EVERYTHING ABOUT ECONOMY, FINANCE AND IINVESTMENT IN GHANA AND SUB-SAHARAN AFRICA
starting-a-business-from-0-in-the-digital-era
BUSINESS MANAGEMENT FOR START-UPS – AN INTRODUCTION
WHY THAT?
I HAVE WATCHED A LOT OF SMALL AND MICRO BUSINESSES IN GHANA SINCE I AM RESIDENT HERE. ESPECIALLY, THERE WERE A NUMBER OF PETTY TRADERS AMONG THEM. MANY OF THEM COLLAPSE EVEN AFTER A FEW MONTHS. WHAT ARE THE REASONS BEHIND THE COLLAPSES? Continue reading “BUSINESS MANAGEMENT FOR START-UPS – AN INTRODUCTION”
WEST AFRICA – AN EXPORT OPPORTUNITY FOR U.S. AGRIC GOODS?
THIS MORNING, I SAW AN INTERESTING BANNER HEADLINE IN THE “NEW DAY” PROGRAMME OF TV 3 GHANA. IT SAID THAT THE U.S.A. IS EXPLORING OPPORTUNITIES TO MAKE WEST AFRICA AN EXPORT OPPORTUNITY FOR AGRICULTURAL PRODUCTS. IT SOUNDS A LITTLE BIT RIDUCULOUS – A SIMPLE COMMENT. Continue reading “WEST AFRICA – AN EXPORT OPPORTUNITY FOR U.S. AGRIC GOODS?”
WHY IS ACCOUNTING NECESSARY FOR A SMALL BUSINESS, AND HOW IS IT DONE? THE ANSWER TO THE FIRST PART OF THIS QUESTION YOU WILL SEE WHEN YOU ASK YOUR BANK FOR A LOAN. EVEN IF YOU ASK A RELATIVE FOR THE MONEY, THE PERSON WILL BE EAGER TO KNOW WHETHER HE/SHE WILL GET THE MONEY BACK.
SO, WHEN YOU ASK FOR MONEY FROM ANYWHERE – ESPECIALLY FOR A BUSINESS – PEOPLE WILL ASK YOU WHETHER YOU MAKE PROFIT. EVEN FOR YOU IT IS BETTER TO KNOW WHETHER YOUR BUSINESS IS PROFITABLE. IF NOT, YOU WILL EAT INTO YOUR CAPITAL – AND YOUR BUSINESS WILL COLLAPSE. THIS SCENARIO WILL THEN SURELY HAPPEN SOONER THAN LATER. (FOR BUSINESS STARTER, IT IS EVEN BETTER, IF YOU HAVE A SECOND SOURCE OF INCOME. AT THE BEGINNING, YOU CAN’T RELY ON YOUR BUSINESS MAKING ENOUGH PROFIT TO LIVE ON.)
SO, HOW WILL YOU DO YOUR ACCOUNTING? YOU DO NOT NEED TO MAKE IT VERY COMPLICATED. NOBODY WILL ASK YOU – AT THE BEGINNING – TO DO SOMETHING LIKE DOUBLE-ENTRY ACCOUNTING, ETC. OF COURSE, IF/WHEN YOUR BUSINESS BECOMES SUCCESSFUL, THIS WILL CHANGE IN THE FUTURE.
FOR NOW, A SIMPLE PLUS-MINUS CALCULATION WILL BE SUFFICIENT. THAT MEANS, YOU HAVE THREE COLUMNS. ONE IS FOR THE DATE,ONE FOR THE INCOME, AND ONE FOR THE EXPENSES. IN THE LEFT COLUMN, YOU WRITE THE DATE. IN THE MIDDLE COLUMN, YOU NOTE THE MONEY YOU RECEIVED, AND FOR WHAT YOU RECEIVED IT. IN THE RIGHT COLUMN, YOU WRITE HOW MUCH MONEY YOU SPENT, AND FOR WHAT YOU SPENT IT. AT THE END OF EVERY MONTH – OR PERHAPS EVERY WEEK – YOU SUM UP WHAT YOU RECEIVED AND WHAT YOU SPENT. READY IS YOU BOOKKEEPING FOR A MONTH.
