IAM2141 – Understanding the 8 Business Pillars: 7. FINANCIAL

Gresham discusses the significance of understanding that financial numbers are crucial in making informed decisions about hiring and investments. He emphasizes the need for thorough financial planning, budgeting, and the ability to interpret financial statements.

The financial aspect of business goes beyond internal numbers. It includes taking loans, getting investments, and raising capital. Gresham mentions that being a good steward of finances, whether using personal funds or other people's money, is crucial for business growth and scaling.

Gresham also emphasizes the importance of having a Minimum Viable Product (MVP) to prove the case for your product or service and attract investment.

Furthermore, he suggests understanding financial reporting and analysis, forecasting, and budgeting as ways to minimize risk. He highlights the value of continuous learning and being aware of the economic outlook of the industry or location.

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Transcription:

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Intro 00:00

Hello. Hello. Hello. This is Gresh from the I AM CEO Podcast, and this is a special I AM CEO Podcast because we're gonna be focusing on the 8 business pillars. I hope you get to enjoy taking a lot of these different pillars that came from the 1600+ episodes we did at the I AM CEO podcast, which became the 16 themes, which eventually now became the 8 pillars that can help you level up your business.

And, really, what we're trying to do is increase the business success rate, and this is going to eventually become a course. So you hear some of these snippets actually be in that course in that library of content and information we're gonna put together to help you level up. So sit back and enjoy this special episode of the I AM CEO Podcast.

Gresham Harkless 00:39

Know thy numbers, and that is a really huge thing when you're thinking about growing your business. And there's so many different aspects of business, of course, that I'm drilling down on the financial part. Pillared number 7 is what I'm gonna talk about today. But know that each of these aspects in the plane, somewhat of an impact. Sometimes if you focus on one aspect, it could be it's you that growth. It could be for a month. It could be for 3 months. It could be for 6 months or an entire year. If you can really drill down and focus on a specific aspect, it might deter it might generate tremendous impact for you and your organization.

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So I think it's extremely important to be aware of all the different aspects of business, but know that depending on the resources that you have, which is a big part of financial, it's going to determine, like, how you're going to be able to invest those things. And while as much as possible, I try to create a lot more of a process to each of these 8 pillars and how they go and how they flow. Know that if you have a strong financial backing, that might give you more time related to entrepreneurship. You might have a better strategy. You might have better people, the human part that are in the business. Your offering might be better created than than everything else, and you might be able to invest in technology, get your name out more.

All those aspects could be huge. So it seems like each episode I say that this might be the most important thing, but this is also a very important thing, which is why most wonderful, our chart take always says, know your numbers. You have to know your numbers. You have to know your numbers. You have to know your numbers. So with that being said, our number is 8 because we have 8 pillars that we're gonna gotta go through. We've been going through we took over 1600 of our episodes. We drill down that into hacks and nuggets and different things that you can learn from each of the episodes, and we're still continuing to drill down.

But those 1600 episodes plus became 16 topics, 16 themes. Things that consistently came up through each of the episodes, and those 16 themes eventually became what we like to call our 8 pillars. And those 8 pillars are what I'm gonna be drilling down on in each of these episodes. I'm not gonna go through all of them on every episode, but I'm gonna touch on each of them just so you have a greater awareness if you haven't been listening. A little bit more on what this looks like and why this is so important and this is so interconnected.

And that while you can't necessarily focus on all of them, you just wanna know where you are and what's maybe weaker and what's maybe stronger. Because there's an argument to be made that you could potentially not necessarily focus on your weaknesses. You focus on your strengths. You focus on the thinking the most. So if you are a financial guru or accounting your numbers, maybe you get that so streamlined that you know exactly when you can bring on a new person. You know exactly what that investment's going to be. What's gonna be the next thing that's gonna develop that ROI? Because you know your number is front, back, side to side, and all around.

And it's important for you to understand that because there's a case to be made that you don't necessarily hire for your weaknesses. You might hire for your strengths. You create them. You make them better. And when you're able to do that, then it allows you to invest more into your weaknesses. So with that being said, there's so many aspects of financial, and I'll just touch on some of those. But, of course, before I do that, I wanna give you a little bit more of an idea of each of the different pillars.

If you have not been listening, number 1, it's gonna be entrepreneurship in the journey. Number 2 is gonna be all around strategy. Number 3 is going to be your offering or your product and service. Number 4 is gonna be understanding the human part or the people part of your business or organization. Number 5 is going to be operations and legal. Number 6 is visibility. So that's your marketing, your sales, your advertising, public relations. And number 7, which we're focusing on today, is going to be more of that financial piece. And number 8 is gonna be all around technology. So number 8 was something that is a little bit more of a late add on, which is why I brought us to 8 pillars.

And there's many reasons that you love the number 8. But with that being said, we're gonna focus on number 7. Number 7 is that financial piece. So know that going back to pillar number 2, your strategy is gonna be insanely important. Your business plan, there's arguments that say that maybe you don't need a long business plan that you had before. But the important part is that you understand exactly what you're doing because your financial part is gonna be the fuel that's going to determine how long you're going to go and what that looks like.

