She Leads Africa

Here’s how to switch up your money management style!

[adrotate banner=”4″] [bctt tweet=”Much of our anxiety stems from the fact that we just don’t know what’s going on with our money” username=”SheLeadsAfrica”] Have you ever interrogated your feelings about money? How would you define your relationship with money management; comfortable, in control, dysfunctional? Even with solid financial advice, some people still feel a level of anxiety around personal financial management. Sadly the topic of money is still viewed by some as ‘the last taboo’, and as a result, many of the attitudes we have towards it go unexplored. As budding #MotherlandMoguls, building a healthy mindset around money management should be a priority. Here are a few tips to help you to make peace with your bank balance, manage your personal finances and develop a healthy money mindset. Determine your ‘money personality’ A useful place to start is to try and understand how you instinctively relate to it. Similar to taking a regular personality test, this will help you to understand some of your predispositions toward money management. You can find a whole bunch of free ‘money personality’ tests here. Keep good records, make good plans Recognizing your financial patterns and setting financial goals is the key to building a healthy relationship with your money. Much of our anxiety stems from the fact that we truly just don’t know what is going on with our money. Sound daunting? Don’t worry, we are here to simplify the struggle. Finance guru and friend of SLA Samke Ndlovu Ngwenya put together this worksheet to help you think through your goals, and keep track of your personal financial management. While you are doing this, take a look back at money management mistakes, or successes you have made and look out for patterns and lessons. Figure out your conditioning We all have a certain level of conditioning when it comes to money which has been proven to affect how we relate to it. For example, if you sincerely believe you deserve to make money, and that you are able to do so, this conditioning is considered positive. It can also be negative and limiting, for example, thinking about money with fear or scarcity. This conditioning is the filter through which you interact with your money. Money coach Lynette Khalfani-Cox says, “You have to ask: what falsehoods and ideas am I believing that are actually sabotaging my efforts, or keeping me from fulfilling my potential?” Work to change these ideas. You could even try out money affirmations if that’s your thing. To help you out with all the serious introspection you are about to do, I caught up with two savvy businesswomen. They gave me some insight into how a successful entrepreneur relates to their money. [bctt tweet=”Money means the ability to uplift – Carol Bouwer” username=”SheLeadsAfrica”] Carol Bouwer is the Founder and CEO of Carol Bouwer (CB) Productions. This pioneering businesswoman is a committed champion of women. Her company PB Productions is behind The Mbokodo Awards which celebrate the work of South African women, as well as The African Odyssey experience. What does money mean to you? For anyone with an entrepreneurial spirit and a desire to be part of shaping our community for the future- money gives you the ability to uplift. Materially and psychologically- money gives you the opportunity to create employment and empower others. It gives you the ability to inspire others to see what results could be possible if they apply the same level of discipline. Money is not the goal but it helps you achieve the goal. Is there a specific event/lesson that has shaped how you relate to your money? Losing it young. Some of the mistakes I made with money management as a youngster have been the greatest gifts in my financial life. The lessons are etched in my mind so they can never be repeated. My big thing with this as in everything in life- don’t lose sleep and lose the lesson- lose the former and gain the latter at all times! What do you wish you knew about money management when you received your first salary/ paycheque? Budgeting! I had a whole list of needs and wants but lacked the wisdom to differentiate between the two. To this day I remain grateful for being raised by an “interfering mom”… many of the mistakes I could have made did not happen thanks to her wise interventions. What habit have you formed, or what trait do you possess, that you believe helps you with your finances? Sobriety and respect. This applies to finances and many other aspects of life. It is easy to be impulsive but the most important trait one requires is respecting the work that goes into building one’s wealth. Being mindful of the energy you put into making every cent is what makes you more discerning about the choices you make when parting with it. Mindless spending is sometimes unavoidable in our youth but in this day, if I am not mindful of what I am spending my money on then I don’t deserve a cent of it. [bctt tweet=”If I’m not mindful of what I’m spending my money on, I don’t deserve a cent of it- Carol Bouwer” via=”no”] Where do you go to get sound financial advice? I could tell you to get a financial adviser or acquire financial planning services but I am not one to say that. My answer is, go internal. You inherently know what to do. You had the wisdom to acquire it, trust in your wisdom to grow it. Read and study the markets. Even when you go to your broker, ensure you are not solely an audience but participate. This is even more important for times when there are losses. It allows you to feel you made empowered and informed choices rather than blaming those to whom you hand your money over. [bctt tweet=”Be honest with yourself and those who need your financial support – Nicolette Mashile” username=”SheLeadsAfrica”] Nicolette Mashile is a social entrepreneur, property investor

