March 10, 2017, by Carla
How to Become a Student Entrepreneur
By Lauren Wise, content writer for The Accountancy Partnership
Despite what you may think, you don’t need a tonne of experience to become an entrepreneur.
In fact, the perfect time to test your entrepreneurial skills is when you’re at university. You have hundreds of resources available to you that can help you gain insight into your chosen industry and begin your business on the right foot.
So, with help from the Careers and Employability Service at your fingertips, the Ingenuity Lab on Jubilee Campus, and a library full of leaders to inspire you, becoming an entrepreneur while studying is easier than ever.
First things first, you need that great idea. Think you do? Follow the evaluation checklist on this infographic. Next, find out what your competitors are up to. What are they doing well? What are they doing not so well? Use your research to help you create a business plan, more on this here.
Now the really hard work begins…
Should I freelance or start a business?
The first decision you’ll need to make is if you want to head into freelancing or create your own company.
Freelancing is particularly popular with students and graduates as it can help you build a varied portfolio while working with a wide range of companies.
If you want to test out your skills on some new clients, go freelance first. If that goes well, or you want to include more people in your business, you can set up a company later on.
You might realise that your business model doesn’t benefit from a freelance structure. At this point, it will be useful to consult an accountant on how to set up a business structure that will suit your needs – more on this later.
Dividing your time
Before you go any further, consider how you’ll divide your time between your student life and the business needs.
Your university studies should take priority as well as any extra obligations, be it a society or part-time job. If after these you have enough time to dedicate to creating a business, set up a weekly time management system to help with your workloads.
Starting a small business can be very exciting. It is crucial you remember to only take on the amount of work you can cope with. If you overload yourself you won’t just damage your business, it could hinder your degree too.
Getting set up
Once you’ve decided whether you’ll be freelancing or setting up a business, there’s some admin to complete.
If you’re heading into the world of freelancing, you need to register as self-employed with HM Revenue & Customs (HMRC). To do this, just follow the instructions for setting up as a sole trader, which can easily be done online.
Alternatively, if you want to begin your own company, it’s a little more complicated. You’ll need to register your company with Companies House. Companies House is the registry of UK companies – think of it as the DVLA for companies. Registering will cost £12 online or £40 by post. You’ll need to provide more information when setting up a company than if you become a sole trader. The full list of what you need to send is on the HMRC website.
Managing your accounts
Once you’re set up, it’s time to get your accounts in order. Nearly all freelancers and bookkeepers will need to send a Self Assessment return. This is the return you need to submit yearly. Every 31 January, you must calculate the amount of tax you owe HMRC – although this is set to change.
To accurately figure out how much money you need to set aside for tax, you’ll also need to do bookkeeping. This means keeping a record of any money you spend as the business, income you receive from clients or customers, and any expenses you may be able to claim.
This may sound pretty intense if you’re a student who ends up spending their student loan as soon as it comes in. However, if you want your business to succeed, budgeting is a vital element that you’ll need to bring into your personal finances too.
If you’ve got a great idea, you can find more information and support on the Careers website. Your also very lucky to have the Ingenuity Lab right on your doorstep, which exists to help you, University of Nottingham students and alumni, to develop your entrepreneurial ambitions.
If you’re taking the freelancer route there are some great opportunities at places such as fiverr and upwork where you can setup an account and bid for jobs that match your skills. If you’re interested in writing then Textbroker is a really good option, writers can make well over £20 per article depending on the project requirements.
The main reason for failure as an entrepreneur is cash flow. Consider using online software such as Xero is you are a startup which makes things relatively easy to run your own books and keep everything up to date.