The importance of being compliant
“Get yourselves complaint and update your financial records otherwise you cannot access any financing.”
This was the advice to all SMEs from Dr Nur Bano Ali who is one of the certified and approved business advisors for Business Link Pacific.
Chartered Accountant Dr Ali is a partner of Aliz Pacific and shares her experience when SMEs come to her office for business advice.
PFK Fiji with Prime Minister Rt Hon Jacinda Ardern
Dr Ali says one of the most common things she finds SMEs don’t do when they start up their business is business registration.
The first thing you do if you want to be in business is to get yourself registered, it will cost you $5 and you must register your business with FRCS as well,” she says.
I teach this to the women and explain that if you run an informal business people will not give you respect and the dignity you deserve. If you have got a serious thing going but you haven’t registered it, this shows you don’t take yourself seriously,” adds Dr Ali.
She stressed that SMEs need to understand the importance of getting advice from a professional and certified business advisor.
What you might call expensive is something that is worth investing in. If you are a small business, you won’t be charged $10K like a large business but the money you do invest will help you through many business hoops such as registration, planning and cash flow management,” says Dr Ali.
Once registered, businesses will be eligible to apply for finance, which is one of the biggest hurdles facing SMEs expresses the charted accountant.
Finance is the single biggest hurdle when it comes to setting up any business especially for SMEs.
In Fiji many SMEs end up reaching out to expensive financiers and money lenders who end up charging a huge amount of money, which drives entrepreneurs into further debt. Because of this debt they don’t bother keeping books or registering the business, which makes it even harder to gain finance from banks,” says Dr Ali
Dr Ali praised BLPs approach towards SMEs and feels that BLP was introduced to Fiji at the right time given the current global pandemic where many have lost their jobs and have started their own small business.
BLP really fits in nicely because you are offering the help of professional services by paying for that service partly and this is so important and the message has to go out.
The difference lies in the fact that the SMEs were working in an ad-hock informal manner before and now that BLP has established itself in Fiji SMEs are more aware of the compliance requirements which is very good.
BLP is quite good because the diagnostic tool focuses you on developing your strategy, your plan, your financial forecast, and who’s checking on you and are you checking on yourself.
This is a great program with a great structure which forces any business whichever stage they are in that these are important tools they need,” stressed Dr Ali.
Ali goes on to explain that BLP has an approved business advisers network, whose skills have already been tested.
When somebody reaches out to those advisers then they know they are getting the real deal, because there are other advisers who have not been properly registered and neither do they belong to a professional body, so they do not take any responsibility for you or the advice they are giving to you,” explained Dr Ali.
SMEs should focus on their bank statements and should check every day where their money is being used and how they can improve their budget.
Keeping a tab on the money in your bank and keeping a tab on the cost for the week is important. One must have the discipline of weekly planning.
With the informally operated businesses, because mostly they operate from home, they do not separate their home and business. If we were to educate our society then the business needs space, it needs a financial plan and you need to keep a tab of the money.
When money comes in some of it goes into your household running but those are your drawings. These are some of the basic tools which are still not understood,” highlighted Dr Ali.
The chartered accountant encouraged SMEs to make a to-do list for the things they need to do and whether they have enough funds to do so.