6 steps to being your own boss

By Kiplinger's Personal Finance Magazine

Got that entrepreneurial spirit? You aren't alone. In fact, two out of three teenagers who completed a recent Junior Achievement "Interprise" Poll on Teens and Entrepreneurship said they hope to start their own business one day. But it takes more than a good idea and a desire to be your own boss to launch a successful venture.

Just ask Max Durovic. At 18, he increased his odds of making it with formal and thorough business planning. By taking the right steps, he built a booming business before he even graduated from college.

While a sophomore at Georgetown University, Durovic founded the inventive street-advertising company Aarrow Advertising. He began hiring 14- to 24-year-old students to carry sandwich-board sign ads for nearby retail chains and to perform trademarked tricks, spinning and tossing the signs to attract attention. The sign spinners received hourly pay with a 10-cent increase for mastering each new trick. Durovic turned the idea into a booming livelihood by crafting a complementary team with an expert mentor, meticulously writing a business plan to focus his vision, following the financial feedback and continuing to plan. By age 22, he was leading 200 employees in five cities, and revenue was growing at an average rate of 10% per month.

Early on, Durovic faced one of the biggest challenges of enterprising young adults: the credibility gap. Most entrepreneurs endure long hours, challenging management decisions and months without income, but young entrepreneurs may face larger hurdles. With minimal work experience, limited financial resources, fledgling credit histories and no start-up experience, they often have difficulty convincing people to take their business ideas seriously. Startups are already risky -- inexperience adds more risk. In fact, one in three new businesses fails by their second year.

How can you minimize your risks? Use our checklist to get ready. We'll help you carefully weigh whether to trade valuable years of traditional work experience for your new business dream -- and then how to pull it off when you're ready.

Get some experience

If you've never clocked a day of work in your life, you might consider taking a job before striking out on your own -- even if the thought of doing time in a cubicle makes you shudder. Work experience in the field you want to break into may be the most productive use of your energy.

Think of it as a paid research position. In a couple of years, you can give your business a go. By then, you'll have learned the ins and outs of the real world and reduced the risk of total inexperience.

"Financial literacy is the language of owning a business," says Irwin Rudick, the vice president of the San Diego chapter of SCORE, a nonprofit firm that gives advice and training to small business owners. So, if you're still in school, take classes in business, management or entrepreneurship. If you've already graduated, sign up for night classes. Durovic, an international-business and marketing major, says that his formal business education has been integral to his success. "Nothing brings the classes to life like running your own business," he says.

Build a winning team

Bring on people who complement your skills and fill in the gaps. Mary Beth Metrey, a 24-year-old Spanish-literature master's student at Georgetown University, had always dreamed of opening a boutique, but her short stint in retail didn't provide all of the details of running a shop.

But Heather White, her hometown friend from Wyckoff, N.J., had studied fashion design and merchandizing. Naturally, Metrey asked White to be her business partner when she opened a shop in Georgetown.

Fight inexperience with advice

Universities and alumni networks are great sources for mentors. Durovic found business-plan help in a Georgetown entrepreneurship class and consulted with his former professor on business decisions. Ryan Comfort, a grad of the University of Pennsylvania's Wharton School and founder of the online art sales business Comfort2020.com also found cost-cutting connections through his school's alumni network.

The Internet is another great place to get free advice. SCORE, for example, boasts a mentor network of more than 10,000 mostly retired entrepreneurs nationwide. You can search by related background and meet the mentor locally or by email. You can also get feedback online from 12,000 peer entrepreneurs at YoungEntrepreneur.com.

And seek out local organizations. At 27, New Yorker Leah Alani founded SophieSays.com, an online boutique for stationery and gifts for special events. She gained the confidence and the practical skills to accelerate the start-up date after taking a four-week class with Ladies Who Launch, which has local chapters in metropolitan areas.

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