NOW, FOLLOWING IS A BRIEF EXAMPLE FOR WHAT I JUST WROTE. LET US GUESS YOU SELL SECOND-HAND CLOTHES AND BAGS.:
DATE INCOME EXPENSES
1. 20 (SALES OF 1 T-SHIRT)
5. 15 (ELECTRICITY)
7. 50 (SALES OF 2 BAGS)
9. 35 (RENT)
11. 15 (SALES OF 1 TROUSER)
15. 25 (SALES OF 1 BLOUSE)
23. 20 (SALES OF 1 T-SHIRT)
30. 25 (SALARY)
TOTAL THIS MONTH 130 75
INCOME MINUS EXPENSE 130-75=55
THAT MEANS, IN THE RECORDED MONTH, YOU MADE A PROFIT OF 55.
GOOD JOB!
SO, THAT’S WHY ACCOUNTING IS NECESSARY FOR A SMALL BUSINESS
A BRIEF INTRODUCTION TO AGRICILTURAL COOPERATIVES
IF YOU HAVE A FARM, CONSIDER A COOPERATIVE.
IN CASE YOU CONSIDER, YOU MIGHT WANT TO KNOW WHAT DEFINES A COOPERATIVE.
THE ADVANTAGES OF AN AGRICULTURAL COOPERATIVE ARE THE FOLLOWING (AMONG OTHERS).
OF COURSE, THERE ARE ALSO DISADVANTAGES OF COOPERATIVES COMPARED WITH HANDLING YOUR OWN FARM SINGLE-HANDEDLY.
THE DISADVANTAGES MOSTLY LIE IN A MORE BUREAUCRATIC EFFORT IN DEALING WITH A COOPERATIVE, FIRST OF ALL, YOU MUST REGISTER A COOPERATIVE SIMILARLY TO A CORPORATION. FURTHERMORE, THE DECISION-MAKING PROCEDURE IS LONGER, BECAUSE THE MEMBERS MUST DECIDE COLLECTIVELY ON IMPORTANT MEASURES. THEY MUST GET AT LEAST A MAJORITY DECISION. LASTLY, THERE MIGHT OCCUR CASES IN WHICH THERE ARE DIFFERENT OPINIONS AMONG MEMBERS. THESE DIFFERENT OPINIONS MIGHT LEAD TO SEVERE PROBLEMS WITHIN THE COOPERATIVE.
BUT YOU MUST ALSO CONSIDER THAT THESE DIFFERENT OPINIONS MIGHT ALSO OCCUR WITHIN YOUR OWN FAMILY. IN CASE YOU WORK ON A FAMILY FARM, YOU COULD HAVE QUARRELS WITH YOUR PARENTS, YOUR SIBLINGS, YOUR HUSBAND OR WIFE. YOU HAVE TO SOLVE ALL THESE QUARRELS. CONSIDER THE COOPERATIVE AS YOUR FAMILY. IN THE COOPERATIVE FAMILY, YOU ALL MUST BALANCE DIFFERENT OPINIONS FOR THE SAKE OF THE OVERALL GOOD.
IF THIS ARTICLE GIVES YOU THE IDEA THAT IF YOU HAVE A FARM, YOU CONSIDER A COOPERATIVE, THEN DO THE FOLLOWING. DOWNLOAD THE BOOK AT THE BEGINNING OD THIS ARTICLE, AND READ IT. THE BOOK IS WRITTEN FOR ESTABLISHING COOPERATIVES IN THE U.S.A. BUT APART FROM THE LEGAL IMPLICATIONS, YOU CAN USE THIS BOOK FOR THE AFRICAN ENVIRONMENT, TOO.
AFTER THAT, YOU MIGHT THINK A COOPERATIVE IS THE RIGHT THING FOR YOU, BUT YOU HAVE MORE QUESTIONS. DISCUSS THE ISSUE OF AN AGRICULTURAL COOPERATIVE WITH PEOPLE WHO MIGHT HAVE THE SAME INTERESTS.
IF YOU THEN HAVE MORE QUESTIONS, YOU CAN CONTACT ME THROUGH “ENQUIRIES” ON THIS WEBSITE. YOU CAN ALSO CONTACT ME THROUGH recklingenterprises@hotmail.com OR MY WHATSAPP NUMBER 0200523362. (FOR PEOPLE OUTSIDE GHANA, IT IS +233200523362.)
BUILD MORE COOPERATIVES FOR A BETTER AGRICULTURAL BASE IN GHANA AND THE WHOLE OF AFRICA!
