I have been in business for just 7 years; perhaps learning to be an entrepreneur. My learnings in the last seven years far out beats my experience of over 19 years prior to my entrepreneurial journey. While working as a professional in a big company I had easy access to abundant & quality resources (i.e. – people, processes, capital, technical know-how, etc.) that subtly added to my success. While working as an entrepreneur I realised the virtue of having these resources and what they meant. I have been a corporate executive and by no means I be-little their achievements, but the respect for the MSME entrepreneurs has gone up significantly.
The majority of MSME entrepreneurs operate with limited resources, and with a focus on optimal allocation, they try their best to create something marvelous. The outside world notices the success, the garden, and its grandeur, but what is not visible is the hard work, the failures, the pain, and the anxieties that have gone into building the beautiful garden.
While juggling the multi–faceted role of an enterprise it is quite possible to leave a few loose ends open. Many times, these are not by mistake but by choice – it’s about priorities.
5 things that shook many MSME entrepreneurs during COVID-19
I ran a short survey with my friends who are all working hard to build something that they all will be proud of. COVID-19 exposed risks, that as an entrepreneur we ignored by either pegging a low-risk probability or something that did not appear in our top priorities. These are not just survey results but are their heartfelt cries.
1. Money in the business
Most people have invested capital, and their time and have built value in the business. The raw materials, the work-in-progress/finished goods, and debtors are all part of their hard-earned money but were not easily accessible during the troubled pandemic times. #MSME experienced liquidity stress while the big businesses who planned well, navigated the bad times with ease.
2. What if?
Most value created is embedded in the enterprise value. God forbid, if something happens to the main business driver or visionary. Will the immediate family & loved ones live the life that you have dreamt of?
3. Personal Vs. #Professionalwealth
Many MSME companies do not segregate professional & #personalwealth. Businesses do fail; if personal & professional wealth is not segregated then it can cause a lot of misery to the business owner & their loved ones.
4. Ring-fence personal wealth
One aspect is to monetise business surplus to create personal corpus in the most #tax-efficient manner. The second & more important aspect is to shield personal wealth or money against any business liabilities or claims.
5. Inheritance / Legacy / #SuccessionPlanning
A friend has grown-up kids – a son and a daughter. He wishes to hand over the business (valued at INR 70 crores) to his daughter who seems more capable while his non-business assets (valued at INR 50 crores) to his son. He doesn’t wish to split the company. People are recovering from the virus but people who carry a few lifestyle diseases (i.e. – Diabetes, Blood Pressure, Cardiac or Kidney, etc) are more vulnerable. Envisioning a family dispute amid a “What if” crisis is more stressful than the pandemic.
Also Read: Does Your Health Insurance Cover Covid 19?
To err is human. To blame someone else is politics.
– Hubert Humprey – Former Vice President of the United States.
The good part is that these business risks can be mitigated. Working together with a professional #advisor to proactively tackle the possible issues, will go a long way to help prevent such situations.
A proverb that well concludes – A stitch in time saves nine.
