May 20, 2012
Young, aggressive and at a competitive advantage, young entrepreneurs can get off to a great start early on in life if well prepared for self-employment. Governments and the private sector realize the value entrepreneurs bring to the economy and business environment, and have tailored programs and services accordingly to meet the needs of young entrepreneurs.
Business Planning for Young Entrepreneurs
Prior to approaching lending agencies, partners or investors for sources of funds, you will need to complete detailed business planning. With the help of mentors and other professionals, you must undertake a high level of due diligence behind your business venture. Ensure that you complete the research necessary as you develop you business plan, and that includes everything from market research to sourcing out human and financial resources.
The US Small Business Administration (SBA) has plentiful resources for you in developing your concepts to planning. There is also a page dedicated to young entrepreneurs, with articles on essentials of starting a business and self-assessments.
Financing, Funding and Support Sources
Keep in mind you must consider a mix of financing and funding sources for your business financing. Along with your own cash equity, you will need to secure funds from other sources such as grants and low-interest loans from government programs, commercial loans from financial institutions, and other sources of cash equity from private investors or your partners.
SBA has a search tool to locate funding and grant programs in your area and possibly specific to your business industry. The tool takes through a series of questions on your proposed business, industry, and area you are located in, and then generates possible programs that may assist.
Loan and Funding Assessment Criteria
In addition to digging into your personal credit history, lending agencies, government programs, and others will be analyzing your business plan and projected financial statements. Those agencies may focus on the following criteria:
- Revenue, expenditures and net profit trends
- Ability to repay (based on revenue levels)
- Level of financial need (must cite the financial deficiencies)
- How credible the business plan is (backed with supporting documentation)
- Security / collateral to support the loan or funding source
- Government programs may assess other information to ensure it meets program criteria, such as employment, targeting youth, meeting equity targets, etc
Check out some other valuable resources on loan criteria:
- Business Grants – 5 Steps in Navigating through the Process
- Grants for Business – Avoid These Common Mistakes
- Business Loan Criteria
Other Resources for Young Entrepreneurs:
Resources for Canadian Young Entrepreneurs:
- Gov’t Canada Youth Business Programs and Info
- Canadian Youth Business Foundation
- Canada One – Info on Youth Programs
Business information, resources and tips for the entrepreneur
© 2012 Strategy Plan One