Can Your Business Survive Without You? Here’s How To Be Sure

If we were sitting down for coffee and I ask what you believe to be the most important factor for success in business, what would you say? If you’re like most people, you might respond that it’s something along the lines of perseverance, determination or talent. What if I told you that while these things are valuable, they do not determine success? There is a more telling factor. But, what exactly is infrastructure? The simple answer is that it’s your design and blueprint. It is made of the basic facilities and structures of the business and includes everything from software and services, to operational procedures. It is the work you do on the business that allows you to work in your business. Imagine taking a one-week vacation. What happens to your operations? Would your team know what to do in your absence? Would your customers panic? If the answer to the last two questions is yes, then you’re currently lacking a sustainable infrastructure. I get it: most of us do not like creating systems. They can be boring, tedious, and may appear unnecessary. If you’re a clothing designer, you went into business to bring your designs and creativity to life. However, if you’re a life coach, you want to help others improve their quality of life, not to work on systems. Again, I get it but imagine not being able to do the thing you love because most of your time is spent putting out fires, experiencing burnout, or making up procedures on a whim. For example, think about the transportation and tax systems in our country. While we may not like it, we have to pay parking meters, tolls, and vehicle taxes to commute within our communities. The expectation is that the money is used to build and maintain our streets and neighborhoods. Similarly in your business, developing an intricate infrastructure creates sustainability through interdependent processes. There is a common adage that is not wise to put your cart before your horse. That has never been more relevant than in this context. Your cart is your thriving business—in a state that allows you to do what you love to do. Your horse is your infrastructure. The more robust it is, the more likely your business can go the distance. I have had the pleasure of consulting with hundreds of entrepreneurs. The concern I hear most often is that people feel like they are reactively going through the motions, rather than positioning themselves for proactive oversight. My advice is always the same: build your business from within. The time and resources spent on this approach will determine the health and success of everything else. How are you improving your spending habits this month? Click here to join the SLA #SecureTheBag challenge.

