Young entrepreneurs are again taking the startup plunge. And why not? It took only 21 months for two twentysomethings to launch and sell YouTube for $1.65 billion.
Still, before the big payoff, many start-ups struggle to find enough funds or clients to get going.
"Money is one of my biggest concerns, says Josh Smith, a 20-year-old junior at the University of Maryland in College Park who recently created his own record label called Indie Street Records. Although he plans to put $16,000 of his own savings into launching the company, he says, "the most difficult challenge is convincing people that you're savvy enough to do something even at a young age."
For all the YouTubes, thousands of young entrepreneurs like Mr. Smith face the daily frustration of having a business idea but the inability to get a foot in the door with potential investors or decision makers that can turn a business idea into a reality. Here are five strategies that may help you increase your odds of success when pitching a business idea to a new client or investor.
1. Be persistent
Laura Darrah, 28, co-founder of Treesje, a handbag and accessory company in Los Angeles, says persistence has been the key to her company's success.
She and her partner, Sheila Nazarian, each contributed $1,000 to get the venture off the ground despite a lack of experience in running a business.
They became regulars at fashion tradeshows to find buyers for their travel-inspired designs. "We pounded the pavement to get our name and products out there. I had to hone my negotiation skills very quickly," says Ms. Darrah, describing her first year in business.
Treesje purses and accessories can be found in upscale chains like Nordstrom and Bloomingdales and in more than 400 retailers world-wide, and Ms. Darrah says the company had gross sales of $1.25 million in 2006.
"Persistence does work," says Ms. Darrah. "We wanted to be in Bloomingdales since the very beginning, but got the brush off for the first two years of business. They finally got back with us last year, and now our bags are in Bloomingdales."
2. Partner up
For young entrepreneurs with no track record of success, the right connection can mean the difference between being in business or not. Unfortunately, most young entrepreneurs lack these all-important relationships. It can help to find a partner that does.
Prior to starting her company, Ms. Darrah had never worked in the fashion industry while Ms. Nazarian had. They met at a friend's wedding where they discovered a common love of fashion and a desire to start their own business. Ms. Darrah had just received a master's degree in business administration from San Diego State University, where she gained business savvy, and Ms. Nazarian had been building up her contacts in the fashion industry as a buyer for an apparel company in Los Angeles. Eager to get started, the two met a week after the wedding, and Treesje was born. The company has benefited from their distinct sets of skills and interests.
"I'm more behind the scenes, while Sheila has the sales tenacity," Ms. Darrah says. "We've moved twice as fast with two people involved, she says. Together, "we have double the amount of connections."
3. Hire the connections
If a partner isn't readily available, another option is to hire a professional that does. A business consultant, marketing expert or publicist can bring a Rolodex of contacts that a young entrepreneur might not have.
Although it cost the Treesje partners $1,000 a month, Ms. Darrah says hiring a publicist turned out to be one of the best decisions the company initially made. Treesje's publicist was able to get a one of their handbags into the hands of Sarah Jessica Parker through a contact who worked for "Sex and the City." A picture of Ms. Parker carrying their handbag was later published in US Weekly magazine.
"Relationships matter, especially in our industry where celebrities dictate what is hip and in fashion," says Ms. Darrah. "A little luck isn't always a bad thing either."
4. Stand out from the crowd
"I think the main problem was getting people to take me seriously since I was so young when I started," says Tina Wells, who started Buzz Marketing Group, a youth-focused marketing-services company, at the age of 16.
To get around this potential roadblock, Ms. Wells, Buzz's chief executive officer, says she tried to focus potential clients' attention on her work, rather than her age.
"Be willing to take risks in your work," she says. "For instance, Buzz Marketing published a report that said that college students did not think downloading was illegal, and they were not going to stop. This got a lot of attention for us."
She says Buzz has been successful because "we strive to produce the most interesting recommendations and analysis for our clients. "
5. Launch it anyway
Mr. Smith has taken the right step in starting the record label even without a financial backer, according to Carlos Barrionuevo, director of business development at NPR (National Public Radio) and co-founder of Blackvoices.com, a media company targeted to African-Americans.
"If you're young and have a great idea for a company or product, you probably won't get far in pitching an idea that is just on paper to a large company or investor," he says. "Set a vision for what it could be, and do as much as you can on your own. Demonstrate some amount of success. Even if it's in a small way, others can see where it's going."
But he cautions not to expect success overnight. For most start-ups, success takes patience.
"Don't expect it all at once," he says. "Sometimes it can take five-to-six years before something takes off."
-- Ms. Garton is a free-lance writer in Washington, D.C. She's the founder of UniversityChic.com, an online publication for university women.
Email your comments to sjeditor@dowjones.com.
Work-at-home is where the CEO is
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