Guess what? I love principles. And I love people that have regards for principles. Reason? Principles make success or failure in any endeavour (may be in business, family life, career or academic pursuit) predictable. They are universal, and they are not respecter of persons, social-status, or race.Show me a man or woman that has no regard for principles, I will show you somebody who will not go far in life. Show me an entrepreneur who is not principled, I will show you somebody who is running a fly-by- night business; his business will soon go into extinction.
Even G.o.d is a G.o.d of principles, and it is upon some basic principles that he created the whole universe that has been in existence for some billions of years. No wonder He made it clear in the holy book that while the earth remains, seed time and harvest time shall not cease.15 Meaning there will be time to sow, and there will be time to reap from what you have sown. This is otherwise known as the principle of sowing and reaping. As long as you sow a seed (or seeds as the case may be), you will definitely reap fruit(s).
Note, this seed could be money, time, kindness, food, goods or services. The seed could be good or bad. Either way, your harvest is guaranteed. And the harvest is largely dependent on the quality and the quant.i.ty of the seed sown. Simply put, if you don"t sow, you don"t reap. And if you sow bad seeds, you will reap bad fruits. It is as simple as that.
However, looking further into this principle, I discovered another sub-principle called the principle of seed and fruit. It is this principle that has guaranteed the continuous existence of varieties of crops, despite the fact that their fruits are always being consumed by mankind. The principle states that, to ensure the continuous existence and multiplication of anything; may be a variety of crops or animal species, the seed contained inside the fruit of such a crop must be sown. Meaning, in every fruit, there is a part to eat, and there is a part to be sown for propagation or multiplication.
No matter how sweet the fruit is, no matter how hungry or desperate you are, you must not eat all the fruit; else you send the crop into extinction and you will suffer hunger in the next season.
I know you may argue that you don"t normally plant the seed of your favourite fruit (say apple), yet it"s still in existence. That is only because somebody somewhere has taken it as a job or profession of planting that apple seed for you. And that is the reason you are paying for them.
Have you ever imagined a world where there are no farmers; be it commercial or subsistence farmers to plant and cultivate that your favourite food crop or fruit? I am sure that fruit you love so much would have long been forgotten on this planet earth. There is no doubt, that is one of the reasons animals" right activists are advocating that some animals, especially wild life animals should not be killed so as to ensure they do not go into extinction.
Do you know what? The Ants understand this principle and they respect it. In fact, they adopt it as part of their core business values. That is why they do not eat up everything they gather in summer. They save, and re- invest into their business in order to ensure the continuous existence of their empire; hence they have been there over a century.
As an entrepreneur, if you want your business to outlive you, you must adopt this principle religiously. You must know that not every cash that comes into your business (may be from sales) is your profit. Even when profit is realised, you must not consume everything. I mean you must plough back into your business either by expanding your scope of business operation; investing in some needed machines, state-of-the-art technologies that will enhance the business or some human resources (i.e. competent and professional staff) that will help you deliver outstanding result.
It could be in investing in your mind in form of attending a business course or buying and reading some business books. And it could be in form of paying a competent consultant that specialises in the area of your business you are currently having challenge with. The major reason for this mental investment is because, all that you are is all that you know, and to know more is to achieve more and better result.
The beginning of your business is not when to throw that extravagant birthday party you don"t need (this is very common in the south west geo-political zone of Nigeria) at the expense of your staff"s salaries. That may be very costly to the development your business any moment from now. It is not the time to buy that landed property that you don"t need yet. Develop your business first, and then build a house. It"s not the time to buy that Toyota Camry (the choice of most young Nigerian entrepreneur) just to impress your friends. It may stifle your cash flow and stagnate your business growth.
You need cash to sustain your business. Cash flow in a business is like the blood flowing in the human body. Imagine a body where blood is not flowing very well? Such a being is at the risk of losing his or her life within the shortest possible time. That is exactly what happens to any business that is stifled of cash.
Please note that some cash are needed for daily running of the business, some are needed for capital projects, while others are needed for investment. You need wisdom to decipher which is which and the amount to allocate to each of them.
In my few years of experience in business, and from the knowledge garnered from business courses I have attended, I have come to realised that most banks (in Nigeria) and angel investors as well venture capitalist don"t lend money to some micro, small and medium scale enterprises (or call them start ups) because they do not have a good cash management system that can guarantee the sustainability of their businesses they want to borrow money for. I mean no good financial plan. And financial planning is a core course in the school of business success.
In most cases, this is because the business owners have not been able to separate the business cash from personal cash. No difference between corporate bank account and personal bank account. At times there is not even bank account or the money generated from the business does not pa.s.s through the bank account; they are consumed or diverted for something, as they are coming.
Dear reader, please note that as your business begins to grow, you may need to leverage on other people"s money to execute some capital projects. But you will not be able to access these funds; be it bank loans or financial a.s.sistance from investors because you do not have a good cash track record or mile stones. You need a good track record. You need a corporate bank account and you must be disciplined to allow the cash to go through the account.
You don"t need to "doctor" your bank account to deceive the bank for loans. I tell you, you may be caught and that may give you a negative reputation, and in turn affect your chances of ever getting funds from that bank or other would-be investors.
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Don"t forget, in the business world, trust is a social capital (i.e. an a.s.set) that is in a very high demand. In the field of accounting, it is called goodwill. And if do not have it, you may not go far in your entrepreneurial journey. Let"s do it right from today.
Remember, in every fruit, there is food to eat and there is seed to sow. In the same way, in every cash or profit that comes into your business, there is a part to re-invest into the business (be it on short term, medium or long term basis) and there is a part to share or enjoy. Never eat everything.
Obey this principle; you will see a thriving business. But disobey it, and you will see your business gracing the obituary page of business newspapers. That is not my prayer or wish for you. However, the choice is yours to make!