Entrepreneurial Finance - Master Course Module 2
Leader: Budapest Business School, Judit Sági and Péter Juhász
163 pages long module handbook (with national specifications, reflective questions, case studies and recommended reading) – 3 Sections, 13 Units
E-learning module material (with interactive elements, short films, self-assessment questions, glossary and additional materials)
ISBN 978-615-5607-54-7

The module ‘Entrepreneurial Finance’ was aimed to offer a detailed introduction into the financial issues related to family business.
It consists of three main sections:

1. In Corporate Finance the authors reviewed issues that entrepreneurs face as a top-manager in a family business.
2. Personal Finance concentrates on challenges an individual has to overcome in her/his personal life if she/he becomes the owner of one or several firms.
3. Finally, the family business from the point of the society in order to consider the financial ethical aspects of the family owned companies.

By studying this module, readers are expected to gain competence in managing the funding resources of expansive, family-owned enterprises.

There are definite learning objectives (“LOs”) of the module, such as follows:

• LO1: to demonstrate a critical understanding of the role and structure of family businesses in the economy,
• LO2: to evaluate the usefulness of common financial accounting and performance measurement practices in case of family businesses and recommend adequate modifications,
• LO3: to compare typical financing sources and strategies of family business to other types of firms,
• LO4: to analyse and evaluate main business valuation issues emerging when dealing with family business,
• LO5: to present and analyse the key challenges of personal finance for family business owners,
• LO6: to address ethical issues characteristically developed by family businesses.

In consent with the learning objectives set before, the teaching material reviews among others the following issues:

• Economic importance of family businesses, focusing on the potential financial challenges within a family business;
• Value based management, i.e. how to create shareholder value by running family businesses as a top manager;
• Financial reporting and analysis, including a qualitative assessment of the company’s future development and planning in order to assess how realistic these cash flow forecasts are, and thus providing an appraisal of an enterprise’s ability to meet its future payment obligations;
• Working capital management, i.e. How to set the target amount of liquidity; how to manage your outstanding receivables; when to pay your suppliers, etc.;
• Investment policy, namely which projects are good enough to invest in; and how to measure the embedded risks of different projects;
• Financing techniques for family businesses, by reviewing the different sources of funds alongside its life cycle, as a family business is growing by turnover, number of employees, is becoming more structured by operation, and is generating more profit cash through its years;
• Taxation and dividend policy, and, for most, paying attention to when considering tax burdens, and explaining how to decide on the right amount dividend;
• Performance management, i.e. how to monitor and improve the performance of the company;
• Business valuation, that is, how to figure out the fair price to pay for an existing enterprise;
• Exit strategies – considering that entrepreneurs will grow older, they preferences may change, and their personal life might turn upside down from one day to the other, the question to be raised is that can they leave their companies without jeopardising the existence of those, and what should be taken care of in such situations;
• Wealth management for family business owners, involving a wide variety of issues from using banking services, financing the home, optimizing the insurance portfolio, preparing for unexpected spending, saving for health care and university studies of the children, creating a safe pension and estate plan, etc.;
• Estate and succession planning, and within, going through the process of planning the transfer of a business because of the individual serving as both main owner and top manager willing to leave the business;
• Ethical challenges at family business, and in this regards, considering what the expectations of the society toward the family business owners are and how they could evade all those ethical failures that are often automatically associated with these companies.

The e-learning outcomes of the FAME programme have been implemented on the Budapest Business School Moodle platform: https://moodle.uni-bge.hu/course/view.php?id=8817
Access to the e-learning materials can be asked from Budapest Business School – please contact László Varga (This email address is being protected from spambots. You need JavaScript enabled to view it.), administrative coordinator of the FAME project.