ON BUSINESS AND LEAKING TAPS - Biztorials

ON BUSINESS AND LEAKING TAPS

profile of a bronze metallic faucet with water drop; Shutterstock ID 136881866; PO: today-david

For a couple of days the shower in my bathroom has been leaking, very slowly. One night I deliberately placed an empty bucket under the shower before going to bed. Drop by drop, hour after hour, the bucket was filled by morning. This is an illustration most persons are familiar with, but then the illustration captured something I have observed and have been mulling over for quite sometime now.

There’s an ongoing struggle for most business owners in Nigeria, especially the ones operating on a small scale and aiming to grow big someday. That is what this tale is about.

Wale is a young man with many ideas, he had always dreamt of owning business empires and becoming the economic saviour of his family. He was able to articulate his idea, create a business model and launch out. He’s counted his tenth year now in business but his company hasn’t grown as big as he always dreamt even though he has been able to afford the basic things of life he desired like a car, a furnished apartment, getting married, travelling outside the country, and so on.

He thinks if he gets more contracts, the company will grow. Contracts come with so much money in profits, but no much growth even though he makes steady improvement in his personal life. One evening he catches up with a friend at the city mall. One discussion led to another and Wale got to mention his concerns about his business with his friend. His friend narrates to him the exact illustration I got from my leaking tap.

Wale has not learnt the principle of separating his personal financial life from that of his business. When he has to pay his own contribution for a friend’s wedding, he wires money from his business account. When he wants to pay for purchases online, he wires the money from his business account and so on.

It is easy to conclude that Wale lacks financial discipline, you are most likely correct, but this is a struggle for many business owners. Let’s ignore those that are merely reckless with finance and without financial discipline. The spotlight is beamed on those who earnestly desire to build a successful business.

You are broke and need recharge card, you go to the business wallet. Your spouse is seriously ill and you are penniless but there’s some monies in the business account, what do you do? Your car broke down and the only place you have money to fix it is your business account, so for every pressing issue you fall back to the business. Five thousand naira yesterday, a thousand naira today, ten thousand tomorrow and so on, the business account gets depleted. Days roll into years and your company hasn’t made much progress just like Wale’s. You read about companies that are younger than yours and how big they’ve grown, you encourage yourself that one day your story will change. Perhaps, you even increase your giving in church for God to intervene supernaturally.

This is a struggle for many business owners and entrepreneurs, perhaps a silent struggle. The reality is that most Nigerian businesses are set up primarily for the sustenance of the business owner. After all, man must whack while dreaming big. This is Wale’s reality, but he has made a resolution.

Wale has decided that he must make the switch from hand-to-mouth business to building the company he has always dreamed of. He has decided to start all over and build a company that will indeed be attractive to investors and the likes. However, the reality of his personal needs keep staring him in the face, and to tackle that he is going to create a salary for himself and stick to spending within his “means”.

But then, what about those whose businesses aren’t big enough yet to pay them a salary? Well, so long as you are collecting something from it, it can afford whatever amount you are taking out of it. Capture it as an allowance, loan, whatever, just get it captured in your books. At the end of every month, take a look at how much the business generated and what percentage of the revenue you took. Your target should be to cut down on what you take out beyond your allowances or salary as the case might be.

Another way to put this in check is to have a business partner to whom you are accountable. Of course, the story will be the same if your business partner also has need to take money just like you. Whatever your decision, by all means strive to limit the frequency at which you take out money from your business. And let the business as an entity have savings. Take note that for every dime you take beyond your allowances, it is a loan from the business you should pay back.

So like Wale, if you really want to build a big company, you need to start making necessary adjustments even if it means shutting down the present business and starting all over, or structuring the business for your sustenance while you go on to establish a new and structured business that is scalable.
This tale is not an all size fits all approach, but the underlying point is that to increase your business’ finances, you have to seal the leaking tap or like Charles Spurgeon would say

“stretch your legs according to the length of your blanket.”

About the Author

Maple Dappa
Maple is the CEO and founder of Mapemond Resource and Fayples.com. Fayples offer a rare and lovely array of both affordable and high-end wares, sourced from international brands of various countries, differentiated home brands, and concessions.