Business Finance: 8 Steps to Becoming More Effective

by / ⠀Entrepreneurship Startup Advice / February 25, 2022
What are the steps to becoming more effective at business finance? We connected with a handful of business experts; they came up with eight.

It doesn’t matter what your role is within a company, at some point business finance becomes a numbers game. From sales to budgets to benefits and even office parties, everything involves the almighty dollar. It is what makes the wheels of a business turn.

That being said, numbers are not the strong suit for everyone and they can be somewhat fear-inducing at times. Many would rather avoid them altogether as making a math mistake in any circumstances is never a good reflection on an employee and can harm the company.

With every team member of a business having to participate in a financial aspect of the company, it’s necessary for each of them to have an understanding of how to make their mark accurately and efficiently.

Financial advisor and radio host Dave Ramsey spoke to the power money has and its relationship to people: “You must gain control over your money or the lack of it will forever control you.”

This begs the question. What are the steps to becoming more effective at business finance? We connected with a handful of business experts to understand their perspectives on this matter.

1. Understand the language.

Michael Williamson is the head of growth at Hoist, a brand offering education on how to run a home service business. He believes having knowledge of the terms being used surrounding finances is an important step.

“While math itself is a language on its own, you really won’t get anywhere with finances if you can’t understand the language being used in conversation or in the data. Obviously, it’s impossible to memorize all the terms straight from the dictionary but if you’re new to finance, be very observant of conversation and quick to ask questions. Google is also your friend when it comes to making sense of spreadsheets or reports when there is a phrase you don’t understand. Don’t spend your time wandering in the dark when a little persistence will help you understand much better.”

2. Be watchful.

LifeGoal Investments specializes in saving and investing for people of all walks of life. Their founder, Brett Sohns, suggests making an active effort to pay close attention to the records and information related to money.

“I think most people have experienced that mild dread which appears when they think of checking financial records or bank account information. Seeing as money is so critical to success, it makes sense that being directly involved with it would be a stressor. However, just because something is a stressor doesn’t mean it should be avoided. In fact, I’d argue that stressors in business deserve more intention. This is why I think people should be watchful of their money as often as necessary. You can’t make progress if you don’t know where you stand financially.”

3. Educate yourself.

There are few better ways to improve at something than to intentionally gain applicable information about the topic at hand. Network Capital is a business providing services related to home purchasing and financing. Their co-founder and CEO, Tri Nguyen, considers seeking out learning opportunities to be a wise approach.

“The internet has brought us to a societal place where information is available at our fingertips instantly. In relation to the rest of human history, this is entirely unprecedented and should absolutely be used to the greatest extent. Between resources like YouTube and online classes put together by some of the largest universities, there is no shortage of ways to educate yourself on business finance. But, it takes a willing and driven person to make this happen.”

4. Do not wait.

George Fraguio is the vice president of bridge lending of Vaster Capital, a brand offering home buying, refinancing, or equity solutions. He advises others to strike quickly when financial issues arise.

“Nobody wants to deal with money problems, plain and simple. The headache money can cause sometimes is palpable but also somewhat imperative due to the ability held in the nature of money. Regardless of who you are or what your company does, problems related to money will appear far more frequently than you’d like. In my experience, your gut instinct may be to avoid the issue because of the headache it will cause. But, this will probably result in a much bigger issue as you allow it to fester. Do not wait to solve any money problems.”

5. Know the big picture.

Outset Financial specializes in life insurance and financial education. Their CEO, Heather Pulier, believes staying in tune with the larger trends of finances may be helpful to most.

“There are truly only a handful of positions within a company that need to be well versed on the fine details of a company’s economic status. But, everyone should know the big picture of what’s taking place and how it affects their roles. What guides the company’s profits? Are there any big expenses on the horizon? Are we meeting the performance goals set before you? These types of questions should be where you start forming a foundation for understanding business finance. From there, you should begin to dive a little deeper. Effectiveness cannot come without awareness.”

6. Over-prepare.

The world of business does not have mile markers to indicate when difficulties or opportunities will arise. Being ready for either of these scenarios is the best course of action. Winden is a business providing banking services for digital businesses. Their CEO and founder, Daniel Sathyanesan, proposes this approach.

“Nobody knows when the next big moment will show up in their business. A new proposal could show up on your desk one morning that could spark growth as you’ve never seen. On the other hand, business does have a fickle streak to it so your train could start to fall off the track at a moment’s notice. Either way, if you’re not over-prepared in advance, your company could miss out or begin to sink. Make sure you have necessary funds stored to be effective when these things happen.”

7. Seek to eliminate cost.

Russell Liberman is the founder and CEO of Altan Insights, a brand offering creative opportunities for investing. He cautions those in charge to be wary of where money is being spent.

“When some people think of seeking ways to eliminate costs from their business they may consider cutting quality in order to achieve savings. I would never advise this. What I would advise is to do your due diligence when getting quotes for expenses and be sure to find the very best deal available. It’s a lot of work to turn over every stone but that effort will be monetarily rewarded. I also advise doing some digging through financial records to better understand where every dollar is going as there is probably something in there worth eliminating. After a while, some expenses just get lost in the shuffle.”

8. Focus on timing.

Acre Gold specializes in a subscription service for buying and saving gold. Their head of operations, Jared Hines, considers attention being paid to how and when financial matters are being handled.

“Waiting around for a client to pay for services is never a great feeling. It’s one to both avoid and learn from. First, be sure you’re clear with your clients about efficient payment so your company isn’t left out to dry. There’s nothing worse than being hampered by a late transaction. Second, late payments are an example of what not to do. Being quick about paying anyone you owe so your reputation and relationships can blossom.”

Operating within the world of business finance is not the easiest task to do. It’s not only daunting because of the ramification but also confusing because of the math. Anyone can have money but not everyone can understand and use it. Rich Global founder Robert Kiyosaki put it best, “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”

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