Lots of businesses started in college. It is a perfect time to try something new and get into entrepreneurship. So why miss such an opportunity? If you have a great idea on your mind, make it real.
Yet there is always a financial concern. How much will it cost? Do I have the needed funds? There is no ultimate answer as all business ideas are different. For example, starting an online retail shop, professional essay service, or a software development startup will all require different amounts of funds. Some things are very accessible in terms of budget, others are not.
Luckily, one can evaluate an approximate budget based on their plans. Here is how to do that.
Develop Your Idea
It all starts with an idea. What are you going to offer to customers? Is it a product or a service? What is the target audience? And what value are you proposing to them?
This is a crucial step in working on your business as it all impacts your future budget. For example, starting a blog or a website can cost about $50 per year with all necessary features, like hosting, WordPress theme, and useful plugins. But if you want to do something more complex, it might be reasonable to think about ways to find additional funds.
Write a Business Plan
First of all, having a plan is a must. Secondly, it is an outline of what you will have to spend.
It includes strategy, necessary tools, and assets, marketing budget, etc.
For instance, if you are starting a blog, you might not need to invest a lot in this. You have a laptop and can create a free WordPress website. But you probably will need some money on digital marketing to attract more people to your website.
On the other hand, if you want to sell self-made prints and T-shirts, you need to evaluate what materials you’ll need, where to buy them, and what tools are necessary, too. Also, figure out the website, packaging options, and shipping opportunities.
Make a Financial Forecast
When you’ve narrowed it all down to a concise business plan, it is time to create a financial forecast. There are two categories of disbursements.
Expenses and assets
It covers not only the tools and materials you’ll need. It also should include all the possible disbursements that have to do with launching a startup. What are those? Well, there are permits and business licenses. One can include website improvements as a forecast for the first year.
In this section, you’ll need to evaluate how much it will take to cover ongoing expenses for at least a year. What are those? It includes rent, insurance, payroll, marketing, or utilities. If you do not have such expenses, lucky for you. But do not forget to also add taxes here.
Sum It All Up
Now it is time to get to a final number. Sum up the ongoing and initial expenses and you’ll get a financial forecast for your startup. And the number depends exclusively on your needs and business plan.
Here is a pro tip – always plan for the worst. Add plus 30% to this amount just in case something goes wrong. It is a safety pillow that any new business needs.
Where to Get Funds?
If your idea is quite big, you might have to attract investment into your future company. There is nothing wrong with it and many companies started like that.
What are the options? There are several of them, look into each one and evaluate pros and cons:
- Loans, grants, or other types of financial assistance can be secured with the help of college finance and scholarship office, check if it is available at your college;
- Consider banks loans, interest rates, and opportunities to get it;
- Digital investment platforms like Crowdfunding or Indiegogo can be a great option;
- Pitching your idea directly to investors;
- Look for possible investors on websites like Wefunder or FounderClub.
Just remember to not settle for immense interest rates or something that can backfire.
Being in college is to your advantage. There are lots of resources available for you completely for free, so do not miss the opportunity to use them.
For example, you have access to an excellent library where you can find almost any essential information.
Also, you can sign up for courses that have to do with entrepreneurship, business management, or finances. Use your credits to your benefit! And one can always ask professors more practical and specific questions to get expert advice.
What else is available for free? Wi-Fi and copy and print services. Use all online resources your college gives you and look for student discounts. There are even discounts to buy software and hardware for students, which is a great plus.
One can also promote their company on campus and find first customers there. Not to mention that your peers might help and be a part of this venture.
The exact sum of money one needs to launch a company or a startup depends on their idea and business plan. Develop it as well as a financial forecast and evaluate how much money you’ll need. Plan a safety pillow, find investors, and go for it!