In most cases, there is no budgetary provision for such expenditure – they are just triggered by impulse. For instance, in a big shop with a variety of enticing items, it is difficult to trust that your instinct will control your expenditure, especially during the Yuletide season.
However, experts say that if entrepreneurs and business managers don‘t imbibe the culture of spending by design during this period, and within a permissible ceiling, their disposable income or working capital will be severely eroded. This situation, they stress, can distort business plan – a situation that can result in embarrassing heaps of debt in the new year.
The Assistant Vice-President, Research and Intelligence, BGL Plc, Mr. Femi Ademola, says avoiding unnecessary spending starts with developing a sound, strategic spending plan. He adds that this will help to put flesh around the areas where the business lacks competitive advantage.
”The plan should be followed with a budget, which quantifies all the actions in monetary terms. The budget should be as clear and practicable as possible for it to be achievable,” he says.
Ademola notes that, although it is necessary to keep to the budget, an entrepreneur or business organisation should, however, be flexible to make room for an unforeseen occurrence that might not have been envisaged during budget preparation. He stresses that the decision to deal with such a situation should be rational and not emotional.
He says, ”Most business managers are fond of making financial commitments without proper consideration of the economic importance of their actions. While it is agreeable that not all expenditure come with financial benefits, the non-financial benefits should be determined before disbursement.”
An investment analyst, Mr. Nkem Jacobs, says engaging in unplanned spending at Yuletide can lead an individual into a debt trap. He says, ”When individuals and business organisations fail to adhere to a spending plan, they are tempted to pursue fanciful but unnecessary projects. And when important projects show up, they end up borrowing. So, in order to avoid unplanned spending, individuals and organisations should develop a spending plan and keep to it.”
He stresses that entrepreneurs and business managers can curb unplanned spending by preparing a shopping list; avoiding social shopping; reducing appetite for trendy items; creating major spending projects and by carrying less cash, among other things.
Similarly, experts, writing in Acceler8now.com note that when an individual carries wads of banknotes in his or her bag and heads for the shopping-mall, chances are that the person may buy more items if he or she has no shopping list.
They say, ”One of the ways out of this problem is to prepare a shopping list and abide by it. Then, target what you came for, deal with it and leave the environment. Roaming the shopping mall will expose you to all the captivating goods that have been cleverly and strategically positioned to entice and stir your buying impulse. So, the less you feast your eyes, the better for you.
“What all these uncontrolled habits do to you as a businessman is that you may eat or spend into your investment, thereby laying the foundation of your business collapse in the New Year.”
”You should choose where to shop. Don‘t go to an over-priced outlet just because it is where the ‘big boys‘ and ‘big girls‘ go to shop, especially when you know you can get the same items cheaper at a not-too-popular outlet,” experts caution.
Another way of keeping your business and investment‘s prosperity in perspective is to avoid a ‘buy now and pay later‘ arrangement.
”The best option is for you not to buy off your budget. And to achieve this, you must begin to learn how to say ‘no‘, politely. Don‘t buy to please, buy because of a planned need,” experts say.
They advise that it is better to create major spending projects for yourself as a businessman. It is normally the dream of every entrepreneur or business organisation to accomplish some landmark projects, such as building a new house or a production plant. If you don‘t focus on developing new projects, you leave a vacuum, which is exploited by weaknesses like the spending urge. You can help curb it by getting into a project that creates excitement for you and which eventually will bring a lot of value.
Source:http://www.punchng.com/
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