Staged disbursement method of funding entrepreneurship

Dear All,

Is staged disbursement method of funding key to a successful implementation of a staged business plan in entrepreneurship development?

It is clearly seen in many projects developed to help enterprising youths to add themselves to the list of successful young entrepreneurs failing due to sub-standards management system and coordination of funds and other issues like mentoring and so on.

The staged disbursement plan of funds, which is tie to a staged business plan is paid upon successful completion of a paid stage of a business plan. This is believe to be a motivational factor for enterprising youths aspiring to become young entrepreneurs to succeed in establishing strong base enterprises, which will respond to environmental and taste change.

Thus, has this approach record a success story in your area if ever practiced? If not, what are the problems encountered?

Regards

Momodou

Dear Momodou,

I believe a staged disbursement methodology may work as a key motivational factor for youths, as it acts as a rewards system for successful completion of agreed upon benchmarks. However, staged disbursement requires additional resources from management teams (including monitoring and evaluation tools, further money management due to the staged disbursement methodology, human resources, etc.)

As you point out, the problem may already lie with the management of youth funds and less with the disbursement of funding to youth (though staged disbursement is a logical and practical idea—especially in terms of further future integration into financial systems). Mismanagement of funding by management teams to youth will not be enabled by a staged disbursement methodology, but rather hindered by further strains and needs placed on the management team.  There would also need to be constant monitoring and reassurance that no risk of liquidity occurs in the gaps between assessment of the program and the disbursement’s calendar. A staged disbursement methodology may motivate youth, but it will not alleviate internal management issues (delivery of funds, mentoring, and so on).

Perhaps what is needed is a system that motivates both, dually encouraging both parties? I am currently unaware of any case studies on such methods, but it would be interesting to see what further is being done to both increase delivery and to do so with increased success rates among youth entrepreneurs. So with this in mind, then I believe a staged disbursement method of funding would be key to a successful implementation of staged business plans for (youth) entrepreneurship development, if a capable and coordinated management system is in place.

I look forward to hearing more on the topic, and perhaps other members of the forum can add some further experiential insight?

Best regards,

Hillery