Gale Ngakane
25 March 2008
Francistown — "Good things happen to those who wait" is a maxim that has been trumpeted by the far-sighted since time immemorial and on Wednesday, Barclays head of retail credit, Dineo Saleshando, did it again to an attentive audience at a hotel in Francistown.
Speaking at a seminar themed: "Financial Solutions for Business Success" to an audience made up of business people from the northern part of Botswana, Saleshando lamented the fact that Batswana have got a tendency of wanting to be seen driving Mercedes Benzes within a short period after starting their business. "They want to show off that they are successful when in actual fact their businesses are doing poorly," she said.
Besides, Saleshando who lectured on the topic, "Cash Flow Management" at the half day seminar, there was also the small business guru from Kgwebo Management Consultancy, Palalani Moitlhobogi who presented on "Business Planning". Saleshando was suggesting that some people borrow money from the bank and divert some of it to their personal needs. She gave the example of a person requiring an injection of P500,000 in his or her business. "You will find that instead of using the P500,000 to expand the business, the person would use only P250, 000. The other half will go into personal use. If you want to succeed in business, this has got to stop. The money borrowed for business must be channelled into the business for it to remain sustainable," she said.
Her other gripe was that Batswana business people leave their businesses to be run by either their children or wives or relatives. By so doing, she said, they are unable to keep an eye on the cash flow of their operation. She advises the business people to take a leaf from people of Asian origin who would sit at the till from morning to closing time.
"By so doing, they are able to ensure that they see how their business is doing. They also do stocktaking physically. If they can do it, why can't we do it too? It is the only way you are in control of your business and will help you convince financiers," she said. As she continued conscientising the audience about the importance of money, she likened cash to "oxygen that enables a business to survive and prosper," as it is the primary indicator of the health of any business.
"Cash flow is essentially the movement of money into and out of your business. It's the cycle of cash inflows and cash outflows that determine solvency. Cash flow management is the process of monitoring, analysing and adjusting your business cash flows. "For small businesses, the most important aspect of cash flow management is avoiding extended cash shortages caused by having too great a gap between cash inflows and outflows. You won't be able to stay in business if you can't pay your bills for any extended length of time," she warned.
One of the things that interferes with money coming into a company, according to Saleshando, is issuing goods or services on credit and then the company does not aggressively pursue the debtors.
"The problem is that when a customer comes requesting to be given goods on credit, you do not check if the customer is credit worthy. But checking with ITC does not cost much compared to the amount of money you will be giving to the prospective debtor. It is of utmost importance to know if a customer is creditworthy," she said.
She spoke about earnings of business owners. "It is important to fix your own salary. And once it is fixed, do not change it willy-nilly. You would find that if someone had put his or her salary at P10 000, the other month she or he takes P20 000, or any amount he or she requires.
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