Tight Money: The Cash Flow Guide
First goal in the quest to being a #MoneyMakingMogul? Master your cash flow. How you handle your cash flow could make or break your business. But if you aren’t sure exactly what “cash flow” means, this guide is where to get started. Before we reached out to the financial whizzes at Standard Chartered Bank Kenya and they broke it down for us, we didn’t know what business cash flow was either. Get you this guide to understand the importance of mastering your business’s cash flow. Topics this guide will cover: What is cash flow? What are the stages of the cash flow cycle? What do you do if you can’t pay all your creditors on time? Can we get an amen on the last point though? Better get your hands on this guide before your creditors go all Rihanna circa BBHMM on you and your business. This guide will get you started on managing your cash flow. Once you’re done with it, check out the next guide in the series for a downloadable cash flow analysis sheet. Don’t forget to read up on when to time your cash flow! Getting access to this guide is easy: just fill out the form below to join our community and get access to this guide, as well as AWESOME weekly content.
Cash is King, don’t ever ignore it
[bctt tweet=”A #MotherlandMogul who underestimates the power of money sets herself up for failure” username=”SheLeadsAfrica”] Phones are ringing, orders are streaming in and your sales department is a beehive of activities. Your business is doing well, the mood is ecstatic. The store person walks to you and breaks unpleasant news, stocks are exhausted. You quickly ring your suppliers and each supplier, as if choreographed responds, “We can’t supply till you pay the outstanding amounts”. You call your accountant and ask her how much money the business has. She says there is very little cash, but quickly assures you that there are receivables which if you collect; the business will have more than enough money to buy stocks. You ask your assistant to call all the debtors and collect outstanding money. Meanwhile, you call the bank, for quick working capital. In your mind, either of these two must come through for you. By end of day, you call your bff to explain you have no money to buy stocks and you have lots of orders pending. She does not have any cash either; all orders for that day are delayed. The next day is no better, and customers start asking for alternatives, to which you direct them to your competitors. It is a sad state of affairs and each passing day, the mood in your business dampens, and activities slowly grind to a halt. Where did I go wrong? you ask yourself; with no answers. Many times we hear an investor say, I will make loads of cash from this idea, so let me put in all the money that I have. Yet she doesn’t consider the day to day cash needed to sustain the business and her life. Such a #MotherlandMogul who underestimates the power of money sets herself up for failure. Money dictates the pace of growth for our businesses, and also the pace of progress of our lives. The absence of money brings business to a standstill and slows our lives down. Planning cash flows is tantamount to respecting the King. Cash must circulate in your business, from your financiers and customers, to be used for purchasing inventory or stocks, investing, paying for labour and some lying around in a bank account to handle emergencies. All these activities are so important for your business survival, neglecting any of them, or leaving it to chance is a quick way of muzzling your business to death. In this series of articles and guides, we are going to breakdown cash flow management’s concepts to help you manage your King in a way in which he will flow, without any turbulence, and provide your business with the much-needed growth. [bctt tweet=”Learn the basics of cash flow analysis with @SheLeadsAfrica & @StanChartKE #MoneyMakingMogul” via=”no”] Tight Money (Guide) The cash flow cycle explains the physical flow of money in your business, from the moment you receive it, through utilising it to pay for your expenses, all the way to banking and using it to produce goods and services. Show Me The Money (Guide) We then delve into the best time-tested strategies for managing cash. Here, we discuss how much money you need to have idle around your business waiting to be spent, what you need to do to manage suppliers and the people who owe you, when to turn to debt and when to dispose your inventories, even if it is at a loss. A stitch in time… (Article) Timing your cash flows to coincide with your outflows is quite a serious strategy in the process of managing cash. It is important that your big expenses are undertaken when you are expecting your big payments from your customers or an inflow from your financier, be it a loan or a grant, or an injection of capital. Read up on how to time your cash flow here. Cash in itself can be an investment. That means by having liquid cash, you can keep it in a form in which it earns interest instead of keeping it under your mattress. Money can be invested to earn a return while waiting to be used in the business. Concepts around managing liquidity, investing excess cash, earning or paying interest and banking will be discussed in our last article on cash flow management. Cash is King. No queen ignores the king. If a #MotherlandMogul ignores the King, it can only be to her own detriment.