8 money tips from African finance experts

[bctt tweet=”We share inspirational finance tips from 8 African finance experts to get you going” username=”SheLeadsAfrica”] Where has all the money disappeared to? This is the age where financial literacy for women is needed more than ever! Whether you are just starting out in your journey to be financially savvy or already an expert, these tips from African finance experts can be a quick reminder and will also inspire you to continue on the journey to financial freedom. Take control “…don’t relinquish the financial health of your life or home to your partner; always give your input and direction. Single ladies don’t postpone your wealth creation activities until after you are married (which is not guaranteed) or have kids (which is also not guaranteed). Start creating a legacy NOW. Set up your own family trust, establish and define your own investment philosophies. Every individual is ultimately responsible for his or her financial health and outcome. You can’t blame anyone else later in life if you are in financial distress”. – Samke Mhlongo-Ngwenya, Founder Justsamke.com The time to start is now! “Lots of people in their 20s don’t save or invest because they are waiting to get a better job or start a business to earn more money but the truth is most millennials spend 30-50 percent of their paycheck on entertainment while they claim they are too poor or too young to save and invest but the reality is by the time you get to your 30s you realize you wasted a golden opportunity… time! It’s better to start putting a little aside when you have minimal responsibilities and take advantage of the power of compounding interest. You have to find a balance between having fun and having funds. Sometimes It’s okay to miss out to stack up”. –Arese Ugwu, Author “Smart Money Woman” Take responsibility “You worked so hard for your money; you owe it to yourself to ensure you protect it”. –Nimi Akinkugbe, Author “A-Z of Personal Finance” Say no to overspending “In order to build wealth and actually accomplish your money goals, you have to keep your spending under control. Start by tracking your spending in a detailed way – one way to do this is by keeping spending journals where you write down every transaction you make every day for 30 days (reviewing your spending each evening). This exercise will not only show you trends of where your money is going but it will keep you conscious of how and when you are spending”. –Bola Onada Sukonbi, Certified Financial Education Instructor [bctt tweet=”Being financially conscious is not easy, it is hard work, but it can be done – Mapolu Makhou” username=”SheLeadsAfrica”] Be a budget freak “A useful tool is to budget. Create a budget and live on a budget”. – Omilola Oshikoya, Life and Finance coach Know The Difference “…there is a huge difference between savings accounts and investment accounts. Knowing this will help you plan better for the future, help you choose the correct financial products and set you on your way to financial freedom”. –Nicolette Mashile, Founder Financial Literacy with Nicolette Mashile Don’t do it alone, seek professional help “…use an experienced fund manager, portfolio advisor, investment advisor or whatever you call it to manage your entire equities. They have access to tons of historical data. And with their skills coupled with advanced analytical tools, they are able to advise on rates and purchase of equities to maximise the full potential of your returns. Also note that, the experienced middleman will advise you on risks and diversification plans.” –Abeena Brigidi, Investment Analyst Finally, I leave you with the words of Mapolu Makhou, Founder Woman and Finance, “being financially conscious is not easy, it is hard work, but it can be done. Nothing good ever comes easy! Stay committed”.

Why review your business accounts?

[bctt tweet=”The bookkeeping records are the mirror that you look into to know how your business is performing” via=”no”] The ultimate goal of a business is to make money for the entrepreneur. On the way to attaining this goal, there are many things that you must do in your business which includes, producing the service or product, selling, managing your customers and keeping financial records. Record keeping sometimes referred to as bookkeeping is an integral part of a business and these records are the mirror that you look into to know how your business is performing.Once you have your records in place, the next important step is to use them to improve your business. This entails pouring through the numbers to understand the patterns and trends that the records reveal. For you as an entrepreneur, there are two reasons why you want to go over your business accounts; To check that they are accurate; reviewing your accounts allows you to make sure they give a fair reflection of the state of your business, which will help to highlight any weaknesses and areas for improvement, for example, you will be able to note the missing records, vouch estimates used and even assess how stock is being managed. To compare performance; when accounts are compared with previous years or with your competitors, they can show unique trends and help you learn from other businesses in a similar position to yours. Business accounts should be reviewed at least every quarter. [bctt tweet=”Reviewing your accounts allows you to make sure they give a fair reflection of the state of your business” via=”no”] What to look out for There are some important things to look out for when reviewing accounts. On the income statement check whether the business has made a profit in the year and whether revenue or costs has gone up or down compared with the previous year? The balance sheet will tell stories about how much money is in the bank. Remember, from the Cash is King article, we discussed why money should be available. The balance sheet will also gauge whether cash levels are moving in line with profit? On the balance sheet, you will be able to note if the stock level is reasonable and also whether there are any big payments due soon in terms of loan repayment or large invoices. When analysing business accounts, ensure there is nothing that is obviously missing and use ratios to help you to compare and contrast the performances of businesses. Comparisons can be made internally with past performance or budgeted results or externally with competitors or industry averages. It is good practice for the accounts to be independently reviewed and you can one or more of the following people to do this on your behalf: Any person other than yourself An accountant or An auditor In our ‘Reviewing Financial Accounts’ guide, you’ll find a section on key ratios for analysing business performance. It will provide you more information on how to go about reviewing your accounts. Download our guide on reviewing financial accounts here. Photo credit: Caldera Gem

