How to Start a Business After College (or a Pandemic)
The thought of becoming your own boss probably fills you with excitement for the future. After all, you can shape your success, salary, and financial security. However, as you’re new to the modern business world, you’ll lack industry knowledge and experience, which could affect your startup’s success.
If you want to dominate an industry and embark on a rewarding entrepreneurial path, you might need to improve your financial know-how, business acumen, communication skills, and more. For help getting started, read these top tips on how to start a business after college.
Boost Your Business Acumen
Education doesn’t need to end once you leave college. Once you have obtained a bachelor’s degree from an accredited institution, you could enroll in an online MBA program to embark on a successful career at an executive or management level.
The course is designed to improve a hardworking professional’s business acumen, as it can enhance their leadership skills, financial management, marketing prowess, and strategic management. Even if you have spotted a gap in the market and have a brilliant business idea, it could fail without much business know-how. Therefore, an MBA could be an ideal avenue for those considering launching a business once they’ve left college.
Start a Business as a Side Hustle
The transition from college to entrepreneurship can be overwhelming. After leaving a supportive environment, you’ll have no choice but to stand on your own two feet and navigate a complex, competitive industry. Plus, you’ll have the added pressure of organizing your company’s finances, adhering to legal obligations, and managing workloads.
Rather than jumping in both feet first, you could start small and build up your business gradually from your home. If possible, secure a job in the same field to increase your knowledge and experience, and work on your venture in your spare time. It will take some of the pressure off your shoulders and remove the financial risk of starting your own business.
Improve Your Credit History
Both your business and personal credit can determine your company’s financial future. Many entrepreneurs tend to use their personal credit to finance their operations when starting out, so you’ll need a good credit history. If you currently have poor credit, you must improve it before starting a new business. For example, you must pay every bill on schedule.
It is also imperative to establish business credit to separate your company’s finances from your own. To do so, you can place all expenses under your company’s name, and you can open a corporate bank account to pay for business-related bills.
Don’t forget to monitor your business credit history, too, as this could determine your company’s relationship with financial institutions, suppliers, and clients. For example, poor business credit could result in your company facing higher loan or credit card interest rates, which can affect your brand’s annual profit margin and financial security.
Look for Startup Grants
If you don’t have the capital to get your business off the ground, you could always apply for a financial grant. The United States offers many fantastic startup grants that aim to help budding entrepreneurs turn their ideas into a reality.
For example, the following programs could provide your startup with funding:
- The SBIR and the STTR grant programs
- Small Business Development Centers grants
- FedEx Small Business Grant Contest
- Economic Development Administration (EDA) grants
If you cannot secure a grant for your business idea, you could apply for a federal small business loan, or pitch your idea to one or more potential investors. You could even ask loved ones to invest in your venture.
Mark Zuckerberg is a prime example, as his best friend contributed $1,000 to help the social media tycoon launch Facebook, and he later contributed an additional $20,000. The financial backing helped Zuckerberg build the social network and secure a $500,000 investment from Peter Thiel, a co-founder of PayPal.
Follow Your Passion
If an industry doesn’t bring you much joy and fulfillment, you will be less likely to invest your blood, sweat, and tears into the business. Even if you have invested much of your money into a venture, your passion for the field will encourage you to wake up every day with the motivation to improve your company. Your working life will be more rewarding when you follow your passion, and the money and acclaim that follows will be a bonus.
Build a Strong Network
It is not what you know but who you know in business. Unless you’re lucky enough to know many successful professionals in your chosen industry, you might need to build a strong support system. Make it your mission to build as many relationships in your field as possible. For example, you could attend networking events, engage with professionals on social media, or cold email people in your industry. Also, don’t turn down party invitations from your friends, as you never know who you might meet at an event.
Don’t Allow Fear to Stand in Your Way
Industry inexperience might knock your confidence when attempting to land your first clients. However, it would help if you weren’t afraid to put yourself out there when talking to others, and you must trust in your knowledge and ability. Get started by looking for potential business opportunities, cold-call prospective clients, and email business owners to request a collaboration meeting. A little confidence could lead to a big annual revenue.
Aim to Solve a Problem
Every successful business solves a problem. If your company doesn’t provide a much-needed service, then you don’t have a business. Think carefully about the various issues your customers might face and aim to provide a solution. If there is no demand for your business, you’ll fail to generate a large revenue and your business could close its doors within its first year.
For example, if you are launching a fashion empire, you could fill a gap in the market by providing same-day shipping on an outfit. It could be an ideal solution for a customer attending a last-minute event or facing a wardrobe disaster.
