• Sunday, November 10, 2024
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“Your hands are not empty”- Olamidotun Votu-Obada on business management and personal finance for SMEs

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The world of small and medium enterprises (SMEs) is a dynamic arena, fraught with challenges and opportunities. To navigate this landscape effectively, business owners must master the intricacies of business management and personal finance.

This was the core message delivered by Olamidotun Votu-Obada senior executive and social entrepreneur, during the recent BusinessDay SME Clinic a program that offers a comprehensive workshop designed to equip small and medium-sized enterprises theme “Business Management and Personal Finance for SMEs” on the BusinessDay TV YouTube channel.

The program addressed the critical intersection of business management and personal finance for SMEs, providing actionable insights for entrepreneurs. Key areas of focus included the importance of separating personal and business finances, maintaining accountability, leadership, strategic planning and marketing.

Olamidotun drawing from her extensive experience as a seasoned entrepreneur, shared invaluable insights and practical strategies that can significantly enhance the financial health and operational efficiency of SMEs.

The essence of finance in entrepreneurship

Olamidotun began her presentation by introducing the key themes of the discussion, commencing with an insightful overview recounting how finance has been an enduring aspect of her career. “Finance is something that never left me,” she stated, emphasising the importance of understanding financial principles in business. She recalled her time pursuing a Master’s degree at Imperial College, where she initially believed she would never work in finance. However, as her entrepreneurial journey unfolded, she realised that finance was an integral part of her ventures.

Her wealth of experience has allowed her to transition from theoretical knowledge to practical application. This journey, she noted, is a familiar one for many entrepreneurs who find themselves struggling with financial challenges as they build their businesses.

Continuing her presentation, Olamidotun detailed the steps that startups can take to achieve effective business management and personal finance

1. Separate business and personal finances

One of Olamidotun’s primary messages was the necessity of maintaining a clear boundary between personal and business finances. “From day one, you must keep them separate,” she asserted. Mixing personal and business finances can lead to confusion and potential financial mismanagement, jeopardising the integrity of the business. She illustrated this point with an example: “Imagine starting a kitchen business and sending a client your personal bank account details; this opens the door for renegotiation and shows a lack of structure.”

By ensuring a professional separation, entrepreneurs can create a solid foundation for their businesses. She advised business owners to adopt a systematic approach to financial management, such as paying themselves a predetermined percentage of 10% or 20% of the business profits and increasing it as the business grows as this strategy not only aids in tracking revenues and costs but also fosters accountability.

2. Be accountable

Be accountable to yourself, be accountable to your business. Accountability emerged as a recurring theme in Olamidotun’s discussion, where she underscored the importance of being accountable to oneself and to the business. “If the business generates N1m but you take out N500,000 for personal use, you’re shooting yourself in the foot,” she warned. Such practices can hinder growth and sustainability, particularly if a business is not properly capitalised.

Olamidotun advocated for setting limits on personal withdrawals and encouraged business owners to gradually increase their income as the business grows. “If you pay yourself 20% now, you might be able to pay yourself 40% later when the business flourishes,” noting that this approach helps ensure that personal expenses do not impede the business’s ability to thrive, she explained.

3. If you cannot pay for it, don’t do it

Olamidotun shared a crucial lesson she learned early in her entrepreneurial journey: “If you can’t afford it, don’t do it.” She cautioned against the “fake it till you make it” mentality, which can lead to unnecessary debt and financial strain. Instead, she encouraged entrepreneurs to be strategic in their spending, ensuring that any investments made can generate returns.

“If you’re considering an expenditure, ask yourself: am I ready to walk away from this investment?” This mindset helps entrepreneurs take calculated risks, fostering financial stability and long-term success, she advised.

4. Don’t be scared to start at the bottom

Start small, and build gradually. The fear of failure can often deter aspiring entrepreneurs from starting anew after setbacks. Olamidotun urged business owners to embrace resilience and the importance of starting from the ground up. “Don’t be afraid to start again. Many successful entrepreneurs have faced challenges and have rebuilt their businesses,” she encouraged.

She shared her own experiences of transitioning from employment to entrepreneurship, emphasising the significance of building a strong foundation with support from family and friends. This network can provide invaluable resources and encouragement as one establishes authority in their chosen field.

5. use what you have

When starting a business, it’s crucial to leverage existing resources and maximise them without incurring unnecessary costs. Olamidotun suggested that entrepreneurs begin with simple tools, such as Excel spreadsheets, rather than investing in expensive software right away. ‘Be creative with what you have. As your business grows, you can gradually invest in better tools and technology,’ she advised.

She noted that this approach not only conserves financial resources but also fosters innovation and adaptability, crucial qualities for entrepreneurs in today’s fast-paced business environment.

6. Think futuristic always

In an ever-changing market, Olamidotun highlighted the importance of adopting a forward-thinking and evolving mindset. “Embrace technology and remain adaptable. Many successful businesses have transitioned from physical locations to remote operations. My immigration consultancy, for example, moved from a physical space to a remote setup,” she explained.

By leveraging technology and evolving with industry trends, entrepreneurs can maintain a competitive edge and better meet the needs of their clients. This adaptability is essential for long-term success in today’s dynamic business landscape she emphasised.

7. Your hands are not empty

Olamidotun stressed the importance of creativity and resourcefulness in business. “Your hands are not empty; there’s always a demand for what you create,” she stated. As entrepreneurs build their authority, they should explore diverse avenues to enhance their offerings and reach new markets.

During the pandemic, many entrepreneurs discovered innovative ways to diversify their services and products, adapting to changing consumer needs. This mindset of continuous innovation can lead to new opportunities and growth, she added.

8. Start building now

“Start building now and keep innovating,” Olamidotun urged her audience. The key to thriving in both personal finance and business finance lies in ongoing growth and development.

Addressing sustainable budgeting

Olamidotun addressed the critical issue of creating a sustainable budget that balances personal needs with business financial goals. She shared her own experience of transitioning from full-time employment to full-time entrepreneurship, noting that many entrepreneurs underestimate the changes in financial expectations this shift entails.

“When starting your business, set realistic expectations based on your new circumstances,” she advised. Many individuals may not realise that they can no longer rely on their previous salary as a benchmark. Instead, they should assess their needs and determine how much income they require to sustain both personal and business expenses.

Olamidotun suggested starting small, using low-cost marketing strategies, and collaborating with others to build one’s brand. For instance, a small bakery might partner with a local coffee shop to cross-promote its products. This kind of collaboration can provide mutual benefits without incurring excessive costs.

Final thoughts for SME owners

As the session came to a close, Olamidotun shared her final thoughts with the audience, emphasising the importance of resilience and innovation in the face of adversity. “Your hands are not empty,” she reiterated. “The most successful businesses are those that continuously reinvent and innovate themselves.”

She concluded by highlighting that true success is when a business can outlive its founder, creating opportunities for others and fostering a sustainable community. By embracing creativity and staying committed to personal and business growth, entrepreneurs can navigate the challenges of the SME landscape and thrive in any economic climate.

Olamidotun Votu-Obada is a Senior Executive, Social Entrepreneur, celebrated global children’s book author, speaker, and podcast host. With a background in Business Economics, she has extensive experience as a Management Consultant. She holds a BSc in Business Economics from the University of Warwick and a master’s in International Financial Economics from the University of Reading, both in the United Kingdom.

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