Bookkeeping for dummies

[bctt tweet=”Bookkeeping is an important skill to have when you’re starting your business” username=”SheLeadsAfrica”] One thing that you quickly learn when you start your business is that you’ll have to handle every aspect of it; from marketing your products, hiring your employees and most importantly getting a handle of your accounts. It is therefore important that you get a good understanding of the basic set of accounts for any business, how they relate to each other and how the different actions you take are represented in your books. The more your business grows the more complex it becomes and at that point, you might want to consider getting yourself some professional help. In this Forbes article, the writer talks about what you need to know about the 10% of start-ups that succeed. One of the things he talks about is making sure you understand the ‘’boring’’ stuff about your business. It is so easy to get carried away by the more interesting aspects of your business and forget to handle the less interesting but many times the most important aspects of your business. One of these is the accounting. What we are going to do here is to give you a basic introduction to the business accounting concepts that you need to understand as you run your business. Don’t be worried about whether or not you have an accounting degree, these are things you can do with your eyes closed. [bctt tweet=”Every business transaction is an exchange of one thing for another” username=”SheLeadsAfrica”] Double entry: All business transactions have a double effect on the accounts Every business transaction is an exchange of one thing for another. This is the basis of accounting, the idea here is to get an all rounded picture of where your money is going and keep yourself from small mistakes. As a boutique owner, you sell an outfit (inventory) in exchange for cash. This simple transaction has a double effect of increasing the amount of cash in your business while reducing the count of inventory. Very simply put that is double entry affecting your cash account and your inventory account. The accounts are interrelated At this point, we are basically building up on the double entry concept by creating an account for every element of your business. If for example, you did not sell the outfit for cash but for credit, then you’ll want to keep an account of the person to whom you sold the outfit to until you get the money in cash and then close off that account while increasing the amount of actual cash that you have. Every time you use your cash for something new then create an account for whatever aspect of your business is affected by that transaction. If it is an account that you already opened then you just keep building on that account. Balance the accounts You’ve probably heard this phrase before, what it simply means is that after some time you’ll want to know how your accounts look. Say every month or every week when you want to know where your business stands you’ll make sure that for every account you opened both sides have an equal amount. For example, your inventory account had a balance of $1000 when you started off, every time you sold something that balance reduced. Let us assume that at the end of the month your inventory reduced to $250, you’ll continue selling it off at the beginning of the next month so to balance your account the $250 will simply be considered as inventory carried forward. [bctt tweet=”Bookkeeping grows more technical as your business grows & there are many apps you can use to do this” username=”SheLeadsAfrica”] These are the basic accounting ideas that you need to understand. Bookkeeping, of course, grows more technical as your business grows and there are many applications that people employ these days to do this, however, the idea remains the same. In the next article in this series, we’ll help you understand the important accounts when doing bookkeeping for your business. We’ll talk about differentiating between cash and profit, understanding the incoming statement as well as the balance sheet.

