Money in, money out
Corporate finance sounds big, but for a market stall it means one thing: where money comes from, and where it goes. Every business raises money (from savings, a loan, or profit) and spends it (on stock, rent, tools). Your job is to make the money coming in bigger than the money going out.
The three decisions
Every owner makes three choices again and again. Investing: what do I spend on to grow? Financing: do I use my own cash or borrow? Operating: how do I run day to day so cash keeps flowing? A tea seller buying a bigger urn is investing; using savings instead of a loan is financing.
A tiny example
You put in 500 of your own money and earn 700 back over a month. That extra 200 is what finance is about: making your money work. If you had borrowed 500 and paid 60 interest, your gain is 140 — still positive, but smaller. Always compare the gain to the cost.
A furniture maker in Kumasi began writing every money decision in one of three columns: buy (tools, timber), fund (savings, supplier credit, loan), or keep (cash for the month). Within a season she could see that her problem was never sales — it was funding growth with cash she needed for timber. She switched to 30-day supplier credit and stopped running dry mid-month.
A two-brother welding shop nearly collapsed after using the month's operating cash to buy a second generator. The purchase was sound — the timing wasn't, because wages fell due before the generator earned anything. They recovered by agreeing a simple rule: an investment may only be paid from set-aside savings, never from the cash that pays people.
Practice
You put in 200 and get back 260. What is your gain, and is it worth it if a loan would have cost 30?
Gain is 60. After a 30 loan cost you'd keep 30 — still worth it, but your own cash keeps the full 60.
Name the three core finance decisions.
Investing (what to spend on), financing (own cash vs borrow), and operating (running day to day).
Track your own money in and money out for the last full week and write down the difference.
If money in is larger, that surplus is what you can reinvest or save. If it is negative, you are living off stock or savings — find one cost to cut this week.
Open the Budget Planner and enter your real monthly income and costs. At what savings amount does your leftover turn negative?
The point where costs plus savings exceed income is your ceiling. Lower a category or raise income until leftover is zero or positive.
