There are plenty of rumblings about how young people these days are doing this or that—from killing Applebee’s and the diamond industry to changing workplace culture and the traditional family structure.
A lot of that is correlation or complex cultural shifts explained away with a wave of the hand, but one change that statistics is bearing out is that college students—particularly MBAs—are opening their own businesses at a much, much higher rate than ever before seen. As of 2016, about 25% of MBAs were opening a business within 3 years of their graduation, with an even higher figure at elite universities.
With college & high school dropout stories like Bill Gates, Steve Jobs, and Mark Zuckerberg embedded in our collective consciousness, it may be surprising to know that entrepreneurs are more well-educated than the average American, with about 45% owning colleges degrees, compared to 33% for the average American.
A 2010 survey done in Quebec also found that university graduates were more likely to be successful entrepreneurs. (Obviously Canada differs from the U.S., but the markets are similar enough to draw apt comparisons.)
Why is this, and why are these stats only increasing with time? There are plenty of explanations, but above all else, it’s likely because of the amazing and vast wealth of resources that colleges provide their students.
Tom Eisenmann, faculty co-chair of the Rock Center for Entrepreneurship at Harvard Business School, agrees, noting, “[University] programs have significantly improved the quality of curricular and extra-curricular support they provide to aspiring entrepreneurs, making it easier for students to test this career path and improving success odds when they do launch a venture.”
So, if you’re sitting in a dorm room right now, or recently graduated and thinking about being your own boss, go for it—right after reading these 5 keys to being fully prepared for the jump.
1. Network like your life depends on it:
Universities are like no other place on Earth—thousands of intellectually-curious people in the same place, hungry for knowledge and opportunity. You will likely never have the sheer number of people in such close proximity to you again after graduating, so take advantage of them all—other students, professors, alumni, friends of friends.
People will always be the greatest resource around.
2. There isn’t (much) pressure on you:
The drive to succeed nudging you every minute may make you feel like you’re under the gun, but that period right after university is typically the freest time in a person’s life.
With (likely) no spouse, no kids, no mortgage, and no company loyalty to worry about, you are a blank slate.
Sure, you may have student loans to pay off, but who doesn’t nowadays?
Starting a company is a lot of work, but it doesn’t even have to take up your entire focus—in the Census Bureau’s 2007 Survey of Business Owners, 50% of respondents ran home-based businesses, and 49.5% of respondents reported that their business was not their primary source of income. So relax, because whether you eat will not solely rest on your business’s success, and even if it fails, you still have your whole life ahead of you.
3. Use your University’s resources:
Internships and on-the-job experience aren’t the only things your university can get you. In the past decade, workshops, guest speakers, and simply the quality of most programs have made the university experience a godsend for aspiring entrepreneurs.
The training and opportunities available alone could help just about anyone, but when you mix in things like free access to library materials, databases, super cheap (or even free) printing and office supplies, and easy pathways to get your ideas in front of the right people, your university’s resources are the most efficient way to get started.
4. Handle your money and know basic math:
It might be a bit intimidating to consider all the math that goes into keeping a company’s books in line, but chances are you’ll have to do that during the first few years of operations. There are billions of dollars invested every year in startups, but according to both the 2007 and 2012 Survey of Business Owners, the majority of businesses are self-financed.
That means scraping together a couple thousand bucks from likely yourself, your family, or your friends, and giving it a go early on. If that sounds like a tight margin, it’s because it is, which means you’ll have to always be cautious about where and how you use your company’s funds.
Don’t be too scared though—the “statistic” that 90% of businesses close within their first 5 years turns out to be false—the true number is more like 50% of businesses failing to make it past year 5. However, the uniting factor of the businesses that went under was cash flow—82% of them cited it as a leading factor.
5. Be yourself:
You know yourself and your wants better than anyone, and if you start your own business you’ll call all the shots, so make sure you always do what’s best for you (at least in the beginning).
- If you can’t put 50-hour weeks into it, don’t try to, scale back instead.
- If you won’t (or shouldn’t) get a bank loan because you already have student loans, look at other alternative funding options, like crowdsourcing or your alumni association.
- If you aren’t passionate about something, don’t start a business about it!
This is the true beginning of your official working career, one that no matter what industry you are in or how many times you change your job, will likely span more than 40 years. You have to enjoy yourself or you’ll be miserable. Nobody wants that.
Be honest about your goals, abilities, strengths, and weaknesses, and go from there. Even if you have a billion-dollar idea, you won’t be the next Mark Zuckerberg, nor should you want to.
Just be you.