And if you are not hitting yourself your financial aspects, you have to really look and see why that is. Are you not hitting that financial aspect because the product or service is not happening? What does that look like? So you really want to drill down more and more and more into what that looks like. So know that financial planning and budgeting is a really big part of what that looks like. Know that being able to take your numbers to be able to tell a picture is going to be absolutely huge, which, you know, goes back into understanding the financial statements, being able to read financial statements. And a lot of times, you want to make sure that you're able to have those conversations sometimes with the people that you're hiring or if you do DIY and then doing it yourself.

You just wanna make sure that you are able to tell a story of where your business is so that you can make some strategic investments in the right way to make sure that your business is gonna grow. But know that that financial piece extends beyond the internal numbers. Sometimes, it's if you're taking a loan. Sometimes, if you're getting investments, if you're going down the the path of raising capital. All those aspects play a really big part, and that's why the financial part ends up being such a huge thing. But I think being a good steward of the financials, like, whether you're gonna be using, your own money or using OPM, other people's money, whatever that looks like to be able to grow and scale your business, you wanna make sure you do that.

What happens a lot of times is people have an idea of, like, their product and service they they're offering, what they're doing. They know how they're connected with people. They create, for lack of a better term, an MVP, a Minimum Viable Product. They have that up and going so that they can prove the case for what it is that they doing they're doing so that they can, with more investment, be able to scale that out even more. So a lot of times, you get people that are going through their other parts because it brings them to the financial part.

And because they have a case for what it is that they're doing, they need investment. Or sometimes it just happens where they need more investment to grow, and the fact is that they need that fuel to be able to accelerate the things that they've been doing greatly. And it's so important to keep that in mind. So know that managing cash flow is one of the biggest things. How much money do you have going in and out of the door, knowing exactly where your revenue is going, knowing where exactly your expenses are at, and knowing exactly, like, what that looks like is going to be absolutely huge.

Make sure that you understand your financial statements. You have a really good idea of what that looks like. You're able to read them and understand them. One of the big things, especially around finances, but you'll find that in another aspect. I think a lot of times you hear consistently throughout the episodes, one of the really strong, like, nuggets that came about is if you are the smartest person in the room, you need to find another room. And the reason is because you're going to get that opportunity to level up, but you only get that opportunity to level up.

If you're willing to ask questions, you'll be able to put that EO aside so that you can, for the greater good of the organization, be able to do that. And sometimes around financials, that's where those questions need to be asked. So make sure that you understand those things. One of the other big aspects I touched on a little bit is funding options. How are you gonna grow? What are the strategies around that growth? Going back to pillar number 2, what is those what do those strategies look like? What are the pros and cons of each? What does that look like? Are you selling a part of your business to be able to generate more money?

Does it make financial sense, but also could it make strategic sense by bringing in a certain co-founder, to what it is that you're doing or an investor, that has a lot more maybe of a presence that can really boost the things that you're doing. So you really wanna look at those things and think strategically on what that looks like. And is that gonna be the same for everybody? So that's why it's so important to make sure, that you're being strategic. Understand your financial risk management and try and mitigate the risk. I think at the heart of business, we sometimes forget is to try to minimize the amount of risk that you have.

You can't get rid of all the risk, but you can try to minimize that and mitigate that risk. So understand what that looks like for your current, organization and at its current state and be able to, of course, pull that information together. Next, you wanna make sure that you understand greatly around financial reporting and analysis, so that you so that you can set yourself up for success as much as possible. But those are the big things around financing, cash flow, budgeting, just all those things. Being able to pull those things together to make forecasts and predictions.

And those things are gonna be insanely huge for you to be able to grow your business and your organization. It's not always necessarily the easiest thing, but I think that you can always learn more than what you might know. And some people might consider it to be easy, and those are the people that you wanna be around. Those are the rooms that you wanna be in because that's going to allow you the opportunity to level up even more. You're gonna have greater awareness around your business and know that as much as I talked about around the financial part of knowing your business, also related to the strategic part is knowing the economic outlook for the industry or the location even potentially, depending on if you have a local business or is locally focused or there's a lot of people in a specific area.

Just know that those things play a really big part. So again, just knowing your numbers, but knowing your numbers, not just saying I have X amount of dollars in the bank or X amount of or Y amount of dollars we made, last year, know your cost for cost for, customer acquisition. Just knowing all those things are gonna be huge in terms of increasing your likelihood of success. So knowing that is going to allow you to be a better CEO, entrepreneur, or business owner. It's gonna allow you to build that business and become even more and better of that architect that we're ultimately hoping for.

So with that being said, this is Gresh signing out. Of course, you can always go to our community to check out our library. We have loads and loads of information around these 8 pillars. Super excited to get to drill down more, get to help people to level up from that same point. And most exciting thing is that you're not gonna be hearing from me. You're gonna be hearing from lots of other people like I've been doing throughout all these episodes. So with that being said, this is Gresh signing out, and looking forward to ending everything with our next pillar in the next episode.

Outro 10:55

Hello. Hello. This is Gresh again, and I hope you enjoyed that special episode of the I AM CEO Podcast. Just like I mentioned in the beginning, we're really trying to laser focus on these 8 pillars and show you as a builder how you can leverage these 8 pillars and really level up there so it helps you level up your business and organization.

So hope you enjoyed this episode, and definitely please check out the show notes so you can learn more about the pillar, learn more about the person that I guested on their episode, and, of course, learn more a little bit more about us as well too. This is Gresh signing out. Hope you have a a phenomenal rest of the day.

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