Growing numbers of university students are breaking with tradition, rejecting the idea of a graduate career with a large company, and deciding instead to start one of their own.
Indeed, the number of startups being set up by students has increased by 54% in the past 12 months, according to figures released by PeoplePerHour earlier this year. And a 2013 survey by the same company found the number of graduates registering as freelancers or micro-business owners had increased by 105% over the previous 12 months.
Many have already taken the plunge, overcoming the challenges of finding funding, mentoring and business support to run successful businesses. We asked them for some advice to pass on to budding graduate entrepreneurs. Here’s what they said:
Use all your contacts
“Make use of all possible connections at university; your enterprise department team should be able to help you with the necessary introductions,” says Arina Osiannaya, co-founder of the Business Funding Show.
“Beyond university societies, there are many cross-university support associations, including the National Association of College and University Entrepreneurs, which works to engage students in enterprise.”
Test out your business idea
Richard Heggie, head of high growth and entrepreneurs at Barclays, says: “You need to focus on really understanding your customers’ needs. Generally, the more customer and market testing you can do, the better. This is especially important if you will be seeking outside investors. Make full use of networking events as well as other avenues, to gain as much knowledge about your target customer base as you can.”
Find the right funding
It is one of the hardest parts of the startup process, and success will very much depend on your product, says Jay Gujral, a graduate co-founder of Gradlancer, a portal connecting students with freelance work opportunities.
He says: “A loan could work if you’re moving into the fast paced world of e-commerce, but if your business is a slow burner, revenues will take time to come in. You could ask friends and family to help you bootstrap, or see if they have a contact who loves your business idea and wants to get involved.”
Crowdfunding is an alternative finance option that has helped many entrepreneurs find early stage capital. Gujral adds: “Done properly, it can make your business go viral and get people talking about your product. You can also end up with funding in excess of what you were looking for.”
Other sources of capital include the Start Up Loans Company, a government-backed initiative that allows entrepreneurs with viable business plans to borrow up to £25,000.
Business grants, of which there are generally three types – government, European and local – are also available, but can take longer to track down.
Start small and invest only what you can afford to lose
Lee Waring, an accounting and finance graduate from the University of Central Lancashire, is now co-founder and director of automotive e-tailer RTG Automotive.
He says: “I’d always planned a career in accounting, with the ultimate goal of having my own accountancy practice, so I’d always had a desire to work for myself. At university I started selling on eBay with my dad as a hobby, which quickly became a viable business.”
Waring’s finance and accounting skills certainly came in useful. Having a good grasp of accounting principles meant he could have discussions with his accountant about different ideas and the tax implications.
“We’ve never used loans or credit, and have always only bought what we can afford and reinvested profits to fuel growth,” he says. “This has a number of advantages. If the business doesn’t take off you can cut your losses and you’re free to pursue new ideas. Using profits to grow your company means that it grows relative to its success. If you’re not careful it is easy to have a good spell and get carried away, then get caught out if revenue dips for any reason.”
Find a ‘door-opening’ role to gain business experience
Oxford graduate and serial entrepreneur William Reeve is currently co-CEO of online grocery retail business Hubbub.co.uk. His ‘door opening’ role was with management consultancy McKinsey & Co. in London, where he spent two years.
He says: “It was an amazing experience that gave me the grounding, the idea and the network to build my first company, Fletcher Research. When I was finishing my degree I didn’t know what I wanted to do, although business was a prerequisite, so I wanted something that would teach me stuff, was prestigious and blue chip, and kept my options open. McKinsey fitted the bill perfectly and I made lifelong connections there.”
Track down a mentor
The value of mentoring can never be underestimated – it can be a vital means of support for a young entrepreneur. A mentor could be a lecturer from university, a friend, a family member with business experience, or a seasoned business owner keen to help newcomers.
“The internet is a fantastic tool for a finding mentor, in particular Twitter and LinkedIn,” says James Gupta, graduate entrepreneur and co-founder of revision app Synap.
He says: “Reach out to people who are well respected in your industry and try to get them excited about your vision. While they may be very busy, most people appreciate that they’ve had help and mentorship to get where they are, and would love the opportunity to ‘give something back’. With a bit of perseverance, you might just be surprised at who you can engage as a mentor.”
Don’t be afraid to fail
Not everyone gets everything right the first time round, and experience is the best teacher, says Buki Ajimobi, managing director of The Nambuco Experience and a law student at the University of West London.
And having seen her own business falter – at the hands of online hackers – she speaks from experience.
“If you ‘fail’, use it as a stepping stone to greatness as opposed to something that puts a kink in the system,” says Ajimobi. “If you don’t want to jump straight in with both feet, there are lots of opportunities to practice entrepreneurialism in a safe environment, for example the Young Enterprise Start-Up programme.”
The scheme runs at universities and higher education colleges throughout the academic year and gives students the chance to set up their own company, as part of their studies, or in addition to them.
This advertisement feature is paid for and produced to a brief agreed with Simply Business, the UK’s biggest business and landlord insurance provider, and sponsor of the supporting business growth hub.
