Chartered Financial Analyst and Chartered Accountant Elizabeth Ayewoh has urged small business owners to strengthen budgeting and cash flow management practices to improve their chances of survival in Nigeria’s challenging economic environment.
Speaking on Trade FM’s Breakfast Business Briefing, Ayewoh said effective budgeting helps businesses maintain positive cash flow, prevent overspending, make informed decisions, and prepare for growth opportunities and unexpected emergencies.
She noted that many small businesses struggle because owners mix personal and business finances, overestimate sales, underestimate expenses, and fail to regularly review their budgets. Poor record-keeping and the absence of emergency funds were also highlighted as common challenges facing small and medium-sized enterprises.
Ayewoh stressed the importance of maintaining separate accounts for business and personal transactions, saying it promotes financial discipline, simplifies tax reporting, and improves access to loans and investment opportunities.
She also underscored the need for regular cash flow monitoring, describing cash as the lifeblood of any business. According to her, while budgets focus on projected income and expenses, cash flow management tracks the actual movement of money in and out of a business and should be monitored consistently.
The financial expert advised entrepreneurs to prioritise critical expenses such as raw materials, staff salaries, rent, transportation, marketing, taxes, communication costs, loan repayments, and emergency provisions.
To help businesses withstand inflation, economic downturns, and unforeseen challenges, Ayewoh recommended building emergency funds capable of covering three to six months of operating expenses and diversifying revenue streams to reduce financial risk.
