5 Tips for New Economy Entrepreneurs

The tough job market is driving many recent college grads to start their own businesses.

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Recent college graduates frustrated with a slow job market are increasingly deciding to take matters into their own hands. A recent HarrisInteractive online pool found that over four in ten 18-to-24-year-olds have considered starting their own small business. But before plunging thousands of dollars into a new website or other start-up costs, consider these five tips from small business experts Karin Abarbanel and Bruce Freeman, coauthors of Birthing the Elephant:

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1) Create options for yourself: Everyone is sending out resumes, but the job market is rebounding very slowly. So don’t just look for a job. Instead, multitask and pursue an alternate path to supporting yourself by thinking like an entrepreneur. Come up with a product or service you can offer even while you’re job hunting, such as designing Web sites, painting houses, managing social media, or producing promotional videos.

2) Make sure your idea has legs: A product or service that no one needs or wants won’t make money. So take time to identify your market: Do online research, survey your potential buyers (including your friends), talk to experienced entrepreneurs about how to market and price what you have to sell. Investigate low-cost distribution channels like the Internet.

3) Minimize costs with creativity: You might have college loans and need to fund your venture on a shoestring. The good news is that lots of successful enterprises started small. So think “creativity not cash.” Barter early and often: Trade skills with someone else who has what you need. Don’t overspend on image; forget the fancy computer or pricey Web site. Keep your operating costs down and use your start-up dollars where they count most, for marketing and product design.

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4) Take advantage of your alma mater: Your college or university offers a goldmine of resources you can tap for expert, low-cost help. Talk to your professors. Ask for their advice—and their business cards! Find graphic design students to create your Web site, turn to film students to produce a high-quality video, contact your marketing department for marketing data and help in developing a promotional strategy and business plan.

5) Connect, connect, connect: Networking with people is the best—and cheapest—way to get the word out about your new business. Tell family, friends, and local news outlets your start-up story and ask for referrals. Tap online tools like Facebook, Twitter, and LinkedIn to promote your venture. Join alumni and professional associations. Find mentors who can help you make smart moves and avoid costly mistakes. And don’t forget to say thank you and keep people posted on your progress. Make them part of your success story!

Kimberly Palmer is the author of the new book Generation Earn: The Young Professional’s Guide to Spending, Investing, and Giving Back.