Over the past few week’s I’ve been reading more and more on the struggles that recent graduates are going through when finding a job or starting a career. Many graduates are going that one step further and launching their own business. Starting a business and coming up with a business idea can be overwhelming and time consuming. There are many things to consider.
Over this post I thought I’d share my experience and tips for young entrepreneurs looking to start their own business. I hope it helps.
Where do you start?
Firstly, think about your strengths and weaknesses.
- What is it that makes you shine?
- What skills do you have that you can put into a business?
Having a good idea of these will help you decide what you are good at and what you can and can’t do. You might have a great business idea, but you might not have the skills to make a successful business. It’s important to start here so you can narrow down on some of those business ideas.
What is the reason for starting a business?
- Why do you want to start a business now?
- Is it because you want to earn extra money?
- Do you want to make big bucks before you’re 30?
- Or just want something to pass on to generations?
You should discover your motivation to starting a business before you go about trying to achieve a successful business. Make sure from the beginning that your personal goals are compatible with your business idea.
Are you the right age for starting a business?
I’ve seen many individuals start a business at a young age and not achieve their end goals. But on the other hand, I’ve also seen many young entrepreneurs start from a young age and go on to achieve wonders. Have a read of my blog on the Canva CEO. Age is not really an issue, so I would suggest not to think about whether you have the life experience to start a business but to think about whether you have the thought process and are in the right circumstance to start a business. I started The Grad Hub at the age of 35 but had the idea at 21. I wanted to gain experience but looking back I feel I should have started this business a lot earlier. Your age should never really be an issue.
You’ve jotted down your strengths and weaknesses, noted your reasons and had a thought about your skills amongst other things. Now’s the time to start thinking about the business idea.
Begin thinking about your business ideas
You might already have a business idea in mind, a hobby maybe that you want to turn into a business, but how do you know it’s a fantastic business idea to start a business with? Start thinking about what your business will solve for the customer. What solution can you provide?
Start researching and looking for businesses already offering a solution. How can your idea provide a better solution? Apple entered the mobile phone market years after many other providers, however they were able to capture the audience with their unique technology.
Are you cheaper than other businesses? Look for ways that you can provide significant savings for the customer.
- Have you thought about the future of your business?
- What will your business look like in 5 years?
Start to think about the future and where your business will be in 5 years’ time. This will allow you to think about new markets that your business can move into or new technology that can help your business grow.
Research, research, research
Once you have thought about the ideas you have jotted down, start researching. Start thinking about your target market.
- Is there a market for your business?
- Who are your potential customers?
Understand their demographics further. Have a look at your competitors. Do a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis on them. You basically want a clear idea of the competitive landscape and how your business can fit in.
I remember when I was conducting my research for The Grad Hub, I went around to several universities and got hundreds of students to fill in a questionnaire which helped me create a compelling business plan. Get out there and research.
Do you have a sales and marketing plan? You should have a good idea of what sales and marketing channels you will need to pursue in order to reach your target market and grow your market share.
What funding opportunities are available to you? When I set up my business, I used the bank of mum and dad until I was ready to go alone. I started my business off with £10,000. That’s setting up my website, paying for an accountant, having design work done, purchasing marketing materials, paying for event stalls, advertising on social media and purchasing the technology for me to run a business. Is this business going to cost a significant amount to set up? This is essential to understand as it will determine whether your business has the resources it needs to grow. Think about small business grants, business angels, venture capitals or bank loans. I will go further into funding options in my next post.
Test your business idea
Now you have an idea. You have done your research, before you go any further, test the waters. You should look into the fastest, cheapest and vigorous way to test your business on your target market. How you test depends on your business idea, but you could look into the following ways:
- Create a professional looking website landing page – this can be done easily with WordPress or any other similar websites
- Find email addresses of potential customers and contact them about your offering
- Build an online store on WordPress, Etsy or any other websites. Then advertise on Facebook, Instagram, Google and see how many clicks you get through to your website.
- Set up a market stall. This can be done at festivals, local communities, universities and gives you a face to face selling opportunity, enabling you to get some real reliable feedback.
- Do some telesales. Call potential customers and see if there is any interest.
Create a business plan
You now have this amazing idea. You’ve tested it and you’re thinking what next. Now’s the time for you to create your business plan.
The Prince’s Trust has a free business plan template that you can download. They also provide you with top tips on how to fill it out. In a nutshell your business plan should comprise of:
- An Executive Summary
- Your Elevator Pitch
- Your Background
- The Products and Services you are offering
- Information about your Target Market
- The Market Research you have conducted
- Your Marketing Strategy
- Competitor Analysis
- Operations & Logistics
- Costs & Pricing Strategy
- Financial Forecasts
- Cashflow Forecasts
The UK Government website also has some fantastic information on how to write a business plan and why you need a business plan.
