BUSINESS
So many times, we are faced with this question.
Is my business a Micro, small, medium or large scale business?
Different countries have different criteria for classifying enterprises.
Some classify enterprises based on staff strength and revenue while some classify enterprises based on staff strength and assets. Some countries use all the three.
The National Policy for MSMEs in Nigeria however bases its own classification on staff strength and assets.
I seem to like this classification because from my own experience and interaction with other entrepreneurs. I know that revenue flow does not determine stability in business.
This means that the assets of a business are a good indication of the scale the business is operating in.
What is the scale of your business? Knowing the scale of your helps you to make informed decisions especially with financing options.
An example is how to acquire these assets?
Some believe in financing assets with loans knowing that the assets become theirs when they have offset the loans.
Some believe in saving up money from sales for their asset acquisition. They plan for their assets one after the other.
Some people are of the opinion that you cannot have capacity and grow your business without loans.
I believe that every entrepreneur is responsible for his/her business decisions even after advise from experts.
We can only make informed business decisions when we know the true capacity of our business.
What is the scale of your business? Does your business capacity align with your financial decisions?
Is your staff strength a blessing or a burden to your business? Does your business truly have the capacity to repay that loan or did your accountant work with you to give the bank the figures they need? Do you have plans to acquire assets that you will use optimally or assets that will help boost your loan capacity?
Have you, like me at some point made medium scale business decisions for a small or micro scale business? 😊
I would love us to share in the comments section.
As always, your comments are treasured.
-the starry-eyed entrepreneur