Younger business boosts

WITH 40 per cent of small business operators expected to retire in the next 10-15 years, the Federal Government has given new blood to small-to medium enterprises (SMEs) and changed the sector’s culture.

“Less than 10 per cent of SME operators are under 30,” says the federal Minister for Small Business, Fran Bailey

“As policymakers, how do we maintain the continuity of business experience on one hand and encourage young people to take that step of transferring a great concept or innovation and commercialise it?”

The Federal Government’s solution has been to take an existing $30 million program and target it exclusively at under 30s.

“We have been funding organisations and companies to make sure we give those young entrepreneurs the support to sustain their
business and enable it to grow,” Bailey says.

The Federal Government also has a $9 million program for mentoring and succession planning. “The succession planning should be
part of the business plan,” says Ms Bailey.
“Generation Xers and Ys will take a concept, develop it, then sell the business and go and develop something else. The funding goes to companies and organisations, who then go and work with the entrepreneurs.”

The minister says 58 projects will receive $11.5 million of funding through the Building Entrepreneurship in Small Business (BESB) Program, which supports young entrepreneurs and provides succession planning advice for older business operators seeking to exit.

“This initiative sends a strong message to young Australians – that starting a business is a great career option. It will provide practical support when it’s needed and help cultivate a future generation of young entrepreneurs.”

The training and mentoring component will fund 47 projects valued at over $8 million, while the succession planning will fund 11
projects at over $3 million. Bailey believes it is crucial that we change a misleading perception in Australia that small business has a high failure rate.

“The truth is that less that 6 per cent of
small businesses fail and just under 1 per cent
of those that fail do so for financial reasons,”
she says.

“We should adopt the culture that exists in the United States and Canada. Often a young person starts a small business and it doesn’t go the way they want it to go, or they may go in another direction.

This is not a failure, she says. “Generation X and Y are flexible – they don’t see themselves as being in that business in 20 or 30 years.”

Current federal mentoring projects include:

  • Enterprise Network For Young Australians,
    Homebush, NSW;$124.900 to boost the skills
    of 600 young people in business in Illawarra,
    Greater Western Sydney and the Central Coast.
  • Business Networking for Growth, Victoria; $185,820 to deliver business planning. mentoring and training programs for 200
    young entrepreneurs in regional Victoria.
  • Ernst and Young. Perth, WA; $1,253,990 for a program in metropolitan and regional Australia to raise awareness of business succession planning issues.

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