Building the strategy for running successful businesses

Title: Business Strategy Manual
Author: Bolutife Oluwadele
Publisher: Winepress Publishing, Nigeria, in Association with Village Boy Academy
Page extent: 141
Reviewer: Ifeoma C. Ana
ISBN: 978-978-60211-4-10

This manual is a must-read, must-have, and must-digest kit by any intending and practicing entrepreneur. All businesses are denominated in monetary terms, irrespective of whether they are private or public organisations, service, manufacturing, local or global concerns. The struggles of most business owners can be resolved if attention is paid to this Business Strategy Manual.

Business Strategy Manual is a 141-page book authored by a very accomplished accountant, an experienced business persona, a distinctive scholar, an avid writer, and a public policy practitioner. It includes a Foreword written by Deacon Solomon O. Adeleke. The 22 chapters in the manual could be categorised into four fairly distinctive business strategies based on their vital content. These categorisations are: (a) the Premise for Business: Chapters One-Four; (b) Technical Business Strategies: Chapters Five-Eight, Ten-Eleven, Thirteen, Fourteen-Nineteen, and Twenty-Two; (c) Relational Business Strategies: Chapters Eight, Twelve, Eleven, Nineteen-Twenty-One; (d) Social Business Strategies: Chapters Nine, Eleven, Twelve, and Fourteen.

In Chapter One, the author took time to elucidate what to consider before starting a business. In his views, these include gap filling, passion for the business, experience, finance, and consideration for the type of business to be registered (sole proprietorship, partnership, limited liability company). Other considerations include business capitalisation, desired return on investment, market segmentation vis-a-vis competition, SWOT analysis, and regulatory imperatives. This chapter clearly denotes the advantages and disadvantages of different types of businesses and underscores that business is a marathon, and not a sprint. Therefore, entrepreneurs who come to business must take the view that it is an endless journey, not a quick fix or hit-and-run programme. Consequently, a desirable attribute of business is patience to go through the growth stages and knowing when to vary the service or product offerings to keep filling societal needs.

Chapter Two takes a deep dive into finance, particularly the matter of raising capital for business start-ups. Here, Dr Oluwadele demonstrates his financial aptitude and business experience in directing the key objectives of the manual, thereby leading readers to the various ways they can raise “seed money” for their businesses, including through cooperative societies, contribution schemes, family and friends, alongside banks and other financial institutions. He warns that banks and lending institutions would consider the bankability of clients before extending credit to them. Therefore, there is need for entrepreneurs, from the planning stage, to project a bankable stance by ensuring that their cash flows are passed through the banking system to establish their good turnovers, while documenting good plans that could be traced to their business activities. He advised that entrepreneurs should work with financial consultants to achieve good success in these directions.

In Chapter Three, the author leads the reader and entrepreneurs to the need for consistent checkups, much as the health checkups we do for our bodies. He explains that entrepreneurs cannot shy away from accounting, which is the language of business.

Chapters Four and Five are similar in many respects because Dr Oluwadele dwells on the accounting principles of budgeting and cash flow, and explains their critical importance for the business success strategy. The distinction between cash flow and profitability is clearly made, especially since it could be very deceptive to the undiscerning to believe they are in good business since huge margins are being recorded, only to discover that their business continuity is hampered by poor cash flow. In these two chapters, Dr Bolu addresses innovation as a critical factor of success, citing the COVID-19 success for some organisations and the need to budget with the business and owner’s needs differentiated consciously. As the author explains, realistic budgeting and monitoring would ensure a balanced cash flow, rather than holding excess or shortage of liquid funds in the business.

In Chapters Six to Eight, Dr Oluwadele takes entrepreneurs through what may be called the rudiments of a successful business, namely: budgeting, record keeping, and credit sales. The critical importance of these three short chapters for successful business operations cannot be over-emphasised. Budget is the almighty plan that gives the entrepreneur direction. But no matter how many directions you have, except you have a proper record-keeping technique, the business owner will simply be operating like a ship without a compass and may not be able to monitor cash flow, accounts receivables, and payables properly, with a consequent catastrophic end.

Dr Oluwadele describes the key elements of budgeting, including planning, implementation, communication, motivation, authorisation, and evaluation. He warns against overzealousness in budgeting or setting too lax or easily achievable budgets, noting that the budget must be challenging, while not annihilating and dispiriting. In these chapters, readers would learn the better ways of achieving, setting and implementing good credit policies as guides to dealing with the needed credit clients. In addition, for a good credit policy, there is a need to know the business customers (KYC), although the virtual business in contemporary times poses additional challenges to KYCs. The author expounds that industry knowledge is always needed, but owners must predicate their business activities on the internal mechanism of gap-filling, passion, and resource allocation.

