Episode 8_Finances

Have you ever thought about how much you'd like to say but never knew where to begin? Well, Neon Bloom Productions is the place for you. They provide services like podcast production, vocal training, translation and consultancies. They've produced a number of super diverse and up and coming podcasts within africa. Go to www.neonbloom.com for more information and awesome podcasts, including this one that is www.neonbloom.co.za. neon Bloom Productions. We make your voice hear. Hi everybody. Welcome to my podcast, Black Woman Business. If this is the first time that you're joining us, welcome, welcome, welcome. I'm Tulum Kwebile and this podcast is about being black, being a woman and being in business or trying to be any of the three. Okay, so today it's episode eight and we're doing a very interesting topic, finances. The reason why I go into this topic is because I've been getting floods of questions about finances. People have been asking from right at the beginning about finances of the business, personal finances. Now quick guys, two disclaimers. Firstly, I'm not a financial advisor, so I'm purely speaking about my journey and what I have found to work and not work. So that is what I'm going to share today. Secondly, so now because we've been working with Neon Bloom, we have been exposed to different platforms for this podcast. So the podcast is available in various platforms including YouTube. So don't be afraid if you see it. It's only a few views on the YouTube. It's because most of the people have gone through to other different platforms. So I'm very glad and very honored that you guys are still through. Nonetheless, let's go guys. So today I will be covering finances under the heading personal versus business. Build your credit cash flow. The big boost be the big beast. Four is stock fell and five, take accountability, damn it. Okay, yeah. So I'll be covering those five for under finances. Personal versus business. Guys, a lot of people have been asking me what do I really mean when I say separate your personal finances from your business finances. It's pretty straightforward and I think it will be easy for you to understand when you are transacting for the business, please have a separate bank account for the business and have your own account for your personal things. So what I'm trying to say is when a customer buys from you, even if they pay cash or even if they do eft, you must deposit that money into your business bank account. Guys, everything that comes from the business must be put into the business bank account and you do have your own personal bank account, that's okay. But in this account, anything that's got to do with the business or the transaction, even money that you want to plow in as capital, don't use it from your personal account. Move that money into the business. What I'm trying to say is if you're going to start selling shoes, take the money from your personal account. If you want to invest, say about a thousand rands into the shoes, take that thousand rands, transfer it into the business account and then it gets there as capital. And then you go and stock with your thousand rands, go and buy from that account, whatever stock it is. And when you do sell and you come back with your 2,000 rands from that money, deposit it back into the business bank account. Now the you need electricity, you need to use some of that 2,000. What you're going to do is you're going to pay yourself a salary from that 2,000 rands. So probably I'm just making a typical example here, guys. So that 2,000 rands, remember, it's in your business bank account because you collected all the money from your customers and you've put it into your business bank account. So you know that on the 25th of the month you are getting paid. Guys, it's okay. There are tough times where the electricity bill is piling up and things are just overcoming you. You find other ways that are outside the business money. Please. Outside the business money. The only thing that must happen with that money is that you must pay yourself a salary. If say instance, the electricity in your house goes off on the 20th, then you know that is going to be your pay date. Okay? I mean, especially for somebody who's setting up from scratch. So what you're going to do is on the 20th, you paying yourself a salary of say, making an example from that 2000 rands, now 1500 zoop. So you transfer that money into your bank account. You reference it correctly from your business bank account, you reference it as a salary or commission. But when the bank sees that it moves from your business account and entering into your personal account, it goes in as salary. So every 20th of the month you, from here on you're going to be depositing an amount of 1500 into your account. Then you buy the electricity from your person because it's your personal need. You, you purchase whatever you need personally from your personal bank account. Guys, don't take straight from the business bank account and use for your own personal use. Don't do that because it just disturbs the trend, what we are trying to establish here is a consistency of showing the bank that every 20th there's a 1.5 that goes into your bank. 1.5. Even if you know that you actually need this money for the business, you want to use it for the business. You transfer on the 20th and then you can always deposit it back into your bank account as like I said one time you can deposit it in as a capital again or just amounts that you really want to invest back into the business. That's always also a very good thing. So very important. Don't spend from the business account for your personal uses the business account you can pay other things like things that you would be using for your business. So those would be your business expenses. And then from your personal account, only from your salary. And maybe sometimes if you feel like, okay, the business is doing quite well, you can pay yourself another 500 rands. Say you call it commission, you're moving it from the business bank account and then you take it into your personal account. The key thing here is cons consistency guys. You're trying to show the bank that on the 20th of the every time there's money going into your personal account. Okay, so another thing that the reason why we are doing this guys