Download - Business Acumen - Ken Flamer
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Business Acumen
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• Understand the financial components of business
• Identify the levers that affect profitability
• Relate your personal finances to business finances
• Make more profitable decisions
After this course you should:
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Business Acumen
What is it?
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Business Acumen
What is it?Keenness and Quickness in understanding and dealing with a business situation in a manner that is likely to lead to a good outcome.
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Improve Profitability
Business Acumen
How?
Making good decisions
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How does the board look at the company?
Company View
Business Acumen
Bottom line
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How does the CEO see the store as a unit?
Business Acumen
Store as a unit
Talent and the P&L
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Series of numbersWhat line item does your role impact the most?
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Revenue
PROFIT
Business Acumen
Margin
SG&A
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What is revenue?
Business Acumen
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What is margin?
Business Acumen
Selling price minus purchase price
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What effects margin?
Business Acumen
Discounting Obsolescence
Returns
Incorrect Stock Position
Coupons
Damaged Gear
Shrink
Competition
. . . and more
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What does this stand for?
SG&A
Business Acumen
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Selling, General & Administrative
SG&A
Business Acumen
Payroll
T & E
Marketing
Rent &Utilities
Supplies Hardware
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Profit
Business Acumen
Revenue minus expenses - EBITDA
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What is wealth?
More passive income than expenses
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Personal Finances
Business Acumen
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What is your personal revenue?
Business Acumen
Salary, Bonus, Passive Income
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What is your personal margin?
Business Acumen
Wages minus costs associated with earning them
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What is your personal SG&A?
Business Acumen
Rent, “workers,” T&E, utilities, food
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What is your personal profit?
Business Acumen
Savings, investments, money not needed for 60 days
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What happens if you spend every dime you make?
What happens if you don’t spend any money (besides on essentials)?
Long-term vs. Short-term
Business Acumen
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No cash, no savings, miss opportunities, no long-term prospects
No growth, old equipment, appearance is poor, no long-term prospects
Long-term vs. Short-term
Business Acumen
Spend
All
Spend
None
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How do we increase revenue?
Business Acumen
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More customers1
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Maximize each customer
Business Acumen
2
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Growth
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What can we do?
• Anything to keep expenses down
• Anything to help others see how their daily decisions impact the financials of the company
• Anything to bring in more revenue
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StoreRevenue
Margin
SG&A
Profit
PersonalSalary, bonus
Car, Gas, Clothes, Lunch
Rent, T&E, Services
Savings
Finance Grid
Business Acumen
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Putting it all together
Business Acumen
Make better decisions
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