We've all heard of legendary college entrepreneurs. Is it the right path for you?
- College entrepreneurs might be foolishly tempted to drop out of school.
- It is possible to be successful as a college entrepreneur, with the right planning.
- Some universities can help with seed money and business planning.
We've all heard the stories of college students starting their own companies and going on to grow their startups into hugely successful corporations, such as Mark Zuckerberg with Facebook and Michael Dell with Dell Technologies. It's like the ultimate American dream – growing a business from nothing while most of your peers are studying for midterms, rushing to complete term papers, or partying with friends.
While today's society hails these students as titans of industry, the path they chose is not one that everyone can afford to travel down. If you're thinking of starting your own business while still in college, there's a lot to consider before going full throttle.
Why go to college or finish your degree when you can start your own business now?
College has become the "logical next step" for most students after they graduate from high school. In 2017, 19.6 million students were enrolled in public and private colleges in the U.S. While most projections see these numbers steadily increasing over the next 10 years, more and more students are seriously evaluating whether college is the right fit for them, especially with the cost of attending rapidly increasing year over year – the average cost of tuition and fees for the 2018-19 academic year was $35,676 for private colleges and $9,716 for public colleges.
However, college still offers some networks and resources for enterprising students looking to start a business, from free Wi-Fi to mentoring and fellowship opportunities.
If you decide pursuing a college degree isn't the right path for you, you may still want to consider enrolling in business classes. While it's not impossible to launch your own business without a college degree, there are benefits to at least taking a couple of business-related courses – such as management studies, accounting, communications and marketing – to set you and your business up for success. These classes will be especially helpful if they let you dive right in to learn exactly what it's like to run your own business. Many non-degree business programs and mini-MBA programs are available, and most of the classes can be taken online. [Read related article: Advice for Starting a Business After College]
Can you really start a successful business in college?
While the lists of entrepreneurs under 30 are always impressive, it's even more impressive to see how many entrepreneurs successfully launched their businesses in their teens and early 20s. Yes, everyone's heard the story of Mark Zuckerberg starting Facebook out of his Harvard University dorm, but there are so many other examples of college students starting their own businesses. We previously published an article listing some successful young entrepreneurs, but there are many more inspiring success stories. Businesses like ModCloth, Reddit, Snapchat and The Onion were all started by college students and have had continued success since their launch. So, it's definitely possible to launch a startup while still in college, but it requires careful planning and thought before you dive in.
What are the first steps to start your business in college?
Your best first step to launch your new business is to create a business plan. Whether you want it to help attract investors or to provide clarity and direction, a business plan needs to address several things, including an executive summary and description of your company, products, or services; a breakdown of your market analysis, company organization and management, and sales and marketing plans; and financial projections and funding requests. The exact purpose of your business plan will dictate the information you need to include.
Regardless of the purpose of your business plan, the best way to start putting the document together is to do your research.
"To write the perfect plan, you must know your company, your product, your competition and the market intimately," wrote William Pirraglia, retired senior financial and management executive.
The most important thing your business plan needs to cover is your company profile. This should include the history of your business, how it is unique and what problem it will solve, the products or services you offer, your target demographic, and the resources you have at your disposal. If you're writing the business plan to attract investors, you need to document as much information as possible to provide the complete picture to potential investors – remember, their main objective is to ensure your business will provide them the best ROI possible. [Need help writing your business plan? Check out our reviews and best picks of business plan software and services on our sister site, business.com.]
Something else to include in your business plan is your exit strategy. While that may seem counterintuitive and potentially damning information to include in your business plan, having an exit strategy is not about planning for the absolute worst. Instead, it shows that your business has your entire focus and that you can devote all of your time and energy to growing it, because you have every step already figured out.
How do you finance a business with no money, no credit and no expert friends to help?
While it may seem impossible to gain enough money to successfully launch your business, especially if you have little or no credit, there are options to get funding. One of the perks of starting a business while you're in college is the unique funding opportunities available to students. College incubator programs offer a community where entrepreneurs can present their business ideas to advisors and tap into external resources. For example, the University of Pennsylvania's Wharton School awards seed funding and intern fellowships to student entrepreneurs.
If the incubator program at your school doesn't offer funding, the school might run business plan competitions. Even if you don't walk away with the cash prize, the competition encourages you to refine your business plan and introduces you to like-minded businesspeople. Here is a list of business plan competitions in 2019.
There are also avenues outside of your college you can pursue for funding, such as startup business grants, venture capitalists and angel investors, and personal business loans. If you don't have enough credit to qualify for a personal loan, you can always apply for a scholarship. Many corporations run scholarship competitions where the winners can receive thousands of dollars. This can provide you some much-needed, interest-free cash to invest in your business. [Looking for an alternative business loan? Check out our reviews and best picks.]
What type of businesses are great for college students to start?
There aren't specific businesses or industries college students should consider when thinking of starting their own business. It may be beneficial to set your sights on something your peers are interested in or something that addresses a pain point of theirs – you'd have unlimited access to your target demographic – but it certainly doesn't mean those are the only business ideas college students should pursue. The most important thing is that you're passionate about whatever business you choose.
Do you see a career with your business beyond graduation?
You don't necessarily have to envision operating your business for the rest of your life, but you do have to be passionate enough about your business for it to have the best chance for success. As Thomas Watson Sr., the late chairman and CEO of IBM, stated, "To be successful, you have to have your heart in your business and your business in your heart." If you don't feel attached to your own business, it can be difficult to convince others to join your cause or provide the financial backing to get it off the ground.