Is it risky to start your own business for a college student?

Question

I've always had the notion that running a business is a rather risky thing to do in life. I just wanted to know what are some good business that a college student can start up on their own? and what are the things that they should pay attention to when starting a new small business.

Answer 1

Starting a business is always risky and not just for students either. To have a chance at success,you need to find a product or service that could have a good demand. Too many people open coffee shops, clothes shops etc and go bankrupt in no time at all. The reasons, No Demand! there are too many similar shops. You need to find a product that is not available in an area. Next stage is checking for the demand (Market Research), you can do this yourself. When you have a location and know of suitable premises, stand outside the premises, with questionairres. Your questions will have to ask What does the person think about having your product for sale, in this location?, Would they purchase the product / use the service? what sort of price would they consider? etc. etc. Now you have the information to make an informed decision. The research data can tell you if the business may have a chance of success, in the short term, may have a chance of success but only with a lot of time and effort or if the business is doomed to fail. You now need to construct a "Business Plan", you'll need both a "Short Term" (1 year) and a "Medium Term" (5years) plan. Both should highlight how you plan to run the business, what level of sales, profits etc. and any potential expansion. It should include a projected cash flow etc. Once you have the Market Research and the Business Plans, you can approach your bank and open a business account. If you need overdraft facilities and / or business loans, try your own bank first as they will usually give you a preferential rate (lower interest rate for being an established customer). All going well, you now need to sign a Lease on the property, move into it, decorate it and purchase your stock / equipment. Things to avoid - Employing too many staff, employing friends and / or family, giving credit to customers, overstocking, leaving your accounts out of date. Things you have to do before trading - Register your business with the local authority to pay your Business Rates, register with Inland Revenue and DSS, obtain both "Employer's Liability" and Public Liability" Insurance. It's a criminal offence to trade without the Insurance and is taken very seriously. There is a lot more but at this stage, most would be irrelevant.

Answer 2

I think there are lot of chances of going into losses because of lack of experience.