5 wedding planning tips for the business savvy bride
Have you recently gotten engaged? Congratulations! Are you deep in the trenches of the madness that is planning a wedding? E-hug. I had no idea what I was getting into when I began to plan my wedding. Prior to getting engaged, I had invested little to no time envisioning my wedding, and I generally dreaded attending weddings (with some exceptions). What I have always enjoyed though, is research and strategic planning. Likewise, when it was time to plan my wedding, I treated it like I would any professional project. It’s been a year since I got married and with the rear view mirror in sight, here are 5 tips I would give any #BossBride: 1. Develop your wedding brand To begin my wedding research, I followed major wedding sites like Bella Naija on social media. I pored through every single post on blogs like Aisle Perfect and bought books like Vogue Weddings: Brides, Dresses, Designers. Once I had a better grasp of things, it was time to decide on my wedding brand. What will my wedding look like? What will it feel like? I asked myself these questions because I didn’t want my wedding to be a copy-and-paste smorgasbord of every trend. It was especially important to me to have a bit of my personality stamped on the wedding. Accordingly, I put together a concept note describing my vision for my wedding (aka #Blavid2015). I have always been passionate about the arts and I created my vision around this. Both my traditional and ‘white wedding’ were like mini-concerts: I had traditional dancers, a choir, musicians, a quartet and poetry reading. Of course several things went wrong on my wedding —but what most people (hopefully) remembered, was the music and the ambiance. 2. Get the budget figured out early A vision without the finances to execute it is pretty much useless, so it’s important to get the finances figured out early. While the bride’s family traditionally pays for the wedding in Western countries like America, this is not always the case across the African continent. My husband and I come from different Nigerian cultures, with different traditional rules about who pays for the wedding. Thus, it was important for both families to discuss who was paying for what and decide on the budget early in the process. Getting a budget together will require getting various price quotes and a lot of prioritization, so it’s best to get an early head start. 3. Do not waste your human capital Once I had a vision and a budget, it was time to figure out who would help me execute my vision. Beyond the usual suspects like my maid-of-honor and best friends; my mother and I delegated tasks and asked favors from whoever asked what they could do to help (perhaps to their shock, Ha!). For example: a family friend who owns a marketing firm designed our logo and handled the programs; another who is a creative helped design my wedding website and invitations. One of my photographer friends did my engagement shoot, and another friend with a hair business hooked me up with a great hair extensions. A former family chauffeur organized a tour of the city for our foreign guests, and my brother-in-law’s fiancé made our bridal train proposals. I could go on and on, but the point here is: #TeamWorkMakesTheDreamWork. 4. Beware of social media vendors Beautiful Instagram feeds do not a good vendor make. Some vendors spend so much time boosting their social media profile that they neglect their actual products and customer service. Additionally, particularly in Africa, some of the best vendors might not be social media savvy or on the Internet at all. No matter how many popular wedding hashtags a vendor is affiliated with, no matter how many blogs rave about a vendor, no matter if a vendor is a family member or friend —do not choose a vendor whose work you have not seen, touched, tasted, heard, etc. 5. Negotiate your contracts like a CEO I shamelessly negotiated prices with every vendor I worked with and they all gave discounts. Two of the most stupid mistakes I made however, were paying some vendors 100% upfront and not insisting on written contracts. As a lawyer, I am very ashamed to admit this. I blame my desperation to book these vendors and what I’ll call PWSS (Pre-Wedding Stress Syndrome). One vendor failed to deliver on almost everything he had promised—it nearly brought me to tears at my reception. When I wrote to him after the wedding, he apologized and explained that a bus with some of the materials he needed had not arrived on time. One year later, a promised refund remains buried in a labyrinth of excuses and justifications. I wanted to sue, but my pastor-mother insisted on leaving it all to God. The moral of this story: a) protect yourself by insisting on paying a balance after the wedding, and b) document all your expectations in a detailed contract. A final note: flexibility and adaptability are important skills for any seasoned professional or entrepreneur in today’s world. The same applies to a wedding: you may have to make concessions to make your family, in-laws and partner happy. I was resistant to some things at first (Type A problems), but I eventually realized that I would have a much happier wedding if all the important parties had some buy-in. I also rolled with the punches—or danced with them, I should say. I decided I would be happy on my wedding day no matter what, and for every mishap I noticed, I danced a bit harder. By the end of my reception, my curls were undone, my foundation had bled, and I had danced my happy heart out.
Making sense of cents: Quick tips to improve your financial literacy
In an increasingly consumerist society it is very easy to get swept up in the barrage of not-so-gentle persuasions on how to spend your money. It ranges from the seemingly harmless dine-out options you yearn for all month long, the glitzy red bottom heels, to a new gadget that you just have to have. Financial literacy is muscle, the more you engage it the stronger and better skilled it becomes. It is important to practice intense amounts of self discipline. It sounds daunting, doesn’t it? Growing up, having a job, earning your own money and then be told be disciplined with how you spend it. Very few people are raised to understand finances beyond what they spend. It is much like not ever teaching children how to read then expecting them to be able to fully engage with a highly literate world as adults. No fair, right? Don’t worry though, help is at hand. We are going to learn this financial alphabet together. Here are a few tools that are easy to understand and implement, provided you’ve got that discipline we spoke of. Draw up a budget It isn’t as scary as it sounds. First, you write down a list of what you need to spend money on for the month. Then, you take out the cost of those items from the amount of your income. When you see just how you want to spend money you may reconsider what you thought was a necessity. Put together a list of your short and long term goals Whatever your goals, they need to be financed to become a reality. Arrange them in order of importance and find space for them in your monthly budget. While having to say, pay for a course module vs. a really expensive night out with the girls may hurt, in the long run it works out. Once you’ve graduated, you will be able to afford many girls’ nights out. Review previous month’s expenditure Once you’ve given your brave new budget a whirl, go over your expenses. Have a hard look at where you spent money wisely and where you did not. Look closely at where you spent most, check whether you spent money on things that tie into your short and/or long term goals. Then review your habits so that moving forward, you make decisions that give you long lasting value for your money. Save 10% of income It is important to save. Life happens, a family member could pass away, a car could be involved in an accident or a job may be lost. There are plethora of unforeseen circumstances that could hurtle themselves into one’s life. It is always wiser to be on the right side of caution. As your spending and saving habits grow, you could even increase that amount from 10%. It is key to note that knowing you can change your habits makes you the boss of your finances. Join a free online financial literacy class The internet is your friend. There are a many resources available to you, should you want to exercise that financial muscle we mentioned above. Ultimately, financial literacy is about attaining freedom, autonomy and peace of mind. There is a life that exists without ponzi schemes and loan sharks. It can be accessed the moment positive, informed decisions are made. In South Africa at least, there are 95 men for every 100 women, that means we ladies have more… um… manpower. The power to change the trajectory of African women is ours.
