As businesses usher in the new year, entrepreneurs are faced with the crucial task of revisiting their financial strategies, setting realistic goals, and implementing robust budget plans.
Whether finalizing budgets in January or refocusing their financial outlook, proper planning ensures that businesses can transform aspirations into actionable steps while maintaining control over their spending throughout the year.
A valuable tool to guide this process is the Old Mutual Financial Services Monitor (OMFSM), which provides deep insights into the financial attitudes, perceptions, and behaviors of working Ghanaians in both the formal and informal sectors. The findings from this report shed light on key financial trends among entrepreneurs and business owners, offering critical takeaways for the year ahead.
Rita Boateng, the Customer Service and Marketing Executive at Old Mutual Ghana, highlights the significance of the OMFSM in enhancing financial well-being in Ghana and other key African countries. “This is aligned with Old Mutual’s purpose of becoming the first choice for customers to sustain, grow, and protect their prosperity throughout their lifetime,” Boateng states.
The OMFSM primarily focuses on urban and peri-urban working Ghanaians aged 25 to 59 years, earning at least GHS 1,000 monthly. The survey offers a detailed analysis of various financial behaviors and concerns, providing valuable insights for business owners.
Key Findings from the OMFSM
The report highlights the prevalence of poly-jobbing, with 24% of working Ghanaians supplementing their primary income through side hustles or additional work. Additionally, 54% of Ghanaians own or part-own a business, with 64% of them operating solo and 32% employing between one to five people. Notably, 78% of these businesses fall within the informal sector, illustrating the challenges of financial inclusion for many entrepreneurs.
Financial stress remains a significant concern, with 65% of business owners reporting high levels of financial pressure and 42% constantly worried about their income. However, the data suggests a disciplined approach to managing debt, as 94% of business owners remain optimistic about their financial future. Their top financial priorities include securing income (73%), ensuring safe investments (46%), and managing expenses effectively (44%).
Entrepreneurs prioritize savings for business continuity, children’s education, medical expenses, and emergency funds. However, retirement savings remain a low priority, with only 21% of business owners actively saving for a comfortable retirement. Alarmingly, only 16% of business owners feel confident that their savings will be sufficient for retirement, indicating a pressing need for greater awareness of long-term financial planning and retirement solutions.
Informal savings mechanisms play a significant role in the financial lives of business owners, with 44% of entrepreneurs participating in susu schemes—a rate significantly higher than the 28% participation rate among non-business owners. Additionally, 34% of business owners hold unbanked cash savings, citing convenience and security as key reasons for this preference.
Addressing the Need for Financial Advisory Support
Despite these challenges, business owners in Ghana demonstrate remarkable resilience. However, the OMFSM reveals that financial advisory services remain underutilized, with only 31% of entrepreneurs seeking professional financial guidance. Even more concerning, 49% of business owners do not know where to turn for financial advice, underscoring the need for more accessible and reliable financial advisory services.
The findings from the OMFSM highlight the urgent need for entrepreneurs to enhance their financial literacy, particularly in areas such as debt management, retirement planning, and savings. Financial institutions and advisory firms have a critical role to play in bridging these gaps by offering affordable, accessible, and tailored financial solutions.
For Ghanaian entrepreneurs, achieving financial security and business growth requires strategic planning, a thorough understanding of their financial needs, and access to the right resources. By leveraging insights from the OMFSM and seeking professional financial advice, business owners can navigate economic challenges, secure their financial futures, and achieve long-term success.
Old Mutual Ghana is one of the country’s leading financial institutions, offering innovative life insurance and pension solutions. Founded in South Africa, Old Mutual has remained steadfast in its commitment to championing positive financial futures by providing excellent financial services across Africa.
The company established a presence in Ghana in 2013, leveraging a deep understanding of the local market while benefiting from the expertise of an international brand. Currently, Old Mutual Ghana comprises Old Mutual Life Assurance Company Limited and Old Mutual Pensions Trust, offering a diverse range of financial products, including savings plans, group life benefits, funeral plans, travel insurance, and pension schemes.
As Ghanaian entrepreneurs strive for financial stability and growth, the Old Mutual Financial Services Monitor continues to serve as an invaluable resource, shedding light on the realities of entrepreneurship and offering actionable strategies to foster financial security in the years ahead.
READ ALSO: Dr. Ishmael Yamson Calls for Fiscal Prudence and Structural Reforms
