After sitting through many lectures on finance, discounted cash flows, etc etc, it always seemed that the income statement and balance sheet were the focus of analysis and value creation.
Now, after traveling the country as a business consultant, and preparing many presentations for investors, I have a better respect for the statement of cash flow and cash flow forecasting. Part of the shift in focus is from the school's need to use static analysis of financials versus the reality of running a business day to day.
Since I am now in the operations side of business, I find that my skills in preparing pro forma statements of cash flow and cash flow forecasting is very important...the key to a company's survival. So how does this translate into your personal ROI you might ask? Aha, the key is in knowing once you enter the business world that the real engine of business is cash and the ability to generate it will make your finance career more bullet proof.
So if you can think along the lines of generating free cash flow for where you work then you are starting to get the focus of a finance person. And...if you can be the steward of creating free cash flow then you are really the master of creating shareholder value! Keep these shareholders happy and you will be successful. The prez will take you to lunch and life is good.
Cash Flow and the Small Business
Career Mentors
It is almost summer and I sit reflecting on my career...albeit by the pool. The reason for the introspection was that I had just interviewed a candidate for a job in finance and when asked why he might choose a path with my company he said he had a few choices but no mentor to help him decide. I could totally relate to that since I have fortunately have had a mentor from time to time.
To me a mentor is someone who takes more interest in the outcome of your situation than you do and that they have the wisdom to guide you without being opinionated. These people are good listeners and have often been exposed to a lot of outcomes over the years...the kind of person who can help you maximize your personal ROI.
Let me share an example of some of the wisdom that has been imparted to me during the years.
(1) When you work for someone it is a two way street; make sure that you learn a skill that will be good for your resume every year.
(2) When you are trying to decide some big career decision think of how you will reflect on that choice when you are 70 years old and looking back on life.
(3) Read a lot of job descriptions to see what skills you will need in a certain career to be employable; my favorite site for this is www.indeed.com.
(4) To be a leader you don't have to be impressive but instead reliable, competent, and original.
(5) Sometimes you have to move to where the hub of the type of job is; NYC or Raleigh-Durham for finance; California for entrepreneurs; Houston for oil and gas etcetera.
There is no substitute for finding someone who is truly a deep thinker and is not just a follower. Don't get me wrong, you can do well following a path but for a mentor it is good to find someone who knows what lies off the beaten path so they can suggest why several choices can take you a certain way. In my experience these have been people who have had to make some sacrifice to get where they are .
