“You Have No Business Doing Business”, this 6-worded statement was responsible for some of the vital changes that had taken place in my life in the past 8 years. I started a printing business sometime in 2012; printing happened to be a sort of family tradition. My dad ran a small printing business from when I was a baby, so my siblings and I were raised to have a passion for the business. Although I never planned to build a career in printing, I have always known I will someday invest in the printing business as a side hustle, whenever I have the resources to finance such a pet project.
Equipped with my informal training from my dad’s business, I undoubtedly have all the technical experiences I needed to start my little printing press, even though I had little or no experience in the administrative and financial aspects of the business. After all my quack financial analysis, which looks good on paper, I partnered with 2 other like-minded friends to start what promises to be a profitable printing business. True to the initial projections, the business seems to be profitable because of its revenue in the first 2 years.
Without paying much attention to other financial performance indicators, my partners and I decided to expand the business by doubling our existing capacity using bank loans, a classic rookie mistake. While our revenue nearly doubled as projected, operating costs rose more than 3 times, eroding our profit in more ways than we ever expected. We eventually invited my wife, who just finished her MBA program at Lagos Business School, to investigate our books and advise us on the way forward. After patiently going through our poorly kept financial records, she looked directly into our eyes and dropped the 6 worded bomb on us: “you have no business doing business”.
As expected, we felt slighted by her remark, even though we were accustomed to her “tell it as it is” character, we weren’t interested in any other thing she had to say. However, those words got me thinking, what do I know about running a business? I asked myself. Well, fast forward 2years later, we sold off the business and paid off incurred bank loans and other obligations, with little or nothing left to recover from the money and time we had invested into the business. Subsequently, I made up my mind not to go into another business venture until I have acquired a formal business education.
However, following the covid-19 induced economic meltdown that rocked the oil & gas industry in 2020, I felt the need to start another business, sooner rather than later. I needed to have a business to fall back to in the event of a sudden loss of my current paid employment due to the volatile oil market. This time around, I am committed to making the business a success by applying time-tested business principles. Just 3months into my MBA program at LBS, I now understood what my wife meant years ago when she concluded I had no business doing business. One key lesson I have now learned that I wished I had known about ten years ago is: “Revenue does not equal profit”.