FINANCIAL MISBEHAVIOURS THAT CAN RUIN YOUR
It is interesting to know that the one-man business, in spite of its simple nature, is the most difficult to sustain.
It is however, pertinent to note that the one-business can come in different scales too. There are really small ones that employ few hands while there are also the large one-man businesses that are heavy employers of labour. The fact remains, however, that no matter the size of the organisation financial discipline is always a problem. The owner often gets carried away by the fact that he owns it and so makes financial mistakes that end up ruining the business. There is usually no check on the person at the helm of affairs unlike a partnership or joint venture where no man can be an island.
Since the first threats to every organisation, whether small, medium or large scale is financial discipline, it is important to seek ways of avoiding it. Ways of ensuring financial discipline could vary among individuals and organisations, but there are general rules that should be obeyed to ensure success.
1. Be Determined Not To Spend From The Proceed Of The Business For The First Year: - This will definitely put the company in trouble because if initial capital is eaten into, there cannot be room for improvement. Instead, the business gradually becomes smaller until it eventually packs up. However, nothing comes without determination.
2. Assume That Source of Income Is Not-Existent: - This not mean that you should not be actively involved in its upliftment; its non-existent should be in financial terms. This may be different accomplish, but achieving it will go along way in the growth of the business.
3. Treat Yourself Like An Employee: - If you, as an owner, treat yourself like an employee, there is no way you can be bold enough to dip your hand in the company’s finances. This also implies placing yourself on a monthly salary just like others which should be paid only when others have taken theirs.
4. Pay for Every Item You Buy from the Company: - It is better not to take something and promise your employees that you will pay later. You might not be able to do so again. For entrepreneurs who fear that this might be difficult to do, buying from else where could be the solution. The problem here is that you may be increasing other people’s sales and depriving your company of income.
5. Employ An Auditor’s Service No Matter How Small Your Business May Be: The reason many sole proprietors misbehave with respect to their company’s account is that there is no check and balance. But if there is an external body that makes you give an account of what comes in or goes out of the company’s purse, you will be able to caution yourself better because at the end of the day, you have to account for it.
6. You Should Not Be Carried Away With Figures: - Do not get carried away with your sales figure and think you have arrived when indeed you are just starting. In most cases, the figures you base your calculations on are actually nominal figures, which become less when they are calculated on the basis of the indices that makes them real. Even when there is profit, it is better to plough everything back into the business for fast growth or better still, plough back a greater percentage of it.
Adediran Mutiu Adeyinka,