Starting up a business enterprise is not easy and even as a student, it is really tasking especially when you have to go to school and still run the business. Normally, thousands of businesses fail every year and as a student running a business there are many setbacks you will encounter and some of these setbacks can bring down your business if not handled carefully.
According to the data from the U.S. Bureau of Labour Statistics (BLS), about 20% of new businesses fail within the first year of operation, 45% fail during the first five years and 65% fail in a decade of their operation.
Even across Europe, according to research and data, 50% of new businesses fail within the first three years of operation. All these failures happen as a result of number of reasons.
According to statistics from BLS, as at March 2020, there were 804,398 businesses that were less than a year old and from the statistics, it has been increasing from 1994 to 2020 even with the fairly consistent rate of failure.
Many student entrepreneurs think about failing even before failing; it is normal to think about failure but your thoughts should be about overcoming any setbacks that you might encounter in starting your business.
Starting up a business requires careful and strategic planning especially as a student whether in school or just graduated. You should be ready to put in a lot and sacrifice a lot too. You shouldn’t fail because others failed.
You are bound to make some mistakes and encounter some challenges in running your business after launching but these challenges shouldn’t cut short your dream and vision.
Many successful entrepreneurs failed in their start-up, some had to strategize and come back stronger while others went into another venture and excelled.
In this article, we will be putting you through how to succeed in starting up your business as a student but it is not only limited to students as young and new entrepreneurs can also benefit from the information we will be sharing in this article.
This information was compiled after careful analysis of some startup businesses and also some successful entrepreneurs about how they overcame challenges they faced in running their enterprise. It is not just about owning a business, it is about having a vision that goes far into the future.
Here are tips on how to succeed in starting up your business as a student. Study these tips and try to use them in running your business as they will bring you closer to success in your business and help you thrive as a student that is running a business.
HOW TO SUCCEED IN STARTING UP YOUR BUSINESS AS A STUDENT
- Conduct a market research about your business
One great mistake you would make in starting your business is not conducting a market research or investigating the market. For whatever business you want to start up, it is very important to conduct a market research especially when it is around the school, it is very important you conduct a market research as to know the demand for your product or service and also the people that demand for your product or service.
The market research will help you know the current trend about your product and also how to produce so as to meet the needs of your prospective customers better. A market research will help you understand the problem in the market and the unmet need around you and figure out the best way to meet that need and make money from solving the identified problem.
Every successful business is formed to proffer solution to problems as it is a way to remain relevant in the market. Jeff Bezos (Amazon) for instance, an online retail outlet (E-commerce) that enables individuals to buy and also sell products or services at their convenience. He identified an unmet need of buying and selling at your convenience and did well to fill up that space.
So in starting a business as a student, it is easier to satisfy an unmet need in the market that to create a demand and convince people to buy. It becomes easier to create demand when you already have a foothold in the market and your product is already known in the market.
- Start up with the right reason
Be honest with yourself; why do you want to start up your own business?
Who will benefit from your enterprise?
Your business will certainly fail if it is not set up for the right reasons. For every business to thrive there must be a passion backing up the entrepreneur’s motive. Your primary reason shouldn’t be to get rich quick or make a lot of money. If you are nurturing this thought, you are on the wrong plane and you are calling for frustration and failure.
Build your business on passion, determination, patience and positive attitude. You have to love what you do as this will help motivate you even when you encounter setbacks in running your business. You have to focus on the problem you want to solve and the need you want to meet.
You have to have a business goal that will give you a direction and path to follow as to why you want to start up a business. You have to be honest with yourself in setting out your goals and reason for startup. The right reasons will lead you to success while the wrong reason will lead you to failure.
- Know your customers
One mistake many new entrepreneurs and start-ups make is that they want to get everyone to be their customer and they risk losing every other customer. It is very important you know your customers and do not see everyone as your customer.
Do not try to please everyone but still try to deliver quality products and contents to your customers. Know your customers and do what you can to satisfy them; they will certainly do some networking for you if your product or service is good.
