In an economy that appears to be dwindling, great management skills and good financial knowledge are financial literacy factors that can single out your business, during economic hardship.
Investors want to see the viability of your business, in times of economic downturn. How you are able to put your Profit and Loss account and Balance Sheet together, without crossing the red line. This results in you, having a bargaining chip for a long term investment, with potential investors.
It is clear as crystal that, a well-driven business, especially, in the times of economic downturn, has the potential to attract investment.
From various indications, it can be said that the success of a business, lies in good leadership, strategic planning, and a good structure workforce, but an aspect exists, which we must not overlook and that is financial literacy.
The dealings of an organization with numbers should not be left flying in the hands of the financial members of your organization alone. For your business to thrive beyond expectation, an awareness of financial management is necessary, at all levels of your business structure.
People do not necessarily have to get a mastery of the financial process at the initial stage. The more they get to work with it, the more conversant they become with the process and that makes them better off and this rubs off positively on the fortunes of the business.
Richard Ruback, Professor at Harvard Business School and the co-author of the HBR Guide to Buying a Small Business, reiterated that “if you can speak the language of money, you will be more successful.”
Having the basic knowledge of financial decision-making tools, while grasping the concept of cash flow and profitability will encourage effective participation of non-financial folks in your business strategy.
People with financial literacy have the capacity to identify potential pitfalls before their impact disrupts the financial performance of a business. Not only that, but they could also assist in identifying financial misappropriation in organizations, making them halt ongoing and potential fraud.
Equipping your business team with the power of financial literacy is a good strategy for a business looking to set itself in a position for growth and investment.