There are two rules for financial success in business. Rule number one is, “Don’t lose money!” Rule number two is, “Whenever you are tempted, refer back to rule number one.” – Brian Tracy
By Phillip Chichoni
“We are not immune to the challenges facing the country. High costs are making products uncompetitive both locally and on the export market. Depreciation of the rand, consumers down trading due to declining disposable incomes and the growth of the informal sector and a slowdown in economic growth are all affecting the business. However, we do see the light at the end of the tunnel. Already the first quarter of 2015 is trending in the right direction.”
While some firms are struggling and many closing, Dairibord is one of the few actually experiencing growth. Mr. Mandiwanza attributed this positive outcome to a restructuring and rationalization process taken earlier, which is now bearing fruit. The group anchored its performance on five business pillars: endurable brands, technology for quality and efficiency, milk supply, cash and cost management and human capital.
Dairibord’s fourth pillar, cash and cost management, is often overlooked or taken for granted by small to midsize companies. Yet it is so crucial that if it is neglected, a business can quickly fold. In our liquidity crunched economy, business owners who want to survive and thrive must practice the principle of economy. This refers to the importance of doing everything at the lowest cost possible. You conduct a careful financial analysis before making any commitment. You conserve cash at all times, always looking for ways to save money and reduce expenses.
Use your brainpower to replace financial power. Look for ways to achieve your business goals in the most economic way possible. Only spend money where it can have a direct influence on increasing sales or revenues. Don’t spend money on non-revenue generating expenses or activities until you have excess reserves in the bank.
The key to success in business is to practice frugality at all times. Be careful with your money. Conserve it. Hoard it. Build up reserves. Always look for cheaper ways to accomplish the same task. Follow the two rules quoted above all the time.
Have a great day and please pass on this newsletter to your connections who may benefit from this information.
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