Uncertainty is a part of making business plans. But this should not stop you from creating strategic plans. This is where financial modeling comes in. Financial models do not make the future more predictable but it does help you choose between various options and prepare your business to navigate twists and turns as you implement your strategic plan.
What Is Financial Modeling?
Financial modeling is the act of building a conceptual framework that depicts where a business’ financial situation will be at some period in the future. It is based on real world information gathered from financial statements and market research.
When done correctly, a financial model considers all areas of a business’ financial performance and generates a three statement models, namely, income, balance, and cash flow . It uses clear, logical, and defensible assumptions in order to account for changes in business activity.
Who Should You Use To Prepare A Financial Model?
A financial model is a tool for your business that will be used to aid strategic planning. The person creating your financial model needs to have a strong understanding of accounting fundamentals and financial statement analysis, and ideally has knowledge of your industry.
What Happens After Creating A Financial Model?
While financial modeling can help a buyer feel more comfortable with your growth projections, it is only the first step in this process. You will want to use your financial model to determine the current and projected value of your company to see if it meets your goals. Next, you should detect areas for improvement or investment in your business, and develop a strategic plan for making this all happen.
Make sure to keep records of everything that goes into this process because buyers want to know how close you came to achieving past projections, what actions you took when you deviated or exceeded projections, which members of the leadership team were essential to this process, and how they can take your business to the next level.
Financial model can be used to develop and enhance strategic planning initiatives. It addresses five components: determining if your business’ value is where you want it to be, revising projected vs. actual results, finding opportunities for improved performance, developing action plans to achieve results, and setting the current organizational structure to reflect your business goals.
Why Should You Regularly Update Financial Models?
It is a foregone conclusion that your financial model will differ from what actually happens as time passes and conditions change. And that is why it’s critical to update your financial models and overall strategic plan on a regular basis. Any deviations from the model must be taken into consideration and actions must be taken to correct the issue.
Long gone are the days where career progression was a linear process. Globalization and the use of technology has redefined roles, eliminated certain jobs and even created new roles in an organization. Career path has become more complex and is constantly changing.
So how do you move up the ladder in an ever changing workplace?
Learning is the only way to stay afloat in such a situation. It is the only means to becoming successful and reaching your full potential. A dedicated pursuit of learning, applying new concepts and adapting to situations is the key to career success.
In order to keep up with the fast changes and increasing expectations leaning should be your top priority. Given below are some ways by which learning will facilitate your professional development.
Learning Is Personal
You need to understand yourself first and identify your passions and goals. Your expectations and aim in life will be the guiding factor in pursuit of knowledge.
An underlying sense of purpose is an important element of learning. This will provide your career a sense of direction and meaning.
Learning Is A Part Of Building Relationships
Once we discover our purpose it opens up a number of opportunities in the outside world. Human beings are social creatures and we long to stay connected in a society. Our aims and interests will bring us closer to other people who share the same purpose.
Building relationships with people will greatly enrich your personal life and help you career wise. Staying connected to people depends on your willingness to learn about individuals and help them reach their goals.
Learning Is Practical
We have seen how you can start the learning process. First by identifying and setting your goals and then finding people who share the same ideals and values. Now comes the practical side of learning.
Practical learning can be easily misguided and misunderstood without a general sense of purpose. This is why it is important to understand your career direction. People often waste time and resources on learning things that are not relevant or useful to them in the long run.
With a clear sense of direction you can easily adopt habits that are relevant to your career progression. Relevant information and knowledge can be anything from the latest trends, economic conditions, government policies and other factors that might invariably affect your career or business.
Know your industry first. Listen to podcasts, read books and attend events that pertain to your industry. Try to stay on top of the game.
Learning Is Mastery
Once you understand your purpose, connect with people and have habits that help you stay relevant, the next step is achieving mastery in your field.
To reach your true potential and gain mastery in your field you must adopt more comprehensive forms of learning to develop your skills and improve your knowledge.
It is often believed that more choices are better. Businesses believe in offering a variety of products ranging in colour and models in the hope that it will attract customers. It is easy to believe that more options and freedom of choice make customers happy but this is far from the truth.
Choices Are Overwhelming
When you give people a multitude of options they become overwhelmed. If at all they do make a choice, they often contemplate about what they had to “sacrifice” or not choose when they made their decision. They wonder if a different decision would have made them happier. This leads to unhappiness and never being fully happy with their final choice.
This applies to buyers as well. When you offer more choices to a buyer, chances are higher that he will not buy anything. Too many options lead to anxiety and inevitably, inaction.
Making a decision is a mentally stressful and emotionally taxing process. Considering the varying factors, while making a choice, makes the entire process even more difficult. That’s why buyers find it easier to say a no than saying yes to any one of the options.
Choosing Should Be Easy
Make the entire buying process simple by cutting down your offers. Give your buyers single choice. It should be whether they should buy something or not. In every scenario you must ensure that the decision to purchase is made simple, easy and quick.
Eradicate and remove all unnecessary factors that might prolong or distress the customer. It most cases, it the vast number of options that scare away potential customers.
Simple Yes Or No
Simplicity of choices must be seen even in your marketing and sales messages. Let people make a simple choice within a limited time period.
This does not mean that you offer a single product every time. Consider your target audience and their budget and income. The idea is to provide three different levels of service to accommodate people with varying budgets and needs. This is also called “Olympic Factor Pricing.”
