Morris Mpala, MoB Capital Ltd
WE once again open our financial mail box from SMEs. Let’s call them “emerging enterprises” across the global village with main focus on Zimbabwe-based players with the idea of “thinking Harare” (very fast) but “acting Bulawayo” (with Ubuntu). In addition we need to be “Hwange” (inclusive) about it and do it with “Binga” (pride) mentality of doing business.
Question: How do I know if am making a profit in my emkambo business? (Makokoba)
Answer: We expect you to understand figures. The basic principle of a profit and a loss as well as income and expenditure.
“If not, seek answers from those that know and master the art of understanding your figures because you are not into this for charity. In business three things matter – figures, figures and figures.
In general look at what is the cost of your goods and what you selling at. The difference indicates a profit. Collate these over a month and deduct other expenses that accrue from conducting your business. It makes much sense in person and with practical data to use as a means of illustration. Use family members to help you understand your figures prior to you grasping the whole concept of business figures. Once you understand figures I tell you will love the business mathematics, which is different from the much hated pure mathematics from junior school days.
Question: Do I need to be cruel to be successful in business? (Riverside)
Answer: Cruelty is a very unkind word. You have to be firm and stand by your values and that isn’t being cruel. Be guided by your values and Ubuntu.
Cruelty is an old trait during the olden war days. You need charm, empathy, compassion and a lot of compromise (but the right term is being accommodative) and empathy to balance all stakeholders that deal with your business from employees, creditors and debtors. The Tshaka Zulu approach has passed; you need emotional intelligence in this modem day era. The charismatic approach has won many deals for a lot of business people. Go ahead dazzle them with your charm.
Question: How do I pay myself when I am the owner of my “spaza shop”? (Cowdray Park)
Answer: Let’s get real, you have to earn a salary for being an employee/owner. Look for a book keeper who will really explain to you in detail as to the implications of not paying yourself a salary and will give you a better understanding of paying yourself. Or simple ask a knowledgeable friend because it is necessary to separate you from the business through these structures. It also gives a better financial understanding of your business. For the time you are spending doing the spaza business you need to get paid otherwise if you did not do it, then someone has to do it and they will need to be paid. The fact that it is you it doesn’t mean you mustn’t get paid. Your services are not free as doing so means you are subsidising the business.
We only live once and if we live (financially) right once is all we need. I have heard people say “life is short “ but what’s longer than living life? After life there is legacy, which defines what you would have done as a living soul on earth and that comes with getting great advice and only great advice will make you leave a long lasting legacy. It’s holiday time and we urge all emerging enterprises to use their hard earned cash wisely and spend responsibly as the New Year is always a harsh reality when it comes to financial jam.
We will you wish all emerging enterprises all the best in their business ended ours at times you need that luck in as much as you create your own luck.
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Morris Mpala is the managing director of MoB Capital Limited, a Bulawayo-based micro-finance institution with footprint across the country.