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Why is Financial Education essential to the Business Start-up?

The most uncomfortable yet probably the most valuable lesson I ever learn’t in business was from the wonderful Scottish Charity P.S.Y.B.T.

Both my husband, my sister and myself were privileged to be supported and helped individually as business start-ups by the The Prince’s Scottish Youth Business Trust in the mid 90’s with start-up loans and grants. What I believe distinguished the success of this charity in addition to the wealth and support of their volunteers was the agreement that every new business start-up would meet their business advisor once per month to review their accounts.

As the great author Michael Gerber of the E-Myth Revisited articulates perfectly ‘Most entrepreneurs are merely technicians with an entrepreneurial seizure’ not business graduate or accountants. I was an unemployed fashion designer and my husband a sportsman and athlete wanting to simply to create a job and income for ourselves.

In my case my Textile business was a very slow starter unlike my husbands Fitness Club which was an instant success. Yet both of us shared one common fear and were terrified of doing those monthly accounts.

That first year in business was excruciatingly embarrassing having to rationalise to my business mentor why I wasn’t turning a profit. That monthly reality was instrumental in pushing an unconfident young woman out on the road in my old rusty £200 Ford Fiesta to start selling my products door to door. I discovered the value of understanding the margins on my purchases as much as my sales and the incremental value of every penny to the pound.

Now 26 years on as a life student in finance and more recently economics I value that ‘tough love’ of my first introduction to financial management through the Prince’s Scottish Youth Business Trust.

That single life experience removed my fear of money through education which made me fully appreciate the value of ‘always being your own book keeper’. Starting with the first step of filling out my cashflow, then filing my own business accounts, tax returns, vat returns to a new chapter in understanding investments and economics.

For young business Start-ups and investors today they have an abundance of great mentors freely accessible on YouTube from the great Robert Kiyosaki to George Gammon, Peter Schiff, Cathy Wood, Max Keiser, Michael Saylor, Harry Dent to Lynette Zang with great podcasts interviews by the likes of Daniel Cambone. 

Several years ago I spoke with one of P.S.Y.B.T. Directors and asked about the statistics of how many PSYBT business start-ups were still self employed or have continued to be in business. I predict that out of all the entrepreneurship programmes that have ever operated this has out performed everyone based on their simple model and principle of teaching financial management as the backbone to every successful business.