is because we want the bank to know that you are a credible person. They can extend even a credit card for what, 3,000 rands for you from you if you've got money going into your bank account every month. And the reason why we are doing that to get an increase of your credit, guys, purely one reason so that we are able to expand the business. If you are able to access credit of 3,000 rand, say in the bank now, you're able to stock for bigger amount and actually make bigger profits. You see. So that one has really, really worked for me. And, and literally you sit there with the banker and they highlight. They see on the 20th, okay, here, money came in. Oh, this 20th. Yes, money came in this 20th. Money came that one. It has worked wonders for me, guys. Okay, let's move on to the next one. Build your credit. Build your credit. Guys. It's not gonna happen any other way. You're gonna have to pull out your credit record. You're gonna have to pull out your credit record. Experian hazard. There's a lot of other platforms which make you pay for doing it, but there are free platforms that you get directly. And then you can have a look at that thing. I know you think it's rotten. You, you think, yay, I'm just a mess. You're gonna have to open your eyes and peel through it and read and see who, who is messing up your name. Why, why are you blacklisted? What, what is going on here so that you are able to solve these problems. Because in the long run it's going to benefit you. You going to be able to attend more credit and make transactions that are bigger. So this is something that has to be done. Guys. I know we but pull out that credit record, have a look and highlight who is this one that says I'm owing them money? What is going on there? That is a very important exercise because you can't fix something you don't see. So you can't just keep on paying people you don't know. Like how close am I to finishing the debt. And then the other quickest way I think to build your credit score is when you finally settled all the debt on your. On your credit report. The other important thing is to get access to credit. And access to credit was through a credit card that built my credit score quite, quite quickly. So like I explained in the previous step of personal versus business is that when you are able to now access a credit card for that 3,000 rands, what I used to do. Oh what I still do is what happens is you look at the statement of your credit card, right? So you know that the statement they're going to give it to you roughly. I'm just making an example. These dates, they do differ. So they make it say for instance, they will give it to you on, on the 15th of the month. So two days before that say about on the 13th of the month, you must know that that credit card money which you've used on a transaction must be there by the 13th to the let it stay in there to the 15th of the month and then you can start transaction transacting. As soon as they hand you your, as soon as they hand you your, your, your. Your statement, your credit card statement. What I'm trying to say is if the bank issued your credit card was 3,000 rand and you went to stock, you stock and you use from that credit card 1500 Rand. So what you' do is on the 13th, even if you can beg or borrow, you can just have 1,500 on the 13th of the month put it into that credit card so that when the bank looks, they think that you haven't really used that credit card amount so they're not going to charge you all these hefty interest. And also another thing, they start thinking that you are somebody that doesn't really need the money. So that made our credit. Credit what? Our credit score go a little bit higher because now the bank thinks that we are borrowing money that we don't even need. So what is needed here is that you guys, if you, if you say you are issued this credit card is to not really guys. Let's get away from that whole thing of if you've got credit it's time to just blow the money. Blow them or you don't even know what you're doing. You are messing up. You are messing up. Don't mess up. Don't mess up. You know this reminds me of my dad when I was young and he got an approval from one of the stores to go and, and do Christmas shopping. You get so excited you get a what you call SMS saying that he's been approved for 3,000. That time he goes and yes, as we go and, and fetch a car, we fetch a car, we drive to the shop. I take all the clothes that I want over 3,000rands. Some of the, some of the clothes are even returned. They say no, you, you actually know you. You're over. You're over. So I have to return some of the clothes. That 3000 rand is finished in one day. Guys, guys, guys. No. Let's get away from those horrible habits. It's terrible habits. So let's move on. Oh my God. This 1 ish the third one which is cash flow is the big elephant in the room. Guys. Cash flow is that beast. Don't look at your friends, don't look at next door or whatever and say they are which bewitching you or whatever. This is the one, this one cash flow, that's the one. That's the one that's gonna catch you up. Yes. The cash flow is the one that will gobble you up. Okay guys, what do I mean by cash flow? So I'm trying to say it's the money that coming in and out of your business. Remember you've got things that you must pay in your business. For me personally I have to pay my staff salaries. I must pay a rental for the place, Wi fi phone, you know those regular expenses. You must know this amount from off your cuff. Like to live for a month, how much do I actually need? Also I do that in my personal finances off the cuff. If you ask me now to, to live for the month, how much do you need? You know so that is very nice because then I can compare that with the income that is you see, so you know exactly what you need. Because cash flow will show you flames if you don't know what you're doing. You're excited, you got a big transaction and you're thinking that you can start blowing everything in two months time. You don't know what happened. You're starting to think now what happened to that big transaction that I had? No, you see, cash flow is gonna gobble you up. That's where. So we want to avoid that situation and it's actually the main reasons or the things that really take us down is that cash flow situation. So sometimes you can't really