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Actor and businessman Williams Uchemba has shared financial advice for small and medium-scale entrepreneurs, stressing the need to distinguish between profit and cash flow.
In a video he posted on Instagram on Tuesday, Uchemba explained that injecting funds into a business does not immediately translate to profit until the original investment has been recovered.
“If you invest one million naira into a business, you’ve not started making money until that one million naira has returned from customers,” he said.
The filmmaker noted that many business owners fall into the trap of equating daily cash transactions with profit, which often leads them to eat into their capital. This, he warned, eventually leaves them without funds to replenish stock.
“That is why bookkeeping is important,” he continued. “If you buy something for ₦2,000 and sell it for ₦2,300, you bring out that ₦2,000 because it’s not your own. Your money there is ₦300. Don’t go and start eating the ₦2,000 thinking you’re making money.”
According to him, the principle is well-known in Igbo as Isiego, meaning the separation of capital from profit.
Uchemba, who runs Prosthesis Entertainment as well as the Williams Uchemba Foundation, further observed that many small businesses collapse quickly because of poor financial management and failure to keep proper records.
Watch him speak below…
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