Five business-defining money lessons you weren't taught in school
By Ben Bierman
Youssof Altoukhi, a 19-year-old entrepreneur and crypto millionaire based in the United Kingdom, delivered a Ted Talk in 2021 at the age of only 16, discussing the challenges of youth entrepreneurship. He highlighted a notable lack of basic financial education in schools from “kindergarten to university” and recounted the discouragement he faced from teachers who dismissed his ventures as “useless”.
Altoukhi admitted the following to laughter from the audience: “I believe it should be mandatory when you’re younger to be taught financial skills to prevent suffering when you’re older. But the government would never do this – they make too much money out of financially illiterate people.”
The state of consumer debt in South Africa highlights an alarming similar financial knowledge gap with only 42% of the population being financially literate. As of July 2024, the average debt to income ratio for people earning R35 000 was 72% and 75% for people earning R5 000. This means about three quarters of the average South African’s income is spent on servicing debt.
Good financial management comes down to a set of principles that transcend the “personal” or “business” tabs on your spreadsheets. Here are five essential financial lessons, inspired by his philosophy, that should be taught in schools:
Budgeting and tax optimisation
Budgeting, tax knowledge, and other foundational concepts equip individuals with proactive skills to manage their finances effectively. Budgeting, often referred to as the "financial GPS" for both individuals and businesses, provides direction and control. As Dave Ramsey, a bestselling author and personal finance expert, says, “A budget is telling your money where to go instead of wondering where it went.”
For small businesses, optimising tax strategies can reduce financial burdens, improve profits, and avoid fines or penalties related to non-compliance.
Saving for an emergency
Business owners may have an inherently positive outlook on success, but an emergency fund can be the critical difference between survival and closure when setbacks strike. The Covid-19 pandemic caught many off guard and businesses who failed to prioritise emergency savings or maintain sufficient cashflow reserves did not survive.
Using debt to your advantage
Compound interest is a double-edged sword. It can be powerful when used correctly (i.e. to invest) but it can also lead to debt spirals if misunderstood or mismanaged. Learning to leverage debt for growth by understanding how it works and building credit early, can help budding entrepreneurs establish a strong financial foundation.
Thinking entrepreneurially
Entrepreneurial skills encourage students to become critical thinkers – enabling them to identify opportunities where others may see obstacles. Something as simple as learning to brainstorm business ideas can build this valuable mindset that fosters resilience and adaptability.
Asking for help
If you consider how many businesses fail due to financial factors that could easily be addressed through mentorship or technical assistance, not asking for help can technically be seen as fiscally irresponsible.
We offer support to the businesses we finance by providing expert technical assistance as well as a network of seasoned business owners and professionals to tap into for mentorship. There’s a reason they say, “your network is your net worth”. It’s not just the potential business opportunities but also the invaluable experience that can be shared. This is the kind of expertise and skills transference that can improve the efficiency, profitability, and growth of a business.
Ben Bierman is the managing director at Business Partners.
BUSINESS REPORT