Demystifying Business Finance – The Value of Spreading the Word

As a business leader, do you ever wonder why poor decisions get made or outcomes don’t meet expectations? It’s easy to blame weak strategy or execution, but is there another underlying reason? Is it possible that the people you work with just don’t understand why your business exists and how it works from a financial perspective?

Businesses exist to make profit and generate cash. Do the people you work with understand those fundamentals and do they take them into consideration when they plan, execute, and make decisions? Do they understand how your business makes profit and generates cash, including the short and long-term implications? When discussions involving profit and loss, expense management, marketing investment, and risk mitigation occur, can your co-workers relate? And if they don’t, would employees be more valuable if they did understand basic finance?

Our work shows that there is a definite correlation between basic financial acumen and individual and team performance. Contribution increases and its value enhanced when people have an expanded foundation on which to make decisions. Basic finance understanding can improve through coaching and mentoring, online learning, and classroom instruction. A leading classroom solution simulates a business operation for students who run a business and make decisions throughout the learning event. At the conclusion of their class day they:

• Understand basic financial terms and principles.
• Understand basic financial statements.
• Understand and calculate basic financial ratios.
• Participate in and understand the financial operation of a business.
• Connect new financial expertise with their business.

The value of this experiential learning event is always high with participants, their superiors, and learning program managers.