Mitigating Financial Risk for Small Business Entrepreneurs
Ohio State Entrepreneurial Business Law Journal, Vol. 6, p. 469, 2011
22 Pages Posted: 17 Jan 2012 Last revised: 18 Jan 2012
Date Written: 2011
Financial distress by definition threatens a company’s viability. Entrepreneurial and start-up entities are particularly vulnerable to this threat. Yet, much of the discussion following the recent recession focuses almost exclusively on financial institutions and "too-big-to-fail" entities. This essay re-examines lessons gleaned from the recession in the context of smaller, entrepreneurial entities. Specifically, it analyzes how small business entrepreneurs might invoke principles of enterprise risk management to mitigate the long-term impact of financial distress on their business models. It also considers related refinements to extant small business regulations, including the U.S. bankruptcy laws. The essay’s primary objective is to help policymakers, entrepreneurs and investors rethink financial distress and recognize opportunities for "successful failures".
Keywords: entrepreneur, small business, risk
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