Running a business as a student, whether you are introducing a new product into the market or you are modifying an already existing product, you should make it different from that of competitors as this will give you an advantage when you are trying to convince them (customers) to leave other products and services for yours.
Knowing your customers will help you figure out the best marketing strategy to use in attracting new customers to your business. Always be up to date about your customers’ changing needs and taste.
- Set out a clear and realistic business plan
Starting up a business as a student doesn’t mean your business cannot go beyond the school environment. It’s a business and should be able to thrive even in a long run.
Have you heard of Chandler Bolt founder and CEO of self-publishing school, he started his business at 21years after deciding to drop out of college. He didn’t just decide to drop out of college; he had a clear and realistic business plan that motivated him to drop out of college.
Every business needs a business plan. This is like a road map showing where you are now and where you want to be. In starting your business, you must have a clear, strategic, measurable and realistic business plan. Your business plan shows vital information about how you want to go about your business.
Your business plan is the foundation of planning your business. Though it is not a guarantee that your business will succeed but it is a direction to what you want to achieve.
Every successful entrepreneur and business owner set out a realistic business plan like Jeff Bezos who wrote the business plan for Amazon on a road trip.
Your business plan should show the following information:
- Description of the business, its product or service
- Analysis of how you want to enter the market or industry
- Financial requirement and cost of operation
- Marketing plan and sales strategy
- Description of management and organization
- Competition and competitors
- Possible problems to be encountered and solutions
If you are planning on running your business on a large scale, it will require a lot of capital and many financial institutions and investors request for a business plan especially when you request for loan. Let your business plan clearly state your business goals and vision too.
- Having enough capital to start up and run the business
One financial problem many new businesses face is lack of capital or inadequate capital to start up and run the business. Many authors have said that capital is a major factor that determines the size of a business and also it determines the efficiency and productivity of the business to an extent but not all businesses that had enough capital to start up succeeded but majority of the new businesses fail because of insufficient capital even existing businesses too.
Are you financially stable to start up and run the business?
Where do you source for start-up funds?
All these questions can be answered if you have a clear and realistic business plan. As a student, it is not going to be easy raising funds to start up your business but you can try getting personal loans from family and friends because there is always little or no interest rate to this kind of loan.
You can also try getting loans from angel investors or venture capitalist that are willing to invest in the new idea but they will definitely scrutinize your business plan. You can also apply for loans or grants from financial institution.
You can apply for student entrepreneurship awards and grants as many organizations are ready to invest in young entrepreneurs with ideas and potentials. The GSEA (Global Student Entrepreneur Awards) is a global competition for students who own and operate businesses while in school.
You can also get a partner that can finance the business and provide other inputs.
- Facing the trouble of quitting and not quitting school for your business
This decisions still comes down to you. You must have heard about a lot of successful entrepreneurs that quit school to focus on their dream and vision and today they excelled. The likes of Chandler Bolt, Mark Zuckerberg, Bill Gates and some others.
Well, this decision was made after critically analyzing of the benefits they would get from focusing all their time, energy and resources to their business.
Bill Gates in one of his interview said that “if things hadn’t worked out, I could always go back to school. I was officially on leave”. He also had the support of his parents and some other persons around him like his partner Paul Allen. These were some factors that contributed to his courage and drive to succeed.
You have to be sure of the benefits of quitting school for your business and also weigh the options of being in school and running your business. Even when you start up and it’s becoming challenging and demanding, you have to seek advice and also think critically about the positive and negative effects of quitting school for your business. If the positive effect outweighs the negative effect, then you can go ahead with your decision.
The issue of quitting school for your dream or business is very delicate and it is a calculated risk. Ask yourself these questions below:
- Why do you want to quit school?
- Why do you want to study and still run a business?
- Why do you want to let go of your business and concentrate on your studies?
This decision is crucial so be very honest with yourself and also think critically, you don’t just jump at the decision.
- Cash flow management
Starting up a business can be difficult especially when you cannot manage your cash wisely. As a student, you have other school bills to foot and irrational spending will affect your academics and also your business success.
