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FEATURED ARTICLES           Wednesday, September 08, 2010                                Email to a Friend

Ready, Set, Start-Up!

- Anne Swift

As you think about the classes to take, the clubs to join, and the events to attend at the start of the school year, you may also be thinking about your long-term career plans.

Lawyer? Doctor? Accountant? Professor? Entrepreneur?

Many students don’t consider entrepreneurship as a profession, particularly right out of school. However, the best way to determine whether the career is right for you is to try it out. Your years at university (or the summers in-between) can be the ideal time to pursue your aspirations to be the next Bill Gates or Oprah Winfrey.

Although running your own business can be a challenging career choice because of long hours and hard work, entrepreneurship can be a great way to gain valuable skills, explore new ideas, build teams of like-minded people, and maybe make some money.

Notice that when you are a student entrepreneur, making money is not the first item on the list. One of the most important lessons taught by serial entrepreneurs is that even if your business does not succeed, you are richer for having spent the time building your skills, connections, and ideas.

Even if you decide that entrepreneurship is not for you, you will gain valuable skills, such as communication, leadership, team work (you will need to build a team), resourcefulness, financial management, and many others. As you may note, all of these skills can be transferred into your future career, as can the contacts that you will make with customers, suppliers, and team members.

The best way to take the first steps toward building a start-up is to participate in a student business plan competition. The business plan competition will provide you and your team with a specific deadline and (usually) a network of resources. Also, a business plan competition might be the first source of your start-up funding.

Since everyone has different skill sets, it makes sense for you to build a team to bring your ideas to market. Many studies have shown that working with a diverse team tends to improve creativity and problem solving. So, if you’re an engineer, you might consider attending business club meetings to find your partners. If you are a business student, you might wish to participate in engineering events to find business ideas and inventors waiting to start a business.

Tips for Preparing a Business Plan

As a first-time entrepreneur, the business plan can help you to build your credibility and provide you with a longer-term vision for the development of your ideas.

1. Use a template for guidance. I won’t discuss the elements of the business plan because these are so readily available online. Young Inventors International, for example, offers such a template to our members. Others can be found on sites such as www.howstuffworks.com (search for “Business Plan”).
2. Focus on the benefits of your product, not its features. For example, if you are marketing a fire engine, do not state that it’s red. Describe why its red color is important to customers (i.e. that the fire engine can be quickly noticed and avoided).
3. Set realistic expectations – it’s not going to be easy! Many first-time entrepreneurs assume that they will be able to capture more of the market than is really available. For example, they might assume that the automobile industry is a very large industry and, if they can capture only 1% of profits in the industry (a very small percentage, right?), they will be instant millionaires. However, the car industry is very difficult to penetrate because of the costs of entry, intense competition, and economies of scale (which means that larger competitors have an advantage over smaller ones because they have invested in things like factories and manufacturing equipment).
4. Defining your niche market. The more specific your target market, the more likely you are to gain the attention of your customers. Think of the success of companies such as Facebook, for example, which targets college students. Niche markets such as college students, senior citizens, or small business law firms can offer your company an untapped market opportunity with truly great potential.
5. Conduct a competitive analysis. Another entrepreneurship myth is that there is no competition for your product. Rarely is this the case. You should consider not only products that would directly compete with yours, but also substitutes. For example, a word processor is a substitute for a computer; a pen is a substitute for a pencil. You must also be prepared to state how your product serves your customer better than your closest competitor. And remember, a lower price is not a competitive advantage unless you can produce your product at a lower cost then your competitor.
6. Don’t forget production, assembly, and distribution. If you are offering a physical product, you should begin to consider these elements of your business plan as soon as possible.
7. Get to know the industry. Conduct market research to determine the largest players, identify their suppliers and customers, and determine whether there are opportunities in the market. Do your potential customers have money for your product? What portion of their funds is allocated to products such as yours? (Check their or their competitors’ annual reports to help you determine this.)

Next Steps for Starting Your Start-Up

1. Find a team of members through your current networks or new associations. This time of the year is a great way to connect with on-campus clubs for entrepreneurs, inventors, and engineers.
2. Identify business plan competitions at your school or community. Often, business plan competitions let students from other schools compete, particularly if they partner with the school’s students. You may consider attending informational meetings for such competitions. Other students will be looking for teams, too.
3. Define your idea and begin to gather information about your target market.

Anne Swift is the Founding President of Young Inventors International and is currently a student in the Doctoral program on Strategy, Entrepreneurship, and Technological Change at Carnegie Mellon University. Young Inventors International is a not-for-profit organization that offers more than 1,500 student members access to resources and networks to build their first ventures. For more information, please visit www.younginventors.org.

© Anne Swift, 2006

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