Young entrepreneurs: this generation - Page 2

Page 2

And if you type "young entrepreneurs" into a search for groups on Facebook, you get more results than the 500-capped search result can count.

Supporting the trend are foundations aimed at helping young entrepreneurs such as The Bright Ideas Trust and thePrince's Youth Business International, networks such aswww.youngbusiness.net, and countless regional schemes and foundations that are springing up at the time.

The challenges

Just because it's becoming more popular and more encouraged, entrepreneurship is by no means a walk in the park for young people. As well as the difficulties in setting up that all business-owners face, they have to deal with numerous other challenges because of their age.

Money

Basically I had to convince the bank manager to give me an overdraft facility on the basis of a verbal agreement I had with my buyer at the supermarket

You can legally become a company director from the age of 14, providing at least one other director of your business is over 18. From the age of 16 you can become the sole director of your company, with no adult necessary. But you can only get an overdraft facility from any bank once you're 18.

"It was just a nightmare," says Phil Batty, who set up his youth-to-youth communication agency Force-7 when he was 16. He started his business as part of the YE Company Programme. "We raised share capital as part of the programme, of about £400, but that was for a specific project. So it's just been getting some work, getting paid for it and using that profit to grow the business."

Batty explains that you get a bank account as a part of the programme, but that to continue banking he had to enlist some older help. "One of my friends was a year older, so we ran the company in her name for five months, then I bought into that company, so we ran it as a partnership, then she had to sell her shares to me - so we were on about our fourth company by that point!

"It's silly. It's encouraged for you to start at a young age but you have to do everything out of a cash tin or through someone else."

Of course, there are exceptions to the rules. Louis Barnett set up chocolate-company Chokolit aged 13, and struggled to find way of financially accommodating supply orders to Sainsbury's and Waitrose amounting to 60-70,000 products. "Basically I had to convince the bank manager to give me an overdraft facility on the basis of a verbal agreement I had with my buyer at the supermarket."

He did, miraculously, manage it - but he's since had to switch banks three times in the fours year since starting up. "I'm now sitting in an alright position, because I've got three banks on the go at once. They all fight for your business, but that's about the only way you can deal with them."

Adam Hildreth launched Dubit Limited, a website and marketing agency for teenagers, when he was 14, and within two years it was worth well over £1m. He got round initial funding problems by using investors.

"We put together the business plan, went out there and convinced a lot of people to invest in the company," he explains. "We wanted a cash investment from them and to use their expertise in that area - web design, marketing."

Money isn't just a problem for the under-18s. Most adult young entrepreneurs are not exactly rolling in it. Add the burden of student loan and other debt racked up at university for many, which comes to £17,500 for the average uni-leaver, and the chances of finding start-up capital shrink even further.