SMEs contribute immensely to the countries GDP, as they have created employment opportunities for many young people ad set the pace for others looking to get into entrepreneurship someday. One of the major setbacks that these SMEs are faced with include financial management which has crippled some operations.
In an SME Forum on entrepreneurship as a vehicle of wealth creation, held in Machakos, Waceke Nduati, the Founder of Centonomy which is a Financial Literacy Institution that teaches individuals about the management of their Personal Finances, shared some lessons from her entrepreneurial journey that SMEs can borrow from, to remain operational and successful.
1. Funding is not always the first ingredient to your business
A lot of businesses do want money but the little they have they are not managing it right. Funding is a challenge to a lot of SMEs yet it should not always be the first answer to any business problems. SMEs need to get their businesses running first, get the structures right, get ideas right, then worry about funding later.
2. Financial freedom does not come because you have money today
Financial freedom starts in the way SMEs think about money. What one has today has nothing to do with their tomorrow. If one thinks funding is their problem and that’s why they are not doing something, they should be doing something about that situation. Everyone goes through financial, challenges so that they can get financially free before the money comes.
3. The show must always go on
Waceke noted that whether you have one client, thirty clients, you must keep on. When she first started training her first class had 30 people. Her business plan was from 30 to 20 a business plan projecting upwards but the reality turned out differently. Resources are not going to find you at the bus stop, resources will find you in the bus, and no matter how small the show looks keep it up.
4. Wealth is not created in disorder
People do not know how much they are making and how much they are spending. It starts on a personal level, how much money comes in how much goes out? And in these days of mobile banking, you have to create records. According to Waceke, we do not think profitably, and when we do we will start planning profitably. You need to treat your business account separately as you cannot run business in a mediocre way.
5. Set the intention for the Business correct
Why is your business up? So you can prove to people that you are there something? SMEs struggle with the pressure from society in the name of business people needs to look a certain way. If your business becomes that part where you dip your hands to fund a lifestyle, to prove to other people then you will fail.
6. Pay yourself
Through a bonus, dividends or a salary, reward yourself. Every business has a cycle, its up and down and when you pay yourself even from these savings you are able to save for yourself so that if there is a three months shock in the business, you still have food on your table. It does not help your business if you go hungry. Disruption is normal and you can survive as a person or as a business.