By Fernando Berrocal

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It may come as no surprise, but Millennials and Generation Z are the perfect small business and startup entrepreneurs. They have a wide range of traits that make them particularly amenable to the entrepreneurial experience, but the most crucial one is their preference towards working independently. They expect greater lifestyle independence than their parents, and they possess the digital skills necessary to run an online business from anywhere in the world–both of which are noteworthy characteristics of entrepreneurs.

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According to different research, over 40% of Millennials and 53% of Generation Z work as independent contractors.  So, there are many workers who follow this kind of business lifestyle–and this type of work is more socially accepted than ever before.  The next question to ask yourself is: what kind of business should you launch if you're a young person exploring entrepreneurship in a rapidly-evolving digital age?

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There is a wide range of options such as e-commerce, product resale, creating influencer content, freelancing, and wellness coaching. Those are the most common options, but there are other ones, as well, such as social media managers and cryptocurrency experts. Although we might not be able to provide you with specific advice regarding the kind of business that would work best for you, I can suggest that a service-based business is a wise place to start. Here are the top six reasons why, especially as a young entrepreneur, you'll appreciate launching a service-based business.

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1. It fits your strengths and expertise. When you're considering establishing a startup business, many founders encounter a tendency to write themselves off. Even though you may convince yourself you're not an expert, you undoubtedly have a few skills that set you apart from most of the people you know in your professional life. Thus, ask yourself the following questions: Are you proficient in math?  Do you focus on the details? Are you frequently writing? Fantastic with video editing?  A multi hyphenate creator? There are limitless career choices that you may convert into a successful, entrepreneurial business.

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2. You’ll have low overhead and few entrance barriers.  Any new business needs money to get started and stay afloat. There are service-based businesses, particularly ones that operate online like bookkeeping or advertising management.  Note that these tend to have considerably fewer requirements than product-based enterprises. For instance, if you’re interested in creating a line of furniture and/or home décor, you'll need to invest in prototypes, inventory, packaging, and warehousing. Nevertheless, if you provide social media management services, all you will need to do is invest in social media management software to assist you in managing the accounts of your customers. Therefore, you don't need to spend money upfront to create a completely new physical product, even if you buy a few pieces of equipment, materials, or pieces of software to help you perform better.

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3. You can serve an industry you truly care about.  As a service-based business owner, you can work with any type of client you choose. Selecting a business niche that you’re passionate about tends to make your work more fulfilling. When you feel energized by your work lifestyle, you’ll be able to put more effort into growing your startup business. Allow yourself to experiment with different target audiences that you might not have initially contemplated.  Eventually, you will find a specific niche that ignites your passion and keeps you motivated.

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4. It teaches you how to be a business owner.  You can learn the ins and outs of running a business without significant upfront costs or excessive overhead–all by starting your own service-based business. In addition, there is reduced risk as a result. You can experiment with various service offers in this risk-free setting; you’ll be able to see what works best for you and your business. Even if you only provide a single, straightforward service, you will still need to perform a variety of other duties to keep your business operating well. Along the way, you'll pick up knowledge about sales, business partnerships (of all kinds!), networking, business outsourcing, strategic positioning, marketing, budgeting, and more. Even if you might pay someone to handle these tasks for you in the future, you'll have to deal with a lot of them in the beginning (when you’re on your own).

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5. You’ll have recurring revenue while pursuing other opportunities.  You will need to monitor your fierce competitors as your new business expands. You can discover that your rivals have a variety of money sources, such as earnings from Spotify or YouTube and e-commerce modern products.  You’ll also discover more traditional avenues, such as client services and group coaching programs. But be aware that not all of these options will be appealing to you. Only one thing is certain: without your service-based business as a foundation, it's possible that you would not have known about or even comprehended these other revenue streams.

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6. Service-based businesses enables you to succeed in the future.  In the end, starting a service-based firm is a fantastic way to enter the world of entrepreneurship. Once you've expanded your business to obtain up to six figures and beyond, you have a few distinct options. These are the following ones:

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• Scale Your Team: You can think about expanding your workforce if you enjoy what you do and want to increase your overall revenue. The majority of the client support job can be outsourced in this manner, freeing up your time to concentrate mainly on marketing and sales.

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• Launch a New Business: You might discover that you wish to experiment with fresh ideas beyond the service-based approach. Your service-based business might act as the initial seed money for your new firm if you have your heart set on launching an e-commerce brand. The good news is that you'll already be far more knowledgeable about managing a business and attracting clients than you would have been had you jumped right into e-commerce.

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• Put Your Expertise To Use: Maybe you could create an online course using your vast knowledge and upload it on different platforms. If someone can't afford your services, you could show them in different ways using the DIY approach. Teaching others how to launch a business like yours is another method to productize your business skills.

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You need to develop new skills, take calculated risks in business, and position yourself for success as a new entrepreneur. You can go from regular employment to founding your own service-based business without worrying about incurring significant debt. The best part?  You'll learn a lot about what it takes to run a business. The remaining entrepreneur-related responsibilities are left entirely up to you!

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Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.