Most college grads open to starting their own business, poll finds
Seven in ten young adult job seekers claim that being their own boss is more valuable than the job security of working for someone else, according to American Institute of CPAs research.
The MAVY Poll, taken on behalf of the AICPA, also found that 53 percent of recent college graduates said that they are likely to start their own business in the future. Pollees were millennials who have either graduated from college in the last 24 months or will graduate in the next 12 months and are currently looking for employment — referred to in the poll as “young adult job seekers.”
“It’s not surprising that the generation currently entering the labor market is looking beyond the traditional approach of rising through the ranks in a well-defined career path,” said Gregory Anton, chairman of the AICPA’s National CPA Financial Literacy Commission, in a statement. “Developments in technology and the internet have made it easier than ever to start a business. However, they have not necessarily made it easier to succeed.”
The AICPA’s National CPA Financial Literacy Commission offers the following tips for starting one's own business:
Start with a solid financial foundation. “The stronger of a financial foundation you build early in your career, the more options you’ll have in the future," stated Gregory Anton, chairman of the AICPA’s National CPA Financial Literacy Commission. "Paying off your student loan debt, getting a head start on saving for retirement and having an emergency fund affords entrepreneurs a degree of flexibility that they wouldn’t otherwise have.”
Ask yourself the tough questions. “Being your own boss means looking only to yourself for the income you’ll need to meet your obligations and save for your goals," stated Neal Stern, CPA member of the AICPA National CPA Financial Literacy Commission. "This means asking yourself some tough questions. Do you have enough set aside to cover your expenses during a potentially slow start-up period that new businesses often face? Do you have a ‘Plan B’ in the event that your expectations aren’t realized within a reasonable time frame? Address these scenarios proactively and have a plan in place.”
Prepare for all the costs involved. “Before going out on your own professionally, it is important to compare your current budget with your forecasted budget," stated Michael Eisenberg, CPA/PFS member of the AICPA National CPA Financial Literacy Commission. "Know what you are currently getting versus what you may or may not have available if you start your own business. For example, if your current employer provides healthcare, retirement benefits and pays for out of pocket expenses-- you will now need to factor those expenses into what it is going to cost you to be on your own. These expenses can quickly add up which is why talking to a CPAabout the costs involved in running your own business is critical.”
Keep finances organized and build an emergency fund. “Maintain a bill-paying checking account where all your fixed monthly bills with a due date and a consistent amount are paid," stated Kelley Long, CPA/PFS member of the AICPA Consumer Financial Education Advocates. "Make sure that account always has at least two months’ worth of bill payment money in it, ideally three-plus, and set up as many as you can for auto-pay on their due date. This not only helps eliminate late fees, but it's an easier way to quickly see how much is ‘leftover’ to reinvest in your business. It can be tempting when you get a big check to take care of that month's bills then spend the rest on wants, but until you can consistently keep three-plus months of expenses in that account, you have to resist the wants. This will give your business the chance it needs.”
Take advantage of free tools and resources. The AICPA’s #CPApowered website provides free tools designed to help small businesses and business owners succeed. The AICPA’s 360 Degrees of Financial Literacy website also features free resources.