Welcome and thank you for joining for this course on – Business Finance – brought to you by Constructum Online Learning
What is Business Finance?
Business Finance relates to:
· How a business fund its operations,
· How a business manages its cashflow,
· How a business makes investment decisions, and
· How a business generates and realizes Shareholder Value
Before we start, I would like to ask you – What are you aiming at?
Entrepreneurs often start out as hustlers, selling other people’s products. And there is nothing wrong with this. If you are just starting out in the world of entrepreneurship, hustling is great. Hustling affords you an opportunity to make some money and learn valuable skills.
But hustling is little more than being an outsourced salesperson for other businesses.
The next step in developing your career as an entrepreneur is to formalize a business. Set up your own company and join the world of the self-employed.
Start building a machine with people, processes, and policies.
· People to do specific tasks,
· Processes, the how of doing things, and
· Policies, the rules you create within your business.
But being self-employed is a little like a gardener pushing a wheelbarrow. Have you seen a wheelbarrow? One wheel in the front, with two stands at the rear, and two handles to hold unto whilst you push.
You can get a lot done with a wheelbarrow. The thing is. A wheelbarrow only works when you grab it by the handles and push!
Being self-employed is a little bit like pushing a wheelbarrow; nothing works unless you do! Running a business as a self-employed person is like pushing a wheelbarrow, your constant involvement is required. Let go of the handles, and the wheelbarrow stops.
To make the transition from self-employed to business owner requires operational and financial independence. The business must develop the internal capacity to operate independently. This allows you to make the transition from working in your business, being self-employed, to working on your business, becoming a business owner.
But, for you to build your business into an Asset of Value, the business must become financially independent also. The ultimate aim for the business owner is to one day realize their investment by disposing of their ownership interest in the business.
What are you aiming at?
Very few hustlers successfully transition to become self-employed, and fewer still to become business owners.
Understanding Business Finance is critical to the entrepreneur who wants to build a business into an Asset of Value with a view to one day realize a healthy profit.
At Constructum Online Learning we aim to provide you with content with which you can develop skills to become successful in business.
You may also be interested in a recent course I completed on How to Create a Winning Marketing Strategy.
From business-idea to profitable business.
You need to develop skills in five critical areas:
Product Development – All businesses start with an idea for a product or service. Your first job as an entrepreneur is to develop your idea into a product that you can take to the market.
Marketing – Having developed your idea into a product you now have to find a customer willing to buy. The ultimate aim of Marketing is sales.
Operations – You make promises to prospective customers in your marketing messaging. Now, you must deliver. You need to design and develop a machine in the form of a business with people, processes and policies to produce your product or deliver your services.
Accounting – Accounting systems to keep control of cashflow, costs, profits, and shareholder value.
Business Finance – You need money, access to capital, to facilitate trade, acquire equipment, invest in assets, and ultimately realize shareholder value. How do you access capital effectively and efficiently? That is what Business Finance is all about.
All of this may sound very intimidating. And to some extent it is. Entrepreneurship is hard. Luckily you don’t need to become an expert in each of these fields to start. But you do need to develop skills in each of these areas to successfully navigate the world of entrepreneurship.
Your success or failure as an entrepreneur has less to do with which of these areas you are very good at, and more to do with which of these areas you are lacking in. Develop your skills in each area as you grow your business into an Asset of Value.
As we go through the course you will notice at the bottom of the screen tabs that highlight – I include this to help you see how we progress. You don’t need to take notes as I provide you with a comprehensive guide available for you to download as part of this course.
The course consists of 6 sections.
1. In section 1 I introduce you to key concepts and principles to lay a foundation for understanding the topic of business finance.
2. In section 2 I address the topic of how to fund business operations.
3. Then in section 3 I talk to you about how a business manages its cash flow.
4. In section 4 you will learn how financiers and investors differ, and how you need to approach either of these two funders.
5. Section 5 is about investing decisions from three perspectives: the business owner, the business itself, and from prospective investors.
6. Lastly, in section 6 I will talk to you about how a business generates and realizes shareholder value.
