Arguably one of the best times to start a business is while you are studying at University. Never again will you have so much free time or so few commitments. Regardless of the success or failure of your business, it will also demonstrate to future employers your entrepreneurial spirit and ambition in the workplace. You will effectively be creating your own work experience and knowledge of how to run a business.
But with so many startups falling by the wayside in their first year of operation, its important you give yourself the best chance of success. Here are some pointers to get you off on the right foot and hopefully see you well on your way to success.
Essentially this step requires you to demonstrate your problem-solving skills. Find a product or service that you think needs improvement. There are always gaps in the market and launching a successful business can often depend on your ability to identify those gaps. Once you’ve done that you can find your unique selling point.
Some leg work at this stage can mean the difference between success and failure down the track. Look at your potential competitors, know consumer behavior, and identify any gaps in your chosen market as well as consumer needs and expectations. Understand what your competitors are doing well and what they could be doing better, they will already have market presence so it’s important that you offer something better to consumers.
This can often be a challenge for anyone looking to start a small business, but failure to understand the costs at this stage will come back to bite you later.
As a starting point, list what you will need to spend on assets. Assets are resources that you can sell or convert into cash but are necessary for your business to operate. These can be raw materials and stock, to buildings and intellectual property. For example, if you were to open a bookstore, you would list the books, the cash register and the shop space you have rented under assets.
Next you will need to calculate startup costs. Call estate agents about renting a space should you need one, contact insurance providers to ask about plans and prices. It’s important to consider commercial liability insurance as this helps cover the cost of bodily injury, property and advertising damage claims made against your business which you would have to pay out of your own pocket should you fail to have this cover in place.
Not every spend is an asset however and you will also need to calculate expenses. This includes money spent on setting yourself up as a corporation, building your website, computer equipment (an expense not an asset as it can be deducted from income tax), etc.
Add together assets and expenses and you have an indication of your set up costs. Lastly estimate sales, costs and expenses for the first 12 months. Subtract costs and expenses from the sales and this is the amount you will need to get off the ground.
Of course, you’re a student, which means that unless you are the lucky exception, you are probably not flush with spare cash. This means you will need to secure funding for your little venture. Try seed funding firms, angel investors, and venture capital firms. Also, small investments from friends and family can help towards the bottom line.
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