Gaining and maintaining financial control of your business is a superpower for owners and managers. This blog from 2020 outlines the many advantages in your key non-financial personnel becoming financial literate.
Imagine being confident enough to understand how a sound knowledge of balance sheets and P&L reports can affect business outcomes? And what about using that confidence to make the right decisions for the good of the business?
You’re making critical financial decisions every hour of the working day as an owner. From sending an invoice for payment to hiring a new member of staff, your decision-making can affect the profitability and health of your business.
Financial upskilling and improving your financial literacy is a smart way for owners and senior managers to understand how financial actions can benefit all areas of the organisation.
Financial knowledge = financial opportunities
But then what can you do with all this new-found expertise? Well, you can make a greater contribution to the smooth-running of your business. Identify where working capital and cash is being consumed at high rates. Pinpoint where to extract ‘dormant’ cash flow in existing structures so you can invest in overlooked areas of the business that offer greater revenue opportunities – opportunities you may not have spotted before upskilling financially.
A more detailed understanding of financial reporting will also enable you to develop better budgeting and cash flow management, create and manage profit plans and, by forecasting and managing the all-important numbers behind the business, you’ll be able to work with your finance team to develop sensible strategies.
Survive, prosper and future-proof
Take something as fundamental as cash flow – the backbone of any business. You need to be as precise as possible when assessing the levels of cash that flows in and out of your business. Managing it properly means you can predict what is going to happen to ensure the business can survive. You can plan ahead, take advantage of any cash surpluses and also spot any potential risks coming down the road.
According to new research by Gartner, 86% of employees feel that their training is lacking. This is important because in the post-COVID-19 workplace, organisations are asking for greater resilience and flexibility from employees and owners and managers.
If COVID-19 has confirmed anything, it’s that upskilling has never been more important – a panacea to disruption. Sure, we’re finding new ways of working and trying to adapt as efficiently as possible, but every organisation needs to devise strategies that prepare them for a post-COVID-19 world.
Upskilling to fight against disruption
And you’ve seen the success stories around businesses that were forced to reconsider their service and product offerings and pivot the business. Agile businesses cope better in a crisis than rigid ones.
If you’re able to shift employees to where they are most needed in the short term, counteract an imbalance of resources within your organisation, and recycle and allocate expertise across other areas of the business, you’ll be able to cope with unforeseen challenges.
Furthermore, upskilling isn’t merely a way of papering over the cracks and coping with the here and now. Business experts worldwide are calling for us all to be more agile. Easier said than done, of course. If you are looking to create an agile business, begin by building in agile methods – encourage yourself and your people to train, upskill and learn. Financial upskilling is a smart way to start that journey. And that makes you a very agile business.
Our Knowing Your Numbers workshop will help you find ways to use financial literacy to strengthen all areas of your business.
For information on how capability building programmes, workshops and advisory can help your business, click here.
For more business ownership and leadership advice, check out more of our blogs.
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