What Does Commercially-Minded ACTUALLY Mean – Business Fixer Podcast 005
In This Episode You Will Discover
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Hosted by Haroon Rashid, the Business Fixer Podcast is for any business owner who wants to know how to get from A to B in the simplest possible way. This business podcast is full of business tips including leadership, sales, marketing, finance, culture and much more. Does something need fixing in your business? Don’t know where to begin with your startup, grow or turn around your business? Whether you’re a startup, established business or a multimillion-pound business, the Business Fixer podcast will help you understand where you are, clearly define where you want to be and guide you on the road to get there.
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SHOW NOTES
Financial Guides
TRANSCRIPTION
Hey, sports fans, and welcome to the Business Fixer Podcast where we believe that clarity is king and simplicity is queen. I am your host Haroon Rashid. And today is episode five. What does commercially minded actually mean? Something that I’m really excited to do? It’s very close to my heart and definitely a big part of my business journey.
The Business Fixer Podcast is sponsored by Dad Mode, which is funny dad t-shirts, dad jokes t-shirts, and you all know some dad or some guy who loves dad jokes like myself who would get a kick out of this. And as it is, father’s day coming up soon, there is a father’s day sale where you can get 15% of all t-shirts.
So that is dadmode.co.uk And I’ll put the link to that in the show notes on the business, a website. So diving straight into today’s episode, what does commercially minded actually mean? Well, look early in my career. I used to say that I was commercial or commercially driven. And do you know why I did that?
It’s because everybody and their dog said that they were it’s a business buzzword or a phrase that people use to sound clever. I guess I’m not really sure why, but everyone claims to be commercial and I was the same, but you know, the truth is that back then I was not commercial. I just thought I was, I didn’t have the foggiest clue about what commercial reality was.
I didn’t know that there was three financial statements. I didn’t know what they did and I didn’t know how they linked together. But if you were in the same place where you might think y’all not as commercial as you probably could be. In this podcast episode, I want to tell you what I believe commerciality is not what I think it is.
And I’m going to give you some really cool resources to help you along your way to be more commercial and more commercially minded. So, yeah. Let’s start with what commerciality is not. So I actually looked up the definition of commercial reality or commercially minded, and I came across a definition in the Collins dictionary.
And this is what it said. You ready? Here we go. Knowledgeable about business, interested in making money. Hmm. Well, I, I, wasn’t very blown away by that, so I’m sure you’ll agree like me. I know a lot of people who are knowledgeable about business, but they aren’t commercial. I know a lot of people definitely who are interested in making money, but then not commercial.
So there’s a bit of a disconnect to what I believe is commercially minded and what the Collin’s dictionary definition is. So I don’t really buy that. I mean, the other thing I don’t like about it is that the definition is very noncommittal. It’s very kind of a it’s like, yeah, but knowledgeable about this and yeah, I’m kind of interested in that.
It’s not really what I think true commercial reality is. So. Let’s start with how to tell if someone is commercially minded. So commerciality is really rooted in the numbers and the financial numbers. There’s different types of numbers in business that you can look at, but how do you know which ones really matter?
A commercially minded person knows which numbers are important at any given time. They know the drivers and the blockers to those numbers and they can make those numbers appear on any statement they want. That’s pretty cool. Isn’t it? So you can look at any number. On the financial statements. I mean, if you think I don’t like what I’m seeing there, you’re able to affect change and drive performance and show them the number that you want to see, which kind of brings me onto the next bit, which is commercially minded people understand.
The three financial statements. So if you will like me earlier on in my career, I didn’t know what these financial statements were, but here we go. Here they are. Firstly, you’ve got the profit, the profit and loss, or the P and L secondly, you’ve got the cashflow statement. Thirdly, you’ve got the balance sheets and don’t worry if you don’t know anything about these statements.
If you go on the show notes on business, fixer.co.uk, I’ll put the links to the guides that I’ve created for you, which are completely free and you can start to avail yourself of that information. Commercially minded people will, um, know what these statements are. And you know, what, if you want to test someone out, if they’re commercially minded or not, you could ask them some really basic questions.
Like where would you find shareholder value? How do you calculate gross profits? How do we recognize income on the P and L? These are really basic questions. And if someone didn’t know the answers to those, I would question that commercial reality now. I said the first step was that commercially minded people understand the financial statements.
The second thing that commercially minded people do is that they drive the numbers. Okay. So it’s one thing to understand the numbers. It’s a whole other thing to drive the numbers. Now, this is the thing chartered accountants. Well, you know, well educated, well qualified people can tell me what the numbers are.
But how do you drive the numbers? That is a completely different skillset that commercially people, uh, commercial people have. So. If you want to drive the numbers, first of all, you know, you need to know which numbers to drive. For example, in a business turnaround situation, the focus can often be, we need to increase turnover.
Now. It’s not that that’s incorrect. It’s just incomplete turnover alone. Isn’t the only way to turn a business around. What about cost-cutting? You know, you can do that. I know that in one business, I worked with a business that decreased their cost of sale by around about 6,000 or 7,000 pounds a month that equates to over 80 grand a year.
Just think about that. So without having to increase turnover, we were able to save 80,000 pounds a year. That’s a lot of money. That’s commerciality. Now, the tweak that we made wasn’t mystical, it wasn’t magical. It was common sense. All it took was a commercial person to look at the right numbers, apply a better economy, apply a bit of common sense and get it done.
So the other thing you can do is to review your cashflow statement, go through all your expenses line by line question, every single expense and say, what is this? Why do we need this? Do we actually need this? And these are the kind of basic questions a commercial or a commercially minded person would ask.
It’s not about advanced strategies, guys. It is about keeping it so simple going through your expenses and just asking those questions. You know, what, what is that payment don’t know. Okay. Do we need it? I don’t know. All right. Can you go find out for me? I’m more from the night you’re paying for stuff you don’t even need.
It’s not commercial. It’s actually common sense. So what I would suggest is if you want to improve your commerciality, there is a great book that I always recommend to people. Again, I’ll put the link in the show notes and it’s called finance for non-financial managers by Jean Cecilia. Arno. Yeah. A fantastic book.
And I’ve given this to so many directors who wanted to improve their commercial LT. And we all swear by that book. Again, if you go into the show notes, you can check out the profit and loss 101, cashflow 101 and balance sheet 101, which will give you a nice starting point for understanding the numbers.
If I were you. And I wanted to just be more commercially minded, I would just get to work on understanding the statements first, once you’ve got that. Then you can move on to the second thing, which is how to drive the numbers. And they haven’t. I hope that you’ve enjoyed today’s little, uh, musings about commerciality as always.
Don’t forget to check us out on businessfixer.co.uk, go and check out that father’s day sale. dadmode.co.uk, where you can go and get some great father’s day gifts for your loved ones. And as always, I’ll see you next time, sports fans.
