Class Acts

Though you won't have millions to work with in the start-up phase, you do have financing options. It will be a challenge to get money, and you'll have to do a lot of bootstrapping. Experts say most college students finance their businesses with funds from parents and friends of their parents, credit cards and the like.

Tara Cronbaugh, founder of The Java House, a chain of four coffeehouses in the Iowa City, Iowa, area, founded her business in 1994 after a visit with her brother at University of California, Berkeley. She loved the local coffeehouses and saw that the area around her school was sorely lacking in such groovy hangouts. Then a junior at Iowa University, Cronbaugh, 30, threw herself into researching what it would take to open a coffeehouse. She took entrepreneurship and accounting classes and picked the brains of all her professors.

With a business plan in hand, Cronbaugh went hunting for the money to open her first location. Luckily, her local Small Business Development Center (SBDC) office was on campus. "I found applications for equity grants--in my situation, it was called the Targeted Small Business Program," she says. "It was based on being a woman-owned business." (To find an SBDC near you, go to www.sba.gov/sbdc.) She also received an SBA loan and used some of what was left from her Stafford student loan. "I still look at alternative ways to acquire financing for [my new] stores," she says. Her resourcefulness has helped Cronbaugh build The Java House locations to sales of $2 million annually.

The Balancing Act

The ultimate challenge, after choosing your business, learning your market and securing your funding, will be balancing your studies with your business venture. Gumpert suggests taking a year off while you build your business, or taking less demanding classes during the difficult business start-up phase.

Or you could form partnerships to share the load. Garman of AllDorm Inc. took a year off from his studies to focus full time on the business while his co-founders finished school. When they graduated, Garman went back to get his degree. Ermine of OHEV Records Inc. is balancing law school classes by working evenings and weekends on his record label business. Whatever method is right for you, it's your creativity and drive that will help you earn a degree and a successful business at the same time.

And, admit it, it sure beats job-hunting after graduation.

This article was originally published in the June 2003 print edition of Entrepreneur's StartUps with the headline: Class Acts.