Financially savvy businesses work well

Financially savvy people engage good financial advisors

Why should you become financially savvy?

Financially savvy people are agile and can take fast action to fix a problem or take up an opportunity. We think you should do everything in your power to become financially savvy to improve your agility. Sure you might have a good accountant or a good finance broker, but you need to understand the ins and outs of money as it affects your organisation. Failure to do so leaves you vulnerable and likely to have faults and to miss opportunities.

Being financially savvy allows you to make the right decisions about the money. It is particularly so during a difficult time. It allows you to be quick on your feet and be able to take up opportunities promptly. No more procrastination and losing out on deals and opportunities.

At least learn the basics.

You may not have started your business to become a financial whiz. However, this should not be an excuse for not taking the time to understand the fundamental economic matters associated with any enterprise.

  • Cash flow can become your biggest problem if you aren’t financially savvy,
  • You only have limited resources, so you can’t afford too many financial mistakes.
  • Why would you want to handicap yourself in a competitive marketplace because you always have financial problems?
  • You need to maximise your potential to take up good ideas and opportunities.
  • Without financial savvy, it is frustrating and saps your much-needed energy.
  • Without being financially savvy, you will have difficulty achieving financial freedom.

The modern competitive global environment has made discussing money matters critical. However, talking about sound financial practices and practising them are two very different things. It is why you need to either become financially savvy or, select competent financial advisors.

Sound financial management is essential when starting your business and for its growth and expansion. Having your finances in order means your business can work more efficiently and it puts you in a better position when seeking to find funding for growth. Successfully managing your finances can create sustainability and growth for your business, so it’s important to get it right. Whether it’s balancing the books, budgeting or proper cash flow management, you can help improve the financial health of your business by becoming financially savvy.

Financially savvy people are not all that common.

According to recent research from the Suncorp Bank, you are not doing yourself any favours by pretending you have your finances under control. More than half the adult Australian population believe they are financially savvy. However one in three don’t have a budget or, know the return they’re receiving on their savings. Only 17% know their superannuation balance.

No matter what stage of life you’re in right now, or what state your business is in, it’s never too late to become financially savvy. Alternatively, find the right financial advisors. With business failures in the order of 80% in the first few years of operation, it’s reasonable to think that a large number of people need to become more financially savvy quickly.

In business, your number one objective should be making sufficient profit. Unfortunately, few take the time and effort to ensure the right objectives, strategies and actions to achieve the financial freedom you are probably craving.

Parents do wonderful things in teaching their children to have good manners, be safe, make their beds and be culturally savvy. However, they let them down by not showing them how to be financially savvy. Something that can give them a better lifestyle than they had.

Becoming financially savvy is difficult for many.

When learning new things about finance, it can be difficult and at times very challenging. It becomes harder if you have no interest in or aptitude for money matters. For many learning about personal and business finance, the economy and money generally can be very daunting.

If you would instead be doing other things in the organisation, it’s perfectly understandable. If this is the case, you must engage the right bookkeeper, the right financial advisor and the right accountant. Don’t keep putting it off as you are taking too many unnecessary risks. These people should not be seen as a cost, as they are a sound investment.

Blindly chasing money is usually not the answer, unless you are chasing up money that is owed to you. Look at money as the method we use to facilitate the exchange of goods and services. If used well it can assist you to take the actions necessary to make more; if mismanaged it only causes stress and relationship breakdowns.

Being financially savvy does not need to be your top priority. Some people put finance before anything else, which has some flaws. While money is essential, it doesn’t make you happy. It can be one of the most stressful things you have to experience and fix. It is always better to do what you do best and engage others in looking after what you are not good at or don’t like doing.

What should you focus on.

Knowing and understanding the things that make you money are far more critical than understanding money. Providing you engage others in managing this crucial function in your household and your business. You need to know about your products and services, how you are going to successfully and consistently market them. Knowing your people, the production and operations of the business well will do more for endearing the customers you seek to serve.

There is plenty of things to keep you fully occupied in making your business successful. Understanding all the primary functions of the company is essential. It helps you to determine, with a higher degree of accuracy, the amount of working capital you will need to make the profit you want and need.

So, if you focus on the things which make money and you do it well, then the money usually follows. If you want to make, even more, do more of the things that generate the money and do them better than anyone else. However, you should ensure the financial leaks are well managed, like a dripping tap, you can lose a lot of money in a week. To have your business working well financially will mean focusing on your priorities and having everything fixed and working well all day every day,

Living with financial devastation has been described as modern-day slavery and is not limited to the undereducated and poor. You should see being financially savvy with agility, as another competitive advantage. Perhaps the best way for you to become financially savvy is to find a good financial advisor or finance broker.

Above all know your key numbers.

  1. The number of sales leads being generated, and the cost per lead.
  2. Conversion rate leads to sales. No leads, no sales, no revenue, no profit, no wages.
  3. Your sales numbers and what you have to sell each day.
  4. Know your margins and markups and markdowns).
  5. Know your Cost of Goods Sold (COGS).
  6. Understand what each item of expenditure involves.
  7. Be careful to maximise revenue-generating expenses.
  8. Salaries and wages.
  9. Profit per person employed.
  10. Profit per customer.
  11. Keep track of other unearned income.
  12. Nett profit to be generated each day, week and month.
  13. Understand the seasonal influences on your critical numbers.

Quotable Quotes.

“When starting a business, focus on making sales first, raising capital second”. Peter Sergeant

“Academic qualifications are important and so is financial education. They’re both important, and schools are forgetting one of them”. Robert Kiyosaki

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