8 Financial Tips that works for Small-Business and Self-Employed Nigerian

In Nigeria being self-employed is no longer a new thing, being a successful one has always been the problem. Most Nigerian Self-employed person or small business operators tend to fail, close down, shut down, windup or pack-up within its first three years of taking off.

In Nigeria as at April 2023, the number of self-employed or small business operators is said to have reach 35% of the nation’s employable population with very remarkable show of innovative and creative your ideas or businesses. However, one major drawback is the large inability to manage business finances for dependable visible growth.

Most business operators at self-employed level are usually scared of looking at their financial records owing to the fact that most of them lack the basic financial skills needed. Most times they rather focus on sales drive with the expectation of gaining financial stability eventually.

1. Hire an Accountant:- This seems to be the best way to go but feels the most expensive option for a small business owner. you may not want to pay for such services as your business is just getting off the grown but one better truth is that hiring an account is money well spent as it will eventually save you a lot. working with a seasoned professional can alleviate the stress of money management allowing you to focus on growing the business and above, help you block all the leakages that can allow for petty but regular fraud that can lead to the early death of the new business. If you are so constrained financially at your take off time, you can shop for a per time accountant that will work for few hours while you make plans to hire a full time accountant.
2. Sperate Business and Personal Finance:- This can be categorized as the number one killer of small businesses in Nigeria. Most Nigerian either because of high rate of poverty or lack of basic financial skills find it very difficult to separate personal finance from business figures. Keeping separate records allows you to easily see how much in flowing in and out of your business. there will be less confusion sine the money spent on personal bills wont get mixed up with business expenses. The easiest way to achieve this to dedicate bank account for personal finance and another bank account for business bills.
3. Think percentages:- as small business operator, you truly will notice that our income flows in in an unpredictable format. your daily, weekly and monthly income may not be consistent. so when this is the case most people prioritize personal bill and thereby unknowingly eating into the business funds. Tip to follow in this case is to decide what percentage of the income you will keep for personal bill and the percentages that you will allocate various units of the business. Stick to those percentages each month regardless of whether you make N10000 OR N100M and see how fast your business will grow.
4. Pay Tax:- please do not ignore this tip. Pay your tax! Do not pass corners, don’t accumulate tax. this is one of the benefits of hiring and accountant even on per time bases. The accountant will look through your books thoroughly to ensure a proper expense account is deducted from income to see what the actual tax is. This act usually decrease your tax figure than doing any of the above mentioned. Paying tax also keeps you in good books of your state.
5. Create an Emergency Funds:- Most Nigerians barely have enough funds talk more of being able to keep funds aside for emergencies. But one thing you must bear in mind is that fact that just as humans businesses face emergencies too. The fact is that businesses can be brought to their kneels of no emergency funds are kept. Just to flash through we can picture a business being brought down by natural disasters or forex trading gone bad over night… So the Tip here is that we must learn to keep between 1-10percent of our income as emergency funds depending how volatile your business.
6. Pay yourself:- Lots of businesses fail because the owners claim to be so selfless in their quest to see the business grown form infant to a very big brand thereby, denying themselves any form of salaries. The truth is that the business cant survive if you don’t take salaries. So as you are dividing your monthly income into various funds make sure you are paying yourself salary. It helps control your business cash flow and ensures that you have a way to pay for your personal expenses each month.
7. Save for Retirement:- Aside the passion and drive to own and operate small business, one other key tips to owning a successful business is see yourself retire successful. one of the keys to feeling successful at the end of the day is to have saved or kept money aside for yourself. Ensure you save portion of every profit you make for yourself. One of the easiest ways to get this done in Nigeria is ask you bank to place a standing order on your account for a particular amount you want to keep as saving on monthly basis. Other more modern ways of doing retirement savings can via Fintech like Piggyvest App, Opay, MoniePoint and a lot more.
8. Secure and Protect your Finances:- Lastly, one of the most important but most neglected is how we go about protecting and securing our finances. Its obvious that from this post a business can become successful only if you divide incomes into different funds and put them in different accounts. however, please note that when you have multiple bank accounts for your personal and businesses finances, you need to keep the safe and secured from scammers and fraudsters. Make sure you keep all your passwords or pins safe at all them.

So as a self-employed or small business operator, it is important that you prepare yourself, follow this 8tips, no matter the stage that you are in your pursuit, following this steps above will help you manage your finances and give you peace of mind in the future.