Like many college students, I had absolutely no idea what I wanted to do when I “grew up,” or what subject area I wanted to study as a major. During my first semester, I registered for all the general course requirements. It turned out, my favorite class was Macro-Economics so I decided to declare Economics as my major.I shared that decision with one of my mentors, who gave me an interesting piece of advice. He said:
“If you like Economics, transfer to the College of Business and major in Finance. Go ahead and take as many Economics classes as electives. Because no matter what you end up doing in your life, you’ll need to understand how businesses work. At the end of the day, business decisions are based on financial acumen and it’s a critical foundation to have. A Finance degree is practical and a great underpinning for any career you choose.”
During my career, professional selling has evolved from pushing product to selling value. The Salesforce.com 2nd Annual State of Sales notes that “79% of customers expect more from a sales rep than product knowledge.” Customers are looking for a trusted advisor, one who adds value to their business.
To sell value, it is critical you know what is valuable to the prospect and how that value will be measured. To gain such insight, high-performing sales professionals, who serve as trusted advisors, hone their business acumen. Business acumen is defined as a keenness and quickness in understanding and responding to a business situation. It is the ability to understand how businesses operate and measure their results. In addition, accounting is the language of business and basic knowledge of accounting terms is what we define as Financial acumen.
The good news is that you don’t have to be a financial analyst or have a finance degree to master this knowledge. Simply develop your business and financial acumen by addressing these three questions for each of the businesses you work with:
- What are the industry terms and trends? Staying on top of industry trends gives you a glimpse into what your customers are facing. And most industries have their own language. For example, a healthcare and manufacturing business may both reference the words “quality and safety,” but those terms may mean very different things. It is imperative that you are familiar with and use the same vocabulary as your customers.
- How is the financial health? All publicly traded companies are required to generate and publish an Income Statement, Balance Sheet and Statement of Cash Flows. Sales reps should be well versed in the terminology found on these statements, as well as how to interpret them for a basic understanding of how companies make money and measure their financial performance.
- How is it organized? Understanding how companies are organized provides insight into how decisions will be made and who is likely to be involved in any changes brought about by a purchase.
To become a trusted advisor to your business customers, you must have the foundational knowledge—the business and financial acumen—to add value to the people you are selling to.