24 Concepts Every Young Person Should Know About Business

1. The Importance of Mental and Physical Health
This means eating right, getting enough sleep,
exercise, building strong ties with friends, family,
and community, and, as much as possible, to
minimize stress! The most important relationship
you will have in your life is with yourself, so treat
yourself well to make life worth living.
2. The Joy of Business
Business is fun. Entrepreneurs coordinate
resources — land, labor, capital, and ideas — and
through the craft of entrepreneurship organize
them in such a way as to provide a product or
service to the public at a profit. If being in
business is not enjoyable, this is the wrong
profession for you.
3. Opportunity Recognition
There are two ways to find opportunities: the
external method, where you see opportunities
where others see obstacles and problems, and
the internal method. To tap into this, make a list
of your hobbies, interests, and skills in one
column, and business opportunities they could
generate in another. Whenever you encounter a
problem, think of how it could be solved.
4. The Economics of One Unit
This is the cornerstone of a business plan. Many
young people dream of how they will make
millions. Instead, think of how you will develop
and sell one product or one hour of service and
make a profit; everything will build from that An
economics of one unit will have three numbers:
the price of one unit, the cost of goods sold
(which is subtracted from the price, leaving the
“contribution margin” — or gross profit). This
number is key, as it will be added to the fixed
costs per unit. The resulting number will be your
profit (before taxes).
5. The Laws of Supply and Demand
The law of supply and demand is the most
important economic concept of all! Discovered by
Alfred Marshall, a Cambridge University don, in
1890, the internal method: make a list of your
hobbies interest and skills in one column, and in
the other list all the business opportunities that
come from the list.
The laws of supply and demand interact to
determine prices, which communicate information
to entrepreneurs and consumers about the best
way to allocate resources.
6. Vision, Mission, Strategy, and Tactics
Find a vision of the world you want to create.
Develop a clear mission for your business. Get
your economics of one unit accurate and
simple.Write down your strategic goals making
them measurable with numbers and a timeline.
Your strategy can be presenting a product at a
lower cost than your competitor, having a better
focus on the consumer market, or differentiating it
in the marketplace. Your tactics will use your
resources to achieve your strategic goals.
7. Don’t Compete, Create a Competitive
Advantage
How will you compete? What will be your
business edge? How can you create a winning
business model with an advantage? Like the
Grateful Dead, the secret is to find a niche where
you can be not necessarily the best but the only.
Find out what everyone else is doing and then do
something different. Your competitive advantage
can be based on a unique skill, intellectual
advantage, or by selling at an unusual time or
location. The alternative to uniqueness is to be
ordinary, and sell the same product at the same
price as everyone else, making minimal profits if
any at all.
8. Wealth Creation, Risk, and Uncertainty
Most wealth is created through a business
opportunity combined with ownership. In an
entrepreneurial endeavor, wealth is created by
building a business that has a profit and can be
sold for a multiple of earnings. Both mental and
monetary wealth is the end result of a successful
entrepreneurial career. Being an entrepreneur
without ownership can be a nightmare-other
people make the profit on your insights. The
sooner an individual understands the difference
between salary and profit, the better. Ownership
of future profits can be sold for a multiple of
earnings. Salaries and wages are compensation
for work in the present, and hence are worth less
than profits — which are projected into the future.
All investments take place in uncertain world with
risk. The investment of resources to create a
business needs to be wisely balanced against the
risk involved.
9. Marketing. Putting Yourself in the Customer’s
Shoes
If you listen to your customers and ask honest
questions, they will tell you they need and want.
People are fascinating, and you can learn so
much about their problems if you put yourself into
their shoes by asking the right questions and then
engage in “active listening.” Out of this will come
business insights that can help you find your
market niche. Be sure to name your business
simply and accurately. Always be building your
brand through excellent products, customer
service, and good communications. Marketing is
the process of creating a product or service that
meets the needs of consumer profitably.
10. Time Management
The most important resource of all is time. Time
is precious. Once spent, you can never get it
back. Do not waste it. By planning how you will
spend your time for the coming day, week, month,
and year, you will be much more likely to achieve
your goals and live a productive and positive life.
11. Leadership and giving back
Every great business leader is aware of the
community around them and looks to satisfy a
community need. Philanthropy is good business,
and if you are known as someone who cares
about your community, more people will want to
do business with you.
Winston Churchill said: “We make a living by what
we get; we make a life by what we give.” It is
likely that everyone will have some problem to
solve that is not answerable from a purely
financial profit point of view. Solving this kind of
problem creates a great deal of pleasure, and
“psychic” income helps build communities. Ethical
and philanthropic behavior will always end up
helping one’s career and business.
12. Financial Literacy: Financial Statements,
ROI, and Breakeven
Financial literacy is a subset of entrepreneurship
education. It’s important to understand that giving
time, energy, and money to your business is an
investment that will help you to meet your goals.
