The term ‘business acumen’ is a relatively vague and widely used entity, and one that may mean slightly different things depending on your knowledge base and field of expertise as an entrepreneur.
Regardless, it’s crucial to understand your financial bearings and foundation as an entrepreneur, especially if you’re to operate successfully and invest your capital wisely.
But how can you build your business acumen, and demonstrate increased judgement and insight when investing? Let’s find out!
Don’t Overlook or Underestimate the Numbers
In some cases, you may either dislike or have a mistrust of numbers or simply underestimate their potential impact on your business venture.
However, it’s imperative that you familiarise yourself and experiment with a wide range of relevant numbers to understand the true dynamics of your company finances, as part of a wider internalisation process that seeks to explore potentially profitable business models.
This also enables you to gauge the impact of potential macroeconomic changes, such as an increase in inflation or a scenario where competitors reduce their pricing.
By also analysing the financial markets and assets such as forex, you can also understand the impact of changing base interest rates and fluctuating currency exchange rates.
Understand Different Growth Stages
As your company grows and scales, its financial needs and circumstances will continue to change.
Make no mistake; a business must be ready and able to go through various growth phases in order to become financially stable, both from an internal perspective and that of competitors.
This way, you can manage growth internally and maintain a manageable cost base, while simultaneously adjusting your pricing and marketing to remain competitive with your closest rivals.
Without this approach, you may struggle at various growth stages, particularly in instances where your business grows quickly and you’re unable to adjust your cost base accordingly.
Keep Learning and Adapting at All Times
Last, but not least, it’s imperative that you continue to learn and adapt at all times, as you continue to build your business acumen and adjust this so that it’s relevant to your company’s needs.
Reading is one easy way of continuing to learn and increase your financial literacy, whether you look to consume on or offline materials that can deliver targeted knowledge over time.
Similarly, we’d recommend that you take advantage of the available social networking sites (such as LinkedIn) in the digital age, as searching for relevant partners, blogs and resources can help you to scale your business efficiently as an entrepreneur.
You should also consider seeking out newsletters and the latest information from specific industries, as this can also provide up-to-date and targeted insights that allow you to take more actionable steps.
You could even seek out a private or public mentor, who can offer you access to their wealth of experience in a particular field, marketplace or area of business expertise.