I spend at least an hour each day writing and rewriting cover letters, tweaking my resume, and tapping out cordial emails.
I’m about to graduate. I’m nervous. And I don’t think I’m alone in that sentiment.
Maybe it’s time to be our own bosses, and start our own businesses.
But many graduates are just starting to reel from the burdens of student debt. It’s not like we have a savings account to put into new capital to start a small business.
Mom and dad have already helped all they can, if at all. And banks are low-risk lenders, not likely to hand out a loan to someone who is young, inexperienced and racked with debt.
Many students and recent graduates, myself included, are hesitant to take on a new load of debt. We were told post-secondary studies would be our ticket to a good life, and from the looks of the job market right now that sentiment was an exaggeration at best, and an all-out lie at worst.
The average undergraduate tuition in Canada is $5,366 a year, according to Statistics Canada. A four-year degree for a student not living at home could run as much as $60,000.
“University doesn’t work if you have to borrow money to go,” says Jason Simmons, who completed a graduate degree in molecular biology from the University of Western Ontario about three years ago.
Because his parents earned a comfortable income, Simmons didn’t qualify for provincial funding sources like the Ontario Student Assistance Program. He instead turned to a bank for the money, taking out a line of credit to finance his undergraduate and graduate studies.
“I figured getting a Masters degree would get me a decent job,” says Simmons. “After I got laid off from my first job, I spent about 40 hours a week applying for work, and it took nearly six months to get hired.”
Simmons is now working at a university, in his field of study, on a short-term contract. He makes ends meet by lifeguarding in the mornings and teaching first-aid classes on weekends.
“I pay $300 a month in interest alone,” he says. “That’s on top of the $700 of principal.”
But he realizes he’s lucky to have a job in his field and part-time work lifeguarding.
“I know people who can’t get shit,” he says with a sigh.
A DIFFERENT ROUTE
Do we really need to rely on job postings to scrape together a living? We are supposed to be an innovate bunch, us millennials. So why are we following those old methods of making it in life?
Starting your own business, even if you have a great idea, can be a daunting thing to imagine, especially if you haven’t yet established a financial base.
Many young people, after getting turned down for a bank loan to start their ventures, might throw in the towel. But they shouldn’t give up so easily. Until I started digging through the web for more information, I wasn’t aware of how many programs are out there to help entrepreneurs with their ideas and with their finances.
One such program is the Ottawa Community Loan Fund (OCLF), which provides startup capital and funding, along with training, to entrepreneurs aged 15 to 39 in Ottawa.
COUNTING YOUR CREDIT SCORE
“The applicant’s credit score is not the only consideration,” says Michael Oster, president of the OCLF. “Each applicant goes through a process, at the end of which, they are presented to our volunteer loan-review committee, comprised of experienced business people in Ottawa.
The applicant is interviewed and given a chance to present his plan and answer questions. Then the loan-review committee says yes or no, and the final decision is left to the Canadian Youth Business Fund (CYBF), who oversees the OCLF.
Oster says more people, especially young people and recent graduates, should consider proposing their ideas to the OCLF instead of a bank, because the OCLF offers better access to startup capital and simpler repayment plans.
“Our training loans require the applicant to pay only interest until two months after they completed the training and counseling we provide,” says Oster. “We are certainly more forgiving when somebody runs into a problem and misses a payment.”
But Oster, not going into specifics, hinted at some changes that might be coming to the CYBF in early April, and is hoping as many people register for the program before the changes take effect.
“I think the program is going to evolve to reflect marketplace realities,” he says. “But it is going to remain the most attractive program that I know of in Canada.
“That’s with respect to providing access to capital to people who can’t get it at a time when they need it, and the mentoring we provide,” says Oster.
COMMUNITY LOAN FUND SUPPORT
Sean Simpson is one young entrepreneur whose business is benefitting from loans and guidance from the OCLF. He runs Mollie’s Munchies, a one-man organic dog treat company named after his nine-year-old border collie.
Simpson used the money to buy food processing equipment and for marketing expenses. Now three years in, Mollie’s Munchies is turning a profit. Simpson mostly sells his treats at local farmers’ markets, but he has his eye on more ambitious sales.
“Once I can establish a brand I think I can get customers to start making regular orders online, and start shipping to places outside Ottawa,” says Simpson. He is constantly trying to find new ways to establish his brand, be it on the Internet or on national television.
Early next month Simpson and Mollie will be featured on Dragon’s Den, CBC’s hit show that pits entrepreneurs against well-established business people to seek venture capital.
Simpson taped the episode back in September of 2012 and is remaining tight-lipped about the outcome until the episode airs.
“Let’s just say, it was an incredible experience,” is all he will say. But whatever the outcome, he’s thankful to be getting the exposure. And he traces his business’ success to the OCLF loan he received years ago.
WE GOTTA RELY ON OURSELVES
As of December 2012, the youth (people aged 14 to 24) unemployment rate was 14.1 per cent, twice that of the national average, according to the Statistics Canada Labour Force Survey. In January of this year, TD Economics said in a report that should youth unemployment stay at this level it would cost the Canadian economy close to $23 billion dollars over the next two decades.
The report also indicated that even short stints of unemployment, six months to a year, has a dramatically negative effect on that person’s earning potential later in life.
At least people are talking about this. Economists are studying it. News outlets are picking up the story. And Finance Minister Jim Flaherty recently indicated that this country is not doing enough to give those looking for work the skills and training they need to land jobs.
They say hindsight is 20/20, and it’s true. We all would play our hand a bit differently if given a do-over in life.
And I can honestly say that if I was given just a few minutes to talk to 18-year-old me, I would tell him to find a decent job, build some credit, find some funding, and give this hard life a go on his own.