UNDESTAND FINANCIALS

Funding and financial management are important for starting a business because they help make your business dreams a reality! Funding means getting money to start your business, like from investors, grants, or even your own savings. Without funding, you may not have enough money to buy things you need for your business, like supplies or equipment.

Financial management is about keeping track of how much money you're making and spending in your business. It's like keeping score in a game! By knowing how much money is coming in and going out, you can make smart decisions about what to do with your money. You can invest in things that will help your business grow or save for a rainy day.

If you don't manage your money well, you might spend too much and run out of money before your business even gets off the ground. That's why it's important to learn about funding and financial management when starting a business. It may not sound very exciting, but it can make a big difference in helping your business succeed!

As an aspiring entrepreneur, you'll need to think about how you're going to fund your startup. Here are some options:

Bootstrapping: This means using your own money or resources to start your business. For example, you might use your savings or borrow money from family and friends.

Crowdfunding: This is where you use an online platform to ask people to invest in your business. You can offer them rewards or shares in your company in exchange for their investment. Each platform has its own rules, fees, and requirements, so you'll need to do some research to find the one that's best for your startup.Some of the most popular platforms are:

1. Kickstarter: This is one of the most popular crowdfunding platforms. It's designed for creative projects and allows entrepreneurs to offer rewards to backers in exchange for their support.
2. Indiegogo: This is another popular crowdfunding platform that allows entrepreneurs to raise funds for their projects. It offers flexible funding options, which means you can keep the money you raise even if you don't meet your fundraising goal.
3. GoFundMe: This platform is designed for personal fundraising and charitable causes, but it can also be used for business ventures. You can set up a campaign and ask your network to support your startup.
4. Patreon: This platform is designed for creators, such as artists and musicians, who want to build a community of supporters. It allows supporters to pledge a monthly amount in exchange for exclusive content and access.

Grants: There are many organizations that offer grants to young entrepreneurs. Each grant program has its own eligibility criteria and application requirements, so you'll need to do some research to find the ones that are best for you and your business. These grants are often designed to help you get started with your business. Here are some grants and programs that are available for aspiring young entrepreneurs:

1. Diamond Challenge: This is a business pitch competition for high school students that provides funding and mentorship to young entrepreneurs. The program is designed to encourage students to develop innovative solutions to real-world problems.
2. Conrad Challenge: This program is open to students between the ages of 13 and 18 and encourages them to develop innovative solutions to global challenges. It offers funding, mentorship, and networking opportunities to young entrepreneurs.
3. Global Entrepreneurship Network: This network provides resources and support to young entrepreneurs around the world. They offer funding opportunities, mentorship, and networking events to help young entrepreneurs grow their businesses.
4. National Youth Entrepreneurship Challenge: This program is open to students between the ages of 13 and 19 and offers funding and mentorship to young entrepreneurs. The program includes a business plan competition and a series of workshops and training sessions.
5. Young Entrepreneurs Academy (YEA!): This program is designed to teach young entrepreneurs the skills they need to start and run their own businesses. The program includes a 30-week course and offers funding and mentorship to young entrepreneurs.

Loans: You can apply for a loan from a bank or other financial institution. You'll need to have a solid business plan and good credit to be approved for a loan. For young entrepreneurs, this would mean getting a parent or guardian to co-sign on the loan. It's important to note that taking out a loan at a young age can be risky and may not be the best option for financing a business. Remember, starting a business is a big responsibility and taking on debt should be carefully considered. It's important to seek advice from trusted adults and to carefully research all available options before making a decision.

Angel investors: These are wealthy individuals who invest in startups in exchange for ownership or a share of the profits. They often provide mentorship and guidance as well.

Venture capitalists: These are investors who provide funding to startups in exchange for a stake in the company. They often invest in businesses that have high growth potential.

Each of these options has its pros and cons, so you'll need to do some research and decide which one is best for you and your business. Remember, starting a business takes hard work and dedication, but with the right funding and a solid plan, you can achieve your dreams of becoming an entrepreneur!

Financial management is important for your business because it helps you keep track of your money and make smart decisions. With budgeting, pricing, saving, and tracking your income and expenses, you'll be well on your way to becoming a successful entrepreneur!

Here are some examples of how you can manage your money wisely in your business:

Budgeting: This means planning how much money you're going to spend and where you're going to spend it. For example, if you're starting a cupcake business, you'll need to budget for ingredients, packaging, and marketing. You can make a list of all your expenses and decide how much money you want to spend on each item.

Pricing: You need to price your products or services so that you can make a profit. This means charging more than what it costs you to make the product or provide the service. For example, if it costs you $1 to make a cupcake, you might want to charge $2 so that you make a profit of $1.

Saving: You should save some of the money you make in your business for unexpected expenses or emergencies. This is called having a "rainy day fund." For example, if your oven breaks down, you'll need to have some money saved up to fix it.

Tracking your income and expenses: You should keep track of how much money you're making and how much you're spending. You can use a spreadsheet or an app to do this. This will help you see if you're making a profit or if you need to make some changes to your business.

There are many helpful resources available for young entrepreneurs who want to learn more about funding their business and how to establish sound financial management practices. Here are a few examples:

1. Small Business Administration (SBA) Youth Entrepreneurship Resources: The SBA provides a range of resources for young entrepreneurs, including information on funding options, business planning, and mentorship programs.
2. Junior Achievement: Junior Achievement is an organization that provides programs for students to learn about entrepreneurship, financial literacy, and work readiness. Their programs include funding competitions, mentorship, and online resources.
3. Young Entrepreneur Council (YEC): The YEC is a community of young entrepreneurs who provide mentorship and resources to help other young entrepreneurs succeed. They offer advice on funding options, marketing, and other aspects of running a business.
4. Khan Academy: Khan Academy is a free online education platform that provides courses on a variety of subjects, including entrepreneurship and finance. Their courses cover topics like accounting, financial statements, and funding options.
5. MoneyAsYouGrow.org: This website offers practical financial lessons for kids and young adults, and includes a section specifically for entrepreneurs. It provides easy-to-understand tips and advice on financial management for starting and running a business.
6. MyMoney.gov: MyMoney.gov is a website that provides information on different aspects of personal finance, including budgeting, saving, and investing. It's a great resource for young entrepreneurs who want to learn about financial management.
7. Investopedia: Investopedia is an online resource that provides financial news, educational content, and tools for investors. Their articles and tutorials cover topics like accounting, financial statements, and financial planning.

These resources can provide valuable information and support for young entrepreneurs who are looking to start a business. It's important to do research and learn as much as possible before making important financial decisions. With the right resources and support, you can turn you business dreams into a reality.