By Lintle Tsita
MASERU – Introduced by the Business and Administration Management (BAM) Group of Companies CEO Mamashiya Ntsepeng Tsita Tikiso, BAM group foundation commemorated the international Small and Medium-sized Enterprises (MSMEs) day on Tuesday. While the foundation as a group normally hosts such sessions at the American Corner, this particular session was seen at the organisation’s offices on Tuesday.
The BAM group foundation is the philanthropic arm of the BAM group of companies. Its main focus is on empowerment of women and youth and entrepreneurship in Lesotho. This part (MSMEs) of the private sector is said to contribute 60% – 70% towards national economy.
“We want to appreciate why it’s important to have financial records in our businesses, and the true reflection of our business’s financial statuses,” Tikiso highlighted.
Having hosted a session of likeness through the United Nations Educational, Scientific and Cultural Organization (UNESCO) this past Saturday, Tikiso introduced and called onto the stage Marc Johnson to provide an inspiring and empowering business financial literacy workshop for entrepreneurs who animate the promise of the African Continental Free Trade Area (AfCFTA) in support of the African Union (AU) vision of an integrated and peaceful Africa.
The highly interactive session began with a brief questionnaire around business maintenance, with these three focus areas in order to assist with analysis on whether one’s small business is doing well or not, in order of prioritization:
Cashflow – is your business making sales? Movement of inventory, Is there anything coming in and going out?
Profit – are you able to buy the things the business needs? Are you able to make extra purchases and expand the business’ reach and activities?
Return on Investment – can more people invest into your business? Does the business have what potential investors look for in order to invest in the business?
Johnson says while entrepreneurs have got to know a little bit of everything, with the understanding to lure investors one is to present financial records to support the theory they pitch to such investors and so, “ if you don’t know how to keep financial records how do you plan to report your business’ progress?”
This is the part where one is to demonstrate where the money and resources they keep investing into the business ‘go.’ Why? Because as soon as the money lands in the bank account, the business has an obligation to the funders.
These obligations are differentiated by the type of funding injected into the businesses however, it is most important to take note of what determines the type of injection a funder may decide to be for your type of business – say a lender or shareholder for example. Is it;
- Risk calculation
- Profitability OR
- Opportunities associated with your type of business?
Beyond this, the group’s key learnings were as follows:
- Every transaction has two effects
- Funding means automated obligations
- There’s five elements of finance
As Johnson concluded the accounting practical session in that, “there will always be a way to place the two effects of every single financial transaction into one or more of these five containers, namely – Assets, income, expenses, liabilities and equity.”