Mums and Dads Foot the Bill for Jobless Kids To Start a Business
While many children stay at home well into their 20s, an alarming number are also looking to their parents for financial support to start a business, simply because they can’t find a job.
Leading business consultant Shannon Daniels said while the Federal Government talked about support for tech start-ups, it was actually mums and dads who were providing loans and rent-free housing to help their children start businesses.
“Millenials are chasing flexibility at work and would prefer to start a business if they can’t find work to suit their lifestyle,” said Mr Daniels
“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,” he said.
“Five years ago people had an idea and worked on it after-hours and only left full time employment when they could provide themselves with a steady income.”
“Now people who never thought about going in to business for themselves are doing so simply because they can’t get work elsewhere or a job with flexibility.”
“There’s a real shift in employment with the jobless reinventing themselves as business owners either with the financial backing of parents or for older workers their partner is their financial support.”
“This is highlighted by figures from the Australia Bureau of Statistics showing in 2015 a massive increase in businesses having no employees and turning over less than $50,000 a year – a decade ago the bulk of businesses were in the $50,000 to $200,000 a year category.”
“According to ASIC there were 242,620 new company registrations nationally last year compared with 131,776 ten years prior. An increase of 84%.”
“In WA there were 20,307 new registrations in 2015 compared with 10,420 in 2005. An increase of 95%, that’s 11% above the national figure.”
“People go into business knowing how to do a particular job well but they’re clueless how to actually run a business which puts them in danger of financial ruin.”
“As many as 60 percent of businesses close their doors within four years according to the ABS.”
“Entrepreneurs understand the need to learn about business which has led to a seminar cult that’s not a perfect fit for everyone.”
“This addictive thirst for knowledge has people on the merry go round of business seminars but instead of implementing the strategies they’ve learned they’ve moved on to the next seminar.”
Mr Daniels has this advice for the self employed or those thinking about going down that path –
1. 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 ensure the parent is treated as a shareholder and you are accountable.
Anyone needing more information about running a successful business can visit http://www.emanation.com.au and download a free copy of Making Self-Employment Work.
About Shannon Daniels
Shannon went from living in his car to cleaning 16 hours a day and then on to building Perth's most successful strata cleaning company which he later sold for a generous profit. A decade on he has started, built and sold several multi million dollar businesses and is now a business strategy consultant helping others to succeed. Visit http://www.emanation.com.au/
High resolution images available on request.
0450 686 693