Funding small time entrepreneurs as alternative option to College?

Bottle_of_Smoke

Was just listening to a discussion about college fees in the UK on a radio podcast. As you may have heard there's talk of increasing university fees

Point was made that going to university isn't the right choice for everyone. Apprenticeship/Working world mentioned. Currently think there's too many people going to college for the sake of it when another type of training would suit them better

So was wondering would the government consider encouraging people to take a businness grant of up to the cost of a university degree instead of going to university?

Instead of academic results the person would have to present a viable business plan. When in school people could be informed about the funding alongside information on third level options, as well as a public campaign

People could also apply for the grants which students get in addition to their tuition fee costs.

I'm aware you can get start up grants but it isn't well advertised and most people would not know the details offhand. I feel this would be more likely to encourage an entrepreneurial spirit.

Even if your business goes tits up you will have gained much personal development and knowledge which may be more important to some employers than a university degree.

Long term it wouldn't cost anything if it simply replaced some college courses and/or was done instead of opening some new degree courses. (And I'd say less of the grant would get spent on booze)

antoinolachtnai

Would these entrepreneurs not be better off raising their own capital? Who would screen these business plans?

Bottle_of_Smoke

antoinolachtnai wrote: »

Would these entrepreneurs not be better off raising their own capital? Who would screen these business plans?

Well like a university course employs lecturers and staff to assess incoming students people with business expertise could be employed to assess business plans. They'd have similar skills to staff of an underwriting department in a bank. There'd just be less focus on repayment capacity as it would be a grant rather than a loan so perhaps it would also be advised by individuals with a proven entrepreneurial track record.

antoinolachtnai

1. What sort of entrepreneurs do you think want to sit around assessing business plans that they will have no role in?

2. Why do you think banks have any skills in identifying and investing in fledgling businesses? They don't. That is really not what banks do.

What would your criteria for success be, if not ability to produce a return?

Bottle_of_Smoke

antoinolachtnai wrote: »

1. What sort of entrepreneurs do you think want to sit around assessing business plans that they will have no role in?

1. What would your criteria for success be, if not ability to produce a return

2. Why do you think banks have any skills in identifying and investing in fledgling businesses? They don't. That is really not what banks do.

True enough banks mostly operate on a basis of personal capacity to repay and collateral, but underwriters do look at business potential as a factor for loans too.

They may be retired entrepreneurs who would be paid a salary to assess some businesses. I'm sure it wouldn't be that difficult to form a team of assessors

I don't know how successful this would be, but I do know we are spending money on degrees which are producing a net monetary loss for the state and maybe even a net loss for people in general - eg doing a degree for the sake of it when you aren't suited to college.

Instead of spending this money on university costs how about some of it goes toward new business, or even for helping current somewhat successful businesses to expand

I'm not saying we roll this out to everyone who thinks they can make money, could start out small to see how successful it is, I just think it quite low risk if done as an alternative to university costs.

antoinolachtnai

Why do you think these wealthy retired entrepreneurs will want to take a job that involves reading school leavers' business plans?

Why not just cut the cost out altogether and give the money back to taxpayers, including those retired entrepreneurs, and let them invest their own money?

Bottle_of_Smoke

antoinolachtnai wrote: »

Why do you think these wealthy retired entrepreneurs will want to take a job that involves reading school leavers' business plans?

Why not just cut the cost out altogether and give the money back to taxpayers, including those retired entrepreneurs, and let them invest their own money?

It wouldn't be aimed primarily at school leavers. Like college anyone can go.

Your second point? WTF?

antoinolachtnai

Well then, why would they want to read anyone's business plans?

Why do you think the government should be involved in this at all?

nice1franko

The thing is, if a school leaver wants to start up a business here he already has options open to him: apply directly to the bank for a loan, look for VC funding, apply to Enterprise Ireland.

I honestly think that if a scheme like this was set up we'd have a million and one scam companies set up with a view to blowing the investment money on a cushy year out or paying it out for the services of family-friend (or their company).

The other thing is, people often go to college because they're not sure what else to do.

Maybe a better approach would be get Career Guidance teachers to highlight it as a valid option and to have information packs.

YouProduce

Hi, great post, the people responding here haven't really got a clue what they're talking about.

I've been considering this for months. I'm a recent graduate and am setting up my own business. LEADER groups & First-step etc already do exactly what you're talking about for common start-ups so there is every reason to think that a programme for young school-leavers or graduates under 24 or so could be an absolutely collosal advantage to the country's sense of spirit and entrereneurial energy. Currently, under-experienced risk-takers are competing with experienced people when an shot at starting up a business for people my age with the benefits of some mentorship etc, would create give people the life-experience to make a killing later on in life. We need to learn that you have to fail to succeed, failures are where you gain the most perspective, its a moral as well as a commercial thing. Right now our eductaion system is geared almost completely towards employment, which kills the spirit of young entrepreneurs before they even have a chance to make a go of things. A few programmes here or there around the country isn't enough. We need to breed this entrepreneurial spirit into our kids systemically.

Use the LEADER group/enterprise boards around the country to bring enterprising young people in and take a minority stake in their businesses for start-up capital & mentorship. Then give the young people the option to buy back the share at market prices if they succeed. And if they fail they'll be better men & women for the experience.

In theory its a fantastic idea, but in practice it would be way too messy.

Look at it this way, the failure level of startups is very high I believe. And you would assume in the irish market anyway, the majority of these have been started by people with college degrees.
Start businesses even earlier after school and your going to increase that number of failures even higher as people don't have the basic knowledge, and theres going to be a huge amount of money wasted that could be put to better use.
Some businesses may work but the overall benefits and number of people benefitting of a scheme like this wouldnt be enough to justify the outlay on the amount of people needed employed and all the support systems to make it actually work.

When I was 17 finished school, although I got a decent leaving cert in honours subjects I would have had no idea on how to put a decent business plan together. Forecasting 5 years of projections with balance sheets and profits and loss would have been really daunting (and one of my subjects was business studies). On the basis of putting a business plan together that would satisfy criteria for government investment alone, the idea would fail. The average person leaving school simply wouldnt be able to do it.
I could be wrong but I dont think people who start very young in business make that start from putting together a flawless business plan and getting required investment to start it.

csm

Maybe a better approach would be get Career Guidance teachers to highlight it as a valid option and to have information packs.

I think this is the way forward. I received no information on the possibilities of starting a business when leaving school. University was just an extension of secondary school. I imagine many people went there because everyone else did.

Of course, as mentioned, your average school leaver will not be able to put together a decent business plan. So if government funding targeted at school leavers is available, I would use it in much the same way that YouProduce outlined: to employ mentors to interested school kids. The student would have to put together a business plan to submit to the mentor group (this would hopefully weed out some non-triers), and then a mentor would help the student to produce a presentation and business plan suitable to be given to VC investors, EI, etc.

I agree with almost everyone on this thread though, that providing seed money to kids in lieu of university would be a disaster and completely unworkable. Much better to create an environment for school leavers to learn from experienced entrepreneurs. They can then use this knowledge to go after investment in the 'real' world, and that will quickly sort out the wheat from the chaff.