It is the dream of every entrepreneur or startup to build a business that outlives its founder. But according to Chartered Accountant and SME Consultant Dickson Assan, that dream rests on something far less glamorous than a big idea.
Speaking on the recent edition of The High Street Talks, he emphasized that to build a generational business the paperwork is actually the deal.
Dickson Assan argues that small businesses that want funding, investors or longevity must first prove they are real, organised and worth the risk.
Why Ghana’s businesses struggle to last
The SME consultant cited research showing that four out of five small businesses in Ghana collapse before their fifth year. For him, the numbers point to a deeper problem. He noted that Ghanaians are struggling to build generational businesses.
He said many entrepreneurs run businesses that merely “pay the basic bills.” Without structure, he argued, a business cannot grow beyond its founder or survive without them.
A major culprit, he said, is the habit of blurring personal and business money. In Ghana, “the business is themselves and themselves is the business.” Owners spend business cash on personal needs and prop up the business with personal funds. In the end, nobody can tell how much the business earns or how much the owner has put in.
Keep the two apart
A business, Dickson Assan further explained, is a separate legal entity, especially a limited liability company. Separating finances is the only way to know whether it is making money. It also matters for taxes.
What banks want to see
The consultant with numerous experience in SME business said lenders must be able to judge how risky a borrower is. For that, a business should have:
- Registration with the Office of the Registrar General.
- Tax records that are up to date.
- Identifiable ownership information, so the bank knows the people behind the business.
- Industry certification, where relevant. A food business, for example, needs approval from the Food and Drugs Authority.
- Financial statements or management accounts showing sales, profitability and cash flow.
Without these, he said, banks struggle to assess a business, and funding becomes unlikely. Investors, too, will not consider a business that has not done the basics.
Records that guide decisions
Records do more than satisfy lenders, Assan noted. A business that tracks its sales and spending can say with confidence how much profit it made. This clarity informs the big decisions, such as whether to expand.
For him, formalizing as a startup or an SME is not a favor and also not negotiable. It is the foundation of a business built to last. For founders who want theirs to outlive them, Dickson Assan’s advice is to register it, record it, separate it and certify it.
