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“Jobs will be our No. 1 focus. ... And we’re going to start where most new jobs do – with small businesses. These are the companies that begin in basements and garages when an entrepreneur takes a chance on his dream or a worker decides it’s time to be her own boss.”

President Barack Obama believes in small business, especially the entrepreneurs who dream big like Jeff Bezos, Mark Zuckerberg or Tony Hsieh.

While many see entrepreneurs as blessed to enjoy their freedom from “the man,” entrepreneurs are fare from that image. Entrepreneurs are true fighters simply surviving all the obstacles thrown in their path for the hopes of making one’s own living. Like last month’s value chain column , this month is going to see what entrepreneurs are realistically up against in starting and running a small business.

To do this, I would like to introduce you to John and Kate. John has always wanted to open his own business while Kate has always wanted to pursue her interest in baking. Together, they open a bakery that specializes in custom cupcakes (in the hopes of sparking a new food trend across the nation). To start the business, John and Kate develop their strategic business plan before hiring a lawyer and an accountant to work with their businesses.

Their first task is to draw up incorporation documents and file with the Secretary of State (which costs $125 in Arkansas) and open their bank accounts (one for payroll, one for general expense and one for taxes). Now if John and Kate needed to file a patent on an invention, they would have to engage a lawyer that specializes in patent/intellectual property law. However a business lawyer is able to assist them with trademarks and trade secrets. Additionally, John and Kate heard that not all accountants are alike, so they set out to find one who is knowledgeable about small business needs and tax accounting.

The next step is for John and Kate to secure their bakery location as well as any bank financing needed to renovate and open the business. The couple has taken all their savings, 401(k) and equity in their home to secure the business loan to get enough working capital to open their doors. Since John and Kate have not been in business before, they are labeled a high risk business, so their loans are at maximum interest rates of 5% plus prime. Also since John and Kate are new business owners, their bank insisted they apply for an SBA loan, which triples the amount of paper work and time needed to process their loan.