You have to understand how money comes in and goes out of your business. There should be a plan on how to spend man y for any reason in particular. In starting up your business, you should be able to account for every penny that comes in and goes out of your purse.
As a new business, you will want to buy different equipment and materials for your business depending on the size but before doing this, you should analyze the cost and reward of the equipment you want to purchase so as not to purchase what you won’t use for a long time.
To manage your cash wisely, you should have a budget and also record for every cash given and cash received. It is only about having a budget; it is about sticking to the budget; so you have to discipline yourself to work with the budget. In your budget, your expenses shouldn’t exceed your income so as not to be running your business on debts as this is bad for every business.
- Manage your time properly
As a student that wants to start a business, you have to be able to manage your time wisely. Time is limited and also valuable. Do not procrastinate as this will affect your efficiency in running your business and also your studies.
Try to know your school activities as this will help you plan for your business and schedule your activities properly. For every schedule you set out, make sure you stick to it.
In order to manage your time wisely, prioritize your activities and perform them according to their order of importance. Everyone has a way they arrange their activities according to how they can meet up and carry them out. If you feel that doing the less important task first will give you enough time to focus on the more important ones, then you can carry it out that way provided you will meet up and complete all the tasks.
- Setting up your business in the right location
You must have heard this in your business studies class; the location of your business is vital for the success of your business. Every business needs a good location depending on the type of business.
Your business should be located close to your target customers and they have to be able to access it at ease. Nobody wants stress especially when it’s their money. The customers are the reason you are starting the business, so your business should be easy for them to assess.
Your business should also be located close to the source of raw materials that is if you are processing or manufacturing like shoe-making, fashion designing and even restaurants or fast food. This will help reduce the cost of transportation of getting the raw materials for production.
Some businesses also have reacted positively to being located close to other businesses in the industry. There are some benefits your business gains from being located close to competitors or other businesses. It is called external economies of scale. It becomes easier to conduct a market research and there could also be joint partnership that could help your business in terms of finance.
- Find out if there are restrictions to starting up a business in the school environment
Planning on starting a business as a student, you should try to check with the school authority to see if there are any restrictions to starting up a business in the school environment and also know if the type of business you want to start up is accepted in the school or anywhere you want to locate your business.
Find out if there are any rules or regulations that may restrict your freedom of doing your business; it might be curfew, license and any other restrictions. Any business you must perform must be a legal business that conforms to the rules and regulations of the school and the environment.
- Try internet or online marketing
Online marketing is really becoming popular in the world today especially during the Covid-19 period where people had to stay in their homes to conduct business. Online marketing is the process of using any digital means on the internet to create awareness about your business to prospective customers and also get them to purchase your product or service.
The online marketing has a lot of benefits for your business especially as a student running a business, it will definitely help you save time and cost too. With the internet, you get to sell your product or service; no matter what you are selling, there is always a customer for the product online provided it is meeting a need. You have the opportunity to reach out to many people across the world.
You have to create an online presence for your business as it helps to boost sales and conversion. You can use some online marketing strategies like;
- Social media marketing where you use Facebook, Twitter, Instagram, Yelp etc. to market your product or service.
- Video marketing with platforms like YouTube, Vimeo, Facebook etc.
- Create a well-designed and user friendly website for your business
- Register your business on location listing sites like Yahoo local or Google local
- You can also run ads on PPC (Pay Per Click) or SEM (Search Engine Marketing).
Tap into the advantages that online marketing offers to modern businesses and see your business succeed.
- Do not see failure as the end of the road
It is true that nobody wants to fail and also there are many articles on “why new businesses fail?” but the honest truth is that failure is part of the success story and learning process. You are bound to encounter setbacks but it is how you handle these setbacks or challenges that make your business survive.
Challenges are bound to occur from different aspect of your business and as a student, you will also encounter challenges in balancing your studies and business but you have to be determined and never give up.
No successful entrepreneur made it without encountering challenges or setbacks at some point in their journey to success. They learnt from failures and came back stronger and better.
