The success of a business is determined not only by the products offered but also by the wise management of finances. This was conveyed by the CEO of Sombong Men’s Care, Denny Sumargo, Sultan Ankaraja, S.M., during the MSME Business Digitalization Training organized by FEB UGM on November 20, 2024.
Sultan presented material on financial strategies and cash flow to dozens of MSME entrepreneurs from Yogyakarta and Central Java regions. He emphasized the importance of cash flow management, financial metrics, and techniques to increase business profits.
“The benefits of this can help maintain financial health and stability and prevent financial problems such as cash shortages and bankruptcy. Another benefit is ensuring they have sufficient resources to achieve their goals,” he explained.
During the session, Sultan encouraged MSME entrepreneurs to learn how to use financial metrics such as profit margin, return on investment (ROI), and revenue growth to evaluate business performance in various aspects such as liquidity, solvency, and efficiency. In addition, the entrepreneurs were invited to discuss and analyze financial analysis case studies to learn how to improve operational efficiency and maintain business profitability.
Sultan also explained the steps to increase the company’s profit margin. These include increasing product prices, evaluating existing customers, reducing available products, simplifying productivity, reviewing marketing strategies, and reducing the number of customers.
He mentioned that margin is also influenced by quantitative factors such as sales, operating expenses, cost of goods sold, inventory, and taxes. Other elements that affect sales include market competition, customer preferences, reward programs, and company leadership.
“So if we want to increase the profit margin, it’s not just about these numbers; it’s also about how we read the market and build the right strategy,” Sultan clarified.
At the end of the session, Sultan delivered an important message for MSME entrepreneurs to understand financial aspects thoroughly. One crucial step that needs to be taken is to prepare sales projections.
“With these projections, we can identify opportunities and potential risks in sales strategies while also helping in decision-making related to budgets, production, and human resource management,” he concluded.
Reporter: Shofi Hawa Anjani
Editor: Kurnia Ekaptiningrum
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