Financial Training = Financial Fitness is the key to business success
According to the American David Lavinsky (head of a company who has helped raise billions in funding to help his clients businesses grow) many companies are just not financially fit.
He has shaped and outlined some of the key areas that he has found really helps businesses get in to shape with the aim of helping your business grow and expand, alongside these key areas an additional plus is the inclusion of financial training from a professional finance training company as many organisations overlook the need to have managers and often teams skilled in understanding the impact that their roles and decisions have on the underlying growth and expansion of the business.
Lavinsky recommends the following areas as key points to an productive and financially fit business and comments that if you aim to use these areas to attract investors, new clients and new talent there are many other financial pieces that you need to include.
Although this is not an exhaustive this list these identified areas, coupled with a robust financial strategy and finance planning, has a marked effect on both the motivation of your workforce and the company’s overall performance:
SWOT Analysis: a comprehensive SWOT analysis (assessing company strengths, weaknesses, market opportunities and market threats) is critical to assess your opportunities, generate ideas and focus on which to go after.
Company Goals: Setting of 5 year company goals is a must. Ask yourself: what income level do you plan on achieving in that time? Will you sell the company, remain at the helm, or go public?
Once you have established your 5 year plan it is easier to break down the plan in to yearly goals. Which opportunities are best to execute this year in order to achieve your five year goals?
Marketing Strategies: Take a good look at your current marketing strategies. Explore all marketing mediums and channels available to you. With the internet opening so many more channels of communication directly or indirectly with your clients you can’t rely on what you may have done in the past.
Business Asset Goals: Formulate projections on customer count, employee count, training, new equipment and other expenditures, like a new facility or office expansion.
Be prepared for growth.
Key Performance Indicators: Many entrepreneurs don’t track things like visitors to their website, customers in the store, the percentage of sales in the store vs. the website, upsell percentages, number of sales, sales closed, proposals issued. It’s critical to keep detailed metrics so that you can analyse problems quickly and make the necessary adjustments to keep the finances flowing. In addition to the aforementioned metrics setting KPI’s for your staff also helps you manage productivity and their performance allowing you to identify opportunities to improve or develop your workforce. The benefits of setting and monitoring these KPI’s help feed in to the financial status of the company, for example, if your team didn’t upsell enough, it may be time to create new sales scripts or perhaps your website traffic is down or is not generating enough sales perhaps now is the time to explore new conversion tactics, maybe an offer, a free download or improving your social media activity to drive more visitors to the site.
Lavinsky also recommends that you ask yourself these two simple questions:
Of my top five direct competitors, which one would I purchase if I could?
Then, what would I want to know to determine the best buy?
Would you purchase the company with the highest sales conversion rate, the best Web stats or maybe the most stable customer base? Once you have decided what is important to you set your KPI’s to track these factors.
Your client base: Identify and define your customer helping to maximize your marketing efforts. “Create your customer persona,” says Lavinsky. “Explore what is important to them, the real reasons they do what they do, and their key problems.” Also include demographics such as gender, age, race, geographic location.
Your Companies Mission Statement: Most businesses either don’t have a mission statement or make it so general that it is relatively pointless. Think about what you’re trying to achieve and include that big vision in your mission statement.
Your market. Lavinsky asks if you’d rather be a sardine in the ocean or a whale in a pond. “Niche down,” he says, “and own your market. Once you do this you can grow into other markets.” Also remember that you will still be serving people outside of your niche, it isn’t as limiting as you may believe.
Your competition: Lavinsky stresses the importance of being prepared for the inevitable—competitive challenges. “Take a good look at your competition and define what steps they could take that would really frighten you. Imagine the worst case scenario and ask yourself if you could deal with it or if your business would be massively hampered,” he says. The next step is to determine what you could do under your current circumstances to pre-empt it. “Make the assumption that they’re really good at strategy and that they do smart things,” suggests Lavinsky. “Then make contingency plans.”
Define your team: “Even solopreneurs should have a team,” Lavinsky says. “Don’t try to do it all on your own.” Consider your virtual assistants and other outside contractors, or employees if you have them. Where do you want them to be one year from now? What skills will they have developed? What training or mentoring is necessary to get them there? Is there anyone who’s not working out? Who do need to grow your company? How can you get those resources in place?
As mentioned earlier, financial planning and having a finance strategy are key to the growth and underpinning wealth of the company. You already probably have a finance manager and perhaps an accounts team or person. But in the wider organisation how much do your managers and your teams understand about finance.
In simple terms even a free coffee in the cafeteria has a direct impact on the finances of the company, do your staff have the acumen required to input into the wider financial strategy. Your teams may have valuable ideas that could real help the company grow and prosper it is your responsibility to nourish this potential untapped resource.
To help your teams and managers to really understand the impact on the companies finance invest in financial training from a professional finance training company