How to start a business as a student: a step-by-step guide to action
Starting a business as a student will help you to understand how the business world is run without any great loss. This is a good opportunity to make some money and gain valuable experience.
That is why those who are starting their business during college very often hire coursework writing service usa writers to keep up with their academic performance and have time for their startup.
So, you have decided to start your business in college but don’t know what to do? Here’s a step-by-step guide that will give you a better understanding of what you are going to deal with.
Step 1: Search for an idea
To start a business, you need to decide what kind of business it will be. Every business is based on some idea. For example, giving people the opportunity to drink coffee on the way to work or replacing plastic bags with more environmentally friendly canvas shoppers, and so on. It is the searching for the right idea that takes most of the time for aspiring entrepreneurs. However, this process can be accelerated.
Focus Groups
To find out what products and services consumers want, focus groups are helpful. These are direct interviews with prospective customers who are asked what they are willing to spend their money on. However, it is not certain that the business idea given out by a numerically limited focus group will be relevant to a wide audience. You’ll have to conduct several dozen interviews to get more or less adequate data.
Search Tools
Search engines already have ready-made tools that can show how often users were interested in a particular combination of words. Based on the graphs, you can conclude the demand for the available idea, as well as the seasonality factor. The information obtained can be used to start a business. A similar service is Trends from Google. Its principle of operation is similar: in the search line you enter the queries whose dynamics you want to look at, and you get the result in the form of a table or chart.
Professional analytics
Reports from professional analytical agencies can be a source of inspiration and business ideas themselves. They track market needs and make forecasts about what will be relevant in the next 5-10 years. Based on this data, it is possible to understand how the consumption model will change, and which products and services will come to the fore.
Analytics can be done not only by private companies but also by government organizations. For example, the U.S. Small Business Administration regularly shares the results of U.S. small business surveys. This means that you can try to match and have time to occupy promising niches.
Step 2: Financing
Today, finding a business idea without investment for students is not that difficult. You can get into tutoring, dog walking, courier services, and more. All of these types of businesses bring a small stable income.
But those who want a good return will have to splurge. Creating a small business can be with investments of $1000. This, for example, is how much it will cost to start a business making handmade cosmetics or baking homemade cakes. A business with its premises and team will require an investment of $3500. Let us tell you where to get funding for projects.
Your savings
The habit of saving money should be formed from the first earnings. For example, 10% of income can be transferred to a savings account or a specially arranged deposit. Over several years, an amount of money can be accumulated to start a business.
It is important to understand that any business is a risk. Therefore it is worth investing only those funds that you are prepared to lose. The advantage of the student business is that there will be many years to recover the losses incurred.
Business loans
Many banks offer the opportunity to take out a business loan to start or grow your business. As a rule, the rates here are lower than for consumer loans. To obtain it, you will have to register as a sole proprietor or create an LLC, which initially will require additional costs.
At the initial stage, it is important to be very careful about loans. It is always worth understanding that a sole proprietor, running a business, risks personal movable and real property. In addition, business credit rates are still quite high and you will have to spend a decent amount to maintain the credit line.
IMPORTANT: Credit is needed to expand production. But even in this case, it is better to take it on the security of real estate or equipment. In some cases, it is better to consider leasing offers from manufacturers of equipment and vehicles – they may be more profitable for current tasks. But it is important to remember that with a loan the lender will be the owner of the equipment and vehicles, and with leasing, the leasing company.
Grants
You can get money without having to repay and pay back loans through grants and incentives. For example, there are government programs to help entrepreneurs get money to start their businesses. You only need to provide a convincing business plan and an application for the assistance program. Make sure it looks professional. And if you decide to hire someone to do this for you, don’t forget to check paper writing service reddit reviews to find a truly reliable one.
It is not uncommon for venture capital funds to give out grants to attractive projects. To get money, you will have to appear before a jury and compete against dozens of similar projects hungry for development money. But, as a rule, the size of such grants is higher than the state aid. In addition, it is possible to receive valuable criticism on the project from experienced entrepreneurs and investors.
Investors
You can find foundations ready to invest substantial sums in projects in exchange for a share of the company. Another benefit of this option is that the project will have an experienced mentor to help with operations and accelerate the development of the company through his skills and connections.
Presenting the project to investors can be done with a business plan and then with a personal presentation. Both formats should convince the financiers of the uniqueness of your project and its competitiveness.
Crowdfunding
It is possible to find investors among ordinary people. To do this, you need to start a project campaign on a crowdfunding platform. If users are interested in the idea, they will vote for it with dollars. Or euros, depending on which platform the campaign is held.
Investors should get early access to the product or service in exchange for funding. You can also offer to mention them in the project as sponsors. Crowdfunding is interesting for social business, it often gets a good response from users.
Step 3: Legalizing Your Business
When starting a student-run business, it’s important to get official registration. This will enable you to record your work experience and receive benefits in times of crisis.
You should research how to do it properly in your country since the options of legalizing business differ from country to country.
Step 4: Premises
If the student business will require premises, they will have to meet state requirements and regulations.
IMPORTANT: Some types of business require additional inspections of premises. When renting or buying ready-made premises it’s worth asking vendors for permission from the supervisory authorities. This will save time and money when registering the premises. But if the premises are to be repaired, refurbished, or converted for another kind of business, then the checks will have to be repeated.
In addition, they will have to comply with legislation on noise levels, pollution, and so on. If the premises will be in a residential building, then communication with the tenants cannot be avoided, so you must be prepared in advance for difficult conversations and a lengthy search for compromise on contentious issues.
Step 5. Automate your accounting department
One of the most routine duties of every entrepreneur or self-employed person is bookkeeping. In the early stages, hiring a professional accountant can be an unnecessary waste of money, so it is worth considering automating most operations.
Automated bookkeeping is often offered by the banks in which the entrepreneur’s current account is opened. As a rule, this is a paid service, but it saves time on routine tasks. Through close integration with banking services, it is possible to ensure that the data provided to the tax authorities are correct.
You can also ask for help from specialized services. They will not only help keep track of contracts, acts, invoices, and other primary documentation, but also suggest ways to optimize taxes. For example, they suggest paying fixed payments quarterly, which will save on taxes. Such services, of course, are paid, but they help keep your books in order and do not fear possible penalties from the tax authorities.
What’s next
Running a business is not just about official registration, compiling primary documents, and keeping accounts. Some businesses require special licenses. To do this, you will have to find out the requirements of the regulatory authorities and undergo appropriate inspections.
To stand out from the competition, you will have to engage in marketing. You will have to dip into the advertising budget, costing SMM and SEO, budgeting for contextual and targeted advertising, and so on. In some businesses, the advertising budget can account for more than a third of all expenses. Therefore, it is important to learn how to identify the most effective tools to increase sales, and to do this, dive into analytics, master Big Data and so on.
In addition, you will have to control inventory and organize logistics. If it is necessary to organize the transport of goods, you will have to master the freight exchange and learn to work with delivery services.
Business for students: is it worth it?
Starting your first business during your student years is a good idea. It allows you to gain practical skills as early as possible, build up connections, learn how to manage people and delegate tasks to them, and earn extra income. By the end of the study, a student can already have not only work experience but also their enterprise, which is to be developed and scaled, increasing profits.
Practice shows that only 10% of entrepreneurs in the first few years can turn a startup into a profit. And the average lifetime of a startup is no more than 3-5 years. That’s why you should evaluate your chances rationally, give priority to gaining an education, and be prepared to fail. However, you should not succumb to pessimistic attitudes. The examples of Steve Jobs and Bill Gates show that you can build a huge business empire by quitting university. Perhaps you will become such an exception from the rule.