THE WORLD BANK HAS JUST PUBLISHED THE WORLD DEVELOPMENT REPORT 2020.(YOU CAN DOWNLOAD THE REPORT AT THE BEGINNINF OF THIS ARTICLE.) IN THIS REPORT, THE WORLD BANK DISCUSSES THE USE OF GLOBAL VALUE CHAINS (GVC), ESPECIALLY FOR DEVELOPING ECONOMIES. GLOBAL VALUE CHAINS DEMAND MORE INTERNATIONAL COOPERATION. ON THE AFRICAN CONTINENT, THIS REGIONAL INTERNATIONAL COOPERATION WAS RECENTLY INITIATED THROUGH THE AFRICAN CONTINENTAL FREE TRADE AREA (AfCFTA). WHAT IS THE IMPORTANCE OF AfCFTA FOR GHANA AND AFRICA? Continue reading “THE IMPORTANCE OF AfCFTA FOR GHANA AND AFRICA”
BUSINESS CONSULTANCY WITH GHANA RESEARCH
DO YOU HAVE A SMALL OR MICRO BUSINESS, AND YOU HAVE PROBLEMS MANAGING IT FINANCIALLY OR OTHERWISE?
OR YOU WANT TO ESTABLISH A SMALL OR MICRO BUSINESS, AND YOU HAVE PROBLEMS DOING THAT?
DON’T WORRY, I’M SURE I CAN HELP YOU. JUST GO TO www.ghanaresearch.org AND CLICK ON “ENQUIRIES” UNDER “PAGES”. FILL THE COMTACT FORM WHICH IS SHOWN THERE, AND CLICK ON “SUBMIT”. I WILL GET YOUR ENQUIRY THEN. BE ASSURED THAT YOU WILL HAVE AN ANSWER FROM ME WITHIN TWO (2) DAYS – EVEN WEEKENDS AND PUBLIC HOLIDAYS.
THIS ANSWER MIGHT BE A SOLUTION TO YOUR PROBLEM, OR ONE OR MORE QUESTIONS. THE LATTER MIGHT APPEAR NECESSARY IF YOUR QUESTION NEEDS MORE CLARITY OR ADDITIONAL INFORMATION.
THIS ASSISTANCE I OFFER IS COMPLETELY FREE. I KNOW THAT OWNERS OR PERSPECTIVE OWNERS OF SMALL AND MICRO BUSINESSES HARDLY HAVE ANY MONEY LEFT. ONLY IF MY INVOLVEMENT DEMANDS FURTHER NEGOTIATIONS WITH THIRD PARTIES, I WILL CHARGE YOU A SMALL FEE TO COVER MY COSTS. FOR ANY FEES AND OTHER COSTS OF THIRD PARTIES LIKE BANKS, ETC., YOU ARE RESPONSIBLE YOURSELF.
YOU CAN BE SURE THAT ALTHOUGH MY CONSULTANCY IS BASICALLY FREE, I WILL DO MY VERY BEST TO MAKE YOUR BUSINESS SUCCESSFUL. BUT YOU MUST KEEP IN MIND ONE IMPORTANT ISSUE. THE ONLY ONE WHO IS RESPONSIBLE FOR THE SUCCESS OF YOUR BUSINESS IS YOU.
ESTABLISHING A BUSINESS NEEDS DISCIPLINE AND HARD WORK. PEOPLE CAN HELP YOU DOING IT. BUT ONLY YOU ARE THE ONE WHO AT THE VERY END DECIDES SUCCESS OR FAILURE OF YOUR BUSINESS.
SO, I WILL ALWAYS BE THERE FOR YOU IF YOU NEED ME. BUT FINALLY, DO NOT BELIEVE IN ME, BELIEVE IN YOURSELF.
I AM EAGER TO HEAR FROM YOU SOON, AND I WISH YOU GOOD LUCK IN ALL YOUR ENDEAVOURS TO SEEK LONG-LASTING SUCCESS.
BUSINESS CONSULTANCY WITH GHANA RESEARCH
SEE YOU!
