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Commercial Awareness
Training your employees to understand your business
Managers naturally expect employees to make commercially
sound decisions. A reasonable expectation, but is it realistic? Unless employees
understand how the business works, they are not likely to meet this expectation.
Commercial awareness means the ability to make decisions
based on an understanding of how the business works financially.
Through our program, which is totally hands-on where the
key learnings are derived through business simulation, employees are in a better position
to make decisions, which enhance the profitability of the business.
As employees increase their commercial awareness, they:
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develop a more commercial, work- focused
mindset |
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more readily accept the need for performance
measurement and KPIs |
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become more realistic about their demands for
capital investment |
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are more responsive to budgets |
Learning Objectives
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To familiarise participants with basic
financial concepts, such as profit, return on assets, debt, equity and depreciation. |
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To enable participants to read and interpret
financial documents, such as Profit & Loss Statements, Balance Sheets and Budgets. |
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To ensure consistent shared experience and
language around commercial and financial matters. |
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To enable participants to analyse the
commercial impact of their decision-making. |
Outcomes
The primary outcome of the Commercial Awareness program is
a greater understanding among employees of the financial aspects of the business.
Some of the more specific outcomes achieved through people
becoming more financially aware are:
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Understanding of the key cost drivers of the
business and how each person's actions on these cost drivers affect the bottom line. |
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Ability to differentiate between operating
budgets and full cost of services. This assists with focusing on reducing overheads
and operating costs. |
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Appreciation of revenue base: who are our
customers and what is their contribution to our income and margins. |
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Appreciation of the need to make a return
based on the capital employed. |
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Understanding of how cash flow and hereunder
stock, creditors and debtors impact the business. |
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Reduction in outstanding accounts and stock. |
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Maintenance and improvements in margins. |
Content
Below are some examples of our Commercial Awareness
modules, which are tailored to suit the client's business.
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Profit - Why is it important, How do
we contribute, What are the basics of the P&L. |
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Cash Flow - What does it mean to the
business, How does what we do impact on stock levels, debtor days and creditors. |
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Cost Structure - Direct and indirect
costs, Full cost of labour, Cost of capital, Efficient use of assets, Economies of scale,
Competitors' cost structure. |
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Budgeting - Why is it important, Who
inputs what and when, Basics of the balance sheet, Maintaining margins. |
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Return on Investment - ROI / ROA -
What happens to the money invested in the business, Cost of funds, Asset life, Utilisation
of assets, Depreciation, Payback period. |
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Shares - Share prices, EPS, Rations,
Link to reporting, Share plan, Superannuation. |
What next?
If you are interested in more information please give us a
call on +61 2 8399 0011 and ask to speak to one of our consultants.
Alternatively e-mail us at info@emdgroup.com.au or use the form on
our Contact Us page. |
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