ENTREPRENEURS – Sincerely, I can’t explain why I am not in love with football. The energy, intrigues, gains, losses, and even craze hardly moves me. Sounds weird right? Even recently I found that my mom who was never a football fan has been converted, thanks to my dad and my two younger siblings. Yet, the
ENTREPRENEURS – Sincerely, I can’t explain why I am not in love with football. The energy, intrigues, gains, losses, and even craze hardly moves me. Sounds weird right? Even recently I found that my mom who was never a football fan has been converted, thanks to my dad and my two younger siblings. Yet, the “spirit” is yet to catch up on me and I don’t know why. Well, that’s a story for another day.
So recently I stumbled across the financial report of FIFA for the year 2013. It is 142 pages. Every entrepreneur who is a football fan should be compelled to read it. (lol) To help you out, check out the following infographic and my thoughts afterward:
Here are a few things I gleaned from the report:
1) Most of FIFA’s income (88%) is event-related. Hence in 2013, in addition to 2014 FIFA World cup preparations, FIFA organized seven other competitions.
So you have an idea of who and what your major clients, products or sources of income are but do you have real sales data (figures and percentages) that could aid your decision making? For example, we once had a client who sold gadgets and home appliances. Through accounting, for the first time he was able to identify his top selling products and brands and how they impacted his revenue. This data helped him to take advantage of the preference of the market in boosting sales. So you need to capture every income in detail and then get someone or a software to do some analysis at intervals e.g. monthly, so as to extract some valuable information. The best time to start is this month.
2) FIFA has been able to explore at least four major income derivatives from one source – football. These derivatives are TV broadcasting rights, marketing rights, hospitality rights, and licensing rights.
For a lot of people, diversification means getting income from various sources. But as you can see from FIFA’s reports, diversification could also mean innovatively creating different income derivatives from one source. (So how can you apply this to your business today?)
3) FIFA had a plan to consistently increase her reserve (profit which is set aside) in view of the need to be financially independent and prepare for rainy days. But they were also concerned that they needed to invest more into football. So while the 2013 income was the highest in the last seven years, the reserve was among the lowest.
Every business should have an allocation for reserve no matter how small. Although most people will argue that it is difficult for a small business to save considering the harsh realities in Nigeria. I agree to an extent. So here is my advice: No matter how little, invest in future earnings or cashflow. In other words, you may not be able to stack some money away for the rainy days but invest in activities such as business development, prospecting for new clients, retaining existing clients, exploring additional income prospects… that will guarantee a continuously expanding stream of income. So as your income expands (while you control your expenses) you can now start building your reserve. (I would love to know what you think about this).
By David Owoyemi, Managing Partner of OWO Consults Ltd, a firm that provides outsourced accounting services for small businesses. (that is, small businesses can access professional accounting services at a friendly rate without necessarily employing a full time accountant). He could be reached via davi[email protected]
(OWO Consults is offering to provide templates and do free analysis for the month of March for the first 5 people to make contact