How to monitor a budget to inform business decisions

[bctt tweet=”Budgets play a key role in the day to day decisions, here are 4 scenarios” username=”SheLeadsAfrica”] The budget is not only important for future decision making but for day to day decisions as well. To be able to use it this way, you must monitor it frequently by comparing your actual income and expenses versus what you had budgeted. When you notice differences in actual performance compared to your budget that is major, consider what caused the variance and what action you can take if the variance is negative or positive. To give you a look at how you can go about this process we will take you through four types of variances that can occur in your business and the kind of decisions you can make to remedy. 1. Sales aren’t coming through Sometimes the projected sales fall short of what was expected due to unforeseen circumstances; maybe a new competition came in or business was just slow. What this means is that you will have a stock in excess of what you had expected. This needs to be followed up by decisions that will enable your business to perform better; your options may include changing the sales strategy or buying less stock than was budgeted for the next month. 2. An employee disses you Maybe you had a bit of a tiff with one of your employees and they ended up walking out on your business. What does this mean for your business? Can the work be done without him/her? Can those left do additional hours? Do you need to budget for overtime? These are all possibilities that can arise based on losing an employee. This will determine whether the positive change in your budget will be a temporary one or a permanent one depending on how it affects the running of your business. 3. Your landlord is acting up… Unfortunately, this happens quite often than we would like to think about; worse still, you might not even get enough notice to organise yourself if the landlord increases the rent at the last minute. Based on the overall outlook of your budget, you can decide if your business can sustain the costs of an increased rental expense. The options you might have would be to negotiate the exact amount of increase or when the new rent amount can be effective to give yourself time to plan. You might also opt to look for more affordable space elsewhere, which may lead to double charges in the month of booking and moving. 4. Repair expenses went up Your loyal van is coughing, your mechanic is charging more for his services based on your desperation. Repairs will be higher than usual. You may not have very many options here except maybe try and find out if the rates are competitive and if it warrants you looking for another mechanic. If this specific expense is on a continuous rise then you might consider getting another van to reduce the monthly expenses. A new van brings in a whole other dynamic to your budget and your financial accounts. In addition to giving you a picture of how your business will look in the future, budgets play a key role in the day to day decisions. It is important to constantly monitor the difference between the budgeted expense and the actual expense and make decisions accordingly. Remember that the decisions should be based on the overall outlook of the budget and how one decision will affect another aspect of the budget. Consider the budget holistically and not as standalone budgeting decisions.

The 3 C’s of the budget cycle

[bctt tweet=”Before you create a budget for your business, you need to know what the budget cycle is” via=”no”] You are probably asking yourself what this thing called the ‘’budget cycle’’ is. You have heard about the budget and how it works but you are less likely to have heard about the budget cycle. The budget cycle simply refers to the phases or stages that you should go through while working on the budget for your business. Following this step-by-step process will help you make sure that your budget is actually beneficial to you and not just a dreaded process. 1. Coordinate This is the very first step of the budget process and is highly dependent on what you want to see happen in your business within the period that is relevant to your budget. Three questions you need to ask yourself What do I plan to do and achieve? How much money do I have to spend? What method will I use to budget? Obviously, you can only budget to spend money that your business already has or is expecting to get. You can project your sales based on past performance and consider that as expected revenue in your budget. The methods for preparing and presenting business budgets vary and are as many as there are businesses. If you haven’t been budgeting for your business though, this is a simple template that can get you started. 2. Construct This is where you get your hands dirty and prepare the actual budget. The past performance of your business and what you want to do in the year should drive this stage of the process. Also, consider engaging other pertinent people for your business. For example,  your suppliers’ credit policies will determine how much you intend to pay out to them at what time. Carry out this process on a monthly basis before coming up with a full year budget. Just as with the financial accounts, have your budget reviewed by external parties and make any necessary changes and then communicate the final budget to all stakeholders. 3. Control This is also referred to as the monitoring phase. We mentioned earlier that the budget is not meant to be 100% accurate. The monitoring needs to take place at periodic intervals e.g monthly; it involves comparing the budgeted numbers with the actual numbers. This step is important for three reasons: Helps you compare what you estimated with what is actually happening Helps you pinpoint why things are not going according to plan It’s an opportunity to react to the costs and respond to them In a case where the first two months monitoring process shows that the sales budgeted are less than the actual sales because business was slow, then you can consider whether you need to order as much stock as you had intended to or you could decide at that point to try a new technique to increase the sales. Similarly, if the rent expenses go up because the landlord increased your rent at the last minute you can adjust the budget accordingly for the subsequent months.

