Small and Medium-sized Enterprises are the lifeblood of every economy, in Nigeria, these businesses make up over 40% of the national GDP. Therefore, it is no surprise that we currently live in the age of the passionate ‘CEO’ and ‘start-up founders’ who have found a need they want to solve. The CEO/founder title is now a coveted status fuelled by the massive valuation rounds and exits that have been glorified in the press, all of which make starting a business seem all exciting and profitable.
Every day, more people are leaving paid employment to start a business with the hopes to fill a gap and provide solutions for customers, and for every business owner, the golden dream is to build a business that can stand on its own and be financially independent in no time. However, the reality is, for many businesses, this is often not the case. Not every start-up or SME walks right into fame and fortune, most of them fail in their first year while others struggle to stay afloat and break even. According to this report by Business Day, the failure rate for start-ups in Nigeria – Africa’s biggest economy, has averaged 61 percent from 2010 – 2018, this accounts for more than half of the new businesses launched.
To stand out from the crowd, businesses need to figure out a working strategy to help them achieve a degree of stability because stability is the springboard to scalability which will in turn ultimately translate to financial success. For many businesses, a major threat that affects their ability to scale and break even is the cut-throat competition as a result of the increased internet penetration and marketplace digitization that has made products and services readily accessible to customers. Only businesses that go the extra mile to do things differently to serve their customers stand a chance to stay in business long enough to achieve financial success.
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This success often results from the ability to effectively run your business and implement an effective financial strategy to ensure the business not only meets its financial goals but also surpasses it. How then can this be achieved? Here are 5 tips to help you unlock the key to financial success for your business:
1. Have a clear business goal: It is not enough to start a business because you want to be called a business owner. You must also understand your ‘why’ and what you hope to achieve with your business. Are you starting a business to solve a problem? What problem do you want to solve? Who is your target audience and how can you serve them better than the competition? Answering these questions will help you arrive at your why which ties back to your goal.
2. Separate your business account from your personal account(s): As a business owner, when starting out, it may be difficult to draw a clear line between your business expenses and your personal finances. However, it is important to keep a separate account for both to enable you keep track of the inflow and outflow of cash. To properly manage costs and expenses, ensure the account is broken down to cover monthly running costs and discretionary expenses including a personal salary to avoid dipping into your business purse at will.
3. Build cost-effective systems: Now that you have started a business, the arduous task to keep the business afloat begins. To succeed, you must put cost-effective measures in place to reduce the amount of unnecessary expenses and increase your profitability. Systems like a well-structured financial plan – which may include cutting down on operational expenses (like rent and running costs) and investing the dividends from the profits can help to effectively maximize your finances.
4. Choose the right financial partner: Choosing the right financial partner to offer financial advisory services to help you manage your books is a key strategy to help you scale your business and become profitable. Financial advisory consulting firms like Seolham Consulting offer corporate financial solutions that can help you build, enhance, develop and promote a sustainable capacity for business growth. Visit www.seolhamconsulting .com to get started on the path to unlocking the key to financial success for your business.
About Adesuwa Edokpolor
Adesuwa Lilian Edokpolor is an experienced Banking Professional and Management Executive with over 15 years of extensive experience working in roles across corporate and commercial banking, investment banking, sales, marketing, and client relationship management.
She has worked with leading financial institutions across Africa including Nova Merchant Bank, UBA Group and Zenith Bank PLC. She is passionate about driving results and she leverages her understanding of the dynamics of the banking industry to drive the development, implementation, and execution of growth strategies of these organisations.
Adesuwa is currently the Managing Partner at SEOLAHM Consulting – a boutique financial consulting firm offering financial advisory, training and portfolio development services.
