Smart With Money: Navigating the Financial Challenges of Being an Entrepreneur

The importance of financial literacy has been stressed in recent years, and it is only more important for those looking to start their own business. During an episode of Grit Daily Startup Show, Ebe Osaigbovo, the founder of SWM Planning (Smart With Money), shared valuable insights on what it means to be an entrepreneur and how to navigate the fears of instability and self-discipline that come with it.

As a CPA with a background in finance and sales, Ebe brings a unique perspective to the table. Keep reading to explore the importance of financial management for entrepreneurs.

The Journey to Financial Success

Achieving financial success is rarely an easy thing, and Ebe’s journey was no different. Growing up, he witnessed his immigrant father struggle with financial management. He remarked, “He didn’t know as much about credit and managing money in savings, emergency funds.”

However, his parents never lacked drive and hustle, which led Ebe to pursue a career in finance. Originally, he believed that meant becoming a financial advisor, but he eventually discovered a passion for accounting and became a CPA. This journey taught him the importance of personal finance and the need for entrepreneurs to have a solid understanding of their financials.

The Challenges Faced by Small Business Owners

Although plenty of people have great business ideas and can run the day-to-day successfully, the financial side of things can be overwhelming. In fact, small business owners often find themselves bombarded by the complexities of taxes, regulations, and financial management.

During the conversation, Ebe acknowledged that it can be daunting, but he also reassured entrepreneurs that they are not alone. He encouraged business owners to be transparent with their CPAs and seek guidance in navigating financial challenges, even if they feel trepidation.

Ebe says, “If you weren’t set up for success before, working with the right CPA and partner will help you do that.”

By maintaining open communication and working together, entrepreneurs can ensure that they are compliant with regulations and take advantage of available programs and grants to support their growth.

The Importance of Financial Hygiene

Another key aspect of financial management for entrepreneurs is maintaining good financial hygiene. Ebe highlighted the importance of separating personal and business finances, as mixing the two can lead to confusion and potential legal issues.

Some of the best advice he could give is for business owners to open a dedicated business account and use it exclusively for business transactions. By keeping personal and business finances separate, entrepreneurs can easily track their business expenses, identify tax deductions, and maintain accurate financial records.

Leveraging Funding Opportunities

As an expert in business credit and funding, Ebe often utilizes his experience to help businesses secure funding. He understands the intricacies of the process, and by leveraging his knowledge, he assists entrepreneurs in exploring their options, including loans and grants, to support their business growth.

One thing that entrepreneurs should keep in mind is that there are relationships that need to be built, especially when it comes to lenders. He emphasizes the importance of establishing business credit and maintaining these relationships to increase the chances of securing funding when needed.

The Role of a CPA in Business Success

Having a dedicated accountant who can provide guidance and support in managing the financial aspects of a business is always a benefit. According to Ebe, entrepreneurs should view their CPA as a partner in their business, someone who is genuinely invested in their success.

While there are multiple positives to working closely with a CPA, a few include ensuring that a business’s books are in order, their taxes are filed correctly, and financial decisions are being made with a clear understanding of the implications.

However, to make the most out of the relationship, it requires finding the right person, someone who understands the business goals and challenges. Owners should seek a CPA who not only has the technical expertise but also demonstrates empathy and a genuine interest in their success. Moreover, regular communication, transparency, and trust are essential for building a strong partnership with a CPA.