How to Start Your Business during College
Facebook. Microsoft. Google. Dell. What do these names have in common, aside from being some of the most recognizable brand and business names in the world?
They were all started by their respective founders when they were still in college. Granted, some of them may not have originally started out as a business, but that was eventually where it led.
This just goes to show that starting a business is not limited only to those who have already graduated from college, armed with business degrees and lots and lots of funding available to them. Even college students can become entrepreneurs, and be roaring successes at it, too!
In this article, you will learn about 1) when it is the right time to start a business, 2) reasons for starting a business while in college, 3) how to start a business during college, 4) useful tips for college entrepreneurs, and 5) examples of businesses started by college entrepreneurs.
STARTING A BUSINESS
When is the right time to start a business? And what, exactly, are the resources and materials that you need to get one off the ground?
We’ve heard them all before: in order to start a business, you have to have an idea – and not just any idea, mind you, but a brilliant and a feasible business idea. It should have been proven viable by various tests and analyses, specifically in terms of profitability and growth.
Next, you have to draw up a business plan, which will definitely come in handy when you are short of personal funds for the starting capital. You need to convince banks, lending institutions, potential investors and other possible funding sources to provide the funding you need for your business, so you have to make your business proposal very attractive and convincing, while staying realistic.
For many, the toughest part of starting a business would be seeking start-up financing. In fact, every day, we hear of individuals and even established companies getting turned down when they apply for financing in banks and financial institutions. This is truly disheartening news, because if they are turned down, how could a college student expect to have a better shot at it?
This is one of the many reasons why most people are under the perception that it would be better to be done with college before you even think of starting your own business. It is probably their cautious nature coming into play in these instances, but what if you have a truly brilliant business idea, one that you are absolutely sure will make it big? What if you are 100% sure that your idea will become the next Microsoft, or the one that will make Google fall to its knees? Should you wait until you are done with college, or should you strike while the iron is hot, so to speak?
If you are smart and have that competitive entrepreneurial spirit, you’ll know the answer to that.
REASONS FOR STARTING A BUSINESS WHILE IN COLLEGE
There is no age limit when it comes to those who are setting up a business. When you were still in primary school, you probably made lemonade and sold them outside your house during summer. That is already a business, albeit on a smaller scale. If you can already do that at such a young age, what’s to stop you from doing it later in life, even when you are still in college?
Here are some of the reasons why it is a good idea to start a business while still in college.
- College students are more flexible. According to Sean Branagan from the Syracuse University’s Newhouse School’s Center for Digital Media Entrepreneurship, college students have “less to lose”. While starting a business, they can survive on very limited resources – eating ramen noodles and living on a couch.
- College students can take the hard hits. Taking risks is essentially part of the college culture, and college kids are more thick-skinned, so even if their company fails, it’s all right because, at least, they got the experience which they can use in later business endeavors.
- It’s best to start early, and college is definitely early enough. The road to a successful business may be long or short – no one never really knows. However, one thing is for sure: the early bird catches the worm. If you start out early enough, say, in college, there will be plenty of time to apply everything that you have learned in building a bigger, better and more successful business in the future. It is also a great time to build connections and establish networks, which are sure to come in handy in future business projects.
- College kids are more in touch with the present. They are more attuned to the current beats, be it in culture, pop culture, and technology. Thus, they are in the best position to put themselves in the shoes of their target customers.
HOW TO START A BUSINESS DURING COLLEGE
If you decide to set up a business while you’re still in college, you have to be prepared for a busy time ahead. After all, you will be juggling your studies and your entrepreneurial plans. It is definitely going to be tricky, yes, but not impossible.
You already have the idea. What should you do to start your business?
1. Start Planning.
Planning is the first step to every venture, because this is where you will have to map out everything.
Research. Expect to put in a lot of hours into doing research, particularly on the industry that your business is entering. You also have to read up a lot on business models, especially those that share similarities with your business idea.
