Top executives share 16 tips that fuel corporate finance
The success of a well-run business is not determined solely by its levels of financial performance, and that is why leaders must take a holistic approach and consider how each area of the establishment and the decisions made regarding specific contributions to the company can reinforce it. or make it heavier.
As you strive to achieve your financial goals, it’s also important to strike the right balance and prioritize how to maintain a stable cash flow and make wise choices about how and where to invest your time and money to elevate the organization.
Here are 16 members of Fast Company Board of Directors to share some of the best practices they received on how to manage their business finances.
1. DEVELOP A LONG-TERM PERSPECTIVE.
As Warren Buffet says, “Think long term.” As a manager, you have to live months or years ahead of where your business is today. Ask where you want to be in a year and invest appropriately. The one you see succeeding today, made his preparations long ago. This philosophy has allowed us to grow steadily 25-30% year over year and to be on the Inc. 5000 list for the past two consecutive years. – Andrei Kasyanau, Glorium Technologies
2. TRAIN AND DEVELOP YOUR EMPLOYEES.
Investing in your employees and their growth potential is something that few entrepreneurs think about. Setting aside a budget for learning and development each month, so that your employees are encouraged to learn, is related to finances, as a more educated workforce will help attract and satisfy more valuable customers. When employees grow, the business grows, and so does your financial situation. – Candice Georgiadis, Digital Agency, Inc
3. INVEST IN A STRONG MANAGEMENT TEAM.
Strong leaders don’t come cheap. While it may seem counter-intuitive to invest in well-compensated employees, I’ve been told it’s a critical component that enables scalable growth. I am grateful for this advice, as it has allowed my business to grow steadily over the past few years. – Jason Hennessy, Hennessey Digital
4. ENCOURAGE FINANCIAL RESPONSIBILITY.
Manage your business as if you were managing your own personal life. Be aware of your cash flow and how you deal with your debts and encourage your employees to do the same. If you own and foster a culture of responsibility to treat all company money as if it were your own money at stake, you will create a company where others will feel empowered to understand and properly manage profits and losses. – Little Rader, Ergobaby
5. TREAT CASH FLOW LIKE A PARTNER.
Respect cash flow as if it were another partner in your business. Don’t loot it, borrow it, or abuse it, especially in the beginning. We have a forecast that we update monthly so we know our cash flow each month and what it will be six to 12 months from now. This has helped us absorb the natural up-and-down cycles of a startup and ensures that we can always pay our team and vendors without issue. – Kevin Namaky, Gurulocity Brand Management Institute
6. ASK ABOUT YOUR SUBSCRIPTION SERVICE OFFERS.
The best financial advice I’ve received comes from Salesforce CEO Marc Benioff, which is to sell our subscription services to our customers with annual upfront payments under multi-year contracts. This has allowed our cash flow to grow faster than our recognized revenue and increased our customer retention rates by accelerating cash flow and improving customer retention. – Godard Abel, G2
7. MAINTAIN A COMPREHENSIVE FINANCIAL PERSPECTIVE.
View financial performance as a single indicator of overall business success. Although we are disciplined in working towards a financial goal, we ensure that we also invest in our well-being, our expertise and our growth. By having this holistic perspective, we are able to manage any financial volatility with minimal stress. – Padmini Sharma, Jester and Genie
8. GIVE YOUR STAFF A RAISE.
The best advice I’ve ever received is from financial advisor Tamar Hermes, who told me to consider increasing the budget I had planned for my team. She said to me, “It exponentially increases your bottom line when you think ‘How much time did it save me not having to do this work?’ It was scary at first deciding to pay my team more than I had been paid. And it pays off multiple times. – Anne-David, Legacy launchpad
9. STAY IN YOUR LANE.
You cannot be an expert in everything. Trying to do it all yourself just to save money will likely cost you more in the long run, so knowing when and where to call in expertise to help you is key. Don’t be afraid to outsource other areas of your business until you’re on solid ground and have a better idea of what you can handle internally. – John Bednar, ShipMonk
10. KNOW YOUR NUMBERS.
We track and monitor a few key metrics daily that indicate the health of the business. It’s baffling how many business owners don’t understand the basic metrics that keep their business healthy. Each company has a turnover and a net result, but these are monitoring indicators. We can anticipate problems before they appear on an income statement or balance sheet by focusing on leading indicators. – Austin Vance, Targeted laboratories
11. GROWTH IS EVERYONE’S PURPOSE.
“Growth is everybody’s business,” said a Fortune 100 CFO after asking me for my opinion on what his marketing team considered their job. People can get lost in defining roles without understanding how the company makes money. – michelle hayward, blue dog
12. NOTHING COMES FREE.
The best financial advice I received was that nothing is free and we need to understand what is at risk. When you know what’s at risk and feel comfortable with it, you can move forward regardless of the outcome. When you understand that nothing is free, you are ready to see what is at stake and what the true value is for you. – Tony Martinetti, Inspired Coaching
13. LIVE WITHIN YOUR MEANS.
Live within your salary, then invest the difference for future growth. I have used these tips to guide spending and investment decisions. We kept our expenses in line with plan and invested for growth in marketing once we reached our margin target. Planning for both operating your business and investing for growth is essential for long-term success. – Matt Dom, FifthVantage
14. PRIORITIZE YOUR SAVINGS.
Save when you can’t afford it. Having a fixed amount of money withdrawn from your bank account each month that is invested in something you cannot touch, and that accumulates over time. You will wake up one day with a pile of money you haven’t thought of. Treat this investment like any other essential business “expense,” such as a mortgage. – Mike Koenigs, The Superpower Accelerator
15. START SMALL AND TEST THE MARKET.
When starting a new business or launching a new product, start small. Take the time to really test your concept before scaling your business. Not doing your homework to confirm you have a viable product first can be a very costly mistake. – Kelley Higney, insect bite thing
16. WORK HARD AND STAY FOCUSED.
The best financial advice I’ve ever received was from my dad when he told me that if I wanted to be successful, I had to work hard and focus on my goals. He also told me that it is important to have a financial plan for the future so that you don’t go into debt. – Kristine Marquet, Marquet Media, LLC