Financial Training Transforms Employees Into
Profit Driven Entrepreneurs
Everyone knows that entrepreneurs are always looking for ways to make profits. How successful would your business be if all your employees thought like entrepreneurs?
The key is financial training. Recently, I worked with 10 employees of a multinational corporation and found about $400,000 in cost cuts during a two-day financial training class.
Did I mention that this was a union shop?
Fear and loathing of finance. I started the training by digging deep into the philosophies and mechanics of personal finance to find some comfort in a subject many people despise. After heated discussions and some pretty significant personal revelations, the employees were very engaged in the subject matter.
Sparking the entrepreneurial fire. Almost everyone dreams of starting some kind of business. As a group we created a business plan for a start-up company including calculations for start-up costs, profitability and practical operations. The employees transformed into business owners during this process and they watched expenses like a hawk.
Taking ownership in the company's books. Then I brought the lesson around to their employer's finances. We analyzed every aspect of the company's financial statements as if we were the owners. How much would we pay for this company? Is it earning a good rate of return? Could we make more money investing in another company?
This exercise was designed to align employee interests with that of the stockholders. They ceased being employees interested only in their next paycheck and were now focused on how to get a better return on investment.
Cutting their own costs. Next, we examined the revenues and expenses of each employee's department. We talked at length about each department's value to the company. How does it contribute to the company's profitability and cash flows? We found practical solutions for cutting costs and improving profitability while maintaining, and sometimes improving, service quality.
The result! With only two day's time, 10 non-financial, non-managerial employees discovered about $400,000 in profit improvements. Just think of what can be accomplished after the rest of the employees are trained to think like entrepreneurs!
Noelle Nitz of Nitz Consulting provides CFO services and financial training to companies interested in improving cash flows and profitability. www.NitzConsulting.com