‘Why should start-ups care about the budget?’ – Top 3 budget myths debunked

[bctt tweet=”Time to bust some myths around budgets for business with @StanChart” username=”SheLeadsAfrica”] Here at SLA, budgeting is not a new concept. I am sure by now we know why we need to set up a personal budget and how to go about it. However, how many of you #MotherlandMoguls spend time budgeting for your businesses? Did you know that there is a difference between the budget and other financial accounts? During Standard Chartered Bank’s Financial Education workshops we have had small business owners give several ideas about budgeting, most of them are misconceptions that we need to debunk. Have you found yourself making one of these statements about your business budget? “As long as I have prepared the financial accounts I don’t need a budget.” “Only big businesses need to do them.” “They always turn out differently.” Read through as we debunk each of these common misconceptions 1. “As long as I have prepared the financial accounts I don’t need a budget.” Here we need to understand that the financial accounts for your business are very different from the budget. Whereas the financial accounts look backward, the budget looks forward. The two do not play the same role for your business. The budget is a financial plan for the forthcoming period while the accounts are a report for a period that has passed. In our view, the budget is more important as it is a predictor or a guiding light for your business. 2.  “Only big businesses need to do them.” It might look like only big businesses need to draw up a budget because they handle such huge amounts of money or because they have much more to lose BUT the reason why you need to draw up a personal budget is the same reason why your business needs a budget. It is actually much more important for a start-up to begin the habit of budgeting so that as the business grows the process becomes easier. Start-ups and small businesses are more likely to go bankrupt in the early years and a budget is one of the important tools that can save your business. 3. “They always turn out differently.” Surprise! Surprise! Budgeting for your start-up is a tricky business; things do not always turn out the way you write them down. Your sales estimates are not always right; your expenses hit the roof sometimes. We have some good news for you though, this is absolutely normal! Your business’ budget does not have to be 100% accurate. You should review your budget ever so often to adjust and check on the variances as you get more information. Yes, budgets always turn out differently because they look to the future and we are never 100% sure what will happen in that future; and it acts as a blueprint to ensure your businesses is not groping around in the darkness. As important as it is,  a budget works hand in hand with the accounts to help you measure the performance of your business, period after period. It is great to have both documents, and if you need the help of an accountant, by all means, go for it.

Need capital to grow your business? UnoEth’s crowdfunding story

Hey there budding entrepreneur, are you finding yourself looking for ways to grow your business?Are you telling yourself, “If I just had more inventory or more capital, my business could…?” Me too! The search for ways to fund your business can be overwhelming and intimidating. There is a wide selection of grants and loans that can leave a business owner confused and unsure of which path to take. Yet, the number of grants that your business qualifies for may be limited and applying for a traditional small business loan may have you jumping through more hoops than you can qualify for. Pitching my business to an investor was another thought, I considered. But was I really willing to give up part of my business so early in the game? No. As a co-owner of a year-and-a-half old leather goods business, UnoEth, I found myself at a crossroads, weighing out our options for funding our young business. Scrolling through the Oakland Small Business Assistance Center’s website one day, I stumbled upon information about a non-profit organization called Kiva. Kiva is the first and largest micro-lending service in the world that has distributed $709 million over 10 years, in 85 different countries (almost 30 countries in Africa), among 1.5 million small businesses. I was delighted to find that many philanthropic foundations, Fortune 500 CEOs, small business owners like myself, and giving individuals contribute to many loans on Kiva. I was also inspired by the giving community on Kiva where lenders and entrepreneurs support one another to reach their goals. After reviewing the terms and qualifications, I thought, “Hey, I think this may be the right path for my business.” I applied immediately. Several days later, I received a call informing me that we had been approved and our private funding round started immediately! In the private funding round, each entrepreneur needs to have a certain amount of lenders contribute to their loan in 15 days in order to qualify to the next round. After reaching out to close friends and family, we reached our goal before the deadline. We are currently in the public round of our crowdfund and are over 20% funded—woo hoo! Reaching out personally in our network and social media has helped us gain momentum in raising funds. In addition, contributions from the Kiva network has greatly helped as well. With less than 3 weeks left, we are confident in reaching our goal so that we can support our artisans and vendors in Ethiopia, increase our inventory, and market our business. Click here to contribute to our Kiva loan! Should you wish to follow our example and start your own crowdfund, take some time to research. There are crowdfunds that can help take your business to the next level such as Kiva, Indiegogo or Fundable. Find out which is the best fit for your business and go with it. Don’t underestimate the power of word of mouth, social media, and the giving personalities of those who may be moved by your business’ mission as well. If you don’t take the risk, you’ll never know what amazing opportunities the adventure may lead!