Traditionally, financial literacy has been approached either as budgeting 101, or a precursor for a career in investing. Now more than ever, there is a need for financial literacy that targets a gray area in between- where business and financial investments collide.
Thousands of ambitious entrepreneurs start a new business every year filled with hope and excitement. Before personal funds are depleted, entrepreneurs begin to search for investors who will see the value in their startup, including venture capitals and private equities. These investment firms have a keen eye for growth and know exactly what to look for in investment opportunities.
In 2021, global private equity transaction volume ended the year at approximately $1.2 trillion, representing approximately 20% of overall global merger and acquisition (M&A) volume and an approximately 111% increase over 2020. This is a huge pie and, unless you’re a professional investor, you may not have even known that there was a bakery.
The potential for investments is great, and growing every year. Here are three reasons why you should train your employees in financial literacy to expertly navigate the financial world.
- Recognize sound investments
Investments will, and should look different to every company. At the very basics, your employees should be able to recognize investment opportunities that align with your company’s goals and objectives. On a more advanced level, employees should know the hows and whys of diversifying a portfolio and how to make the most from an investment while cutting costs.
- Seize key partnership opportunities
If you can’t beat ‘em, join ‘em. Even if your company is an industry leader, it is unlikely that you are the best in the sector at everything you do. Forming alliances with firms that complement what you offer or niche companies that specialize in providing certain products or services can help you fill in gaps in your products, services, or expertise. Partnerships between large corporations and startups can also be mutually beneficial, as well as reaching outside of your industry. Financial literacy training can help you to understand where your weak points lie in your business and take advantage of key partnership opportunities.
- Take strategic risks
Risk taking can revolutionize business, but you need to know when and how to take a strategic risk when the opportunity arises. Managing risk means effectively assessing a threat by recognizing the probability of that risk occurring and evaluating the impact of the risk should it occur. This is a skill that can be learned, but is too risky to practice on the job. Your employees need a learning environment in which they can practice making strategic risks and hone their decision making skills without the worry of grave mistakes.
By educating your employees in financial literacy, you will set the stage for a financially strong company in the future. Train your greatest assets, your employees, to help you branch your business by making them part of the growth. This comes from ongoing training in financial literacy. Scenario based learning is the perfect solution for financial literacy training. As an asynchronous eLearning experience, it offers a safe space to practice taking risks. Branching scenarios can offer scenarios which show the effects of seizing partnership opportunities and help recognize sound investments. The nature of financial literacy also sets itself up perfectly for gamification, which increases motivation and morale in workplace training.
Investments no longer belong solely to elite investors. Get around the gatekeepers by training your employees in financial literacy with scenario based training. Ready to get started? Talk to us today.