The Paradigm Of Profit And Capital

Lanre lives in Lagos. He is a hot-headed “runs-man”. No “dulling” with Lanre, he prays too. Lanre is miffed at the moment. Gbadebo, his flat mate, just told him how he bought a shirt for N500 and sold it for N600. Lanre has made attempts to tutor Gbadebo on profitability of his ventures, but it’s been like taking the proverbial camel through the eye of a needle.

Gbadebo has incurred transport and other expenses to acquire the shirt he has happily announced “successfully” sold. Lanre is certain that the next time he’s going on his entrepreneurship adventure, he will come begging for money. Lanre’s mum comes to his mind at times like this. He recalls how she supplied pepper and other condiments to restaurants on the island. Mama sourced her products from Oyingbo until one fateful day wisdom directed her to Mile 12.

Mama testified of the next level her margins were shot up to upon her discovery of the first level dealers in the wares she supplied. In order to defray her logistic costs, Mama partnered with Iya Bunmi who was a yam merchant on the island. Mama actually came home every evening, and with Lanre’s assistance, she would calculate what it cost her to get to Mile 12, cost of buying her goods, cost of carriage to the car park from where the goods are transported and all other incidental expenses. Mama was always thorough about her calculations and records. In fact, she had a hard cover note they all referred to as “Iwe-Mama” which she guarded jealously.

Lanre’s frustration is borne out of the fact that Gbadebo has failed to understand the nitty-gritty of capital and profit. Next, he expects to hear Susan’s voice in the kitchen cooking Gbadebo’s supposed earnings away, while the man sat in the parlour feeling like a business mogul. “How do I get this man to understand that he needs to take into account all the costs incurred in getting that shirt he bought at N500 in order to sell and run a profitable venture?”, thought Lanre. Both of them have been friends since forever and Lanre knew he could only do so much for him. Perhaps books will help. Lanre knew he had the opportunity of learning from Mama. Books and his persistence may cut it for Gbadebo.

Gbadebo has the elements of passion and opportunities to succeed. But the key element of strategy was off, and that, Lanre knew, he needed to take as a personal project to bring to fruition. Gbadebo must learn to punch the numbers! Lanre knew some good books that dealt with issues of profit and capital. He was sure Gbadebo could take some time off his mirage ventures and really look at the books. He could even throw in a seminar or two while at it. Susan has finally arrived, he could hear the chirp in her voice in the parlour. She was going on about the “Assurance”. Gbadebo is definitely being strung up and Lanre knew it was time to get to his rescue.

It’s no gainsaying that profits is the life of entrepreneurship. Without profit, forget the venture, except you are a transformed charity. Like Mama, you need to know your expenses and guard your profit jealously. While you are meeting the needs of your customers (the Kings) you are also in business to meet your need (profits). Don’t be the seller who invested N100 in 20 cups of rice. Over 4 cups of that rice are given as charity to friends and family. 10 cups are sold at N4 while 6 cups went for N5 but on credit to men of straw. Business can be very profitable, but only if you make it work.

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