With the decreasing graduate job market a hot topic for media stories right now, it’s hardly surprising that more and more graduates are considering creating their own work. A word of caution though, if you’re thinking of setting up a business as a quick money making solution…think again! Being a business owner is lots of hard work, can be all-consuming for the first few years and definitely isn’t for everyone. That said running your own business can be hugely rewarding, providing you with a fantastic sense of achievement, a certain sense of control over your destiny, a constant stream of learning and development and hopefully, over time, a good income.
The time is now
Over the years I have worked with hundreds of graduate entrepreneurs, from those who have set up a small business within their University to those that have developed successful global businesses. With the benefit of hindsight I could say that I wish I had set up my own business earlier but the big difference is that the support just wasn’t there when I was in my twenties, whereas I think NOW is the right time to setup in business. The environment has never been better, with the UK Government funding start up loan schemes, some specifically for under 30’s and many business networks and training schemes targeting a younger age group for free or discounted support.
Never too young
The one big advantage to setting up a business when you are young is that you are likely to be in a position to take more risks. You may still be living with parents, have no dependents or few responsibilities, in which case now is a great time to dip your toe in the entrepreneurship pool. However the downside to having limited responsibilities is possibly a lack of assets or funding but don’t let this deter you. Of course if you’re considering opening a chain of restaurants you may have to rethink this and maybe consider starting with a small catering business that can be run from home but thousands of businesses are setup and can be run on a shoestring budget. It’s possible that all you’ll need is a simple website, a computer and lots of drive and ambition.
What type of business should you start?
Look at you skillset could there be a demand for this? Could you offer your services probono (free of charge) for one or two initial clients in return for recommendations and referrals and as a means to gain experience and build up your initial portfolio? Consider your hobbies and interests and think about whether there might be any business potential in some of the things you love to do the most.
Some businesses that require a small initial outlay and running costs include:
- Web based businesses such as specialist search portals, affiliate marketing, product sales or development of mobile apps.
- Business services such as secretarial, bookkeeping, ICT services, web design or translation services.
- Consumer services such as catering, fitness training, health and beauty, gardening services, etc.
What do you need to know and who do you need to know?
The key is to research your market place. Think about your prospective customers: who are they and where are they? Can you do some market research with this audience? Maybe use social media, local networking events or be prepared to ask questions on the street or door to door.
There are areas where your lack of work experience will be an obvious hindrance so do all you can to turn that around:
Social capital – network like crazy! Join local business networks, university entrepreneur societies, industry sector networks and talk to everyone you know in the world of business and work in order to build up your social capital.
Experience – go and get it! Offer to do some jobs for free, at a reduced rate or in return for much needed advice or services.
Running the business
It’s not all about your products or services though, as there is some admin that comes with setting up and running a business. You’ll need to register the business with Companies House and HMRC, setup a business bank account and file tax returns. It’s worth seeking professional advice on these areas as getting it right upfront can save a lot of headaches in the future. A good accountant can help or if you are working with a business centre or start up loan scheme, they should guide you through this.
The first thing you need is the idea, followed by lots of drive and ambition, a good work ethic and resilience to be able to bounce back from the inevitable knock backs. Everything else can be learnt or developed along the way.
Alex Ritchie is the author of Collins’ Starting a business in 7 Simple Steps (£7.99) part of the new 7 Simple Steps Series.
Alex has over 15 years of experience supporting businesses. She runs two small consultancy based businesses: www.alexritchieconsulting.com