avoid it because even if you do make say for instance, a good profit and then you make sure you stretch it for about four months to sustain you after that four months, you're still not having transactions that are enough to meet your monthly expenses. Then you start getting into trouble. Now you start getting into trouble. Also this beautiful bank and expanding your credit idea, they start looking at you all funny. Now this ship looks like it's going to sink, but it does prevail most of the time. Yeah, yeah, it does prevail. So this is the one that gives us sleepless nights, guys. Hey, like Nama actually recently found myself in that very unfortunate situation because things sometimes they don't work out the way you planned. Even though you do have big transactions to carry you. Then that wonderful client or customer that you've got a long contract with, that pays a bulk of your money. Actually now start it pays late. You see, that's, that's a problem because then if that person pays late your salary and you can't say to your employee is whatever, no, it's none of their business. You need to make sure that you kid, you can't say to your landlord, firstly, they don't even believe you. So they, your, your wi fi, your phone, your things that will start getting cut out. So that's, that's a major one. And really to look forward for here guys, is just to really know your numbers. You must know your numbers because if yayas were per month, then you are safe. Then you are safe. And you know that if 6,000. So at least I'm covered for the month. The rest is for next month. And, and, and you understand, so you understand your numbers. You do it on your personal side and on your business side. So that thing for me is just the biggest, you know, it's the one that will make you swap your conflicts for Millipub. Yeah. Anyway, so usually, usually when myself in this very tight Bind. Yes. I'm just, I'm just like mom, what, what the hell was I doing? Like what was going. What was I thinking? So I will pull out my grandmother and be like mama, yeah. And then I will just call even yeah my mom or my grandmother. And usually the solution is that we break their bank accounts to make sure that everything happens smoothly or most of the time I'm gonna go to the next one which is the fourth one is that we go for the stock fell idea. We go for the stock fell. So I know this is not something I've mentioned before but I'm somebody who grew up a lot around stock fells. I'm just trying to think of another sort of global name for stockfell house. I can't, I can't, I can't think of a name. But nonetheless. So since I was very young there's always been stockfells of different sorts at my, in my grand's house. So there'll be people coming in clubbing their money. Clubbing their money and then at the end of the year the what you call and yeah or it depends but there would be different kinds of it society. I remember one time I was so offended this one girl was telling my friends, my new friends that no this one because really they really used to love. In fact they're still into them. But now things are a hell of a lot more different now. We've gone really digital because of the crime. The crime when it comes to when it's time to split the money, people come in and whatever. So I, I. Fortunately for our group that has never happened because as soon as the crime started we started going digital. Digital meaning monies just get paid into people's bank accounts. There was also a stock fell, a stock fell same say food. A food stock fell. So there December. We've had that since I was in primary school but, but since the, the robberies started they started digitizing and going for Amakadi. So what they do is when the money is deposited for a stock fell by everybody and then it's being sent to the shop that we actually going to buy from for the end of the year there we've got it on Amakadi. So Amakada actually loaded with that money. So that actually the main idea here is that there must be nobody sit physical cash, you know also very important to use to be with people that you really trust as a group is a very important thing about the stock fell. So usually like what I said when I'm in that cash flow bind I will borrow money from the stock fell. Usually this really helps because the interest that I will buy at least it's go the interest that I will have to pay when I return the money. It's going to be. It's going to be something that benefits the whole group. It's going to benefit us. It's not like really going to the bank, you know, most likely by that time the bank doesn't even like you because they can see that. Hey you, when are you running into cash flow problems? And I really take to heart what said on one of his talks because really I feel like. Yeah, yeah, yeah. I think our group for is dog fell when comes to umakuluam starting his dogs so early when they were not popular. I mean I think we really should have covered some big ground by now, a lot of ground because I mean it's been so consistent and it's still in existence and it helps me when I'm in a bind. So I mean, yeah, but I can really commend the work that was done there because the digitization is a big deal because the crime. I also read very recently that somebody, you know, there's different types of these stock files. Sometimes it's like everybody just sends money to the same person, so. And then the criminals will find out that this person is the one with the money and they think they're gonna come and collect hardcore cash, you know. But obviously these days things are very digital, very digital. So you can't really. Nobody's walking around with a suitcase of cash, you know. Okay. Trust is a big issue. And also the stock fells really guys, when, when it push comes to shove just to get through that hump, you know, of the delayed payments from your customers. You know, obviously cash is king. If you have a customer that opts to pay cash rather than credit or even letting you wait that 30 days, that customer is the most beautiful one. Pick them, pick them. Pick to transact with them first, you know, and yeah, because you don't want to find yourself in that bind because when you suddenly have another order and your money is still sitting with another customer, you can run into a very a bad corner where this beast will gobble you up in no