Under 18 & starting a new business? Check out our handy guide!
Cryptotax Accountant’s Guide to Starting a Company when you’re under 18
With recent research showing that the average age of entrepreneurs is declining, we take a look at some of the specific issues and challenges faced by entrepreneurs aged under 18 and guide you through some of the main things to be aware of as a minor.
Starting a business at any age is a big challenge. Thinking of a good idea and then turning it into a profitable venture is not easy, but if you are one of the growing number of entrepreneurs who are aged under 18 then there are some additional challenges that may be standing between you and entrepreneurial success. For example, your age can bring barriers to setting up a business bank account, accessing credit and raising business finance.
There are also issues surrounding your legal status as a minor and the type of work that you can do, as well as balancing business with your education and the required business tasks of registering your company, understanding tax and growing your business. But despite these issues there is no reason why as a young person you can’t get started in business and make a success of it.
Bank accounts & raising finance
People aged under 18 are legally considered to be a minor and, unfortunately, this means that you can’t open a business bank account. It also means that you will be unable to borrow money or have a credit card, so if you need to raise finance for your business this has to come from an alternative source. This could be:
Getting a loan from a family member to fund your venture
Going into business jointly with an adult who is legally able to access finance
Grants or cash payments from enterprise funds, trusts or agencies
Thanks to the internet, many businesses can be set up with very little finance. If you already have a computer and an internet connection in your house it’s possible to start up an online business with less than £50 and then build it up into something bigger as you go along. A lack of finance doesn’t have to be a barrier to business success - many well-known business figures such as Sir Alan Sugar started their businesses as minors and all on a budget.
Balancing your business, education & social time
Young people aged under 16 are required by law to be in full-time education and there are also restrictions on how many hours you can work per week. 14 to 15 year olds can work for no more than 12 hours a week during school terms and 25 hours a week during school holidays (for 14 year olds) or 35 hours a week during school holidays (for 15 year olds). It is important that you find a good balance between your business, your education and things such as seeing your friends and relaxing with your family.
A young age & lack of experience doesn’t mean you can’t be successful
As a young person you might feel daunted when talking to experienced business people and you might wonder about things such as whether they will take you seriously as a minor. The good news is that many people are impressed by young entrepreneurs and see it as a good thing. As long as you conduct yourself in a professional manner there is no reason why other business people won’t take you seriously or why it should act as a barrier to success.
Don’t be afraid to ask for help
There are many organisations out there such as Young Enterprise and Youth Enterprise that can provide you with practical business advice and even funding. There is also a ton of general information available about starting a business across the internet.