Financial Leadership In The Workplace

By Dave Ramsey

Financial Leadership means following sound financial principles as well as leading your team in the same direction. Following common sense financial strategies at the office can positively affect the company’s bottom line and following them at home can positively affect your own financial situation.

You must SAVE money.
It is going to rain. You need a rainy day fund. At the office it’s called Capital Reserves; at home it’s an emergency fund. Too often companies operate on the edge until something bumps them right off the edge. Your industry has a downturn; your client-base dries up; or regulations change. Life happens, so be ready. This is not a surprise. Sometimes people tell me I should be more positive. Well, I am positive. It is going to rain, so you and your organization need a rainy day fund. Are you and your company ready?

Live on LESS than you make.
You’ve gotta walk before you can run. Ever heard that before? We want the success and everything that comes with it, including the assets. But too often we don’t consider the liabilities. Very often, as business owners and leaders, we get so caught up in setting up the business that we wind up leveraging ourselves right out of business. It’s the business version of keeping up with the Joneses, but whether it’s at home or at work, the Joneses are broke. You want your business to look like the picture of success so you buy all the right office furniture, the special tools, the perfect office location and on and on only to wake up and realize the American dream has turned into your nightmare. I started my business on a card table in my living room. Our first copier came from a used office supply auction. Now I have more than 250 employees. I’m not worried about making payroll or overhead costs because I didn’t spend more money than I made at any point in my company’s history. Are you just trying to keep up with the look of the competition without actually having the means to achieve that look? Watch out! You may look good, but you’re hanging on to the edge by your fingernails.

You must have a written CASH FLOW plan.
And so we’ve reached the dreaded B-word, the BUDGET. John Maxwell has the best quote on budgeting I have ever heard. I wish I had said it: “A budget is people telling their money where to go instead of wondering where it went.” People who win at anything have written goals. Zig Ziglar says, “If you aim at nothing you’ll hit it every time.” Money won’t behave unless you tame it. Brian Tracy, says, “What does it take to succeed on a big scale? A tremendous God-given talent? Inherited wealth? A decade of postgraduate education? Connections? Fortunately for most of us, what it takes is something very simple and accessible: clear, written goals.” Know where the money is going to go ahead of time; don’t just look at how much you spent after the fact.

Live DEBT free.
If your organization is “normal” it has debt, and I’ll bet there’s lots of it. But let me ask you this: What could your organization do if it was debt free? Imagine layoffs, downsizing, transfers, giving employees “the opportunity to succeed somewhere else,” or firings not having to be one of the first options during economic hard times. Cash flow drains of debt payments lead to business failure. The dream of your organization can become a nightmare because of the debt.

Obtaining the status of wealth while remaining debt-free is possible. I get pounded by financial talk shows and so-called experts who say that I’m too simplistic and they know how to use debt, “Debt is a tool; it is used to lift things like a lever. In a capital driven market, how can you ever expect someone to open and operate a business without going into debt?” Guess what? People do it every day! Debt brings pain and suffering, and magnifies stupidity.

GIVE
You can only do three things with money; Spend, Save and Give. And by far, giving is possibly the most fun you and your organization will ever have with money. FUN is good, but you will tire of golf and travel, and if you eat enough, lobster starts tasting like soap. I can promise you from meeting with literally thousands of business owners and leaders, the thing that the healthy ones share in common is a love of GIVING. Money gives power to good intentions. That’s why I’m unashamedly in favor of building wealth.

Don’t get me wrong; money is not the only way of giving. By building a financially healthy organization, you free your business to be able to give in many other ways: time, volunteer efforts, business mentorship, the list is endless.

With wealth comes great responsibility. It will make you more of what you already are. A culture of volunteerism, charitable giving, and community involvement can have a huge impact on your community and your organization.

About the Author
Dave Ramsey offers life-changing financial advice as host of a nationally syndicated radio program, “The Dave Ramsey Show,” which is heard by nearly 4 million listeners each week, on more than 375 radio stations throughout the United States. The author of multiple New York Times best-selling books, Ramsey added television host to his title when “The Dave Ramsey Show” on Fox Business Network debuted nationally Oct. 15, 2007. For more information, visit www.daveramsey.com