What PMS @ N145/ Litre Means to Me

I run Audeo, a smallish firm in Lagos, Nigeria that provides back office support to SMES — Personalized bookkeeping, accounting, payroll, compliance and my best part, decision support services. So the questions we get from our clients typically range from “how much do I pay myself?” To “what do you think we should do with this extra space?” to “do you think purple is a good colour for our brand?” You know, questions that plague the average entrepreneur.

Earlier today we did a business review with one of our clients, a beauty salon located in Victoria Island and after we discussed the numbers and strategy for getting more customers through the door, right at the end, the client asked “so should we increase our prices due to this fuel hike?” My first instinct as their accountant and advisor was “of course yes, you should”. Afterall we had just quantified the effect on costs of sales and overheads, and added a “probability of failure” which increased the numbers even more. So dire stuff. But as a customer I stopped because it meant N1000 extra every time I had a blow dry or get a perm or a haircut.

But someone has to pay.

I started to think about all the ways the hike has affected me. For my Company, it means I now spend N23,000 per week on petrol to fuel our generator, we have reviewed staff transportation and feeding allowances to cushion the effects as much as we can afford to, however inadequate. We also anticipate at least a 25% increase in the cost of other services we utilize such as security and maintenance. Because someone has to pay. The effects on my personal life are just as far reaching.

But I will not bemoan the situation any further. It is for our own good — my naïveté recites on a loop. Instead I employ efficiency in resource allocation and through there to the rest of my life. I will allocate resources more efficiently, and will find cheaper alternatives for things I can afford to change, so that for those that I cannot change, I will be able to afford those too.

So to my client, I said, “Not yet. For now let’s focus on making your business leaner, let’s review your cost models and see what we can rework or let go of.”

To quote from Shimon Peres’s Foreward in “Start -Up Nation”, “…a readiness to take risks and seek renewal” … perhaps this too will be our story.

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