This is especially important when you are selling high end or costly items. It need not be taken into consideration with cheaper products because more products only complicate the process and the complication is not worth the end result.
Simplification Is Key
Reducing your options can also be applied in your marketing strategies. When you want people to share your content online, provide them with lesser options. Choose one or two of the best platforms that appeal to your audience and do not clutter your site with other icons and options.
The same can be applied for e-mail marketing. Do not overwhelm customers with innumerable offers and choices through a simple e-mail. Instead, stick to one major offer which the customer will be automatically drawn to.
Keep your homepage and websites relatively simple and user friendly. Do not bombard potential clients with your latest products and news. A simple website will be easier to navigate and let buyers make their decision.
All in all, if a business wants to improve its sales it must take away the customers’ freedom of choice by removing options. This will make customers happier and earn you profit in the long run.
Brand identity is the collection of all elements that a company creates to portray the right image to its consumers.
Brand identity includes the visible elements of a brand, such as colour, design, and logo, etc.
Complete Your Brand Strategy
Your brand identity will help you in executing your brand strategy. Your strategy is a detailed plan that outlines exactly what you are trying to achieve and how you are going to achieve it. Your brand identity, along with your content strategy, helps you communicate in ways that will let you achieve those goals.
As such, before you dive into your brand identity, it’s important to have a fully fleshed-out strategy.
Understand What A Brand Identity And Its Importance
Brand identity is more than a logo and colour palette. When designing your identity, you need to create a comprehensive visual language that is versatile enough to be applied over packages and used in websites. Depending on your brand, your needs may be more expansive, but a basic brand identity includes:
- Interactive elements
- Video and motion
- Web design
Build Your Identity
Get information from competitive analysis, customer feedback, brand audit survey, and brief to help form ideas. You need to take the text-based information and translate it into visual concepts. Luckily, the information you have is often steeped in emotional language about your brand’s personality, goals, and values. Now the challenge is to figure out how to communicate and enhance those sentiments through visuals.
The goal is to bring those words to life. The associations may be abstract, but it is important to get everything out.
A brand identity is an intricate design system. Each element influences the other, but it starts with your logo. As you go through iterations, flesh out logo mark, core shapes, and complementary imagery—all in black and white. As you receive feedback and iterate, you want to make sure that the core imagery is powerful enough to deliver the message on its own, without the enhancement of colour.
Certainly, emotion plays a huge role in colour choice. This is also, as previously mentioned, a good chance to differentiate.
A good colour palette is clean and flexible.
Your brand identity is a cohesive language. Typography should be informed by the shapes of your logo. You will think it is a simple choice, but typography is just as emotional as anything else. It needs to communicate the brand persona effectively.
Consider the type of imagery you will use, as well as the visual treatments. Include guidance on filters, treatments, sizing, etc.
When it comes to illustration, you need a cohesive and uniform language. Do not over-illustrate or use clashing styles. Instead, think of how your illustration will be used in conjunction with other visual elements.
Again, your brand may have unique communication needs, depending on your industry, content, etc. Make sure that your design:
- Interactive elements
- Motion graphics
- Web design
Build Your Brand Style Guide
Ensure that your designed brand identity is used correctly. A brand style guide should be created promptly.
Include clear, easy-to-follow guidelines for every part of the brand identity, including examples.
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Innovation is simply doing or making something different to meet a perceived need or gap in the marketplace. Ideas are what stimulates innovation, and creativity and conceptualism make those ideas unique. Innovation is not merely doing something different for difference’s sake. Usually, innovation involves creative thinking that escapes from a common viewpoint. It can be difficult when you are customary to something, that you cannot see it in another way.
To help you gather associates and brainstorm here are five tips.
Have A Vision For Change
You cannot demand your team to be innovative if they do not know the direction in which they are heading. Innovation needs a goal. It is up to the leader to set the path for this goal. You need a single statement which determines the direction for the business and which people will readily understand and remember.
Explain to people how their role is essential in fulfilling the vision and meeting the challenges. It motivates people to become passionate about finding innovative routes to success.
Fight The Fear Of Change
Innovative leaders constantly preach the need for change. They replace the comfort of satisfaction with the hunger of ambition. They must paint a picture that presents an appealing future that is worth taking risks to accomplish. The prospect involves risks and opportunities. The only way we can get there is by embracing change.
Brake The Ice With Bad Ideas
At times people feel pressured by the presence of their bosses during a brainstorming session and this stops them from giving their ideas. Logically this fact is not favourable at all since you can lose the creativity of your team because of the shyness or fear of some team members.
To solve this situation, an effective method is to suggest they share bad ideas for a few minutes. You can begin this to break the ice by throwing out there an illogical and least favourable idea. This can be a warm-up session and when all the members have shared their bad ideas and laughed about them without fearing being exposed, they can concentrate better on formulating innovative ideas.
The innovative leader encourages a practice of experimentation. You must teach people that each failure is a step towards success. You need to give people the liberty to innovate, the liberty to experiment, the liberty to succeed. That means you must give them the liberty to fail too.
Concentrate on the things that you want to change, the most important hurdles you will face and be passionate about overcoming them. Your enthusiasm and energy will translate into inspiration for your people. Filling your bus with contented, self-satisfied passengers is not enough. You need people who believe that reaching the goal is really worthwhile. If you need to motivate people to innovate, to improve the way they do things and to achieve amazing outcomes then you have to be passionate about what you believe in and you have to show that passion every time you speak.