Your business is making sales.
Customers are coming.
Money enters your account.
You are busy almost every day.
Yet somehow, at the end of the month, you are asking yourself:
“Where did all the money go?”
So you conclude:
“I need more customers.”
You start looking for new marketing strategies.
You run promotions.
You reduce your prices.
You post more on social media.
You try to increase sales.
But what if sales are not actually your biggest problem?
What if your business has a visibility problem?
That is one of the first questions I would ask as a business consultant.
Because before telling a business owner to sell more, I want to understand what is already happening inside the business.
The Problem
When a business owner says:
“Business is not moving.”
That sentence is not a diagnosis.
It is a symptom.
A consultant needs to ask:
How much did the business sell?
How much cash actually came in?
How much do customers still owe?
How much was spent?
What were the biggest expenses?
How much inventory is sitting in the business?
Which products are selling?
Which products are barely moving?
What does the business actually make after its costs?
How much money is the owner taking from the business?
What happens to the money after each sale?
Without those answers, recommending a solution becomes guesswork.
Financial records and bookkeeping help business owners understand revenue, expenses and financial performance instead of making decisions from assumptions.
And this is where many SMEs need something different from simply being told:
“Go and get more customers.”
A Realistic Example
Imagine a small cosmetics business.
The owner tells you:
“I need more customers. Sales are too low.”
Instead of immediately recommending advertising, you ask for the numbers.
You discover:
Monthly sales: ₦1,200,000
Customer payments received: ₦900,000
Outstanding customer payments: ₦300,000
Inventory purchased: ₦400,000
Operating expenses: ₦250,000
Now you start seeing a different picture.
The business is generating sales.
But ₦300,000 is still sitting with customers.
Another ₦400,000 has gone into inventory.
And ₦250,000 has gone into operating expenses.
So the owner's problem may not simply be:
“I need more customers.”
The business may need better control over:
cash → inventory → customer payments → expenses → profit.
That is a completely different consulting conversation.
The Impact
This is why I believe a good SME consultant should not start with solutions.
Start with diagnosis.
A doctor does not prescribe medication simply because someone says:
“I don't feel well.”
The doctor asks questions, examines the situation and looks for evidence.
Business consulting should follow the same principle.
When an owner says:
“My profit is low.”
You investigate.
When they say:
“Customers are not buying.”
You investigate.
When they say:
“I need funding.”
You investigate.
When they say:
“My employees are stealing.”
You investigate.
The statement tells you what the owner believes is happening.
The records help you understand what is actually happening.
What a Business Consultant Should Look For
1. Revenue
Don't simply ask:
“How much do you make?”
Ask:
What are your sources of revenue?
Which products or services generate most sales?
How often do customers buy?
Has revenue changed over time?
Revenue gives you the starting point.
It doesn't give you the entire health of the business.
2. Expenses
Look beyond the total.
Ask:
“Where is the money going?”
Break expenses into useful categories.
For example:
Rent
Transportation
Staff
Electricity
Marketing
Packaging
Inventory
Technology
Personal withdrawals
Other operating expenses
The goal is not simply to reduce expenses.
The goal is to understand them.
3. Customer Payments
A business can record a sale without receiving the money immediately.
So ask:
“How much do customers currently owe you?”
Then:
“When are they expected to pay?”
Cash-flow problems can occur when the timing of money coming in does not match the timing of expenses going out.
4. Inventory
Ask:
“How much money is currently sitting inside your stock?”
Then investigate:
Fast-moving products
Slow-moving products
Dead stock
Stock losses
Purchase costs
Selling prices
Inventory is not just something sitting on a shelf.
It represents money that has already been committed to the business.
5. Profit
This is where many business conversations become interesting.
A business owner may tell you:
“We made ₦2 million this month.”
Your next question should be:
“How much of that was actually left after the relevant costs and expenses?”
Sales are important.
But sales alone cannot tell you whether the business is creating enough profit.
Common Consulting Mistakes
Mistake 1: Solving the problem before understanding it
A client says sales are low.
You immediately recommend advertising.
But what if the real problem is pricing?
Or inventory?
Or poor customer retention?
Or unpaid customer balances?
Or excessive expenses?
Mistake 2: Accepting the owner's first explanation
Business owners know their businesses better than anyone else.
But they can still misunderstand what is causing a problem.
That is why diagnosis matters.
Mistake 3: Looking at only one number
Sales alone are not enough.
Profit alone is not enough.
Cash alone is not enough.
Inventory alone is not enough.
A consultant needs to connect the numbers.
Mistake 4: Giving complicated solutions to simple problems
Sometimes the business doesn't need another complicated system.
It needs a reliable way to record:
what came in → what went out → what is owed → what is left.
Strong financial systems can make it easier to understand where money is going and support better business decisions.
A Simple SME Diagnostic Framework
If I were diagnosing a small business for the first time, I would start with five areas:
1. Sales
What is the business selling?
2. Customers
Who is buying, and who is still owing?
3. Inventory
What products are moving, and what products are trapping money?
4. Expenses
Where is business money going?
5. Profit & Cash
What is the business actually generating, and how much cash is available?
Then I would connect the five.
Because the real story is often hidden between them.
What You Can Do Today
Take your business records from the last 30 days.
Don't try to fix anything yet.
Just collect the information.
Write down:
Total sales: ₦______
Cash received: ₦______
Customer balances: ₦______
Inventory purchased: ₦______
Total expenses: ₦______
Owner withdrawals: ₦______
Estimated profit: ₦______
Then ask yourself:
Which number surprised you the most?
That number may deserve your attention first.
The Bigger Consulting Lesson
A business problem is not always what the business owner first says it is.
“I need more customers.”
“I need more capital.”
“I need more sales.”
“I need to reduce expenses.”
“I need more employees.”
These may be valid conclusions.
But they should not automatically become the starting point.
The starting point should be:
What is actually happening inside this business?
That is where consulting becomes more than giving advice.
You are not simply telling a business owner what to do.
You are helping them see their business clearly enough to make better decisions.
And sometimes, the biggest breakthrough is not finding a new opportunity.
It is finally discovering what has been eating the money all along.
A Question for You
If you were asked to diagnose your business today:
Could you show someone, with actual records, exactly where your business made money, where it lost money, where its cash went, and what is currently tying up its money?
If the answer is no, your first business project may not be “grow faster.”
It may be:
“Understand the business better.”
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