Business Challenges for the Entrepreneur

As an entrepreneur, you know a lot about the daily challenges you face. In this article, the objective is to address some of these challenges and to highlight the issues involved.

In this article we will address three (3) areas: 1. Business ownership; 2. Financial Management; and 3. Process Management.

Business Ownership
There are several options available to you in deciding the form of entity to choose for your business. Work with a trusted advisor (i.e. Financial Advisor, Attorney, and CPA):

a. Sole Proprietorship
b. Partnership or limited Partnership
    i. Consideration for the Agency Power; 
c. Corporation
    i. S-Corporation
    ii. C-Corporation
    iii. Limited Liability company

Potential Issues: Family and Business interactions; Husband – Wife “Team;” One entrepreneurial spouse; In-law interaction; Sibling rivalry; Friends working in the business.

Financial Management
The next challenging area to discuss is Financial Management. What do you want to focus on? How about the following:
Internal Control - How well do you understand what is going on financially within your organization?
Firm’s Liquidity - If there is an urgent need for cash, do you have the resources readily available or would you have to rely on borrowed money? Was this part of your plan or an added cost that you never planned for?
Firm’s Operating Profitability - Are you profitable? Do you know how to measure profitability?
Adherence to Financial Governance - Is there a Line-of-Credit at a financial institution? Is there a long term loan outstanding? Do you understand the requirements that you need to abide by? Do you understand your firm’s use of debt?
Integration of Other Assets and the Firm’s Assets

Operation Process Management
When was the last time you reviewed your operation processes? Does your operation require analysis and re-design?

In our next article, I will be discussing “Financial Planning, wealth creation, and accumulation.”

Fola Odejimi, CFP®, ChFC®, CLU®
Managing Member, The Odyssey Business Advisory (TOBA)

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