Money management in business is one of the most underrated but essential skills for any entrepreneur. Whether you’re hawking deras on the streets, running an online shop, or managing a clinic, the truth remains: if you can’t manage your finances, your business will likely become a burden instead of a blessing.
I’ve learned this the hard way—through tears, mistakes, and empty wallets. I’m a spender by nature. For a long time, I didn’t see anything wrong with that. But launching my own business forced me to confront a difficult truth: you can’t separate money management from business success.
Let me share the key lessons that changed my financial habits—and saved my hustle.
Why Money Management in Business is a Game-Changer
When most people dream of starting a business, the first thing that comes to mind is capital. But the focus is often only on startup capital—the amount needed to launch. Few think about operating capital, which is what keeps the business running day by day.
Operating capital includes:
- Rent and utilities
- Stock replenishment
- Staff salaries (if any)
- Marketing and promotions
- Transport and delivery
- Emergency expenses
Without these, even the most promising business can collapse within weeks.
I once worked at a clinic where the officer in charge had a booming client base and steady income. But by month-end, he’d struggle to pay staff. Why? Because he spent money as it came in—no budget, no discipline, no financial structure.
Business income is not personal income.
Dipping into your business cash for lunch, fare, or airtime may seem harmless, but over time, it depletes your capital and sabotages sustainability.
Financial foresight—anticipating needs and preparing for them—can prevent countless crises.
How Poor Money Management Can Kill Your Business
When I started my dera resale business, I thought sales alone would sustain me. I didn’t anticipate the cost of restocking or the fact that I still needed money to survive while the business gained ground. I began using profits for personal needs, and soon, my stock disappeared. I’d eaten into the capital.
“You cannot open a business today to feed you today.”
I used to wonder: What are successful businesspeople doing differently?
The answer: discipline and structure.
Read more on my early struggles with this in Self-Doubt in Business.
They knew:
- Not every shilling is meant to be spent.
- You must separate personal and business money.
- You need a backup income while the business grows.
Even babies don’t walk on day one. Your business is no different. It will drain you before it feeds you. But with solid financial planning, you’ll survive the growing pains.
Real-Life Operating Capital Examples (and Affiliate Resources)
Let’s break down realistic numbers from a small mitumba resale setup:
Initial capital: Ksh 5,000
- Stock: Ksh 4,000
- Transport: Ksh 1,000
Weekly expenses (often forgotten):
- Airtime: Ksh 100
- Data bundles for WhatsApp & TikTok: Ksh 300
- Restock/delivery fare: Ksh 500
- Packaging (paper bags, etc.): Ksh 200
- Accidental expenses (rain, theft, etc.): Ksh 500/month
If you don’t have another income source, this setup becomes overwhelming fast.
Here are tools I’ve found useful (affiliate links):
📘 Budget Planner Ledger Book – For daily tracking of sales and expenses
📱 Mini Thermal Receipt Printer – Helps issue receipts and appear more professional
💻 Cash Flow Excel Templates – Free and editable for monthly planning
These can bring structure to your operations and reduce chances of overspending.
Why You Need a Separate Source of Income
When your business is new, relying on it to pay bills is risky and mentally exhausting. You’ll grow resentful when sales are low, and may end up quitting too soon.
That’s why I keep part-time jobs and side gigs. I talk more about this in The Bumpy Road to Self-Employment.
Your side hustle should support your:
- Daily expenses
- Family obligations
- Business reinvestment
It also shields you from panic decisions like selling stock at throwaway prices.
Bonus Tip: Having multiple income streams builds financial confidence—and that confidence translates into better business decisions.
Can You Afford Not to Track Your Money?
Some entrepreneurs hire accountants, and if you can afford it—great! But if not, start where you are with basic tools.
Affordable tracking options (affiliate picks):
📊 Small Business Accounting Software – Tracks income, expenses, and even stock
✏️ Simple Expense Tracker Notebook – Pen-and-paper friendly for low-tech users
💰 Free Profit & Loss Templates – Great for startups and free to download
Don’t ignore this step. Tracking your money isn’t optional—it’s a foundation for growth.
Conclusion: Discipline Over Desire
Money management in business isn’t glamorous. It means saying no to impulse buys, tracking every coin, and staying consistent—even on slow sales days. But if you stick with it, the reward is stability, growth, and freedom.
If you’ve been struggling with this, you’re not alone. Let this be the season you rewrite the script. Be intentional. Be wise. Give your business the fighting chance it deserves.
💬 What has money management taught you in your business journey?
Let’s talk in the comments or connect on Facebook or LinkedIn.
🌐 Explore more reflections and resources at lobbyreflections.co.ke
Leave a Reply