For a profitable business and one that will outlive its founder, business owners have been advised to develop and commit to a business strategy and profitability implementation blueprint.
According to statistics, 30 percent of new businesses fail within the first two years of starting, 50 percent of businesses fail within the first 5 years and another 60 percent within the first 10 years of operation.
A business strategy and profitability expert explains that one major reason for this is the lack of profitability in businesses, saying that when a business experiences profitability, it will lead to the sustainability of the business.
“If your business is profitable, coupled with the right strategy, it will outlive you and remains sustainable even if you have to exit the business,” said Henrietta Agboola, an expert in business strategy and profitability development.
She said this at the first edition of Your Business and You (YBAY), a business strategy and profitability workshop intended to help entrepreneurs succeed and rake in profits.
“I decided to organise ‘Your Business and You’ workshop to share from my personal experience and teach business owners how to get back on track to profitability,” she said.
Explaining why most businesses suffer losses, she said that most businesses fail to take into account the income and expense factors, stating that the only way entrepreneurs can experience true profitability was if the income far outweighs their expenses.
“We need to ensure that our expenses are always so much lower than our income so that we will always have profits in our businesses,” she emphasised.
The CEO of House of Henri, Agboola, who is also the brain behind YBAY and the facilitator of the workshop, said price evaluation and expense reduction were the two major ways to increase profitability in business.
She encouraged business owners present at the event and entrepreneurs generally to evaluate their current prices to see if they are compliant with profitability pricing strategies, and also increase or double their prices to increase the income of their businesses.
“Most times our pricing strategies are wrong and so that will always lead to struggling at the end of the month to meet up with paying bills and you’ll be wondering where all the money went!
“If your pricing is right, amongst other factors of business growth, you are sure to be profitable. Cut down on your expenses. This is harder to do because it involves proper record keeping and documentation,” she said, adding that a price list creates a limit to how people price a product or service.
She warned that entrepreneurs will find it difficult to tell where excessive spending is channeled through if they failed to document both expenses and income consistently.
“If proper financial records are kept, an expense audit can be done at the end of the month, sifting through all expenses to cut off frivolities in spending. This will guarantee that more income is reserved in the bank for the business,” she revealed.
The workshop also addressed real-life business challenges and complex concepts were broken down to enable participants to gain clarity for profit boost.
She also encouraged entrepreneurs to think of all the processes that go into their businesses as it would help them determine whether profits are being made or not.
Commenting on the event, Kikelomo Akapo, a participant and CEO of Tannies Food Ventures said she had been able to get proper information on how to put structure into her business to make it profitable, cut down the things that are not necessary, manage her rent, salaries, and how to manage staff behavioural culture.
“Before now, I’ve been trying to create a Facebook page for my business but I don’t know why it’s been taking me forever. But in-between the meeting I’ve been able to create one and in that few minutes, I have a few numbers of traffic,” she said, excitedly.
“I’ve built my confidence in doing business. I now know the areas I need to work on, especially in the area of social media, to increase profits,” said Elizabeth Okoronkwo, a fashion designer who attended the conference as well.