When looking into business models, do not just focus on the successful ones. Pay just as much attention to the unsuccessful business models, so you will know what to avoid.
Resources. Identify the resources available to you as a student. Do you have enough money or savings to fund your business? Are the tools that you will need for your business’ operations readily available? Doing this will also help you refine your business plan, especially when you draw up a budget and think of a figure to ask for when you seek funding for your business.
Reinforcements. There are several excellent business planning software and applications specifically designed for students that are now readily available. While it is true that they may cost a bit, consider them to be one of your initial investments.
2. Consider Finances.
In any business, expect costs to be incurred, if not for overhead, then for startup costs.
Detail expected costs. Make a list of all the costs that you expect to incur when starting, and classify the costs into two groups: regular costs or expenses and startup costs. Regular expenses include those costs needed for the operations of the business, such as rental fees and utilities costs and labor costs, if you are hiring other people. Startup costs, on the other hand, include fees that are required for the business to formally start its operations, such as registration fees and accreditation fees, if needed.
Listing these down will give you more than a rough idea how much capital you will need. If you have savings and you are able to cover the amount, good for you. However, not all college students come with ready funding, so they have to seek for funds elsewhere.
Seek financing. What are the financing options available to college students? You would probably think there isn’t really much, because lending institutions generally prefer employed individuals or those that already have a steady income to lend their money to. In short, they want a sure bet, and college kids do not really make that cut, at least, to their eyes.
Fortunately, aspiring college entrepreneurs have chances in obtaining outside financing aside, of course, from getting part-time jobs.
- Investment and/or personal loans from family members and friends.
- Small business loans aimed specifically for small businesses and startups.
- Grant programs aimed at aspiring and young entrepreneurs.
3. Get on to marketing.
The next order of business is to get clients or customers. This involves flexing your marketing muscles.
Market analysis. Being a college student does not exempt you from conducting market studies and analysis. You should already know what your target market is, who your potential customers are, and how you can reach them.
Students in college are actually in the best place to perform a market study. They have their friends and classmates to act as respondents or test cases. If they need advice, they can readily approach their professors and instructors. For reading and research materials, the university or college library has an abundance of these resources.
Use channels available to you. College kids – and entrepreneurs, in general – should consider themselves lucky to be setting up businesses in this day and age. The internet has certainly made it much easier and quicker to reach target markets and niches. When done right, online or internet marketing can be what will get your business out there, and will bring in the customers and their precious dollars.
You are your best marketer. The best marketing tool, despite the many marketing tools out there, remains to be word-of-mouth. And the best person to start that is you, the owner of the business. Start the ball rolling with a good word here and there, and let them pass it on to others as recommendations or suggestions.
4. Monitor and maintain.
Even when you have already successfully started your business, and the profits are coming in, you should not let down your guard. In college or not, you are still vulnerable to the same challenges and threats as other business people. In fact, starting the business is only the tip of the iceberg. The hard part is just beginning.
Be vigilant. Be watchful, be alert, and always keep pace with how your business is going. This is probably going to be difficult as you are also trying to get through college, but with proper time management, scheduling and planning, you’ll be able to pull it off.
Share the load. No man is an island. If you will notice, the biggest success stories of college-students-turned-business-moguls had at least two people working together, pooling their resources towards starting and running a business. If you can enlist a peer, a friend, or even an acquaintance with the same interest, then do so.
Continue studying business. If there are seminars, workshops or even short lectures on small business, management or any relevant subject that will be of help to you as a business owner and manager, grab the opportunity.
USEFUL TIPS FOR COLLEGE ENTREPRENEURS
- Brainstorm whenever and wherever you can. Talk and flush out ideas with friends at the cafeteria, with classmates at the benches or under the tree, or with your roommates. You’ll be amazed at what you can come up with when randomly talking with them.
