Imagine this scenario: You’ve just graduated from college. You are given two options: (a) work at a well-known company, or (b) start your own business. Which would you choose?
Many new college graduates would most probably play it safe and choose option (a). Increasing numbers, though, would rather take the risk and go the entrepreneurial route to start up their own businesses.
Donna Fenn, author of Upstarts, a book about the Generation Y start-up phenomenon, says graduates are “starting businesses in droves.” This is due to a number of reasons, among which are the inspiring success stories of Internet entrepreneurs like Steve Jobs and Bill Gates; the founders of Facebook Inc.; and the founders of the photo-sharing app Instagram.
Aside from these, graduates are also aware of regular downsizing and layoffs, meaning lack of job security at large companies.
Nowadays, with advancements in technology, especially the Internet, it really doesn’t take much to start your own company. Most entrepreneur-wannabes just need a few laptop computers, a reliable Internet connection, and start-up capital.
Speaking of start-up capital, it is getting relatively easier for aspiring small business owners to get investors. CB Insights, a New York firm that monitors start-up funding, reports that investors made 1,749 seed investments, generally worth no more than $1.5 million each, in early-stage companies in 2012.
Aside from investors, graduates can also get the capital they need by applying for a business loan. However, this may prove to be challenging if one has a poor credit score.
Fortunately, there are some things you can do to manage a bad credit rating.
First, determine the “damage” that needs to be “repaired” – check your credit score and think about what you can do to turn it around, if indeed it is in the bad credit range.
More often than not, a person obtains a poor credit score when he or she does not manage his or her credit properly. Sometimes, though, this may not be the only reason. If you are a victim of credit scams, this can lead to bad credit as well. This is why it is important to perform regular credit checks, and to protect one’s identity as much as possible.
Once you have your small business set up, make sure that you manage your business credit as you would your personal credit. Here are a few tips:
Small business owners will find that managing their business credit proactively can help guarantee positive cash flow, which is, of course, something every business owner desires.
This is because they can:
Starting a small business, especially if one is still a fresh graduate, may seem challenging. But once you are armed with all the knowledge, tools and resources you need, the journey will not seem so tough anymore. So go ahead and launch that business, and reach for your dreams.
Do you have any useful tips to share with new graduates on how to set up a business? Please feel free to share them in the comments section below. If you find this post useful or know others that could use some tips, go ahead and share it with your friends.
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