Small Business: 5 Steps to Being an Entrepreneur

Last Updated May 24, 2010 5:53 PM EDT

A funny thing happened on the way to the unemployment lines in 2009.
Many out-of-work young adults became disillusioned by the "security" and "benefits" of corporate America or frustrated by the lack of job openings - researchers at Harvard's Institute of Politics found 60% of young adults worried about their financial survival. So these 20- and 30-somethings began taking their careers into their own hands.
Some (like me) started juggling several freelance gigs at once so that if one door shut, several others were still open. Tim Chan, 26, works full-time as an entertainment news producer - but wanting to feel more in control of his income, he tutors English on weeknights and publishes a pop-culture magazine a few times a year.
Still others are scraping savings and severance to start a business from scratch: After getting laid off last year Amanda Cox, 30, turned a lifelong baking hobby into a home-based business called NothingButChocolate.com in Cambridge, Ohio. "Chocolate is recession-proof," she says. "Plus, I'm happier."

Want in on the action? Want to secure income and do what you love - on your terms? Here's some advice on getting started as a young entrepreneur.

1. Do What Comes Naturally

Pursue what you love so it won't feel like "work." What are your creative skills and strengths that you may not be showcasing at your 9 to 5? What do you daydream of doing during the workweek? What may you turn into a revenue stream during your off-hours? Do you enjoy writing, photography, baking, designing, working with kids, speaking a foreign language? Pinpoint evening and weekend opportunities in your neighborhood â€" like a craft fair or a freelance writing position at local paper - to showcase and profit from your talents. Or start your own blog and network with other bloggers to create viral interest in your work. Get word out about your services, too, by telling co-workers, friends and family. Market your skills on Facebook, Twitter and your own Web site.

2. Don't Quit Your Day Job ... Yet

While you may be tempted to put in your two weeks' notice, don't sacrifice a steady paycheck if you can help it. On the road to entrepreneurism, it's all about building momentum and taking baby steps. Gradually the side business may take off and you will feel more confident quitting and turning it into a full-time entrepreneurial pursuit.

Just ask Martha Stewart, who freelanced as a caterer in her Connecticut neighborhood while juggling a Wall Street job during the day. The time eventually came when she knew it was smart to make the full-time transition, but her Wall Street paycheck was probably affording her the security to pursue her passions in the beginning.

3. Tap Into the Web

Thanks to the Web, many of the barriers to starting a business â€" like having a physical location, networking and having a giant marketing budget - are no longer essential. For those looking for additional revenue streams online, sites like elance.com, project4hire and freelancer.com list hundreds of thousands of jobs you can do from the convenience of your computer at home. It's easier than ever to establish a business online and market it through free networks like Facebook and Twitter. There are also easy-to-use ecommerce platforms at Shopify.com and Etsy.com. Using their free existing templates, you can showcase and sell your creative work online in a professional manner. Also check out weebly.com, which helps you create a Web site or blog in minutes.

4. Connect with Your Peers

The community of young go-getters is expanding and you can easily network via the web. StartUpNation.com and LadiesWhoLaunch are two booming sites that cater to budding entrepreneurs. At MeetUp.com you can find networking events in your town specific to your interests - or set up your own meeting.

5. Get Health Care

The new health care bill allows you to stay on your parents' health insurance until the age of 26. If you're older than that and self-employed, you will need to secure your own health insurance. You can find relatively affordable health care by joining a professional organization â€" like the Freelancers Union, whose members can get access to more affordable health care. Your state may also have a subsidized plan for those who are within certain income brackets.

And if you are young and healthy it may be worth checking out rates online for an individual policy. Visit sites like esurance.com and ehealthinsurance.com. And remember, businesses like Whole Foods, Costco and Starbucks offer amazing health benefits to part-time employees - even if you just work 10 hours a week. I'm just sayin' ...

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    Farnoosh Torabi is a personal finance journalist and commentator. She is the author of the new book Psych Yourself Rich, Get the Mindset and Discipline You Need to Build Your Financial Life. Follow her at www.farnoosh.tv and on Twitter at @farnoosh.