GLOBAL ECONOMIC OUTLOOK OCTOBER 2019
IN THE IMF GLOBAL ECONOMIC OUTLOOK OCTOBER 2019, THE ORGANISATION GENERALLY PAINTS A NEGATIVE PICTURE OF THE GLOBAL ECONOMY. (YOU CAN DOWNLOAD THE REPORT ABOVE, AT THE BEGINNING OF THIS ARTICLE). Continue reading “IMF GLOBAL ECONOMIC OUTLOOK OCTOBER 2019”
START SAVING A CERTAIN PERCENTAGE OF YOUR INCOM
MANY PEOPLE GIVE 10% OF THEIR MONTHLY INCOME TO THE CHURCH – THE SO-CALLED TITHE. BUT APART FROM THE SPIRITUAL WELFARE, THE PHYSICAL WELFARE IS ALSO OF IMPORTANCE. THIS IS ESPECIALLY TRUE FOR SAVING FOR RETIREMENT AND/OR UNFORESEEN EXPENSES LIKE HEALTH ISSUES. SO, HOW MUCH SHOULD YOU SAVE FOR THESE SPECIAL EVENTS IN YOUR LIFE? Continue reading “START SAVING A CERTAIN PERCENTAGE OF YOUR INCOME”
AS THE GHANA STOCK EXCHANGE (GSE) CONTINUED ITS WAY DOWNWARD, I’LL START MY OVERVIEW NOW HOW TO BUY STOCKS THE WAY WARREN BUFFETT DOES. FIRST OF ALL, AND THAT IS A GENERAL PRINCIPLE, BUY STOCKS IN THE WAY YOU WOULD BUY YOUR OWN BUSINESS.. FURTHERMORE, FOLLOW THE PRINCIPLES (TENETS) LISTED BELOW AND IN FUTURE ARTICLES. THERE ARE FOUR GROUPS OF TENETS: BUSINESS, MANAGEMENT, FINANCIAL, AND VALUE. I WILL START WITH THE PRINCIPLES (TENETS) CONCERNING THE BUSINESS.
FOR SEVERAL YEARS, WARREN BUFFETT REFUSED TO BUY INTERNET STOCKS LIKE FACEBOOK AND GOOGLE. ALSO RELATED STOCKS LIKE APPLE WERE NOT ON HIS LIST. THE REASON FOR HIS NON-COMMITMENT TO THESE STOCKS WAS, AS HE SAID, THAT HE DIDN’T UNDERSTAND ANYTHING ABOUT THESE STOCKS. THAT CHANGED IN THE LAST YEARS, AS HE BOUGHT SHARES IN GOOGLE. THIS MIGHT BE BECAUSE HE MORE AND MORE PASSED DECISION-MAKING OVER TO PEOPLE HE TRUSTS. THOSE PEOPLE MIGHT UNDERSTAND MORE ABOUT THE SO-CALLED FAANG STOCKS (FACEBOOK, APPLE, AMAZON, , NETFLIX, GOOGLE) THAN HE DOES.
BUT THE PRINCIPLE STILL STANDS, YOU SHOULD ONLY BUY STOCKS IN COMPANIES YOU UNDERSTAND. THIS UNDERSTANDING INCLUDES THE BUSINESS MODEL AS WELL AS THE ENVIRONMENT IT OPERATES. AT THE LONG RUN, THE SUCCESS OF YOUR INVESTMENT DEPENDS ON THE SUCCESS OF THE COMPANY IN THE FUTURE. TO ACHIEVE YOUR SUCCESS, YOU MUST ANALYSE THE BUSINESS VERY WELL. AND TO ANALYSE THE BUSINESS VERY WELL, YOU MUST UNDERSTAND IT. SO EASY IT IS…
IT IS ALWAYS DIFFICULT, IF NOT IMPOSSIBLE, TO PREDICT THE FUTURE PERFORMANCE OF A COMPANY. BUT AT LEAST, THE PAST PERFORMANCE WILL GIVE YOU A HINT FOR THE FUTURE. OF COURSE, IT DOESN’T HELP JUST TO LOOK AT THE LAST ANNUAL REPORT. THE FACT THAT THESE NUMBERS MIGHT BE POSITIVE SURELY DOESN’T SAY ANYTHING ABOUT THE FUTURE. YOU SHOULD BE ABLE TO DEVELOP A SUSTAINABLE TREND IN THE PERFORMANCE OF THE COMPANY.OF MUCH IMPORTANCE IS – OF COURSE, BUT NOT ONLY – A THOROUGH ANALYSIS OF THE FIGUES PRESENTED IN THE LAST TEN YEARS.
BUT YOU SHOULD ALSO LOOK – AS I SAID BEFORE – AT THE ENVIRONMENT IT OPERATES. IT MIGHT BE THAT ECONOMICAL OR POLITICAL EVENTS IN THE PAST INFLUENCED THE COMPANY’S RESULTS POSITIVELY OR NEGATIVELY.THESE EVENTS MUST BE TAKEN INTO CONSIDERATION WHEN JUDGING THE COMPANY’S PERFORMANCE. THAT’S WHY IT IS IMPORTANT TOUNDERSTAND THE BUSINESS, AS I MENTIONED UNDER POINT 1).