Having dwelt with the hard aspects of businesses, from Chapters One to Eight, Dr Oluwadele takes a short detour to the soft business angle of avoidable pitfalls in Chapter Nine, before returning to hard stances in Chapter Ten. Chapter Nine advises business owners to avoid staff favouritism via in/out groups, guard business secrets, desist from spying on or undermining competition, and not run their businesses on the auto-piloting dogma.

Dr Bolu demonstrates the expertise of deep accounting techniques in discussing project appraisal proficiency in Chapter Ten. This accounting specialist touches on the Accounting Rate of Return and cost of Capital/Lending Rate and insists that a business owner must take a stance on whether to undertake or continue in business after matching the Rate of Return with the Cost of Capital. He goes further to explain the payback period, how it helps the entrepreneur in business decision-making, in addition to the Discounted Rate of Return (time value of money), and Internal Rate of Return, positing that entrepreneurs need to consider these accounting measures before entering or continuing in business. Appreciating that most of these techniques are beyond the business proficiency of an average SME, he again calls for the engagement of professionals to achieve accounting success.

The author once more diverts to the subtle but crucial elements of business strategy in Chapters Eleven to Twelve, dealing with maintenance management and culture; organsational, interpersonal, interdepartmental relationships and cultures; and how these elements elevate or undermine strategic momentum and, by extension, business performance. Dr Bolu stresss in these chapters that except employees are properly motivated and made veritable components of businesses, from the decision-making to implementation stages, buy-ins and ownership may give way to organisational dissonance. The author clearly elaborates on the success and failure factors of human resource management.

In Chapter Thirteen, Dr Oluwadele revisits the hard strategic aspects of accounting, showing how accounting ratios are used to determine business success and failures. He delineates how accounting ratios impact the financial activities and production outcomes, pricing, and, eventually, the profitability of an enterprise. Again, he reiterates that an entrepreneur needs not be an accounting expert but should engage a consultant’s services. However, s/he must strive to have basic accounting knowledge to have a good grasp of the financial aspects of his/her business.

In Chapter Fourteen, the author shows the overarching benefits of retaining a consultant, especially regarding strategic planning and financial management. He expresses the opinion that although maintaining a good consultant may appear expensive at the time, the long-term benefit usually outweighs the costs.

In Chapters Fifteen to Sixteen, the book exhibits the risks inherent in every business, showing that it would be tantamount to the lack of a sharp business acumen not to anticipate and plan for business risks from the strategy formulation stage. Risk management is an area that most SMEs overlook, though this is very well embraced by large organisations as a critical aspect of their operations. Risks include those that are financial (liquidity and credit), legal, third-party; involving the supply chain, security based, operational, market related, and involving compliance. Dr Oluwadele dwells more on the financial risks related to bad debt crystallisation, recoverability, losses from bad debt, and effective management strategies for debt in Chapter Sixteen.

Dr Bolu expatiates on business management, the costs of running a business, and the effect of these costs and management on profitability in Chapters Seventeen to Nineteen. A good grasp of the concepts enunciated in these chapters would reveal that business success entails an entrepreneur’s proper abstraction of the interrelationship between self/executive management, staffing, cost control, and profitability. Undermining any of these tripods for successful business operations would affect profitability and may mean the business is doomed to fail. The author, at various times, stays on the message that “money does not grow on trees,” connoting that it is the proper management of costs and business activities that result in profit.

Dr Bolu warns business people to resist the tempting but fraudulent activities of collecting new funds from new prospects to pay existing creditors, otherwise known as Ponzi schemes. In Chapters One to Three, sources of funds for business are succinctly dealt with. Although mention is not made anywhere in the book on public quotation, there is always the tendency to obtain more capital than what was strategically planned from friends, families, or investors in a limited liability company. Readers are cautioned to return excess capital to investors, rather than get involved in overtrading or putting this extra cash in funds that promise extraordinary returns (Ponzi schemes) as these may lead to catastrophe for the business owners and investors.

Finally, Dr Oluwadele takes a short dive into business fraud, using the food industry to exemplify an entrepreneur’s downer in Chapter Twenty-One. These are reinforced with the author’s experiential manifestation of causes of business failures in Chapter Twenty-Two, where he also proffers many ways to circumvent such failures.

This manual is a must-read, must-have, and must-digest kit by any intending and practicing entrepreneur. All businesses are denominated in monetary terms, irrespective of whether they are private or public organisations, service, manufacturing, local or global concerns. The struggles of most business owners can be resolved if attention is paid to this Business Strategy Manual.

However, I noted that the book mostly covers business strategies for small and medium-scale enterprises (SMEs), leaving the big businesses and conglomerate out of this important tool. Therefore, the challenge to Dr Bolu is to have a part two out soon that would detail strategies for big organisations and conglomerates.

Secondly, most of the terms and principles in the manual are quite abridged and summarised that only people with considerable financial and strategic planning experience can fully understand the concepts covered. Obviously, the manual is also intended as an educational tool for non-financial entrepreneurs and managers; therefore, the inclusion of graphical and deeper quantifiable profiles may improve learning.