This is it. The culmination of all the late nights and coffee-fueled days. All your hard work has led to this moment. You’re finally graduating. Once all the confetti clears and you’ve turned the tassel on your graduation cap… what comes next?
For many recent graduates, celebrating this accomplishment doesn’t last long. With school in the rearview mirror, it’s time to focus on the road ahead: your career and all the decisions you’ll need to make now.
Many grads will start job hunting immediately after graduation. However, most — about 60% — college students have a business or are considering starting one after graduation.
Which option is right for you? Let’s explore whether starting a small business is a good option for you and some strategies to help get started on the right foot.
For new grads considering starting their own small business, there’s a lot to consider. Do they have the right experience and expertise? Is it a good time to start a business? Can an entrepreneur succeed right out of college?
The road forward after graduation is filled with opportunities and challenges alike. For outgoing students, graduating could be a chance to start fresh and possibly even take some measured professional risks. One way in which new grads may often have the upper hand is that they’re typically on the young side. College debt aside, they’re less likely to have dependent family members or costly mortgages. Some may be able to continue living with their parents to save money.
This can help put many new grads in a great position to start their own small business. However, starting a business can be a risky venture. Having fewer major financial and familial responsibilities means a greater ability to make sacrifices while growing their business.
While this certainly isn’t going to be a universal experience, many recent grads have a good amount of time on their hands. Full-time students transitioning out of college typically won’t be working full-time jobs yet.
Working 40 hours a week can make it difficult to be productive in your downtime. For students who aren’t working full hours, once you’ve walked across the stage, you may find yourself with a little buffer time while you come up with your next professional move. This could be a great opportunity to begin creating a business plan and making moves toward launching your start-up.
In addition to lending itself to more time, forgoing the rat race could also help you start a business off on the right foot. What you may end up lacking in work experience, you might just make up for by having a fresh perspective.
Professional experience can be extremely valuable, but it’s not without its problems. For prospective business owners, their work experiences could have a negative impact on how they build and run their business. Without that lengthy resume, you’re less likely to have picked up bad habits and lax leadership skills from dysfunctional work environments. Everything you implement will be based on your own knowledge and intuition, rather than colored by previous management teams.
First things first. If you want to start a small business, you should have a clear idea of exactly what that business is. That doesn’t just mean knowing what product or service you want to provide — it also means figuring out what gap it fills. What problem will your business solve?
Maybe your community is lacking a flower shop. Or maybe the contractors in your area are focused on specific types of repair and maintenance, but could really use a general handyman who can provide a wider range of services. This will help you identify your biggest selling points.
It’s easy to get swept away in the ideation phase of starting a small business. Make sure you’re not neglecting the basic administrative tasks that you’ll need to complete in order to make your dream a reality.
A good place to start is to look at your state’s business licensing requirements. Each state is different. Not every business will need a business license, but it’s important that you confirm whether yours will need it. Another important bit of admin to consider is whether you want to create a Limited Liability Company (LLC). You can learn about the benefits of being an LLC and how to register your business as one here.
If you’re planning to become a contractor, make sure you also look into your local contractor’s license procedures. Making sure you’re correctly licensed and have the appropriate credentials could save you a lot of hassle down the road.
Having a vision for your small business is important. But if that vision is only in your mind, it can be difficult to pitch your business to others or create an action plan to get the business started. Making a business plan can help.
A business plan is typically a master document describing what your business is, who it’s for, your goals for it, and how you plan to achieve those goals. It will help you organize your ideas into a concrete plan, which you can refer to as your small business comes to fruition. Creating one doesn’t need to be difficult, either. A business plan template can be a great jumping-off point.
Part of ideating and creating a business plan should usually involve input from the target market. Figure out who your small business is meant to serve, and bring your thoughts to them. This will mostly be people within your personal circle, such as friends and family members.
Ask them about the problem your small business is meant to solve and what they want from it as consumers. Getting input directly from your intended demographic can be a valuable tool for optimizing your business plan.
Starting a small business straight out of college often means being a little green. A lot of the skills needed to run a successful business are ones that are learned by doing. You’ll likely be learning to run a small business on the fly. But there is an upside to this.
Starting from scratch without much work experience could make it easier to adapt when necessary. Your original plans for your business may not work out the way you want — being able to shift focus to better suit a changing industry landscape could help you stand out from your competitors. Don’t be afraid to play ideas by ear.
You can learn a lot by speaking with other business owners and entrepreneurs. That’s why it’s important to prioritize networking when starting a small business.
Speaking with people in your industry is a great opportunity to bounce ideas off someone and work on your elevator pitch. You can seek advice and learn from their experience. It could even help you get leads and find funding. Check out our guide to small business networking to learn how to make the most of your professional connections.
Starting a small business often involves some hefty upfront costs. New graduates especially may find it difficult to meet those costs. School can be pricey, and without a full-time paycheck to back you up, funds may be in short supply.
Touch base with any potential investors you meet through networking to see if they’re interested in helping finance your start-up. Consider getting a small business loan and grant. Check to see if your school or university offers grants for alumni, and look into funding programs from the Small Business Administration. You also may consider getting a part-time or contract job on the side to help fund your dream.
As with any financial decisions, it’s also a good idea to consult a financial advisor or professional.
The road to starting a small business can be long and lonely. For recent grads, it can feel like an uphill battle against financial constraints and lack of industry experience. There will be many challenges as well as victories. Make sure you reach out to your friends and loved ones for support. You’ll want people in your corner if it’s for emotional support to help you celebrate the little wins along the way.
Building a support system doesn’t just stop at friends and family, either. You’ll need a whole host of people, services, and scheduling techniques in order to bring your plans to life.
One thing no new small business owner should be without is business insurance. Simply Business® offers a wide variety of commercial policies from top national insurance carriers to help you find coverage that fits your new small business’s needs. Our online quote tool is a quick and easy way to get quoted and explore options for your business. Prefer to do it by phone? Call our licensed insurance agents at 844-654-7272. They’ll walk you through your options and answer any questions you may have.
You’re taking a leap of faith to bring your dream to fruition. Make sure you have business insurance as a safety net.
After several years of working in insurance while also freelance writing, I've finally found where the two interests intersect. I'm a writer with Simply Business with an insurance processing background and a love of research.
Kristin writes on a number of topics such as small business trends, license reciprocity, and BOP insurance.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.