When I was working with corporates as an accountant, one of my daily role was to ensure I share daily cash status of the company. Sometimes I could find the bank balance was at Kes 500M.

Onother area that was monitored on daily basis was collection from the customers that were sold on credit.

These needed to reach Chief Finance Officer (CFO) by 10am of the following day.

As I became refined in finance management role, I was able to start connecting the dots and got the bigger picture on why those reports were very crucial to the CFO – Backbone of key decision-making.

Beside pressure from reporting timelines, I was able to connect why big corporates sustain growths for years – displine of money.

A bank account with Kes 500 Million and there was no shilling that flowed and moved without clear traceability in relation to value it was expected to bring back.

When the final assessment was done every 6 months, management would go back and set the system to ensure they have learnt from failed decisions.

Refining decision making for the next season was silent assignment of the management.

Indeed, many in micro and small enterprises dont understand that element.

Flexibility and being alert in experimenting decisions ready to learn and upgrade them on the go.

This is more in spirit other than just an activity to accomplish.

That is what I would term epitome of continuous growth in corporates. And they have sustained it.

What is all this

In my writing, one of the key agenda is to help the community that enjoys this writing develop a sence of entrepreneurship spirit.

For so long micro business makers get stuck in shallow chase interpreting shallow outcomes as if they are the ones that drive their businesses.

Developing entrepreneurial spirit is about shifting from this shallow interpretation to adopting longterm perspective about business making.

Reflecting long into the back, predicting, and planning long into the future using the right trends, which you have developed, and others that you have picked from the market.

One piece of writing will not achieve this – but when you develop real interest to pick my frame of thinking we will walk together and real conversion picks up.

That is one key agenda why we are here.

That is also why our Enterprise Support Agency (ESO) – www.poweringhouse.com- was developed. Targeting to build spirit of entrepreneurship to as many as 1000 small and micro business makers.And now partnering with agency like Dream Crest Limited – www.dreamcrestlimited.com – to enhance this mission.

Simple way of growing small business – a shilling at a time- is just simple way of enhancing your daily displine on your business cash. Practicing it repeatedly as you witness real transformation.

Lets dive in and cover following;

· What is business money

· Business money cycle

· Lost opportunities for business to create more money

· How you steal from your business

· Cash as a micro biz growth pillar

· Start point in growing business money

What is Business Money

Business money is in two forms – Liquid / hard cash and non hard cash ( that is other existing form of investment – always ignored)

Without understanding and appreciating these as two different form but relate to same thing, your business will continue going down because you will not be directing your attention to the right things.

Simply – every coin that comes through trading in your business is what you need understand as business money. On same every item helping you run business is money in different form.

Missing this, you will take a totally different route that will not deliver you to right destination.

Understanding this will help you understand the value you have and expected return on investment

Business Money Cycle

If you cannot clearly define the journey a shilling takes in your business, then you don’t understand money cycle.

Money cycle is simply journey from when a shilling enters your business until it is used up or taken out of the business.

A lot of cash get lost in many small businesses because of not understanding this cycle.

This include losses through cash diversions and non value add activities and getting non optimal value from business cash.

Unless you have clear cash cycle, you miss the points.

What are signs you don’t understand the flow:

· Poor understanding of profit versus cash

· Lack of cash management skills

· Bad cash and capital investment

Lost Opportunity for Business to Create More Money

As the business owner miss to understand the power of business money, there is continued drain from business, which also leads to lost opportunities to make more money.

Non hard cash business money is expected to be sweated / exploited enough and optimally to generate more return on investment.

When it is not aligned with expected value, business get lesser and lesser value which means lost opportunity from investment.

Secondly the business is not able to establish right monitoring metrics on performance. There will be no measurement against expected return.

It is very clear that anything that cannot be measured can never be improved.

How you steal from your small biz

When the whole cash cycle does not have any traceability, the next thing is reactive responses.

When you are on shortfall – you join a choir of economy is not doing well.

When there is increased cash in your hand- you commit things that don’t add value to business

This leads to business owner becoming the biggest thieve of his or her own business, which is depicted through the following;

·   No accountability structures –you can pick any cash from business and commit any thing as far as no one is asking you. It feels a great convenience, however it kills or stagnate business

· Diverting business money – As far as a need arises, you feel very comfortable fetching business cash to close the issue

· Treating sales cash like profit – As far as you don’t want to get financial report to clearly get picture of profits you made, you continue using business cash without any accountability.

 Cash as a micro business growth pillar

Cash comes with power.

Power to activate many growth projects that are well designed.

When you deny business opportunity to build cash float you miss big opportunity for growth.

Some of key opportunity you miss include – ability to negotiate for more discounts, negotiating credit supplies because you cannot be trusted, ability to see long-term and plan most profitable projects.

Start point – growing business money

Building reliable cash balances is a doable mandate.

When you acknowledge the power that comes with business cash, you can build it.

The start point includes;

·  Intentionality –Acknowledge the need and start building right displine and accountability systems. If you have no adequate information about how, seek support from right source

·  Make enough sales – when you keep diverting business cash, you operate on very strained business operations. This leads you to blame everyone and everything without appreciating that you might not be making enough sales. Build right sales infrastructure and commit to it.

· Design business to be customer ready- Many small businesses stretched on cash are usually set just for bringing in cash without considering if what you are doing is resonating with customers – this is designing business for now and future.

Business money is the engine.

It set the business to become strong for the world

It set the small and micro business for growth and sustainability.

I hope this is onother letter to move you close to building entrepreneurial spirit.

Thank you for feedback I am receiving and many asking to join our coaching program. Every business is scalable and my joy is actualizing the gold in entrepreneurship and as many micro and small business maker achieving FREEDOM.

Next time.

Gachoka

Ps

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I am Charles Gachoka - CPA-K , MBA- C.O.O & Business Development at www.cygnus.co.ke . I am also the lead in Business Finance Operations consultancy portfolio. Cygnus prides working with over 50 owners and decision makers of mid-level businesses, helping bring out huge growth through Kaizen in Operation Excellence, Business Finance Operations, ESG & Strategy Deployment model (Hoshin Kanri).

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