Tight Bond Between Strategic and Financial Success: 3 Questions & Answers

Entrepreneurs, senior management and business owners are aligned in that all want successful outcomes and business growth.  However, often the entrepreneur and/or senior management become so involved and focused on business strategy that aligning financial strategy with the business owner (or potential business owners) goals is lost in translation.  The pot of gold at the end of the business rainbow is dependent upon aligning both the strategic and financial plan.

3 questions to check whether strategic success is aligned with financial success:

  • Can the strategy be described in an “elevator pitch” that includes financial goals?  Often the business strategy is described in much detail but when financial questions are asked, there is no clear answer.  Be able to give a clear financial response when investors or potential investors ask for strategy or plans.
  • Does the financial strategy support the strategic business plan? Often in a strategic growth discussion, there are many projections and clear business strategy goals.   It is important to also consider the financial strategy aspects of these goals in creating the strategic growth plan.  Does 10% growth for the business revenues require 0%, 10%, 20%, etc…increase in costs?  It is important to be able to articulate these relationships and what growth means to the financial strategy.
  • Is there clear alignment between the strategic growth milestones and the financial strategy milestones?  Often times the strategic business description includes in-depth and well articulated business success milestones.  However, these milestones must be aligned with clearly articulated financial strategy milestones in order for business owners (potential owners) to have clarity and comfort in a business’s long term success.

Driving business success is an exciting goal for all business’s.  Even though the business strategy is often easier and concrete than the financial strategy, long term business health and well-being is concretely centered on the financial strategy.

Leave a Reply