Being a university student is a really weird point in time to be. People who will go on to lead very normal and responsible lives temporarily lose their minds. Experimentation is the thing to do and “being young” is the perfect fallback when things go wrong. Most amazingly it is OK to fail and try something else, a lesson that is quickly lost upon graduation.

This is the perfect opportunity to not only wake-up in someone else’s house with no recollection of last night, but also to start a business!

I’m a Student that Wants to Start a Business Eventually, but Why Start One Now?

The perceived barriers to starting a business are a lack of time, money, and experience. Given infinite time and someone else’s money to play with the people who complain about this stuff would suddenly all become master entrepreneurs. Too bad real life doesn’t work this way. Everyone needs to start somewhere with all the risks and work associated with it.

As a student you don’t have a hell of a lot of assets to risk, so your total investment and risk in a business might be a month’s beer budget. Your bills are minimal and you only have yourself to support. Student loans and parents are there to fall back on if things go poorly. Unless you win the lottery it’s only going to get tougher to get started as you get older and start supporting a whole family plus a mortgage payment.

There’s no obligation to start something big that will make you rich or which you will run for the rest of your life. It’s always nice if things go that way, but you have so much to gain even from starting a little thing that nets you $200 total. You’re real return on your efforts will be the amazing experience you’ve gained, a very valuable asset in entrepreneurship.

I’ve started businesses in high school and university, two of which are now looking to be serious long-term successes. However many failed before launching, and others launched to deaf ears. I’ve noticed some things time and time again in my own ventures and those of my friends. From this experience I’ve decided to bring you some success points that are important for anyone starting a business, but are particularly strong points of failure for students.

Start Something Sensible

One of the lessons you may end up learning is that the carefully thought-out idea you had turned out to not be so good. This is tough because it spells almost certain doom from the start. Many students forget to do the whole “is it actually viable” check before going ahead with a venture. This doesn’t have to be a complex report involving looking up meaningless demographic statistics and printing pie charts. Ask yourself basic questions like “who is going to buy this?”, “why would they buy it?”, “how will they know about it?”, and “how will I make money?”. Now answer these questions honestly rather than with what you want to hear. Better yet run your idea by that brutually honest friend who won’t hesitate to tear it apart.

Check out this list of 8 stupid fratboy ideas for cliche examples of what not do. Note that it’s not so much the products that are bad, it’s the lack of thought characteristic to each one.

Spend Very Wisely, but Don’t be Cheap

There is a fine line between the importance of minimizing business expenditures on a shoestring budget and just plain being cheap. I forget who said that you can’t cost-cut your way to greatness, but it’s certainly true. Some stuff just plain makes sense to spend a little extra on, like 500 color business cards, or your own domain and a web host that won’t go down every Friday.

On the same note don’t try to start your business for nothing. There are good reasons for doing so, but not wanting to risk any money is not one of them. Given the financial situations of most students, I would say that as much as $500 can be risked before you’re looking at any substancial amount of money. Here in Ontario that is the cost of a single one term university course; if the business goes under you will still have gotten at least a course’s worth of knowledge and experience under your belt.

I find that the larger obstacle to putting your money into a business isn’t the actual financial situation somebody is in, but the fear of the sense of loss if things don’t work out. Ask yourself how your life will look if you do lose that money. Will it matter at all in the long run? Will it have been a genuinely bone-headed move in retrospect if it fails? If your answer to the latter is yes then your idea needs more thought.

Don’t Partner with Anyone Less Passionate Than You

The students that start a business together, particularly one that requires no upfront investment, and then do absolutely nothing are a university cliche. The excuses are always a lack of time and money, with neither partner ever being free at the same time. Exams and wing nights get in the way you know. Yes the cruel reality of university life has crushed these poor entreprising souls.

The reality is that running a business is a lot of hard work, and inevitably the amount of said work put into the venture by each person becomes equivalent to that of the person least serious about the project. If you don’t both firmly commit to a certain amount of time to spend on this, trust each other, and put real money into the game, stuff just isn’t going to happen.

Don’t partner with someone for the sake of partnering, only do it because your partner brings something important to the table and both of you are absolutely set on making the business a reality.

Have a Plan to Advertise the Hell Out of It

Those feel good stories in the press about student entrepreneurs making it big represent a miniscule portion of student businesses. No matter how cool your business idea is, you’ll find yourself very short on customers if you’re marketing plan involves a media frenzy begging for your story. You must promote the good old fashioned hard way, and make this your priority. If you have only ten things that you will do, that’s not enough. In all the successful campus events I’ve been involved, the promotion for those exceeded that. Think how much more it takes for a product or service that costs money. Be a Shameless Self Promoter.

You’ll find that most methods you try don’t work, or don’t work well. Keep trying new things while putting more effort into the strategies that are working. Make sure you can measure where you are getting your customers from too, otherwise you are doomed to continue spending significant time and money on the tactics that have failed.

Don’t Give Up Too Easily

School and life tend to get in the way very quickly. You do need to put some time and effort into this, and it can be harder to do when the initial excitement has worn off and you’re profits are $2 after two weeks of hard work. When your sales are inevitably much lower than you first expected, you need to analyze why that’s the case. Don’t give up too quickly, but don’t keep pushing forward blindly. Fix the problems in your business model and understand how you will eventually make money through realistic way. Few people have gotten it right the first time.

If you are looking at starting an online business be sure to read my guide to creating a successful e-venture where I cover many of the important considerations and pitfalls involved. Best of luck!

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This entry was posted on Tuesday, August 15th, 2006 at 7:31 am and is filed under Business, Entrepreneurship, Startups, Business Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.