Achieving Financial Stability Through Entrepreneurship

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Windsor, Ontario boasts one of the highest unemployment rates in Canada. This city — which is located directly across the Detroit River from Detroit, Michigan — has always been heavily dependent on the automotive industry. As much of the automotive manufacturing industry moved overseas in recent years, thousands of people in Windsor lost their jobs. As a result, the city has one of the highest unemployment rates in the country.

As someone currently living in a city in the midst of a severe economic downturn, I understand all too well the realities of large-scale layoffs and unemployment – particularly how they impact your finances. Despite being a generally financially savvy person, even I got a financial literacy education in these circumstances.

I also understand how entrepreneurship can be a solution to job insecurity.

Before I left traditional employment to run Money After Graduation full-time, I was a consultant to early-stage start-ups. I helped entrepreneurs at every stage of business growth, from concept to launch. It was a nice job, with a good salary and challenging work. But more than that, I had the opportunity to help people realize their dreams. Calgary itself is a very entrepreneurial city, and there’s no shortage of ambitious people with great ideas. Being part of the start-up community and delivering the resources entrepreneurs needed in order to succeed was incredibly rewarding work. I left for the only reason I feel is worthy of leaving: to run my own company.

I handed in my letter of resignation at a time when most people were being laid off from their jobs.

As the price of oil continued its downward spiral, my friends and family, as well as tens of thousands of other Albertans, were let go. The worst of it is that it’s still not over. Thousands of people are still losing their jobs here each month, and there still seems to be no sign of it stopping anytime soon. Needless to say, job loss wreaks havoc on your personal finances. However, a solid understanding of financial literacy can help you manage your money better through challenging times in your career.

Quitting a great job in the middle of an economic downturn is taking a leap without a safety net — or so people think. Now that I’ve been self-employed for 5 months, I understand better than ever that working for yourself is one of the least risky things you can do. If you can create a business that supports you, you will have a kind of job security you can’t get anywhere else: you can’t be let go. If it were practical, I’d wish everyone were self-employed in whatever capacity suited them best — as a freelancer, a business owner, a consultant. I understand that entrepreneurship isn’t for everyone, but for those who it is a good fit, it’s one of the best investments you can make in your long-term financial security and happiness. This is why I am so impressed with organizations that help people make the leap into self-employment, and one of my favorites is Enactus.

Enactus is a global non-profit organization that seeks to better the lives of others through entrepreneurship.

Enactus is a community of student, academic, and business leaders that are committed to making the world a better place through entrepreneurship. They focus on empowering students to take entrepreneurial action to improve the lives of those around them. Enactus currently operates in 36 countries at over 1,700 universities. They host a series of regional and national competitions which provide teams an opportunity to showcase the impact of their outreach projects.

The Enactus team at the University of Windsor was named one of the 2016 Capital One Financial Education Challenge Regional Champions for their CityThrive program. They will be one of six teams competing at the Enactus national competition in Toronto on May 3.

The Capital One Financial Education Challenge

The purpose of the Capital One Financial Education Challenge is to empower Enactus teams to identify, create and deliver projects that address a specific and unique financial education opportunity in their community with the aim of improving livelihoods. Teams, like the one behind the CityThrive project at the University of Windsor, have to prove how they used financial education to improve livelihoods in their community in an economically, socially and environmentally sustainable way. The challenge is just one of the initiatives that Capital One is involved with to help empower Canadians to make wise financial decisions.

One Enactus team is located at the University of Windsor, where students operate a program called CityThrive.

CityThrive is a 12-week program offered through the Enactus team at the University of Windsor that helps people on social assistance achieve financial stability through entrepreneurship. To learn more about what they do and the impact their incredible program has on the local community, check out this incredibly inspiring video below:

Students from the Odette School of Business at the University of Windsor are paired with people on social assistance who want to start their own business. The students provide one-on-one mentorship, financial guidance, and various supports through the CityThrive program to individuals who are looking to become entrepreneurs.

By lifting 11 people off of social assistance, CityThrive has saved the City of Windsor over $330,000

Some of the beneficiaries who completed the CityThrive program have grown their businesses large enough to hire employees, which further amplifies the reach of this initiative.

