The Millennial Employment Gap: Three Lessons Learned Supporting Young Entrepreneurs
Across Latin America, there are roughly 20 million young people who are neither studying nor working: the infamous ninis. Helping these young people find economic opportunities is one of the most important challenges facing Latin America’s economies and governments. Since businesses with five employees or fewer generate 60 percent of the region’s jobs, the creation of vibrant, growing small businesses is an important part of the solution. That was our thinking when we launched the Crece Tu Empresa (Build Your Business) program — with the support of the Citi Foundation — to help young entrepreneurs in Central America’s cities grow their new businesses and create opportunities for their peers.
While the project was built on the success of a program called Impulsa Tu Empresa (Boost Your Business), which had helped accelerate the businesses of older entrepreneurs in the region, we knew from the beginning that we would have to adapt our methodology to serve a younger cohort of entrepreneurs. We planned, for example, to use social media more in order to recruit these millennial entrepreneurs. However, in the process of implementing Crece Tu Empresa, we also learned some important lessons. Here are three of them.
Help entrepreneurs understand their business—and futures
Young entrepreneurs are new to both their businesses and to the very concept of having a career, so they need help thinking through both. Often, this means that business advisors need to be active in helping entrepreneurs refine, or even dramatically adjust, their business model and develop a unique value proposition.
For example, we worked with a family business in El Salvador that turns old bottles into beautiful glasses. But they used to go months without making a sale. Their business advisor helped them develop a sales and distribution strategy that allowed them to make consistent sales.
But it is equally important to work with young entrepreneurs to develop a vision for their own future and how the business fits into it. We drew on lessons developed under a TechnoServe project in East Africa to build the entrepreneurial skills of unemployed and underemployed rural youths.
On a practical level, this has meant that Crece Tu Empresa staff helps the entrepreneurs with things like time management, as the young entrepreneurs struggle to find a balance between their businesses, their studies and their personal lives. We developed practical resources like business-planning templates, business/personal agendas and goal-tracking tools to help them.
Adapt the curriculum to the needs of young entrepreneurs
Because young entrepreneurs are different from their older counterparts, the curriculum should be adapted to their needs. The media portrayal of young people is often that they are technologically savvy spendthrifts, able to juggle five apps simultaneously but unable to balance their personal finances. While that exaggerated view doesn’t accurately depict our entrepreneurs, it does point to some of the relative strengths and weaknesses we have observed.
Entrepreneurs breeze through the workshops on the use of technology for business, which is often a difficult subject for our older entrepreneurs. On the other hand, finance has been a more difficult subject, and we have had to reinforce the topic. But that extra work pays off: Entrepreneurs finishing the program often cite tools for financial accounting and making projections to be among the most important lessons.
In general, though, we are able to move more quickly through material with the Crece Tu Empresa entrepreneurs than in projects with an older age group. Often, this is because the young entrepreneurs are completing, or have recently completed, their academic studies, and it is easier for them to adapt to the pattern of workshops and homework. This allows our workshops and curricula to cover more material in the same timeframe.
Adopt a different kind of mentorship
In both Impulsa Tu Empresa and Crece Tu Empresa, a lot of the benefit to the entrepreneurs comes from personalized advisory service. But the relationship with the advisor is different with the young entrepreneurs, who often look for a kind of friendship with their mentor.
Responding to that need, Crece Tu Empresa advisors provide business guidance, but also might end up helping the entrepreneurs figure out a way to handle stress, or even work through their feelings after events in their personal lives. This can be very demanding: It is not uncommon for mentors to receive WhatsApp and Facebook messages seeking advice at 2 in the morning. As a result, the program had to set ground rules with entrepreneurs about when they could expect to receive a response from their mentors.
This also means that you have to hire advisors who are flexible and used to dealing with young people. The Crece Tu Empresa team has members who have taught in universities, where (ask your professor friends!) today’s students are not shy about reaching out for guidance at all hours and through various channels.
By adapting the curriculum to address the knowledge gap of young entrepreneurs, helping them map a sustainable course for the business and their careers, and delivering training and advice in a way that they can relate to, we can help young entrepreneurs build and grow competitive businesses. Crece Tu Empresa participants, for example, have increased their sales by an average of 92 percent since joining the program.
But with millions of young people looking for economic opportunities, there is more to do.
Oscar Artiga is TechnoServe’s Central America Entrepreneurship Program director.
Image courtesy of Technoserve.