Starting your own business after graduation

As students across the UK don their gowns and mortarboards this summer to receive their well-earned degree, one of the biggest questions that will play on their mind is ‘what’s next?’.

For many graduates, the world of work beckons, spending the coming months applying and achieving their ideal position in what will be the first step into their chosen career. However, increasingly, the prospect of establishing your own business is a path that a significant number of graduates are choosing to go down, and for very good reason.

Not only will starting a business allow you the chance to explore your passion, but it also gives you more control over your career progression, your working hours and ultimately, could potentially allow you to earn much more money.

In fact, some of the world’s largest companies were started by individuals during or directly after university – just look at Facebook, Snapchat, Reddit, Microsoft and Google; all established by bright-eyed university students and graduates, all of which are now a dominating force in the business world.

There are risks and rewards for anybody establishing their own business, but particularly for graduates, who likely have little experience of the business world. They will be thrown straight into the deep end of running a company. Therefore, knowing what to expect and how they can get their business off to the best possible start is vital to its success in the longer term. So, what tips do we have for recent graduates considering launching their own business?

Your business plan

Any successful business must start with a well thought out plan of action that will map out exactly what you will do, what you want to achieve, any challenges that you may need to overcome and how you will measure your business’ success. A business plan is often a requirement when looking for investment or a business loan, therefore having it readily prepared is essential.

There are countless resources out there to help you when writing your business plan; GOV.UK guidance is one of our personal favourites as it provides free templated examples as well as advice on writing your plan from scratch. Contrary to popular belief, writing your business plan does not have to be a daunting, monumental task that you must get right straight away; it will develop and change alongside your business.

Gain experience

There is no substitute for experience when it comes to running your own business. Particularly for graduates, knowing the ins and outs of the business world, how it works and how to make it a success are all factors that are difficult to gain knowledge of without prior experience.

Many successful entrepreneurs, in their first stages, worked on establishing and building their business and its brand alongside another job role. Ultimately this allows graduates to gain that vital real-world experience and the skills needed, as well as understand where the challenges may lie and how to overcome them – all of which can be used to inform their own business.

Understand your responsibilities  

Unlike fellow graduates who have taken a more ‘traditional’ route into their careers, and will over time learn the correct business terminologies and lingo, those choosing to jump straight in as a business owner will have to overcome a steep learning curve.

You may have great knowledge of your core business idea, but there are other aspects to running a business, from accounting to tax responsibilities and administration requirements to employment law. As a business owner, it will be down to you to become au fait with the majority of these areas to ensure that you comply with relevant legislation and regulations. Once again you will not be left in the dark, there is a whole host of information and guidance out there that can support you as you learn.

Your business’ finances

Cash flow is key to any business, particularly for start-ups, and therefore it is vital that you have a good grasp of your finances from the outset. Understanding your financial duties (i.e. insurance, corporation tax, supplier fees, etc.) may be tricky to get your head around at first, but a reliable, experienced accountant will ultimately be able to support you in handling these responsibilities.

In those first months and years of your business, keeping your costs low to maximise profit and knowing where your finances are at all times, will serve you well in the long run. So, whether this may be working from home in those initial stages, choosing suppliers wisely, keeping on top of invoices or even forecasting your cash flow for the coming months, in the longer term your cash flow will see significant benefits.

Finding your network

Many business owners will tell you that one of the most invaluable resources they have is their network. These are the business people that can not only provide you with products or services (and vice versa), but those that can offer expert advice and opinions on running your business. Growing the right network will take time and effort; attending multiple networking events, reaching out to professionals you admire and even looking into business mentors.

These people will naturally have a great deal of experience and knowledge of the business world (having already established a successful business) and therefore are the ideal people with whom to gain that vital insight into running a company.

Of course, our guidance above is not the be-all and end-all of running a business. Your success will ultimately be determined by your willingness to learn, ability to adapt and the time and effort put into your business day in day out.

Many choose not to take this leap from fear of failure, and unfortunately, this is something very real that entrepreneurs will likely have to deal with at some point in their career. However this shouldn’t be seen as a failure, but an opportunity to better yourself.

One of the best pieces of advice we could give you is to weigh up your options and analyse your preparedness. At this stage, you may choose to wait a few years and gain more experience in your chosen field, or you may decide that you are ready to take this monumental leap into the position of a business owner.