to market those skills to a broader audience. Acting and debating skills learned at school can provide a basis for careers in the highly lucrative motivational speaking sector – all of which require limited upfront investment.
Search for franchises in those areas.
If you absolutely need capital
Finding finance is undoubtedly a challenge. However, there are a number of entities that are willing and able to finance youth ventures.
Here are a few establishments, which could assist you in strutting down the path to business success.
- National Youth Development Agency (NYDA) Website: nyda.gov.za
- Gro-E Youth Scheme: Gro-E Youth Scheme is run through the IDC
- The Youth Entrepreneurship Fund (YEF) Website: yef.co.za
- Umsobomvu Youth Fund
- Free Mentorship Programme: The Mara Foundation Website: mara-foundation.org
- Mentorship Programme by Application: Bizco Business Consulting Website: bizco.co.za
- Acceleration Programme: New Ventures Studio Website: newventuresstudio.co.za
- Business Partners has a R150 million Brands and Franchise Fund Website: businesspartners.co.za