The traditional path for college students has typically gone like this: get a degree, find a job with reasonable pay and benefits and, as long as the job goes well enough, stay there until retirement. Today, though, there are numerous paths to employment.
Some college graduates are branching off and starting their own businesses while still paying off student loans. If you want to become your own boss, this post provides tips to guide you along your own entrepreneurial journey.
Clarify What Products or Services You’ll Offer
Perhaps you’ve already come up with your big business idea. Maybe you’ve recognized a need for college students to have round-the-clock computer troubleshooting services at an affordable price. Or, maybe you realize that people with significant medical bills need guidance.
Or, maybe you have the entrepreneurial urge, but aren’t entirely clear yet on what direction you want your business to take. If so, Entrepreneur offers great advice on how to evaluate yourself and come up with the best business idea for your personality.
To evaluate yourself, examine your skills and areas of expertise, where your passion lies and what type of lifestyle you want to live. If you still need to hone your business idea, the article shares that you should:
• Figure out what’s coming next, whether it’s a new technology or business environment; how can you be ahead of the curve?
• Think about what bothers you and figure out how to fix that for yourself—and then for your customers
• Brainstorm new ways to use the skills you already have, and determine what fresh perspectives you can offer clients
• Determine how to take a current business offering, and then make it better, or cheaper, or faster (even better, make it more than one of those attributes!)
Research Your Target Market and Your Competition
Regardless of the product or service your business is selling, the success of your business depends on your understanding of the needs, wants, and pain points of your potential customers, as well as the current competitive landscape.
The Small Business Administration (SBA) offers a wealth of information and resources on this subject, providing a list of questions you should ask yourself about current:
• Demand for your product or service
• Market size
• Economic indicators
• Location of customers and your business reach
• Marketing saturation
• Pricing strategies
You can find out more about customer wants and challenges through these tools: surveys, questionnaires, focus groups, and in-depth interviews. The SBA link shared above includes links to numerous resources to use for competitive intelligence, and you can also get free business counseling .
Write the Best Business Plan Possible
Writing a quality business plan will not only help you clarify the goals of the business, but can also be a key piece when you approach financiers later on. With a business plan, you are creating a roadmap so you can efficiently build, structure, run, and grow your entrepreneurial vision into a successful business. A quality plan helps to convince other people of your unique vision and can encourage them to want to invest in your company.
Your marketing will likely be a key piece in the growth of your business, so be sure to consider that in your plan. On the one hand, digital marketing has opened up incredible new ways to get yourself in front of prospects.
But it’s also easy to feel overwhelmed by all the options available today. And while no two businesses are exactly alike, this blueprint for digital marketing for startups offers a logical, step-by-step strategy to get you started as you develop your own marketing strategy.
Calculate Start-Up Costs and Ongoing Expenses, and Fund Your Business
Now that you’ve come up with a business idea and created a business plan to help you start and grow your business—you’ll want to determine how much all of this will actually cost. Don’t forget to include estimates for startup costs, ongoing business expenses, and marketing costs.
You should also set a target for when the business will break even and when it will, hopefully, turn a profit. In the internet age, many businesses can now be run entirely online and be operated out of your home—which could reduce your initial expenses. Take a look at this worksheet developed by the SBA to give you some idea of the costs you might need to account for.
Now that you know how much money you’ll need to get your business off the ground, securing funding for your business is a critical step.
One avenue to look into is crowdfunding. Crowdfunding, in general, is a lower-risk strategy for a business owner because you typically don’t need to pay anyone back nor do you have to give away any shares of your company.
Review Your Personal Finances
As part of your business plan, you’ve estimated what you’ll need to start your business as well as what you’ll need to maintain it while you grow the company. Take a good look at your personal finances, including what you own, what you owe, your monthly student loan payments, projected new income and/or expenses, and your current cash flow.
Cash flow is, without a doubt, the engine of business finances. You may have plenty of customers and a healthy amount of assets, including accounts receivable—but, if you don’t have adequate cash flow, you can’t pay your employees, your bills, or yourself.
Here are tips to estimating your business cash flow . And as you consider your finances, both business and personal, consider ways in which you can increase money coming in (income/revenue) while reducing what needs to be paid out.
Improve Cash Flow
From a business perspective, there are multiple strategies to boost cash flow, including accelerating invoicing procedures, reducing quantities of inventory, and more.
As far as personal expenses, how can you reduce them? Doing so is an excellent way to free up cash flow for your business. Depending upon where you live, cost of living might be high, so maybe you can share living expenses with a friend or family member.
If you’re furnishing an apartment, check out thrift stores and you may find amazing values. Again, depending upon where you live, biking to places may be an excellent way to reduce your costs as you build your business. Be creative as you pursue your dream!
Positioning Yourself Well Through Student Loan Refinancing
The tips above can help significantly in your entrepreneurial quest. But if you’re still paying a hefty portion of your income towards your student loans, then that can continue to serve as a financial stumbling block. So, to further free up your cash flow, you may consider reducing your monthly student loan payments through refinancing.
When you refinance your student loans, you’re taking out a new loan with a new (hopefully lower) interest rate, new loan terms, and a new monthly payment.
If you have federal student loans, note that when you refinance with a private lender, you will lose access to some benefits like deferment or income-based repayment plans. But refinancing may allow you to streamline your student loan payments with one, easy-to-track monthly payment.
When you refinance with SoFi, there are no origination or application fees and no prepayment penalties. To see what you can save, you can use our student loan calculator. Applying is fast and easy, with a convenient online process.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
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