Research Your Idea
While a business idea might have seemed like a smart avenue when brainstorming in your college dorm room, it might not fill a gap in the market. If you’re serious about starting a successful brand in the near future, you must thoroughly research your idea’s potential.
Market research is essential, as you must have a firm understanding of your target customer before investing in products, a brand identity, or marketing campaigns. Don’t forget to extensively research the financial capital you will need to get your business up and running. For example, you might need to invest in product development, packaging, office space, employee salaries, various insurance policies, and more.
Running a business might sound glamorous, but the reality can sometimes be the direct opposite. It can require a great deal of hard work, late nights, stress, and perseverance. While you’re busy juggling deadlines and satisfying customers, your employed friends might be partying until the early hours or making the most of their disposable income. As a result, you might compare their life against yours, which could be disheartening.
It is essential to remember that you will have different goals and responsibilities, leading to opposite lifestyles and financial circumstances. Remember, all the hard work and effort you put into your business while you’re young could pay off in the future.
There is plenty of room for error when launching a business. If you want to become a successful entrepreneur, you cannot throw in the towel when facing your first challenge. The biggest and best entrepreneurs in the world will have experienced failure at some point. Yet, they will have picked themselves, dusted themselves off, and moved on from the gaffe.
Mistakes will occur, marketing campaigns will fail, and customers might complain, but that doesn’t mean you should give up. Instead, you must learn from every mistake you make to develop a stronger, more successful business. If you lack commitment and resilience, you’d be wise to walk away from your business idea now.
Understand the Reality of a New Business
As a rising entrepreneur with limited finances, you will be unable to hire many employees to complete various creative and everyday tasks. While you might imagine running a business as wining and dining clients, fancy business trips, and a flexible lifestyle, you will likely need to complete many tasks and work many hours when first starting out. You must become your company’s administrator, marketer, receptionist, and billing and collections department until you can hire employees.
Take Advantage of the Resources Available
There are many fantastic resources available to provide young entrepreneurs with help and support. For example, you could seek assistance from the Young Entrepreneur Council, which is available for those under the age of 40 and provides handy business-related forums, product discounts, and offline events. Alternatively, you could join the Young President’s Organization that’s open to those under 45 years old, and it offers networking and educational opportunities, various events, business advice, and guidance.
Register Your Business
It doesn’t matter if you are running a part-time or full-time company, you must register your business. While filings and regulations might not be the most exciting part of kickstarting a new venture, it is essential to avoid legal consequences.
It is important to do your homework about the different business structures available. Three of the most popular options include:
- Limited Liability Company (LLC)
- S Corporation
- C Corporation
You must also obtain a Financial Tax Identification Number to separate your company’s finances from your own. It is similar to a social security number, as it enables the IRS to track your business transactions.
Understand Your Legal Requirements
In addition to registering your startup company, you must gain a firm understanding of your company’s legal requirements. If you are starting a business once you have left college, you might not be in the best position to hire employees. However, you must learn about employment law to ensure you don’t make a mistake once you’re ready to hire your first members of staff. For example, you will need to learn about:
- Federal and state payroll
- Anti-discrimination laws
- OSHA regulations
- Unemployment insurance
- Workers’ compensation rules
- Wage and working hour requirements
You must also familiarize yourself with your company’s insurance requirements, tax responsibilities, permits, professional licenses, and more.
Work on Your Sales Patter
Your sales patter can make or break your business. As an entrepreneur, you will become the voice of the business, which is why you must aim to shine a positive light on your products and services as much as possible.
The best product in the world is useless if you don’t know how to sell it, so you must develop a pitch that will help you to secure many customers. Remember, you’re not selling a product or process, you’re selling a result.
If you can make your product or service sound simple and innovative, you could attract many customers and enjoy a healthy revenue year on year. Once you have boosted your profit margin, you can hire professional sales representatives and marketing departments to refine your pitch.
If you want to shape your career over-placing it in another business owner’s hands, you could always launch your own company once you have left college. However, it’s important to be aware that starting a business will require a great deal of hard work, effort, and perseverance.
If you want to enjoy success within your first year, you must pick a field you feel passionate about and look for ways to improve your business acumen, such as enrolling in an online MBA program or gaining hands-on experience.
If you’re willing to forgo social events, embark on many working hours, and tackle various tasks each day, there is no reason why you couldn’t enjoy success in your chosen industry. Yet, you must have confidence in your ability, learn from your mistakes, and take advantage of the many professional resources available.