- If you can, align your business with your course or degree, or vice versa. It is to your advantage if you are starting a business that is directly related to the degree or courses you are taking. For example, you are studying computer programming, and you are thinking of developing an application as your business. Or it could be the other way around. You have an idea for a business and, even if you think you have the basics down pat, you are also aware that there are still a lot more to learn. If you still have time to spare to take extra courses, then do so, but make sure you take the right courses. For example, you are starting a business that is retail-oriented, and so you can take a marketing course or additional entrepreneurship courses. In some cases, you can opt to take them as additional credits, or as summer courses.
- Be on the lookout for kindred spirits. Two heads are better than one, and you would have greater chances of making a success of your business if you have someone to share the load with. Always be attentive. You never know, your business partner in the future may be seated right in front of you.
- Seek a mentor. Is there someone that you truly respect at the university, one that you are absolutely sure will be able to share lessons and ideas that will help you as you start and run your business? It could be a professor, or a teaching assistant who has helped you out in the past. If your school has a mentoring program, you may also find your mentor among them. The purpose of a mentor is to guide and inspire you. Setting up and running a business is not easy, and it is bound to take a toll on you if not physically, then emotionally. You need someone to keep you on the straight and constantly push you in the right direction.
- Take on internships. The beauty of internships is that they give you firsthand experience of the real world. You will land smack in the middle of a working environment, and you will get more than a taste of how things really work. Take on as many internships as you want, especially those that are going to have similarities with the business you are going to start. This will give you a better understanding and enable you to form expectations of your business.
- Seek protection. How many times have you heard of incidents where college students sue other people for allegedly stealing their business ideas? This is one of the things that most college kids overlook. They have to make sure that they register their intellectual property with patents, copyrights or trademarks. This will save them a whole lot of trouble and headache in case the business booms and becomes huge in the future.
- Don’t give up too easily. So your first business venture was a bust. That’s all right. You still have other ideas up your sleeve anyway. Even the most successful entrepreneurs today had some false starts and early failures of their own. Take whatever business lesson you can get from those failed attempts and turn them around to something useful when it comes to your future business ventures.
EXAMPLES OF BUSINESSES STARTED BY COLLEGE ENTREPRENEURS
Mark Zuckerberg was a college sophomore in Harvard when he started a dating website, which evolved into the social network giant the world now uses as Facebook.
Also in Harvard, Bill Gates and Paul Allen’s long-time friendship resulted to the start of Microsoft while they were still in college.
The beginnings of WordPress can be traced to the University of Houston, where freshman Matt Mullenweg joined forces with co-founders Michel Valdrigh and Mike Little.
Michael Dell did things differently; he took computer stock parts and built customized computer systems. He then sold these custom computer systems, setting up shop at his dorm room and calling it PCs Limited. Less than a year later, he received more funding to grow the business to what we now know as DELL.
Here are three other examples of successful businesses by entrepreneurs who were still in college.
Insomnia Cookies – Cram sessions during his junior year at the University of Pennsylvania meant Seth Berkowitz had to contend with hunger pangs in the middle of the night. Therefore, he decided to bake cookies inside his dorm room to battle these hunger attacks. What used to be a personal, for-his-stomach-only cookie operation became a business when other students started ordering cookies from him. Berkowitz then aptly named it “Insomnia Cookies”. Today, Insomnia Cookies has more than 70 locations, accepts online orders, and delivers to anybody and anywhere, not just students craving a late-night snack on exam season.
Lingt Language – This website that utilizes an online classroom format to cater to those who want to learn a foreign language to have classes or sessions with foreign language teachers was actually started by three students of the Massachusetts Institute of Technology who were looking for a tool that will prepare them for their period of study in China. Their need, as well as that of their professors and classmates, prompted them to come up with a foreign language tool, which they also tested on teachers, students and other language schools and classrooms before finally launching it to the public.
Simply Splendid Donuts – Presently, the Simply Splendid Donuts chain consists of three stores, and it is set to open more in the months to come. The founder of this business was a senior at the University of Houston, Danny Klam. He was working to earn a double-major in marketing and entrepreneurship, and it’s safe to say that he is on the right track, both in his studies and his business venture.