For young African women: How to build wealth at every stage of your life
This is part one. Read part two here. The Young African Woman – How to Build Wealth at Every Stage of Your Life I recently attended a seminar where one of the key speakers mentioned that there are three main categories that are forecasted to thrive and succeed in this season: Youths, Africans, and Women. It is therefore a good time to be a Young African Woman. In order to succeed as a Young African Woman and to ‘win’ in all areas of your life, you must be in control of your finances and build wealth. It is therefore important to understand the different stages of life i.e. the financial life cycle and how to build wealth at each stage. I would start from the girl child, in order to ensure that we also empower our children, sisters, students, mentees etc. This is the most important stage because if you get it right at the stage, you are likely to be wealthy. There are different theories on the number of stages in a financial life cycle, however, for simplicity they’ve been split into 5 stages. Stage 1: The African Girl Child This is typically between ages 0-12. At this stage, we begin to understand the value of money i.e. N200 can buy more sweets than N100. We begin to have conversations like Kid: “Mum, why can’t we buy a bicycle?” Mum: “Because we do not have enough money at the moment.” Kid: “But mum, what about the money in my piggy bank? I have a lot of money in my piggy bank.” Mum: “Honey, N500 is not enough to buy a bicycle.” Generally, we believe that money is to be used to buy junk food and also to buy toys. At this stage we receive pocket money. Financially intelligent parents would begin to teach their children the basics of savings via a piggy bank or a kids’ account. They would also learn the concept of earning money by being paid for household chores as well as through mini businesses such as making and selling lemonade or bracelets etc. I attended a conference where a speakers stated that when she was younger, her parents paid her whenever she did her household chores and that was how she learnt the value of hard work and earning money. My daughters started their first business at age 6 and 3. During their Christmas holiday, they made personalized bracelets from beads and with virtues such as love, faith etc, and sold them to their aunties, uncles and friends. Shortly after, they received an order to make personalized bracelets for a birthday party. Within two weeks, they made about N30, 000. I introduced the concept of a piggy bank and also taught them how to give as well. I also had a very proud moment the other day. My daughter had received some money as a gift from her uncle at Church to buy ice cream. A blind man came to ask for money and she heard me say I didn’t have any cash left. She then said to me “Mummy, he can have this money” and she gave him her ice cream money. At a very young age, I opened investment accounts for my daughters with a monthly direct debit in place. Warren Buffet began investing also at this stage. He has also created an online club for kids called the Secret Millionaires club where kids learn the basics of entrepreneurship and wealth management. This is a good place to start. Stage 2: The African Teenage Girl This is typically between ages 13-19. At this stage, we develop a better understanding of money. Our needs include buying top-up cards for mobile phones, shopping and entertainment etc. We understand that it is not everything you want that you can get. We also start earning money via jobs like baby-sitting, etc. In developed economies, at this stage, teenagers are sent to work in fast food restaurants or retail clothing stores to earn some money. Some teenagers are also required to work in companies as interns during holidays. Ty Bello, Nigeria’s renowned photographer started her hair styling business at age 15. One of Africa’s youngest billionaires Ashish Thakker started his first business at age 16. When you get to University, you begin to understand the importance of managing your finances. In University, you are also introduced to the concept of credit cards, over drafts etc. It is important to educate teenagers on the pros and cons of credit cards and overdrafts. A lot of students get it wrong and end up in a lot of debt once they graduate from university, and this affects their ability to build wealth in other stages of their life. Key things to consider at this stage include: Learn the value of hard work and earning money through internships, holiday jobs Start a business using your talents and gifts Start a savings and investing culture Be involved in the process of managing bank accounts and investing. Read books on personal finance How did you fare in these stages as a young person? If you have passed these 2 stages, you can still share them with a young person or a parent who might need it. In Part II, we discuss – stage 3: The Young African Woman, stage 4: The African Woman, and stage 5: The Older African Woman.