Whether you’re currently studying or are a recent graduate, entering the world of work can be daunting. But rather than becoming someone else’s next star employee, you could put your talents to good use in another way as a young entrepreneur. Although deciding to take your career into your own hands may not have been your initial objective, more and more young people are choosing to explore their full potential by starting their own businesses. Yet even if this does sound appealing, you may not be aware of how to turn your ideas into a profit generating venture and the range of funding options for starting your new business might seem daunting. So if you’re looking to unleash your goods and services upon the British public, some of the many aspects you need to consider are:
What is your idea?
Although you may have some good ideas, you need to appreciate that not every idea is a money making idea. But, if you feel the potential exists, you first need to be specific about what it is. Are you going to providing goods and services such as software solutions, inventory management, data analysis or property refurbishments? Whatever it may be, being clear about what is your business proposal is all about will make taking initial steps in your development much easier, especially when pitching to investors and lenders. Plus, there’s no need to be original either, which may work to your advantage by allowing you to learn valuable lessons from your competitors.
Have you taken a look at your competitors?
Whether your business is going to be trading online or in a physical premises, you must always take the time to review your competitors and where you stand. Although it may be intimidating, carefully assessing which areas they cover, their mode of operations and what services they provide could prove instrumental in driving your own venture forward. It could lead you to discovering services, specialties, markets or niches that they aren’t currently exploiting, giving you the means to squeeze in and seize an early foothold. A useful and pragmatic tactic you may wish to consider rather than going head to head against a rival firm who may have more funds available than you do. Ultimately, competition is just one of the many challenges you’re bound to face. By conducting a thorough analysis of your sector, you’ll be able to identify what potential pitfalls you may run into and how to overcome them before any lasting damage is done.
Have you created a detailed business plan?
If you’re serious about starting your own business, you must create a coherent business plan that discusses every aspect of your venture, which will serve as your go to guide. For it to be effective, your plan must outline key details such as:
- Who is your target audience?
- What is your unique selling point?
- What equipment and technology is required?
- Where are you getting supplies from?
- How are you going to cost effectively manage your supply lines?
- What issues might you encounter and will you overcome them?
- How are you to going to market and increase brand awareness?
- How are you going to raise capital?
Naturally developing an effective business is going to take a lot of research, but with it you will gain a clear strategy for your venture that will enable you and your team to work towards a single objective – growth. But with so many responsibilities consider alongside your studies, the next obstacle you need to tackle is management of your time.
How are you going to balance your responsibilities?
As anyone who has started their own business will tell you, it’s a full time endeavour that requires steadfast determination and many hours of hard work. But if you’re still studying, the pressure on finding a suitable balance between running a business, studying and socialising is going to be even more intense. That’s why if you’re a young entrepreneur, you may prefer to pursue this objective during your 2nd year or later when lectures tend to be more diversified due to less term-time, allowing you more time to focus on your business and study independently. Just remember to allow yourself some free time as well since locking yourself away will add unnecessary stress, which may affect productivity and your mental health.
What funding opportunities are available for your business?
Access to capital is one crucial area that can either make or break your business. But as a startup raising capital for your business may prove challenging since many finance solutions and lenders require you to have a trading history of at least 2 or 3 years. Nevertheless, there’s still plenty of funding opportunities available providing you know where to look.
Although as a young entrepreneur, the solution could be arrive in the form of Investment Crowdfunding or Government-backed grants, there are plenty of startup loans available too. These include, but aren’t limited to:
Peer-to-Peer Lending (Loan-Based Crowdfunding) allows you to pitch your business venture to a community investors using an online platform. By creating blog posts, videos and hosting online discussions, your aim is to promote your goods and services whilst convincing investors that you and your teams are competent to see the business into fruition. If so, they may join a panel of investors to form a short-term loan, which will need to be gradually repaid using a fixed monthly repayment scheme, plus interest.
Merchant Cash Advance:
This is an unsecured product that require your business to have the ability to accept credit and debit card payments. Although very little attention is paid to your credit score, you must submit 3 or more your latest consecutive monthly sales reports in order to apply. Using these, lenders will calculate your average card sales, forming the basis for the advance. So if your business regularly earns £15,000, you could receive an advance for the same amount, if necessary. Plus, rather than making you make fixed monthly repayments, Merchant Cash Advances uses a flexible monthly repayment scheme. This enables to the lender to automatically intercept an agreed percentage from each your card sales until the debt has been fully repaid. Therefore, the amount repaid every month is not set and varies according to your card sales, without affecting your cash-based revenue.
If you possess assets such as equipment, machinery or vehicles (that aren’t into the structure of your premises) you could release up to 100% of the equity they contain to form a lump sum. Offering terms of up to 5 years, you’ll still have access to these assets providing you keep up with the fixed monthly repayment scheme. Because Asset Finance is a secured form of lending, it’s worth noting that your assets are at risk should your business default or become unable to resolve the debt on time.
Got a money generating idea you want to support?
If you’ve got an idea that you believe could turn into a generating business venture, you’re no doubt eager to see it get started. But in order to see it take off, you need to do all the necessary planning first. One area that requires keen attention to detail is the matter of funding. However, at such an early stage in your development, raising the funds you need using the traditional can be difficult. By by speaking to a business finance professional, you may discover alternative pathways that you might not have been aware of.