With research showing that the average age of entrepreneurs is declining, there are many issues and challenges faced by entrepreneurs aged under 18 that minors should be aware of.
Starting a business at any age can be challenging. Coming up with a good idea and making it into a profitable business is not easy, but for a minor considering it, there are some additional challenges that may stand between them and success.
Firstly, their age can bring barriers to setting up a business bank account, raising business finance and accessing credit. People aged under 18 are legally considered to be a minor and therefore cannot open a business bank account. It also means they will be unable to borrow money or have a credit card, so if they need to raise finance for their business this needs to come from an alternative source, such as:
- Getting a loan from a family member
- Going into business jointly with an adult who is legally able to access funds
- Grants or cash payments from enterprise funds, trusts or agencies
However, thanks to the internet, many businesses can be set up with very little financial input. All you need is a computer and the internet to start up an online business. You can then build it up into something bigger as you go along.
There are also issues surrounding the legal status of a minor and the type of work that can be done, as well as balancing business with education. Young people under the age of 16 are, of course, required by law to be in full time education. There are also restrictions on how many hours that can be worked per week. 14 to 15 year olds can work for no more than 12 hours a week during school terms. A 14 year old must work no more than 25 hours per week during school holidays; for a 15 year old this number rises to 35 hours a week. It is essential that a balance is struck between business, education and social interaction.
Trainee Solicitor, Andrew Guilfoyle comments “Another challenge is that, being so young, talking to experienced business people may be intimidating and there is a perception that you will not be taken seriously. Fortunately, many people are impressed by young entrepreneurs and view them very positively. As long as you conduct yourself professionally, there is no reason why other business people will not take you seriously.”
Of course, like any business person, there are also the usual complications of registering the company, understanding tax and growing the business. There are many organisations, such as The Prince’s Trust and Young Enterprise, which provide practical business advice and even funding. Despite all of these challenges, many young people get started in business, learn valuable lessons and make themselves a success. Good luck to them!
Our Employment Team, based in Christchurch, also cover Bournemouth, Poole and the New Forest. If you have any questions, you only have to ask us at Frettens. Please call 01202 499255 and Andrew or his team, will be happy to chat about your situation and your particular requirements.