Earlier on this week, Prime Minister Rishi Sunak outlined plans to make it compulsory for young people to continue studying maths up to the age of 18 (more on this here).
However, we believe he is completely missing the key issue which is financial literacy. Unfortunately, school children are not being taught the sort of maths that they really need to know about – balancing a household budget, how mortgages work, what an APR means and understanding basic cash flow.
While a lack of financial literacy may not be a serious issue if someone is employed, it can be terminal for those setting out in self-employment.
Given that almost 800,000 companies were formed last year and there are hundreds of thousands of sole traders operating, this adds up to a massive financial headache.
Over the last few years, we have worked with hundreds of small business, right across the country, and it is clear that few business owners have a firm grasp of basic business finance – pricing, setting aside for tax, simple bookkeeping and managing revenue.
Without this firm base, it becomes nigh on impossible to build a viable and long-term sustainable business. It’s no good talking about getting the most out of Instagram Reels or building a TikTok audience if you don’t have a grip on your figures.
Many people seek help from a business adviser or enterprise support organisation because they want to ‘increase sales’ – particularly true of so-called micro SMEs. However, very few actually understand this in the context of their overall business finance.
We believe that from the age of 13, children should be taught about financial literacy. With so many young people now seeing self-employment as a career option, this essential education may be the difference between success and failure for their businesses.