time. So sometimes it's required to make some certain bold moves. I'm not one for those, but my husband is pretty good at it. Like for instance, if we're having very delayed payments from our customers, then he will phone our debtors or people that we do owe money and just let them know that it might Be a week late or whatever. So just to make, you know, have communication, open communication with debtors, people that you, you owe money, even the landlord or the rent, the rental for your premises, you say like the, the business place, you will let them know, like you listen, I'm just in a bind. My. I might pay a little bit late. It's not, it's not usually well received, but your conscience is clear. And also they know what is going on, you know, and obviously now you work so hard and try to make sure that it doesn't really happen that way, you know, but always, it's always a good thing. Like when you have other small orders coming in and out, whatever. But really what will count is this time, at this time is money that will be able to also pay your debtors. So this thing just goes smoothly, you know. Okay. This one I'm most passionate about is take accountability, damn it, take accountability. What I'm trying to say here is oh my God. And I've had a horrible experience with side hustlers. These people with a normal job, a normal nine to five, and then they're doing this thing as a side hustle and they're saying, tuli, I can supply you with this. I can supply. I please be my customer. I love those ones. I. I like to assist them. But I've had the most horrible experience. I don't even wanna lie. Yikey. I can't begin to tell you it's something that happens like all the time. Like it's. I don't know, I'm. I've been trying to figure out. But it's because the salary that the person gets is fulfilling. So what they're doing at the side, it's like, like a, it's really a side. So you are like a side. So you don't really matter. Forgetting that this transaction to me could either mean conflicts or Millibub or sometimes like when I was in a bind, I'm sitting with Millipub. Yeah, I'm trying to move to the conflict situation. But when like basically you are not me because now I'm gonna be out of the game just because you are not delivering on time. Guys, I'm talking something even as simple as ordering cosmetic lipstick, eyebrow, whatever you taking your own sweet time to deliver. Why you are relaxing. I'm. I'm just gonna. Guys, you might never know. I'm really waiting for that thing. I'm going to send it to my contacts in Namibia as a sample. They are getting ready to order, order in bulk. And you are Busy. Dilly darling, while when we had our first conversation, you are very adamant and very excited that I might be putting an order with you. Guys, please just stop this thing, man. Please just stop this thing of non delivery. Because you owe it to yourself that you've been wanting this side hustle. It's time to deliver. I could have chosen just about anybody, but I chose to work with you. Don't you think you owe it to me, me at least as your customer to deliver on time? Guys, I'm gonna make a typical example. Very recent one. Very recent one. So on the 23rd of June, it was my grandmother's birthday. So. And it's very cold in Cape Town. I, I, she loves her warm meals. And I saw this lady, like I know her quite well. So I, I saw her posting like lovely warm food. I said, okay, please just do this for my granny. And also, just also a few family members that will be there on the day. Whatever, whatever. Listen, this lady, she first tells me, tuli, please remind me closer to the time. Guys, I'm placing an order with you. So I must also still remind you of the date when you can't open your diary. Nonetheless, I see no problem. I'm gonna remind you because I'm too excited about this whole situation of, of, of the birthday. So I remind her, fine, she's going to cook for my grand. And I tell her, don't make it on those takeaway boxes. So she doesn't like things like that. Just make it on your plates when I just quote me. Right. I need to make sure that you use your cutlery, guys. Cutting a very long story short, this lady delivers on the 22nd of June. I reminded her that my granny's birthday is on the 23rd. So. And when she sends me a message telling me about this, she's like, oh, you know what? Hey, I, man, I just made a silly mistake, guys. No man, no man. You're delivering a day before the birthday. And I've been very clear and I've actually reminded you of the day. You seem like you don't care about what you are doing. And these people, there's always a story. Like there's always like I was supposed to deliver there, but okay, it's fine, I'm gonna deliver there. Oh no, don't worry. And it's worse when it's family. It's worse, worse when it's family. Because then you must now understand that. Let's love what we are doing, guys. Let's not show what is behind the curtain. I can't be going to my customers and explaining my cash flow situation. It's. I'm showing them behind the curtain and it's wrong. What I should be doing is presenting what I promised when I quoted and presenting it in. In the best manner that will be received by her. This thing of thinking that we can just let things lie. No guys, it's not it. And you know what is very sad about this situation? Once you enter with tool into that room of non delivery, late delivery, wrong quality. Yes. The. The people that are listening to this podcast that have entered that room with me, they never see me the same same way because I'm. I'm just not the same person. Because you are trying to take that millimeter out of my kid's mouth. How am I supposed to now survive so and be right. And be right. It feels like you've scammed me. You actually have scammed me because you've promised me something and now you are not delivering. And now I must understand that you had. You had a long trip and also Aunt Wakula and then no guys, let's get over away from that. Take yourself seriously. Take yourself seriously. So that's where I think I'm going to end it guys. Those are the things that I thought I must really touch on. I look forward to more in depth questions but otherwise those are the things that I think we should really, really look into when it comes to finances. I really enjoyed it. I really enjoyed this one. Thank you very much. Goodbye.