This was recorded during the height of the lockdown
This is a topic that I may not have thought about before, but right now this whole lockdown, this whole business disruption, this whole business slowdown is definitely exposing a lot of business models and also business habits.
For me, l have never been in support of wanting to borrow money to grow, but I also understand that you are not just going to grow your business with just the money that you have as it would take way too long.
This virus pandemic is definitely something that nobody expected. Take out the virus and let’s look at it from a business disruption perspective, there would always be things that would disrupt businesses when you borrow money from somebody for a business or whatever the case is, you will be paying back with interest and principal and there are things you just cannot foresee.
Everyone has taken a hit, even the ones functioning right now have had a level of hit and felt the impact.
I’m not saying don’t borrow money for your business because I know some people have to do that but I think it should be an amount convenient for you to pay back. For example, I have a million naira in my account for rainy days, then I can go ahead and borrow #500,000 to grow my business. It’s almost like if shit hits the ceiling, you have enough cash reserved to pay.
What I feel happens is that most people will have a million naira in their account and go borrow like 4 million because they expect that they are going to get a certain amount of sales to kick in and that is where the challenge comes in because nobody knows what is going to happen.
Listen to the Podcast
Blue ocean strategy by W. Chan Kim
E- myth Mastery by Michael E. Gerber.
Take away points :
1. Excess money can make you loose focus on the fundamentals.
2. Every business need to have at least 6 months of cash saved aside.
[00:01:10] Borrowing money to grow.
[00:06:16] Cash flow and growth.
[00:09:57 ] lessons learnt.
[00:10:56] Building a community.