Utilizing the tools of compound interest and the
time value of money are indispensable to create
wealth. It is imperative that every young person
learn basic record keeping, and how to read
income statements, balance sheets, and cash
flow statements. Return on investment (ROI) is
calculated by dividing the profit from a venture by
the amount of the investment. What the ROI will
be should guide you on your investments. And
“breakeven” is important because it tells you
whether or not you can afford your marketing
plan. Understanding how to save and invest your
money is vital to create and sustain wealth.
13. Ownership
From a very early age, everyone should be
exposed to the idea of owning assets. The best
way to teach this is to discuss the concept
openly. The responsibilities of ownership as a
good citizen should be discussed as well.
Without understanding and appreciating the
concept of ownership, you will be less likely to
understand who has financial power in the
community, and you will be less likely to own the
output of what you produce. This is what has
been missed by so many leaders who discuss the
importance of math, reading, and writing skills-
who owns the output from people’s skills is as
important as the skills themselves. The most
successful entrepreneurs, like Madonna and
Russell Simmons, own their own economics of
one unit.
14. Lengthening Time Preference
Perhaps the most important characteristic of
success for a young person is the ability to wait
for gratification — to save money and plan ahead
in order to control future time. Aside from goal
setting, this can be taught best by a standard
wholesale-to-retail lesson. Before you go to the
wholesaler, draw a chart and think about how this
event will take place. Much of success in life is
thinking about what to do now to make your goals
come true in the future. Entrepreneurship, and all
of business, is about investing ideas, money, and
time in the present to get benefits in the future. I
would argue that working on lengthening time
preference is one of the most important skills you
could develop.
15. The Basic Sales Call
Preparing appropriate sales material is as vital as
learning to be an active listener. What problems
does your product solve? Who is your audience?
Answering these questions is important. View
selling as both learning and teaching. By
identifying the consumer need, you can educate
the customer on the benefits of your product or
service.
A sales call a day can help develop a skill that
can be used anywhere in the world at anytime.
Practice your sales call, so you are
communicating clearly the benefits of your
product. Good sales-call procedure will give you
feedback on your product and help continue to
improve it.
16. Goal Setting
Goal setting is something every young person
should practice every week. Having long-term
goals (ten years), intermediate-term (five years),
and short-term (one year), and immediate (the
next month) is absolutely crucial for success.
Make sure to make them visual, so you see them.
Always set goals that are numerical and
measurable-for example: I want to have five new
customers by next month or I will lose ten pounds
by April.
17. Public Relations, Media, and
Communications
Communications strategy is a key asset for a
young entrepreneur to understand. Learning to
communicate to other people by being covered by
the media is valuable. The key concept here is to
learn the craft of story development. A story is
helpful if people can understand it and it
motivates them to buy your product or service. A
good story would show how your product had a
positive effect on someone. Remember, though, it
must be 100% accurate.
18. Teamwork
Ultimately, all success is based on teamwork.
Learning to pick people that you can work with
successfully, training them, and providing them
with incentives is absolutely essential for
success. Playing sports or engaging in any other
activity that involves teamwork will help build
these skills.
19. Think Globally
The world is much smaller now, and even young
entrepreneurs need to think globally, taking into
account markets and suppliers worldwide. Being
respectful and educated on different cultures will
be critical to success. Travel for young people is
also important, to develop an international
perspective and knowledge of foreign markets.
20. Technology
Wealth is created through the inter-connectivity of
the Internet and progressive use of technology.
Stay up-to-date with technology to keep your
business vibrant and growing. The ultimate
technology rests on the intellectual skills of
entrepreneurship and ownership.
21. Study Economic Theory and History
Learn basic macro-economics, particularly trade-
cycle theory. Starting a business during a
recession can be a huge advantage because the
cost of land, materials, and labor are cheaper.
Many business failures are blamed on
entrepreneurs but, in reality, they are the result of
companies being founded or expanded during the
boom portion of the trade cycle. It is better to
start a business when resources and prices are
lower. Save money during a booming economy to
survive and be ready to take best advantage of
the opportunities available when others go out of
business. There are three main theories of trade
cycles: Monetarist, Austrian, and Keynesian —
study them all.
22. Be Prepared for Failure and Success
Many business ventures do not work out, often
through no fault of the entrepreneurs. Your
business success or failure will not be a reflection
of your self-worth. Be prepared for setbacks in
any venture you undertake. Be mentally strong
and positive at all times. Plan for the possibility of
closing the business and learning from the
setback. Get experience in a field before starting
a business in it. Uncontrolled growth can also
lead to mistakes and business failure.
23. How to Write a Business Plan
There is an adage that goes, “Failing to plan is
planning to fail.” A lot of young people have
visions and dreams. By putting your vision and
goals in writing, your chances of success will
improve. The format NFTE has developed is good
for youth and can be found in our books,
Entrepreneurship: Owning Your Future (Steve
Mariotti and Tony Towle) and Entrepreneurship
(Steve Mariotti and Caroline Glackin). Go to
www.nfte.com for more info.
24. The Golden Rule
Treating others as you would have them treat you
will help you achieve success in life, both
personal and financially.

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