AS I SAID BEFORE, IT IS VERY DIFFICULT TO FORESEE THE FUTURE PERFORMANCE OF A BUSINESS. BUT IF YOU LOOK AT THE FINANCIAL STATEMENTS (BALANCE SHEET, PROFIT/LOSS STATEMENT, CASH FLOW STATEMENT, ETC.) INTENSIVELY, YOU WILL SURELY COME TO A CONCLUSION. YOU MUST, OF COURSE, PUT THE FIGURES INTO A RIGHT PERSPECTIVE.THERE ARE CERTAIN RATIOS WHICH WILL GIVW YOU THE RIGHT PERSPECTIVE. THESE ARE, FOR EXAMPLE:
OF COURSE, THIS LIST IS NOT COMPLETE. FURTHER RATIOS AND WAYS TO FIND OUT WHETHER A COMPANY IS SECURE TO BUY, YOU’LL FIND IN GRAHAM’S “SECURITY ANALYSIS”. YOU CAN DOWNLOAD THIS BOOK ON TOP OF THIS ARTICLE.
NEXT WEEK, I’LL DISCUSS BUFFETT’S MANAGEMENT TENETS. STAY TUNED!
I HAVE WRITTEN A LOT ON THE NECESSITY OF FINANCIAL LITERACY AND THE NECESSITY TO LIMIT THE LOSSES O INVESTMENTS. THIS AFFECTS HUNDREDS, IF NOT THOUSANDS OF PEOPLE IN GHANA. AND IT’S NOT ONLY GHANA WHERE THESE PROBLEMS OCCUR. FURTHERMORE, IT’S NOT ONLY A PHENOMENON OF DEVELOPING COUNTRIES, ALTHOUGH IT MIGHT HAPPEN THERE MORE OFTEN. BUT THAT MIGHT HAVE MORE TO DO WITH THE DIFFERENCES IN THE OVERALL LITERACY THAN WITH FINANCIAL LITERACY IN PARTICULAR.
WHEN FINANCIAL LITERACY IMPROVES, IT WILL BE MORE DIFFICULT TO LURE SAVERS AND INVESTORS INTO DUBIOUS FINANCIAL PRODUCTS. THIS IS VERY OBVIOUS IN THE SO-CALLED “MENZGOLD SAGA”, BUT NOT LIMITED TO IT. HERE, THE QUESTION WHETHER MENZGOLD WAS REGISTERED AND WHERE PLAYS A MORE OR LESS SECONDARY ROLE. THIS IS A QUESTION FOR THE REGULATOR(S). THE PRIMARY CONCERN FOR INVESTOR SHOULD BE TO DIFFERENTIATE BETWEEN HONEST AND DISHONEST INVESTMENT OFFERS.
I OFTEN REFER TO THE OLD SAYING “IF IT SEEMS TO BE TOO GOOD, IT PROBABLY IS TOO GOOD TO BE TRUE”. IF SOMEBODY OFFERS YOU AN INTEREST RATE OF AROUND 40% PER YEAR, IT IS SURELY NOT SUSTAINABLE. SOONER OR LATER, THIS OFFER WILL COLLAPSE. CONSEQUENTLY, TRY TO AVOID SUCH SEEMINGLY “ATTRACTIVE OPPORTUNITIES”.
YOU SHOULD PREFER TO INVEST ANY SURPLUS AMOUNT IN YOUR LOCAL RURAL OR COMMUNITY BANK. THESE ONES OFFER A REALISTIC INTEREST RATE WHICH IS NORMALLY EVEN OVER THE INFLATION RATE. FURTHERMORE, YOU EVEN CONTRIBUTE TO THE DEVELOPMENT OF YOUR DISTRICT. THIS IS BECAUSE THE BANKS USE YOUR INVESTED MONEY TO DISTRIBUTE LOANS FOR MICRO AND SMALL BUSINESSES. APART FROM THAT, RURAL AND COMMUNITY BANKS USUALLY USE PART OF THEIR PROFIT TO SUPPORT LOCAL INSTITUTIONS.THEY DO THAT IN PURSUING THEIR CORPORATE SOCIAL RESPONSIBILITY.
RECKLING ENTERPRISES THROUGH GHANA RESEARCH WANTS TO CONTRIBUTE ITS PART TO IMPROVE FINANCIAL LITERACY IN THE COUNTRY.
I HOPE YOU WILL PARTICIPATE!