For many entrepreneurs, finances are known as the life blood of any business. The success of any company primarily depends on how well finances are managed. For this reason, they have to be a key consideration for any business that would like to achieve exponential growth. There a many things that entrepreneurs can do to grow their business successfully and to achieve financial success
Finance tells a story about your business, therefore it is important to determine in the very beginning, what story you would like your finances should be telling about your business. Is it
‘’Give me six hours to chop down a tree and I will spend the first four hours sharpening the axe’’~ Abraham Lincoln
Explain quote: What this quote highlights, is the importance of effective planning before going into any task. This reflects how crucial planning is when starting a new business, when growing an established business. In this instance, the four hours allocated to sharpening the axe; refers to the time spent in planning for the finances in your business. The two hours that are remaining to chop the tree; refers to the effective financial management of the implemented plan.
I would like to introduce the wheel to financial success.
The wheel to financial success represents important components of the business that will ensure the business moves forward for financial success. The wheel consists of five components which are all necessary to keep it working effectively. All the components will be covered today.
The wheel that keeps the business moving towards Financial Success
Opening: stats, facts, shocking truth.
Key questions to ask?
- Why the business exists? Vision
- Where are we heading? Goals
- How are we getting there? Plan
- What is needed to get there? Execute
- How do we know we are on the right track? Monitoring
Vision
- Financial goals
- Plan
- Monitoring and evaluation
- Adapt or amplify strategy
- A roadmap
1. Always start with the end in Mind
b. Business Objectives
c. Long-term financial goals
2. Determine how much is required to start and run the business effectively
b. It is key to gain a thorough understanding of your business so that you know exactly how much would be needed to operate it
when determining this: calculate the capital needed by determining assets required: machinery, laptops, etc.
d. Working capital: what’s needed monthly
3. How will finances be managed: budget
b. Time frames
c. Management of finances involves the evaluation of financial records to determine whether or not you are meeting your financial targets
d. Bookkeeping
4. Costing & Pricing
b. Pricing
Conclusion
When you are good at financial planning and management, these are the things you can benefit:
- It’s easier to get financing as banks are inclined to lend you money
- A healthy cash flow is maintained and leads to growth opportunities: you can invest in growth
- Can negotiate favourable terms with suppliers
- It becomes easier and quicker to solve problems and to see if something is not working
Closing
This is the wheel to financial success and these are the key principles that are crucial to your business growth and to you starting a new business. I would like to say to you today. Keep the wheel spinning constantly, because if the wheels stop turning, your business will stop with it
Author bio: Sibusiso ‘’Busi’’ Raphekwane is the founder and CEO of The Transformation Legacy, she is also a Business Mentor and Entrepreneur Development Expert. Contact her at: info@transformationlegacy.com, 010 005 5753 or 010 023 0508 or visit: www.transformationlegacy.com.
