SEP 26, 2016
Written by: Evelyn Suvajdzic, CPA, CGA
Generation Y (those born between 1977 and 1994) is taking to entrepreneurship like no other generation before them. It is not just due to the economic environment, but also due to role models such as Bill Gates and Steve Jobs as well as the desire to emulate peers like Mark Zuckerberg. They understand what it takes to reach the expansive and increasingly more affluent youth market of which they are a part. Generation Y has never known a day without computers and internet, they have grown up comfortable with tech savvy tools that enable them to succeed in today’s business environment.
So, what are the main reasons young entrepreneurs fail? An Inuit survey of 1,000 Canadian would-be entrepreneurs states that a poor understanding of finances, along with a lack of planning or strategic vision are at the top of the list. Of those interviewed, 30% said the best way to long-term success is financial literacy and financial management acumen.
A good financial plan should be easy to use and understand and, with the widespread use of spreadsheets, it is easier than ever to create models and plans specific for your individual needs. Financial models, which are a forecast or budget of future financial statements, are paramount to making informed decisions about your business. They can assist you in everything from marketing strategies to determining the potential value of your business. Models allow you to build a business plan using different scenarios that will show you what would most benefit your company for the long-term, before you commit actual capital to the enterprise.