Students are turning to self-employment to fund their studies

The failure of lecture attendance to return to pre-covid levels has strongly been attributed to the cost-of-living crisis and the need for students to earn more money during term time – with half of students having missed lectures and a quarter missing deadlines because of this.

However, many students are creating their own jobs to give themselves both the money and the flexibility to focus on their studies – and universities could do more to help.

For earning in term time, flexibility is becoming the key priority for many students, with students already evolving with term time jobs – for example, Wetherspoons are one of the biggest employers of students in the UK, partly because of the element of flexibility with shifts but also the ease of transferring to a pub in their hometown to earn money during the holidays.

Delivery jobs are also especially popular with students, and many jobs of course have moved permanently online since Covid such as tutoring. However, with many of these jobs minimum wage, many students are finding the best solution is working for yourself.

A marked increase

Several surveys show students are taking matters into their own hands, running a variety of micro businesses to fund their studies – which is ideal for fitting around their studies. Santander found in 2020 that 27 per cent of students plan to or currently actually run a business while at university – with 9 per cent actually doing so, up from 3 per cent in 2018, bringing in on average £5k per year in revenue. Many of these ideas come from hobbies such as arts and crafts and IT. Another recent survey showed that 43 per cent of British people had a side hustle on average earning £207 per week, with the younger Generation Z rising to 68 per cent.

Students are part of this rise – a post covid survey in 2022 also suggested that 31 per cent of students had a side hustle, with 2 per cent of these earning more than £10k per year. There has been a Student Side Hustle Awards since 2022 with a £2.5k prize: UnidBooks winning in 2022 – a platform based at the University of Leeds where students can buy and sell text books guided by student recommendations tailored for different courses – saving students money and reducing waste. In the US Duke University student Sophie Riegel started buying and selling clothes and impressively made more than $100k per year to fund her studies.

There are other benefits of working for yourself – students working for themselves are gaining skills above what can be gained from a part time job – taking responsibility for acquiring and managing customers, scheduling work, managing demand, customer satisfaction, and of course generating income. With experience, self-employed students have been able to manage the right amount of work to take on that can fit around studies and modulate the amount of work you do to when they have less deadlines. These are all great skills to have to impress potential graduate employers.

What can universities do to help?

With the Sutton Trust saying the effect of increased working is having a disproportionate effect on students from the more deprived areas of the UK and the Santander survey suggesting that 64 per cent of students think there is not enough support for student entrepreneurs – it is in the interests of universities to do more to help.

Much entrepreneurship support is aimed at high risk, high reward innovative ideas with support mechanisms such as venture competitions, incubators, and accelerators, however there is less support available for the “unglamorous” side of entrepreneurship – budgeting, tax, and bookkeeping rather than the more exciting aspects like intellectual property, opportunity spotting and marketing. This is important as there can be tax benefits to being self-employed – for example, you will be able to offset some tax against your expenses – even if you are working from home. You may need to budget for when your tax bill is due if you pay income tax on your profits (when you reach £12,570 per year at time of writing). This is likely to become even more important especially with the new rules from January 2024 which mean that those earning more than £1,000 from side hustles need to register as self-employed. Peer speakers would help with this, especially from a practical perspective, and explanatory workshops and regular drop-in sessions would also help.

The practicalities of business development, contracts and other laws and regulations e.g. those governing food service would also be useful, as would help with filling in self-assessment for tax. Universities could create a hub for self-employed students with this support and peer networking. In my experience there are many local law and accountancy firms and other organisations that are happy to give time to help students with this, including the local Chamber of Commerce. Some students target their biggest potential customer – their university, but the university could do more to buy from student businesses where there’s a reasonable business case to do so – and open up more opportunities for them to sell products such as at student markets.

Berriers

Predictably, access to capital is one of the biggest problems for these businesses, with the Santander survey suggesting 76 per cent of students saying it was the biggest barrier, so relatively small amounts of money can be put to work very effectively for universities – providing working capital for these ventures that could be used for buying materials, renting a market stall, or advertising.

Most universities consider 20 hours work per week a maximum, and terms and conditions of student visas may restrict hours or prohibit what students are able to do, and this time should be used as effectively as possible – so finally, the university could help students running their own business by addressing the ongoing debate about timetabling. There is already a sense that timetables don’t really reflect the modern student – especially commuter students living at home who are spending many hours per week travelling, which the Sutton Trust suggest could soon reach 33 per cent.

Students are already judging for themselves whether it is worthwhile travelling in for a single lecture – ideally it would be condensed into only needing to travel a few days per week (should lecture space and teaching staff time allow). This would obviously free up time allowing students to work on their business.

Ultimately a mix of working and own business could be ideal for an optimum of regular income but with flexibility when needed – universities could ensure they are catering for these students with benefits to both students and the university.