College students often complete detailed projects for business or elective courses, developing stellar concepts with the potential to become profitable enterprises. If you’re the first to come up with the idea, you might carve yourself a niche in the market, creating career momentum and a regular revenue stream.
Transforming a class project into a thriving company is not easy but worth the effort. Here are the steps to take to make your dream of owning a small business a reality.
1. Research Competition
You have a great idea — now, you must determine how unique it is. Research competition locally and nationally. If you want to open a coffee shop, existing locations nearby are stiff competition for a newcomer. You could even be up against chain stores with slick marketing materials and a recognizable name.
On the other hand, if you’ve come up with a new invention, it might be the first of its kind. Consider how much of a need there is for the product or service, and if there is anything similar.
2. Validate Marketing Potential
As of 2023, the Small Business Administration reports there are 33,185,550 small businesses in the United States. With many enterprises promoting online and offline, grabbing user attention is harder than ever.
Before opening a business, consider where you’ll promote it and determine how to offer a unique perspective. Project the cost to run ad campaigns on your preferred social media networks. If you plan to hang flyers on doors or take out an ad, estimate the return on investment (ROI).
3. Decide on a Business Structure
The World Bank ranks the U.S. 91.6 out of 100 for easy business enterprise formation. How you form your entity can impact your taxes, regulations and the way you protect your assets.
For instance, you can run a small brand as a sole proprietorship, but you’ll pay taxes as a self-employed person. Another option is to form a limited liability corporation or an S-corporation. The structure you choose influences how you operate, so don’t feel tied to whichever one you start with.
4. Secure Intellectual Property Rights
If your idea or marketing approach is unique, consider trademarking your brand or applying for a patent. The ins and outs of securing your intellectual property rights vary widely. It’s wise to solicit the help of a legal professional who is well-versed in business copyright, trademark and patent.
In addition to legal fees, you’ll have to file paperwork regularly to protect any intellectual property long-term. If you fail to maintain a copyright, you may lose the right to it.
Disney is a good example of an enterprise with many trademark registrations for unique characters, such as Mickey Mouse. It takes trademark infringement seriously and sends letters to anyone violating their rights. Small business owners also notoriously avoid going up against its legal team.
5. Start Talking
After strategic planning, you’ll want to share your idea and determine when to launch. Set a date and start fundraising — tell family and friends, providing a link to invest in your dream. If your idea is particularly unique, secure your copyright, trademark or patent before discussing it with others. Generating buzz is good, but you don’t want to risk someone stealing your idea.
Experts predict a surge in data science and higher growth than in other areas by 2029. The companies succeeding in this arena are experts at getting others excited before product launches. Think about the chatter surrounding ChatGPT before its release and in the months after — you couldn’t search without coming across an article about it.
Finding the Funding to Start a Business
Once you’ve fleshed out your idea and finished your research, it’s time to raise money so you can open doors. You likely won’t have thousands of dollars to get your business off the ground coming out of college, but you have several fundraising options.
Leverage University Resources
Start by talking to your school about what resources are available to students. For example, there may be grants you can apply for as an alumni. Likewise, you may ask peers or professors to analyze your marketing plan.
Find Angel Investors
Talk to everyone you know and attend local Chamber of Commerce meetings. Ask about pitching to angel investors, and discuss your enterprise with CEOs and business owners who might benefit from it. Angel investors foot upfront costs for a percentage of the profits.
Utilize Crowdfunding
A truly fantastic idea may attract a lot of chatter, so start a GoFundMe or a Kickstarter campaign. Several small donations add up and may be worth more than a few significant investments when enough people are involved.
Make Your Dream Come Alive
Going from college student to entrepreneur is exciting. While you should prepare for a bumpy road, the rewards of turning an academic concept into a commercial venture are worth the race. Just ensure you have a solid business plan and mentorship opportunities, and talk to your business professors about overcoming challenges.
