MIND THE KOBOS

Before I go in to today’s issue, I would like state that Last Week’s article was an excerpt from ‘Awake Magazine, March 2009 edition.’ This credit was omitted in the process of transmitting our materials to the editor. I take full responsibility for this and regret any inconvenience.

Mind the ‘kobos’ and the ‘Nairas’ will take care of themselves. I think there is a popular saying that goes along this line which I can not readily recall. However my point today stems from something my late mum has said to me like a million times. “Kobo kobo l’owo nlo”. The literary meaning of this is money leaves you kobo by kobo. In a more generic perspective what she was usually trying to say was “You loose your wealth a Kobo at a time”

To this end, she asked for an account of every last kobo when ever she sent me on errands. I could hold on to any money in excess of N100 (the naira had much more value then) because she believed it was big money I would not dare spend on frivolities. All loose change was dropped at a corner of her desk and she knew how much was there at any point in time. She had little tolerance for sales attendant who said “there is no change” in a ploy to get you to give them a tip. She would insist on her change but was more likely to be quite generous when it was least expected.

How does this affect us as business people? In my experience, I would say very greatly. Having worked with some very big corporate bodies, I am amazed at how wasteful may entrepreneurs are. In many of these companies, you must account for every spending. All expenses are carefully scrutinized and ruthlessly negotiated. You do not process any invoice if there is a minute change in prices without your prior agreement. You do not give out a check before the due date and there is a strict schedule for collection of debts and due liabilities.

However, I have discovered that many of our small business owners lack financial discipline. Letting go of money is a sign of being ‘big’ and as such they would not demand for a full account of spending. They give their staff so much slack in financial matters that they practically encourage them to become fraudulent.. Just as a typical bank worker, knows he has to retire any cash advance, your staff should know that they should explain to you how they have utilised the resources you place at their disposal.

I am not talking about penny pinching here, but penny watching. (or should I say kobo watching. If you have to account for the last N5,000 you spent it probably would not be a problem. But try and recollect what you did with the last five N50 or N100 notes that came into to possession individually as loose change and that may be a hard nut. Note that N5000 consists of just fifty N100 pieces. My point is this, many of us are busy running around chasing million naira deals while we daily loose a fortune through our lack of attention to the finer details.

For a take home, pay attention to seemingly small expenses – phone usage and charges, bills, bank statement, bank charges, transport cost e.t.c. These are the things that gradually erode your profits.