10 Financial Tips for the Entrepreneurial Student
Starting up a business is hard work. Succeeding as a student in college is also hard work. Doing them both together is even harder, but it can be done. Just ask Mark Zuckerberg.
Starting up a business while still a student is challenging, but it’s also exciting. And, if you succeed, you'll be a big step up on the career ladder. Here are some tips to help the entrepreneurial student succeed.
1. Your intellectual property is priceless.
If you lose the patent to your intellectual property, you could lose out on a lot of money -- or potentially your entire business. In the U.S., patent priority still relies on the "first to invent", so write down every idea you have and date it. Save your emails and time-stamp documents too so that you can prove your originality, if it’s necessary. Even if no one challenges your IP, any future purchasers or licensees will be more willing to pay for it if it has a well-developed history.
2. Make the most of free support.
One big advantage of starting a business while still in college is that you’re surrounded by expert knowledge. For example, you could ask a law professor to look over your contract or a business lecturer to give you advice about writing your business plan. Once you’re out of college, you’ll probably have to pay to get the same level of assistance, so draw on it now while it’s free.
3. Choose the right credit card.
Credit cards can cause you to lose a lot of money, especially if you don’t make payments on time. But, the right credit card -- one that’s designed for students -- gives you access to a line of credit which is highly valuable as an entrepreneur. A student credit card with no annual fee and a good cashback offer can even save you money that you can spend on your new business.
4. Look out for grants.
The university world is full of grants for student entrepreneurs and college business ideas. Depending on your field, you might be able to qualify for grant funding that’s aimed at specific research projects in particular fields. One example is scientific funding for green electricity projects that you could use to back up the viability of your rechargeable laptop idea.
5. Keep a careful eye on your credit rating.
Your credit rating is like a report card for your financial behavior, and it follows you long after college. Getting your own credit card as a student helps you to start building your credit history early. A long credit history can be a key factor when applying for business loans. Make sure that you stay on top of credit card payments, since even one slightly late payment can affect your score. Don’t max out your cards.
6. Maximize your college connections.
College is a great time to build useful business connections. Having your college professor on the advisory board of your startup gives it respectability and gravitas. You can create cross-departmental networks with students, post-grads and lecturers in other fields to deepen the value of your business idea. Once you graduate, all of these connections will be invaluable for marketing, references and support.
7. Start a retirement plan as soon as possible.
As an entrepreneur, you won’t have an employer to contribute to your pension or retirement fund. On the other hand, starting a business in college gives you the opportunity to begin paying into a retirement fund early, which means it can grow bigger by the time you need it.
8. Track everything.
When you start a business in college, it’s important to take it seriously right from the beginning, and that means tracking everything. You need to write down your expenses, your income, ongoing costs, incidental expenses and basically everything to do with the ins and outs of money in your business.
9. Open up a business account.
When you’re a student, it’s usually enough just to think about the one student bank account, but it’s not sufficient when you’re also an entrepreneur. Even when your business is very small, you need to keep your personal and business funds separate. It’s not difficult to open up a business account, and you don’t even have to keep a minimum amount of money in it. What matters is that you can track your personal and business transactions separately.
10. Make your school assignments do double duty.
This might depend both on what your major is and what your business is, but you can save a lot of time and money if you use school assignments to develop your business idea. Research projects can focus on the pain point that you aim to solve, economics papers can look into market research, business majors can run feasibility studies, and relevant term papers can examine some aspect of your business proposition.
Succeeding as a student and an entrepreneur at the same time is a challenge, but with some planning and a lot of hard work, it’s one you can surmount.