What to Ask About Starting a Business in College
You can start a business while you’re in college. In fact, college is a great time to try out a side hustle or two. It’s like picking a major, except you (hopefully) earn money instead of having to pay it. That said, there are a few questions you should be able to answer before starting a business as a college student. Let’s take a look at three of those questions.
1. How much time do I really have?
Your first priority should be your education. We don’t mean to sound like your parents, but it’s the truth. You need to come up with a plan that balances both your academics and your business. And if you find out that you still don’t have enough time, you may need to cut back on the business side.
It may help to think of your business like a class you’re taking. For instance, let’s say you’re taking a class that meets twice a week for 90 minutes each session, meaning the class requires a total of three hours per week. Start by devoting three hours a week to getting your business going, then seeing if you can scale up from there.
If, after a few weeks, it turns out that you have additional free time, then you can devote that time to your business. If not, you can either continue with your current schedule or scale back as needed.
2. Should I form an LLC?
If you start selling hand-knit scarves out of your dorm room, then congratulations, you’re a sole proprietor. A sole proprietorship means you’re an unincorporated business with a single owner. Depending on what kind of business you’re running, that may work fine for you.
However, there are good reasons to consider starting an LLC, which means filing paperwork with the state. An LLC offers you some legal protection if, for instance, someone sues you because the scarf you made gave them a rash. It’s worth thinking about turning your sole proprietorship into an LLC when you’re just starting out and don’t have a lot of customers.
If you do decide to start an LLC, you’ll need to answer another question: Where do I start it? This is a tricky question for college students because they may not be sure where their “home state” is.
As an example, let’s say you graduated from high school in Idaho but are now going to college in Oregon.
In most cases, you’ll want to start the LLC where you primarily live and do business. If you’re in Oregon most of the year for college, then you should start your LLC there. It’s simpler and cheaper that way.
3. How will it help me after college?
Not everything you do in college has to be about planning for the future. But it’s not a bad idea to think about how running your own business in college could help you once you have that diploma in hand.
In some cases, the connection will be obvious. If you’re going into teaching, then starting your own tutoring business will provide you with valuable experience. But it’s also fine if your college job helps you simply by putting you in a better financial position both during and after school. College costs continue to soar, and there’s no leveling off in sight. If your side hustle means you have to take out fewer student loans, then that’s already a win.
Besides that, running your own small business provides you with tons of so-called “soft skills,” and employers love those. You’re learning how to solve problems and develop your own work ethic. That will aid you in the future regardless of if your degree is in English or engineering.
