Many students dream of starting their own businesses, whether it is to pursue their passion, earn some extra income, or gain some valuable experience. However, starting a small business is never a small task. And it requires careful planning and preparation.

The most important aspect of starting a business is to consider the financial implications and challenges that may arise. Most of these happen at the early stages of the business and have higher probabilities of collapsing it.

In this piece, we will discuss some of the financial considerations that college students should keep in mind when working towards starting a small business. This article will cover:

• How to Fund Your Business Idea
• How to Manage Your Cashflow and Expenses
• How to balance your Academic and Business obligations
• How to deal with Taxes and Legal Issues

These are the main considerations you have to make financially in starting a small business as a College student. Now, let’s have it.

How to Fund Your Business Idea

This is the point where you determine how much money you need to launch the business and operate it. This will be influenced by factors such as the type of business, the market demand, the competition, the location, and the materials and equipment needed.

There are different ways and means you can fund your business

• Using Personal Savings or Assets: Do you have some money saved up during the previous summer break or from a side hustle on campus, this is the perfect time to invest it into your business.
• Borrowing Money From Families: If you come from a well-to-do family and there are willing to help you kickstart, you can convince them to buy into your idea and lend you some money to start with. However, you should make sure to recover such money even if your family doesn’t want it back.
• Applying for Grants or Scholarships: Look for entrepreneurship scholarships and grants in or outside your institution. Check on other organizations and firms that give out scholarships. Apply for these scholarships convincingly and get the boost you want.

Some of these scholarships are Gary Saitowitz Scholarship, Verizon’s Young Entrepreneur Scholarship, Beese Fulmer ‘Stay Rational” Business Scholarship, etc. But make sure you meet their eligibility criteria before you apply.

• Crowdfunding Campaigns or Partaking in competitions: Use platforms such as GoFundMe, 99Pledges, Fundly, or any other fundraising platform to raise funds for your business. Make sure the campaign videos and images are clear and convincing enough in addition to the message you will put out.

Better still, partake in campus prize competitions and stand a chance of winning some resources and hopefully money. But don’t worry if you fail to win these competitions. There is still a way out.

• Seeking Investors and Partners

Pitch your business ideas to potential investors and partners. Investors can be colleagues and teachers, and outside the school, you can approach other similar business operators. Try and convince them enough with plans and potential prospects.

How to Manage Your Cashflow and Expenses

This, in most cases, is one crucial part of sustaining a business as a college student. Cashflow is the amount of money that flows in and out of your business over a period of time. It is very important to have a positive cash flow, which implies that you must have money coming into the business than going out of business. That will be converted into profit over time.

To manage your cash flow and expenses accurately, you should:

• Create a budget and track your income regularly: Have a record of your total income and net income for every sale.

• Set realistic goals for your sales and revenue: That means you must know how much is supposed to come in after closing a particular sale or sales over time.
• Reduce unnecessary costs and optimize your operations: To have a good flow of production thereby increasing profits, you must optimize operations and reduce or stop anything that doesn’t affect the business positively.
• Negotiate with suppliers and customers for better terms and operations.
• Seek advice from professionals regularly and implement better ideas

Balancing your Academics and Business Obligations

Starting a small business as a college student can be very challenging as you will have to have a perfect balance between your academic goals and business obligations. Some of the most challenges students have in balancing academics with business obligations are:

• Having very limited time and energy to devote to both tasks
• Facing conflicts and distractions between business and education
• Dealing with stress and pressure from both sides
• Missing on social and extracurricular activities

And so, how do you overcome these challenges and have a perfect balance between your business and academics? By taking the following steps and strategies:

• Prioritize your tasks individually and set deadlines for yourself
• Take control and manage your time and schedule effectively
• Delegate or outsource some of your work if possible.
• Seek support from peers or colleagues and professors in managing your business and handling academics
• Maintain a healthy lifestyle and take breaks when needed.

How to Deal with Taxes and Legal Issues

Starting a small business as a college student also involves dealing with taxes and legal issues. And when found guilty of breaking any rule in this regard, your finances will definitely suffer. Depending on the size and nature of your business, you have to take the following steps:

• Register your business name and structure
• Obtain lincenses or permits for your activities
• Comply with local, state and federal regulations in running your business
• Pay taxes on your income and expenses
• Protect your intellectual property right
• Handle contracts and agreements with your stakeholder fully involved.

To be able to defend yourself in the face of taxes and legal issues:

• Take it upon yourself to fully understand the requirements of your business: Know what the law says about running such a business [ if any ] and make sure you meet the requirements.
• Keep accurate records of receipts and transactions you made.
• File tax returns on time and don’t default on payment
• Avoid every illegal or unethical practice that may harm your business and your personal reputation.

Conclusion

Starting a small business as a college student can be an exciting and rewarding venture, but it also requires careful financial planning and preparation. By considering the financial implications and challenges that may arise, you can increase your chances of success and avoid potential pitfalls