Parents Risk Nest Eggs To Finance Millennials' Business Dreams
If their kids can't get loans, they're willing to risk it all.
31/08/2016 7:19 AM AEST | Updated August 31, 2016 07:19
Millennials who want to launch their own businesses but don't have the funding are increasingly turning to their parents for loans.
Business consultant Shannon Daniels said that despite the Federal Government pledging to support innovation, wannabe small business owners without cash reserves or credit ratings were struggling to raise startup capital.
He said that many millennials were choosing to start their own businesses simply because they couldn't find a suitable job.
"Millennials are chasing flexibility at work and would prefer to start a business if they can't find work to suit their lifestyle," Daniels, who runs Perth business consultancy Emanation, told The Huffington Post Australia.
"In some cases we're talking about loans of $100,000 which is eating into retirement nest eggs and putting parents at big financial risk."
Despite those risks, millennials are asking their parents for money -- and it's paying off.
Shannon Daniels four tips for those thinking about starting their own business1. Mentor: Connect with an independent mentor who is not a family member. They will be encouraging and realistic and help keep you on track of where you want to be.
2. Milestones: Set Goals. Have big goals and small goals that you can meet in short and long timeframes. This creates focus and keeps you accountable.
3. Financials: Understand everything about your financials. Know how much money is coming in and how much is going out. Have financial goals to work towards.
4. Parental Financial Help: Be cautious going down this path as it can put strain on relationships. If you do borrow from parents, ensure they are treated as shareholders and remember you are accountable.