SEC-S20W2 | My Business Ideas |Capital Management.

Steem greetings all the way from the motherland-Cameroon and welcome to my blog as I share my thoughts about “capital management”. In every business, the management of capital is essential to be able to know if the business has generated gains or losses.

To further explain my ideas, I will focus on the questions below 👇👇.

Please tell us about your initial investment value in terms of Steem as well as in US$, and how you manage it.

In 2021, I decided to venture into business after the impact of COVID-19 was devastating and many people within my community were afraid of going to the markets to buy. Everyone was avoiding crowded environments such as the markets and most people were not willing to be vaccinated.

I decided to create a Facebook page where I displayed different items on pre-orders. It was a joined business with my mother-in-law while she was producing pastries, I was focused on house utensils.

The initial investment capital we had at hand was as follows;

The conversion of dollar to steem was done at the present steem market rates.

I ordered the house utensils from Alibaba directly from China because I realised buying directly from factories in China, the prices were moderate. Though our tax systems are costly it was far better to buy from China than from home business owners who also buy from China.

My mother-in-law was in charge of the pastries as she lost her job in a law firm due to the Anglophone crisis in the country. She did all the frying, baking, packaging and supply. I am in charge of marketing and keeping account records.

We used my mother in-laws’ house to keep the products because she lives alone and has enough free space we use for storage of our products.

I also have a WhatsApp community where I put up the items to my contacts and anyone interested in buying negotiating and placing an order.

How do you determine whether your business made a profit or loss during a stipulated period?

Before I brought up the business idea to my mother-in-law, I had done a course on business management during my master's degree. I had knowledge about profit margins which helped us maximize our profits and minimize losses.

A. Are you earning profit or incurring losses?
We have been running this business for almost 3 years now. I can confidently say we have been earning profits and intend to expand the business to a different region of the country.

We calculate our profits on a yearly basis. At the end of each year, we check our record book, we subtract expenditures from the initial capital and the balance we consider it our profits for that year.

B. What are your plans to make your business a more successful one?

From our online sales, we realised that a majority of our client base is not from our hometown but rather from a different region. We have decided to target this area to better serve the customers.

I also intend to create a website for the business because scammers have taken over Facebook in my country and are making it difficult for potential customers to trust us. Creating a secure website will boost our business and attract potential customers to gain our trust.

C. Are you reinvesting your profits or using them for your personal use?

Of course, with the present economy, there are moments when I use part of the profits for personal use but I ensure my expenditures do not exceed my savings.

I also plan to use the savings to reinvest in another business to diversify the markets. This will help further minimise risk and open up new sources of income.

D. What are your expenses for your staff and establishment, if any?

It is a joint business and we have no plans to hire staff for now. Maybe in the long run, we might recruit but for now, we do all the work by ourselves.

But when we diversified the business, we gonna employed a management team, I still remained a general overseer of the business.

Did you take any loans or working capital for your business from any financial institute?

Most financial institutions in Cameroon have harsh loan recovery policies. As I earlier made mentioned, we live in a crisis zone and running a business on loan is a risk I cannot take. I know many businesses that went bankrupt not because of poor management but because the warehouse and the shop were burnt down by separatist fighters. This shop owner had collected a loan and after the stocks arrived, the shop and warehouse were burnt down to ashes. The bank had to liquidate all his properties to recover the loan. He suffered from depression and later died.

I know most businesses run on loans but the risk of losing everything, especially as we live in a crisis zone is quite huge.

I try as much as possible to minimise risk. I do not go in for loans to run a business. We used part of my savings and also my mother-in-law’s savings to run the business. We use the profits to expand the business.

Did you take any collateral loans for your business or intend to do so? If not, why not?

Before I answer this question permit me to share a story of my sister-in-law who collected a loan and placed her house as collateral without her husband's consent. She was scammed and her house was gone, her husband divorced her because he was not aware of the loan.

With stories as such, I try as much as possible to avoid taking loans. I do not want to become a victim of circumstance.

As I already said, we live in a conflict zone, it is risky to lose everything. Though I'm a conflict area some businesses flourish but the risk is high.

However, I would prefer to take a loan from a close family member like my elder sister. Taking a loan from her, there is less pressure to repay it back than collecting a loan from a bank.

Also, it is advantageous to collect a loan from my sister because she will not request collateral before handing the loan to me.

In sum, running a business on loans is risky and the pressure to repay is something I cannot withstand. In every business, we must take risks but we should try to minimize the risks in order to maximise profits. We can also diversify the business by using the savings to bring new products into the market.

At this point, I will invite @aviral123, @josepha, @ruthjoe, @rafk and @pelon53 to share their business ideas with us.