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Johnny Martin

Page history last edited by sceptrept 11 years, 5 months ago

Learning to understand business finance

Johnny Martin, Finance Training and Advice to Entrepreneurs

 

Many professionals will at some stage of the careers get involved in the financial side of a business and a basic level of financial literacy is useful to include in the education of all professionals. But basic financial awareness is often missing from professional training in many disciplinary areas. Finding ways of delivering this type of training in a cost effective way is a useful goal.

I am involved in enterprise education and of all the modules in enterprise courses, finance is the one learners seem to dread most.  This “fear of finance” is pretty well universal - it is the combination of dreaded numbers with the jargon that generations of accountants have invented, probably for obvious commercial benefit.

So many entrepreneurs come away from financial meetings bemused by what has been going on – and yet it is crucial for the success of transforming ideas into businesses that entrepreneurs can talk to and understand the money men.   Dragons Den has cruelly exposed how financially illiterate so many people are – even those who are already in business.

The purpose of this paper is to focus on how we can promote financial business literacy and an interest in financial matters. 

Motivation is a crucial starting point.  Even before the credit crunch business TV programmes and personalities were making young people more familiar and interested in business.  The challenge is to develop and deepen this interest to include cash flow and margins.  Paul Smith (inventor of “Who wants to be a Millionaire”) told me – don’t go into business if you aren’t prepared to negotiate the cleaning contract, and along with the cleaning contract goes basic financial literacy.

So if we can further develop motivation, the next hurdle is to overcome the “loss of face” issue – taking the first step to put your hand up and admit I need finance training.  There is a presumption that people learn finance like parenting – on the job! 

It is here that tutors and teachers need to recognise that learning the language of finance (break even, gearing etc) requires sensitivity, and creativity.  It requires delivery mechanisms that learners can relate to and not have their fragile confidence shattered.   I have found that the use of  video/digital media, keeping the numerical aspects as simple as possible to explain concepts, using real life business examples and finally avoiding at all costs overloading the learner with too much information.  Examples of my video work will be shown during the presentation and be available for viewing afterwards.

 

Key words:  financial training, business plans, enterprise, start-up, raising finance

 

 

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