In your business plan, you are to highlight some possible problems and also solutions to those problems as this will help you get a little bit prepared for challenges and also have a contingency plan so as to support your initial plan because no plan is perfect until you have succeeded.
- Work with the right team
Your workforce is vital in the success of your business. You should do well to get the right team and hire the right people for the job.
As a student, it might be expensive to hire workers for your business so you should looking a working with the people around you provided they have the same passion and zeal that you have for your business.
Never think that you can grow a successful business alone; 85% if most successful businesses have a strong workforce. Even the Facebook you hear today was started by Mark Zuckerberg and his roommates who are now co-founders of the enterprise. It doesn’t matter how smart you are; they say that two good heads are better than one.
If your friends and family are people you can count on, then you can include them in running your business but do not get carried away by the relationship as this can cost you your business.
Having the right team is very important to help pivot the success of the business. So talk to your friends and roommates about your business idea and try to get their opinion whether good or bad but never get swayed by naysayers.
- Do not engage in impulse spending
This really affects the level of funds for the business. Impulse spending is when you spend money on items that you didn’t plan for. You buy things because you saw them and liked them. You must weigh the cost-benefit of items before purchasing them.
As a student starting up a business, you should buy things on luxury but on necessities. You should have a scale of preference where you arrange your needs according to how pressing they are so as to help you spend rationally.
Impulse spending will always come back to affect the business and also your cash reserve. Having cash reserve is very important for your business because there are good and bad days in business. There are days you will encounter a smooth and decent cash flow and some other days, you might encounter some hiccups or interlude in cash flow. Your cash reserve becomes a life line to help meet up with expenses.
Always spend money wisely.
- Have a proper management: do not be a control freak
Most businesses fail because of poor management which could be lack of trust, getting the wrong team or even being a control freak. The business idea might be yours and also the business too but you should learn to allow others air their opinion and participate in active roles. This will make them become innovative and show their creativity.
You cannot do everything on your own and also as a student, time is a limiting factor and so you have to delegate responsibilities if you have people working with you so as to meet up with school activities especially when you don’t have the intention of dropping out of school.
Be open-minded and also allow your workers (team) to bring what they have to the table as some ideas can help foster the growth and success of your business.
- Focus on your customers need
Most successful enterprises enjoy customers’ loyalty because they focus on the needs of their customers. The customer is always right and so your product or service should be channeled towards satisfying their needs.
This marketing concept will help you gain a foothold in the market and also retain your customers. Always take your customers into consideration; research about changes in their needs. Focusing on your customers’ needs will give you an advantage over your competitors.
- Be hardworking and also ready to learn
The learning process doesn’t end and it is not limited to the four walls of the institution. We learn as we grow and we learn every day. We learn from experience, reading books and article on business and also learning from others. You should be open-minded and ready to learn.
Always know that no one is an island of knowledge. Listen to people’s opinion and see what you can learn from them but do not allow naysayers to talk you out of your business. Be open to criticism from your customers and learn to improve.
You should also be hard working and do what you have to do at the right time. Like we have said earlier, do not procrastinate as this is a result of laziness. You should have a to-do-list of your activities every day and mark each activity as you complete it.
You should be creative so as to work smart. When you work smarter, you save time and energy for other activities. Do not multitask, perform task one at a time as this will help improve your productivity and also efficiency.
You should also make out time to rest as health is wealth. Do not skip meals and also eat healthy food so as to stay healthy.
Starting and running a business as a student shouldn’t limit you from expanding your business because many institutions and countries now encourage students and young ones to own businesses. This will help them become job creators instead of job seekers and this will reduce the unemployment rate.
The information in this article is to guide students and youths that are planning on starting up a business. The tips highlighted in this article are to help you succeed in starting up and running your business so that your business will not be among the 20% of new businesses that fail in the first year and some others that fail after some years.
As a student, even after graduation (if you can cope with running a business and studying), you don’t have to look for job as you already have something doing and you can also be an employer of labor.
Do well to read this article very well as we hope to see you establish a business and succeed like other successful entrepreneurs.