This last December 2020, I travelled with my family to spend the Christmas with my Mum as I usually do. It’s always a special experience for me and a time to bond with my siblings and take a break essentially from the hustle and bustle of Lagos, especially the traffic…but sadly Ibadan is wearing that traffic cap of Lagos now.
On my second day at home, I observe my Mum summon the children staying with her and asked them to start accounting for everything that had been sold in the shop. Now let me give you a brief profile of my Mum, she is a retired Assistant Director of Nursing from University College Hospital, UCH. She ran a Chemist Shop while still in active service to make ends meet while we were in secondary school still she shut it down. And when she retired, she opened a small shop just to keep herself busy where she sells recharge cards, provisions and be the favourite Grandma of every child that passes through who would always give her a shout out whenever they pass in front of her shop or come to buy sweet or biscuits. And of course provide medical advice and motherly counsel to people who come to see her.
As I was saying, she began to audit their records, every 100 Naira recharge card, every 10 Naira biscuit had to be accounted for and the records was been cross checked with the cash on hand and and stock remaining. I mused out loud that she was still in this business of scrutinising sales records (lol) and she says, “even if i borrow as much as 100 Naira recharge card for urgent use, it must be recorded and I must pay for it…not recording it and getting me to pay for it, he pays for it”. Now mind you, it was not strange to me that she was doing that, it was strange to me that she was still doing it, meaning she had always been doing it. Yeah, while running the chemist shop when we were in secondary school, we account for every drug sale, every provision sale in that shop. She would leave for work, we open the shop, holidays 11am and won’t close till 9pm, if during school period, open 3pm and close 9pm times 10pm. Every sale is written down and every Naira and kobo made and spent is accounted for. She had this habit then of folding money inside paper and labelling it for their purpose, tithe, food, cooperative savings, cooperative loans, provisions etc…you get the picture, right? I am sure some folks would be smiling and saying, no wonder! I will come to your matter later 😉
So she basically accounts for every Naira and kobo, and virtually every one of us her children understood the essence of that and it instilled in us a sense of accountability and responsibility in managing resources committed to our care.
What is the moral of the story?
How many SMEs, would be entrepreneurs, actually take the pains to document every sale they make and do a self audit to know if they are on track? How often do you separate your profit from your revenue before feasting it on expenses? Business succeeds not just by the cash rolling in, but by the verifiable records of what as come in real terms and how it went out. Once you can track your income and keep tabs on your expense, you are on course to building a sustainable business. And if you can isolate your profit first, and set it aside…and streamlining your expense based on available cashflow, you are quite near been successful.
It always amuses me how a company on paper, makes profit but in reality it can’t account for the profit…in the coffers and all that is seen is mounting bills and what have you. A familiar tale right? Oh yes it is! While it’s not always the case, there are exceptions to the rule where profit on paper is almost the same as profit in the coffers. That is feasible, I believe because every dollar and cent, Naira and kobo is accounted for and documented for posterity and accountability sake.
How many of us really want to be accountable to someone over our business finances? Just asking? Do we feel, I worked for this sweat, its mine to enjoy…? Dear ‘CEO’, you are wrong. That sweat you worked for, IRS (LIRS/FIRS) would knock on your door to collect their cut from the sweat on behalf of the Government. Perhaps you think, what is the government doing for me??? Where you are doing your business? Who made it fleetingly possible to do? The cash entering your hand and leaving is it by your making or Government fiscal and monetary policy? The government may have its defects in social amenities, but we have a responsibility to hold them accountable and responsible by been accountable and responsible as well! And beyond that, what’s the future goal of the business entity? Is it going to join the 100 year club or go by the way of viable business entities that we only hear of their exploits and see their empty shell of a building now. I am sure if we look back we would have pointers to several, Odutola Industries, Dunlop, and several more that passed away when the ‘CEO’ passed away. Is that the kind of business you want to run?
“The percentage of U.S. companies that make it to the 100-year mark is such a small number, there is no clear go-to source for accurate data on the topic. We know from the U.S. Bureau of Labor Statistics that only 36% of companies last 10 years and about 21% survive to see their 20th anniversary. Beyond that, the U.S. Census Bureau reports that only about 12% of companies are older than 26 years. The prevailing theory, though unconfirmed, is that only about a half a percent (0.5%) of all companies have what it takes to last 100 years. This means that centennial firms truly do have lots to celebrate. They’re so rare it’s difficult to calculate just how rare they are.”https://buildingindiana.com/the-centennial-secret-how-do-companies-last-100-years/
Lydia Belanger captures it more succinctly, “These companies haven’t just scraped by. They’ve reinvented themselves multiple times, acquired and sold entire business divisions and remained at the forefront of branding and marketing. As mass consumption habits and values have evolved and fragmented, they’ve simultaneously leveraged their timeless appeal and adapted to stay current.https://www.entrepreneur.com/slideshow/287183
These companies can acquire and sell business divisions because they have data and records to show. They leveraged on documented data and records to make decisions and stay relevant in the market and not just on a whim or impulse. How many companies in Nigeria can boast of been more than 20 years and with the prospect of staying on till 100 years? Do not get me wrong, there are corporate companies that are on that verge based on their internal control processes and corporate governance code. But I am referring specifically to one-man business, SMEs and entrepreneurs. How is your business set up? What does your internal control process say, how efficient is your corporate governance process when it comes to decision making and process? We owe it primarily to ourselves, as SMES, Start Ups and Entrepreneurs to be accountable, responsible and document everything we do as pertaining to the business. You never can know when it would come in handy and how valuable it would be for you then.
My 70 year old Mum has detailed record of all that happens in her small shop…what stops you in your prime from doing more than that?