A renowned Business Coach and Financial Analyst, Mr Shaffi Olabanjo has advocated for strict adherence to record-keeping in business, be it petty or big, saying lack of proper documentation is an habit that kills many ventures.
Mr Shafii made the disclosure while speaking at the Disbursement Exercise put together by New Crescent Charity Foundation, an arm of New Crescent International Travels Ltd, held in Lagos, over the weekend.
The business workshop was organised for the 21 beneficiaries of the N3m disbursement of the Foundation in a bid to assist them to be disciplined in business and encouraged to keep records of every transactions.
According to him, when we talk about reasons for business failures, research has been conducted and many things were discovered. Many factors were discovered to be responsible for business failure. There are about ten of them, but the one we’ll discuss has to do with poor record-keeping or lack of it.
In his words, “We have come to realize a lot of people don’t keep records about their businesses and when it has to do with decision making, they find it very hard to make decisions. So, that’s why this discussion is important. If you want to keep records, there are some basic things you need to consider, which include being economical, that you don’t need to do big, just start from where you are.”
The Financial Expert also talked about verifiability where he said, “Anything you are writing must be verifiable. You have to be precise. You don’t need to keep a lot of information, just be precise and straight to the point.”
Mr. Olabanjo, who later spoke with Muslim News, identified four basic records every business, big or petty, must keep.
“We also told them that, we are not saying they should keep all records, but there are four basic records they should try to keep for a start. They were told about keeping sales records, purchase records, debtors record and the creditors record. If they are able to keep these four basic records, they should be able to make informed decisions about their businesses,” he emphasised.
Speaking further, the finance guru dissected the effects of a poor record-keeping culture, while advising the conveners of the disbursement exercise to help the beneficiaries on stepping up their businesses and keeping them relevant.
According to him, It can be very devastating. If you don’t keep records, you will not know the time you are going to probably spend from your capital. You know there is working capital. It’s possible you have some cash with you, thinking possibly it’s profit, but most often than not, the cash you have with you is not profit. These are your working capital, but if you don’t keep your records, you will not know when you begin to spend your working capital, thinking you are spending your profit.That’s the number one effect.
“Also, you will not be able to make informed business decisions. A lot of people cannot make informed business decisions. They don’t know when to buy and not to buy, when to sell and not to sell. They don’t know the price to sell and the price not to sell, because they don’t have records and also you will not be able to determine your profitability. So, whether you are making profit or not, you don’t get to know because you don’t have records and a lot of people don’t know if they are even making profit,” he added.
Mr Shafii also revealed the categories of people in the business world. He said there are some people that do ‘busy-ness’, which he explained to be “busy, but are not doing business.”
He also said, “There are some people whom, what they do is work-chop. They just “work and chop” while we have some people who are doing business, regardless of the size and amount involved. If you know you are doing business, then record-keeping is very important. It’s not a matter of size or nature of your business. As long as you know that what you are doing is not work-chop, it’s not busy-ness, it’s business, then record-keeping is applicable to you.”
Olabanjo lauded the efforts of the organisers, saying they have done well to facilitate such an important business workshop, because giving money to people to do business alone is never enough.
“I’m actually happy that they have taught them the essence of record-keeping but running a successful business in Nigeria goes beyond that. Record-keeping is very important, but there are other aspects of business that they need to care about. Business planning is also part of it. For example, how to source for fund is also part of it. Very important also, is digital marketing. Where the world is going now is digital marketing.
“I always tell people that, if you cannot take your business online, then you should close your shop. I discovered a lot of these people don’t have online presence. They don’t have virtual visibility and they feel they are in business. So, the organizers should find a way of going the extra mile by teaching them, taking them through other skills that are necessary and relevant to business sustainability and success.”
One of the beneficiaries of the disbursement, Mal. Abdulrasaq Ajayi Yusuf, a Patent Medicine Dealer, lauded the brilliant presentation of the Guest Speaker, while thanking the organisers for the initiative.
Emphasising on what he has learnt, he said, “You see, when you keep records in business, if the business is successful, you will know, if it is not you will know. My own experience has been that when you pay rent and then you discover that monthly, maybe the monthly gross profit is not even up to the rent you are paying, you already know that, that business is not successful and sometimes you will see the landlord, they will bring in increment in rent, so at that point, you have to take a decision whether you want to continue running the business at a loss, or you want to leave that place.
“I think this type of seminar has assisted us to know that if you are starting a business, you don’t have to spend that much, you have to be disciplined and it is when you keep records that you will know where the problem lies that you will be able to block the loopholes, especially the issue of credit sales. Unrecoverable credit is something that can kill businesses.”
“Alhamdullilah I have been in business for eight years and I pray that I continue growing, especially with this assistance that we have gotten today.”
SUPPORT MUSLIM NEWS NIGERIA
With your generous financial contributions to MUSLIM NEWS, you are helping to sustain a culture of journalistic integrity that promotes tranquil Islamic values and ensures it remains free and available to all.
Rawshield PR Company
Guaranty Trust Bank