By Rogers Aghan, March, 7, 2023, For seven years, Peter Mutegi, director of Tegemeo Cereals Limited in Tharaka Nithi, struggled to manage his venture. Due to limited business skills, he would mix his personal finances together with those of the business. This would bring conflict within the business since the accountant could not trace the money and the director could not account for the funds.
“At the beginning, we were receiving both cash and mobile money and there were many times when the cash would be lost without trace,” recounted Mr Mutegi, adding, “the revenue from the different commodities we were selling, for example seeds and agrochemicals, was also not separated so it was difficult to know which commodities were bringing profits and which were not.”
The situation was untenable for a large agribusiness working with 12,000 farmers in Tharaka Nithi and Makueni Counties to grow and aggregate sorghum, green grams and millet, and produce, pack and sell seeds.
The roll out of Farm Africa’s Cultivate business development initiative in 2019 came at a time when the enterprise needed help the most. Tegemeo Cereals Limited was one the businesses that undertook the six-month Cultivate Grow Your Business skills training programme offered in collaboration with African Management Institute (AMI) to growth stage enterprises.
Thanks to the Cultivate programme, I now know the importance of separating personal funds from business funds because this has enabled the accountant to fully account for every payment or purchase made by the company.
The programme focused on identification of risks and opportunities, developing an entrepreneurial mindset and fostering business resilience, market and opportunities analysis, finances (profitability, costing and pricing), building team and operations and strategy for growth.
For the next six months, Tegemeo Cereals and 63 other businesses in Kenya, Tanzania and Ethiopia underwent the business skills training, which combined webinars, online courses, online peer learning, coaching and technical assistance visits from Farm Africa staff.
The training on finances and financial management enabled Mr Mutegi to understand the importance of separating income lines, which has made it easier to track the performance of each business line. All sales are now either transacted through banks or mobile money so the business is able to account for every shilling received.