Lessons for young entrepreneurs – know the impact of debt and learn how to stay calm
The combined effect of debt and a limited understanding of financial planning were indicated as two of the most important lockdown side effects young entrepreneurs have to deal with.
Speaking at a youth forum organised by the One Economy Foundation, well-known financial planner, Afra Schimming-Chase warned delegates that debt is both an obligation and a responsibility. Young entrepreneurs must be particularly careful, taking on debt only a a strategic means to safeguard their businesses’ future, and finding ways to deal with the mental strain that debt brings when businesses are struggling to survive.
This forum was the first in a series on a Covid-19 Survival Kit for young entrepreneurs. The foundation’s Chief Executive designate, Sem Mandela Uutoni, said, “The forum provided a space to discuss the most pressing challenges that youth entrepreneurs are facing during COVID-19, and to brainstorm abouty practical and actionable ways to mitigate the negative impact of the pandemic on their businesses and mental health.”
A critical outcome from the forum is to build the resilience of entrepreneurs as prerequisite to build strong businesses. In this regard, the wellness of entrepreneurs beyond the balance sheet is a priority to ensure the longevity of a business and avoid burn-out. Verona du Preez, Operations Manager at Bel-Esprit Clinic, said “Mental health issues have no boundaries. They do not discriminate – they affect people of all ages, races, social and economic backgrounds, and standards. Do not isolate yourself; remain connected to entrepreneurs who can relate.
Allan Gray’s Managing Director, James Mnyupe, Managing Director told the audience that “as much as risk scares people, it also hypes people. As asset managers, we try to instill humility in valuing your business by applying a stress test that will illustrate the growth potential of the business model.”
The forum reinforced the importance of a holistic response to the needs of youth entrepreneurs and critical opportunities that the youth can leverage to future-proof their business and accelerate their growth.
The second part of the COVID-19 Survival Toolkit is scheduled to take place on 08 August 2020 and will zoom in on the changing business landscape and how youth entrepreneurs can innovate businesses to remain competitive.
The role of technology to support financial planning for young entrepreneurs was explained at a break-away session at last week’s Covid-19 Survival Toolkit forum presented by the One Economy Foundation.