Lessons from Wade: How strong financial planning gives you the competitive edgeEmma
South Africa is on a high this week, and anyone who stayed awake until 3am on Monday morning to watch Wade van Niekerk’s 400-metre victory will tell you why. It was an electrifying moment: the unassuming 21-year old blitzed his opponents, won the final and broke Michael Johnson’s 17-year world record in the process.
Van Niekerk is trained by his 74-year old grandmother, who was once herself a highly competitive athlete. In an interview with the Daily Mail, someone close to the athlete shared how ‘Tannie Ans’ had helped guide her grandson to success.
“She has rules, standards and is very much into the discipline of training and competing,” said the friend.
“Tannie Ans has a strict regime and everyone has to respect that.”
Following that ‘strict regime’ is part of what helped van Niekerk gain the strength and stamina to beat his competitors. In the same way, laying out a strict financial regime for your business can help it gain an advantage over others in the industry. Here are three ways to ensure that your financial planning can place your company in a strong position.
- Start with the end in mind. Every successful athlete puts a considerable amount of effort into visualising their win. The night before the big race, they might lie in bed and imagine themselves streaking ahead and snatching the victory. Financial planning should also start with a big picture. That is, first and foremost, your financial planning process should be a strategy session. Where does the company want to be in ten years? What is the vision or ‘one big thing’ you want to achieve? Financial planning should not be seen as a way of erecting barriers to spending. It’s a way of helping your company figure out how it can achieve its dreams.
- Build on your wins. Even though van Niekerk might have dreamed of one day breaking the world record, his mind probably didn’t see it as anything more than a dream at first. It’s likely that he set several smaller goals along the way, and as he met them, he could more realistically chase his bigger aim.
In the same way, financial planning should allow you to take advantage of your ‘wins’. What is the best way of using the extra cash that has come in from a great sales quarter? Should you invest it, expand the business, or give bigger bonuses to your sales staff to incentivise them to keep performing? Effective financial planning will answer those questions ahead of time. As you follow the plan, your company will literally be able to move from strength to strength, capitalising on every time you do well.
- Work out an effective daily regime. A world-class athletic victory only comes about as a result of daily slog. It’s a daily workout programme that stretches the athlete but doesn’t injure him; it’s getting the nutrition that will allow the body to perform optimally. Similarly, your financial planning should translate your overall goals into daily operational objectives. How much money needs to be on hand at any given time in order for your cash flow to stay healthy? How much revenue needs to come in every month in order to meet operational requirements? The better you trace your goals into actionable items that can be carried out by your staff, the more solid your financial foundation.
Start with a dream, build on your wins and determine your operational requirements in order to make the most of your financial planning. If you’re looking for some guidance in this process, contact The Finance Team. Our associates are all highly qualified and experienced, and can help ensure your financial plan is created and implemented in a way that will see you win.