The impact on the small business owners lifted off of social assistance is tremendous, but the impact on the students who mentor them shouldn’t be overlooked! Finding opportunities for students to get real-world experience while still in school isn’t easy, but it’s absolutely essential. This is the goal of the Enactus program and the Capital One Financial Education Challenge. Even though I feel I received a world-class education in business school, I will admit that I did not learn everything I needed to about how to run my own business in my MBA. The opportunity for students at the University of Windsor to help people build businesses is as valuable to them as mentors as it is to the people they’re guiding. These students are learning valuable skills about everything from business plans to marketing to finance.

Unsurprisingly, business and personal finances are closely tied in entrepreneurship. Managing and mastering one will help you do the same for the other. This is why financial literacy is an integral part of the CityThrive program. As aspiring entrepreneurs learn how to manage their business finances, they also learn the importance of managing their personal ones. From creating a budget to tax planning to the time value of money, the financial literacy education that participants receive through the CityThrive programs helps them be successful with money both professionally and personally.

What’s your best financial literacy tip for entrepreneurs?

I know you can already guess I’ve had my own ups and downs with my personal finances since transitioning to self-employment last year. If I could go back in time, I’d have a swath of advice for getting my finances in order.

But I want to hear from you!

Watch the CityThrive video above, and then leave a comment below with your best financial literacy tip when it comes to entrepreneurship and business. Your comment could be featured in a future post and the students can use your advice to make the CityThrive program even better!

This post was sponsored by Capital One. The views and opinions expressed in this blog, however, are purely my own.


13 Comments

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  1. This what worked for me:

    1. Have a personal runway: Three months wages in cash to make rent is a nice buffer.

    2. A working spouse. I always say my wife was my first investor. Her income helped keep bills at bay. What’s better is getting to return the favor to allow her to quit her job and persue her passion (It is a partnership after all.)

    3. Try to make money from the business before you quit. The first few months are spent spinning your wheels, so best earn a wage while you’re figuring it out.

    4. Downsize your life. This is not sacrificing things it’s liberating your life of stuff to worry about.

    5. Get literate. Like Bridget, I studied as much on personal finance as I could ahead of making the leap. This ensured my decisions were made on hard math not hope.

    Reply
  2. Kevin Bartel

    Create a product or service that you would buy yourself. This helps drive determination as your creation becomes something you truly believe in.

    Reply
  3. One of the best pieces of advice I’ve ever received is to create your ideal customer from head to toe. Even go as far as deciding their favorite coffee shop. This way, when it comes to making a difficult decision as far as your product or company, you can ask yourself if your ideal customer would be okay with this? Would they still love you or your product? It’s very good for the ethical side of things as well.

    Great post and so many cool organizations (especially in Canada, which I love to see!) Thanks for sharing.

    Reply
    • We did this at the consulting firm I worked at! It really helps you see how your product and business fits into the market.

      Glad you enjoyed the post!

      Reply
  4. Love this program. I’d say really understand the customer’s need (and sometimes they can’t articulate it) and build the product or service to fix that need, rather than just making something and hoping they ‘will come’.

    Reply
  5. Bronwen

    Reduce your expenses as much as possible before you quit your job!

    And, like Chris said, having a buffer is essential.

    Reply
  6. Love this program. I was part of it during college, ran it, and competed at the national level. It’s an amazing organization where I learned and helped others.

    Reply
  7. Work SMART not HARD.

    For years I boasted about how much time I spend daily on my web design business.

    Then I had a baby and had to squeeze in maybe 2 hours of work per day. And it threw me off course.

    After months of feeling sorry for myself I finally realized that, if I wanted to really be there for my kid, I need to keep a short work schedule for a while and live with it

    So I became more productive.

    I increased my rates, started tracking my income and the number of hours I work, use Pomodoro’s technique and also apply the pareto’s principle (i see which type of work brings the best results and focus only on that).

    In the past 5 months this allowed me to get more web design clients, create an entire freelancing course from scratch (design the website, promote it, work with my students) and still be a mother.

    So, be productive. Do highly productive work and then enjoy life.

    Reply
  8. Tommy

    Entrepreneurship has benefits. As your own boss, you make all the decisions. You earning potential is not limited by any corporate salary structure. You can be more creative and you can choose when you work and for how long.

    The benefit of working in a traditional job is that you can often leave the job at work when you go home. You know exactly how much you will earn so long as you remain employed. Finally, it is usually the only way for most people to provide the seed capital required to launch their own business.

    However, I think that ALL work (traditional job and/or entrepreneurship) is precarious in today’s world.

    Reply