For an organisation to function effectively, it needs up to date information about the cost of its activities. The overall information will help the Management to monitor trend, current activities as well as provide guideline for future planning and policies
By Nwokolo Charles Ike
Most Micro, Small and medium sized Enterprises (MSMEs) are established for various activities which include the production and distribution of goods and services with intent to make returns to the owners in form of profit. For other entrepreneurs, they establish their businesses for reasons other than profit motivation but to creating and securing financial future, and contributing towards societal growth and development. Generally, the profitability of a business and the meeting of Revenue objectives have great impact on the operational continuity and long term success of a business.
Having set objectives and all plans put in place to keep the business running, the operators will benefit much when they pay greater attention to the following essential needs:
Increase in Revenue
The need to increase Revenue is uppermost in the mind of most entrepreneurs. They can pursue Revenue drive by developing strategies to increase Sales. They can generate Sales from new and existing customers of their products or Services through marketing activities to widen customer base, improved delivery, quality of products and service to customers.
Increase in price of products or services by employing appropriate pricing policy that ensure adequate margins for their products or services.
They can also boost their revenue by seeking finance in form of Loans from financial Institutions to meet business requirements.
Adopting Cost effective measures to operations
They can embark on deliberate plans to reduce expenditure or cost of operations by monitoring and controlling expenses. These measures can be achieved by developing budget and budgetary control to guide the company on the allocation and the best use of scarce resources, monitor and evaluate performance to ensure attainment of objectives. In this way, budgeted income, expenditure and expenses are compared with actual so that necessary corrective action may be taken before it is too late.
Provision of credible financial information for decision making
Effort should be made to establish financial systems for measuring performance, financial position and cash flows of the business. For an organisation to function effectively, it needs up to date information about the cost of its activities. The overall information will help the Management to monitor trend, current activities as well as provide guideline for future planning and policies.
Maintaining optimum level of operations, setting objectives and derivable for focus of activities
Operating maximally within the available capacity in terms of manpower and facilities, with quality management and efficient allocation of resources to basic needs of the business. Exploitation of success when and wherever it is achieved by doing what they do best to maintain financial stability and competitive edge.
Constant and steady stream of Revenue is healthy for a business and should form the strategic objective of entrepreneurs because financial power facilitates investment for business growth.
•Nwokolo Charles is a Consultant and he can be reached at cinwokolo@gmail.com, 08030599774.
