Last week, an article in the Detroit Free Press highlighted fears about another possible recession, noting that consumer debt reached an all-time high in December. According to the article, credit card debt is up 7.5 percent from 2015, with an average balance of more than $5,700. Young people (Millennials) were cited as most likely to carry a balance.
Now, imagine about a third of these consumers trying to start or operate a business. (The Freelancers Union estimates that 35 percent of the U.S. workforce, or some 55 million people, either have a side hustle or have a freelance business as their primary job.) Even those who don’t have a retail or manufacturing component to their business still need a computer, software, a printer, a phone, and business cards – and many put those expenses on a credit card. In fact, a 2017 study by U.S. Trust found that 16 percent of entrepreneurs used credit cards to finance their businesses, with 37 percent of Millennials busting out the plastic to fund their needs.
Entrepreneurs can find themselves in a tough spot when it comes to raising capital for a small business, and that’s because their businesses (and funding needs) are too small for banks to help. According to the Kauffman Foundation, the $30,000 in average funds need to start a business falls below banks’ ability to lend profitably. As a result, nearly 65 percent turn to friends or family to raise cash.
Unfortunately, while many entrepreneurs have the vision and the passion to start their businesses, they often don’t have the financial knowledge to fund, grow and scale their businesses, as well as create wealth for themselves and their families. That was the impetus for my new book, The Entrepreneur’s Guide to Financial Well-Being, which will launch on Amazon.com Tuesday, March 12.
In my experience, both as a financial adviser and an entrepreneur, I’ve seen the need for holistic advice that considers both the business and personal aspects of an entrepreneur’s life. Too often, however, business owners aren’t sure how to find the help they need. I created The Entrepreneur’s Guide to Financial Well-Being to explain how the adviser world works, and to teach entrepreneurs how to select the right one for them.
Over the coming weeks, I’ll feature some excerpts from the book here on the blog, but for now, you can download the introduction for free at my website, www.waynebtitus3.com. I’m very excited to share a career’s worth of insights with you, and I hope you’ll share this information with the entrepreneurs you know.