Cash is King

Hello, trust you are well. Its 3 years since my last blog. So much has happened. Covid and the war in Ukraine have been the most reviewed. They have shaped the global supply chains, see . In Kenya, Covid took toll on most small business with most having to close. However, some weathered these negative economic repercussions and grew. In my opinion, its these tough times that dictate Cash is King. 

How?

In running a business, you need to show up each day. There are rough times. You either show up or the business closes. Thus, in my opinion, entrepreneurs are very religious. You never know what the day will avail. With time, a good business idea will pick up. Your suppliers are happy when they are paid on time. You are the happiest when paid in cash. Your return on investment may determine how soon you can start accumulating your cash reserves (assuming you control your growth appetite). 

King?

A profitable business attracts many suppliers. Most of these suppliers are willing to supply on credit. In my case, I have seen business thrive on this "free" money. Some employers will use this money for their personal gains, example, buy a car or house. Such are money pits. How will you service the credit when it falls due. You take a loan? This is the most convenient. However. the interest adds to your expenses. In case you fail to pay, suppliers are disappointed. They call each other to understand what's happening with your business. Once they realize that you failed them, frustrations set in. There is no single supplier that is willing to support a retailer that's unable to pay. Salespersons can only support businesses that are supporting them. Its mutual, I avail the goods and support services in return for timely payment. A salesperson is NOT a credit officer. 

What Next? 

As a businessperson, you either shape in or out. Discipline yourself to separate your personal and business expenses. This will shape personal craving that may affect your future. Take care of that salesperson that visits you to understand how they can support you. There's no need to erode the trust that you created amongst suppliers. One day you will get a good order and if you have delayed your payment, then, you will lose your customer. Thats where cash comes in, something I have learnt from successful businesspeople like Warren Buffet of Berkshire Hathaway, see. A King controls their Kingdom, they cannot lose its, they defend with their might and soul, so is your business reputation. 

What are your thoughts on this? Get back at karanja.wa.ngigi@gmail.com