The aim of your business plan is to share with others, mainly investors or partners, what your objectives are and how you are planning to get there. The business plan should help people understand what your business is about.
The business plan is a document that will always be used, so it is essential you keep this updated as often as possible.
There’s more to setting up a business including registering your business with companies house, setting up finances, accounting and tax. Plus protecting your business with legal and insurance, but we will leave that to our next post.
Speak to a business advisor
Before you go and set up your business, I would recommend speaking to an advisor. No one told me to speak to an advisor before I set up The Grad Hub and if I knew better before I would have made different choices. But I guess you can speak to an advisor at any stage of your business and my stage was 2 years in. However, I would recommend speaking to someone sooner rather than later as they will help you understand your end goals better. They will pick out flaws with your plan and help you develop it into a suitable plan for investors. They will further put you in touch with potential investors and be with you every step of the way.
I used a company called the London Growth Hub. They support London’s small businesses and offer hundreds of programmes and initiatives including ways to unlock finance, access workspace and business mentoring. Plus they have a library of useful factsheets, news, articles, podcasts, videos and more to bring you all the information you need to start and grow your business.
And what’s more, the service they offer is free of charge. You do need to have a business based in London however to receive this advice. But many regions also have similar hubs. i.e this one is the link to the Manchester Business Growth Hub.
The Prince’s Trust Enterprise Programme
Have you heard of The Prince’s Trust? They’ve helped over 86,000, 18-30 year old’s living in the UK, turn their big ideas into reality and start their own business. From training and mentoring support to funding and resources, The Prince’s Trust are here to help you become the best entrepreneur you can be. Their free Enterprise programme takes place in a centre near you and is broken down into stages:
- Info session
- Build your business
The Prince’s Trust is ideal for anyone dreaming of becoming their own boss.
Are you starting a business in your spare time?
Many of us can’t afford to quit our full-time jobs and start a business. I know how that feels. During the day I am a Marketing Director and in the evening, an Entrepreneur. I guess running a business in your spare time is one way of reducing the risk of starting your own business.
Have you really thought about what type of business you should be running in your spare time?
To ensure you are able to manage your business effectively you should look into the type of business you want to run in your spare time. Think about the following:
- One that allows you to communicate with customers via email than by phone
- An internet business that does not require your constant attention
- A business that you can outsource to others, i.e. a telemarketing firm who can handle calls
- A business that is not in competition with your 9-5 job
Should you tell your boss you are running a side business?
For my business this took a while to decide. I first built The Grad Hub website and got it running before telling my boss as I didn’t want my boss finding out from someone or somewhere else and wanted to be open. I would suggest being as open as you can but keep your entrepreneurial intentions to yourself. No boss likes their employee’s attention focussed elsewhere so only provide information on a need to know basis.
Don’t ever work on your business during your 9-5 job. Don’t give your boss any reason to clamp down on your business venture, whether that’s working on a new product during office hours or taking some stationary home for your own business. Keep them both separate.
How many hours should you spend on your business?
It’s now 1am and I am still writing this blog post. I’ve done a 9-6 job, put the kids to bed and started working on content. Make the most of all the hours available to you. Don’t forget you also have your lunch hour to work on this venture. But please make sure you get some rest. You don’t want to be ill or run-down, which can lead to poor judgement and will lose further hours.
Many of the worlds successful businesses started from the smallest of plans. There’s a lot of information I’ve piled into this post but I hope it’s been of help and good luck with your venture.
In our next post I will share my tips on the other parts of setting up a business including:
- Registering your business with companies house
- Setting up finances, accounting and tax
- Protecting your business with legal and insurance
If there’s anything I’m missing, I’d love to hear your thoughts. Drop us a comment below or connect with me on LinkedIn.
A bit about the author
Rohan graduated with a BA Dual Honours Law and Business Admin (Marketing) Degree from Keele University in 2001. Since graduating he has held several roles including Recruitment Consultant at Kelly, Retail Branch Manager at Threshers, Marketing Assistant at Emap, Marketing Executive at United Business Media (UBM), Exhibitions Marketing Manager at IQPC and Marketing Manager at the Royal Institution of Chartered Surveyors (RICS).
Rohan is currently the Director of Marketing at Staffing Industry Analysts the global advisor on staffing and workforce solutions, where he is responsible for growing the presence of SIA globally through the promotion of research, award-winning content, data, support tools, publications, and executive conferences and webinars. In 2018 Rohan founded The Grad Hub, an online marketplace and job site for UK students. Through The Grad Hub, Rohan provides students with university advice, career advice, travel advice and more. Have a read of Rohan’s story here.
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- Young Entrepreneur Spotlight: Melanie Perkins, CEO, Canva