College is more than just a place to learn and form new experiences. For many it’s where they first receive that spark of inspiration that leads them to start their own businesses. If you’re one of these people, you should be commended for your insight. You’ve spotted a gap in the market and you know exactly how to fill it. You have a business plan sketched out and you even have some reasonable projections for your first year’s cash flow. The trouble is that dorm room businesses are notoriously difficult to finance. For all your smarts and ingenuity, you’re an untested and unproven commodity in the eyes of investors. Thus, it can be frustrating and disheartening when you face rejection after rejection from those with their hands on the coffers.
The banks are obviously a no-no. Since the financial collapse of 2007-2008 they’ve become extraordinarily skittish about the idea of lending to anyone who isn’t already wealthy. It doesn’t matter that it was their irresponsible lending that started the problem in the first place, as far as you’re concerned the doors to the vault are closed. Even the online only business finance solutions whose websites look so helpful and appealing are far from forthcoming when it comes to raising the capital to get your venture off the ground. Don’t let yourself be deterred by the reticence of these lenders. It’s their job to be risk averse. In their eyes you’re just some kid who has an idea… But then, so was Mark Zuckerberg. You must not let their negativity prevent you from nurturing your business plan… But you need capital to get it off the ground. Since the traditional avenues of funding are closed to you, you may need to resort to less orthodox methods to get your business off the ground. Depending on the nature of your business, how much infrastructure you need to invest in to get it up and running and how much free time you can dedicate to funding it, any of these may be of use to you…
Run a side hustle
As a student, your time is likely divided between your studies, any part time work you may be pursuing to keep the roof over your head and what little additional time you may have is dedicated to getting your business off the ground. If your free time permits it, you may have the time spare to start a side hustle.
The ideal side hustle would be running a limited aspect of your business online. This will grow your brand and create awareness of what you do. Even if you’re unable to run your business in its fullest capacity you may be able to operate some elements of it such as limited sales, services or consultations from the comfort of your laptop.
Even if this is not feasible given the nature of your business, there are still plenty of side hustles open to you. Entrepreneurs tend to be resourceful and multitalented individuals. Perhaps you could make a little extra money to fund your business through;
- Photography– If you’ve always been a shutterbug, taking photos of weddings, Christenings and Bar Mitzvahs could be a profitable side hustle
- Tutoring- You may be an academic ace but your peers may be struggling. Lend them a helping hand while making some money.
- Seasonal sales work- Check out this company who can help you make some money over summer break.
- Baking- Everyone loves cake. If you have the time, energy and talent, you could make a small fortune by selling baked goodies.
- Hair, nails and makeup– From weddings to proms lots of people want an expert touch when it comes to their look. Their need could be your startup capital!
Crowdfunding
One of the best ways to build your business with a minimal capital investment is by building your brand on social medias. Set up an account and make a small investment in a PPC campaign to target the people who would have need of your business. If possible, establish an online presence with a website and some content marketing materials such as blogs, vlogs and podcasts.
With your branding already in place, you will build an audience who is predisposed to want to help you get your business off the ground. Now you can link them to your Patreon account or whatever other crowdfunding platform you choose. If you’re prepared to invest a little in growing your crowdfunding reach, there are companies out there to help you do this.
Play the stock markets
Let’s face it, you’re never going to raise the capital you need by saving with your high street savings account. Instead of saving your money, you can potentially make far more money by strategically investing in stocks, commodities or Forex. It may be a little over your head at first but when you get to know the markets you can reap some serious dividends. Some investors even automate the process through the use of algorithmic trading platforms. Check out this guide to how they work. By strategically buying and selling stocks you can grow your money exponentially. Of course there is always an element of risk when trading stocks since their values fluctuate due to a wide range of economic factors. It’s important to diversify your portfolio enough to insulate you from risk while also ensuring that your investments are sizeable enough to yield meaningful growth.
Credit cards
As a student, you likely have a nice, clean credit score and that makes you extremely appealing to banks and credit card companies. They’ll likely try to lure you in with attractive introductory offers and years of 0% interest. While your peers may be squandering this on new TVs, clothes and games consoles, you could put it to good use, funding the infrastructure for your business. You’ll have to factor the repayments into your annual cash flow (along with any interest you incur) but you’ll likely have much more luck with credit cards than business loans. Let’s not forget that Kevin Smith funded Clerks with credit cards and it became the precursor to a long and successful career in Hollywood.
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