Here's how you can cultivate a strategic mindset for long-term success in Corporate Finance.

Knowing the big picture is everything. Start by developing the financial business acumen to thoroughly understand your company's business model, industry , and competitive landscape. It also helps to be able to quickly switch between your organization's short-term objectives and long-term goals.

The ability to understand the health of a balance sheet allows a business owner to make proactive strategic decisions on cash flow, leverage of assets and potential business growth.

A key tenet of “the basics” of a corporate finance project or transaction is the return on said project or transaction must exceed the cost of capital deployed. As such, the Weighted Average Cost of Capital (“WACC”) is otherwise known as the “hurdle rate.” The inputs are the Cost of Equity & Cost of Debt & Beta (sensitivity to the market- which, for private companies is that of publicly traded companies- with a liquidity discount. It is of paramount importance that these inputs are accurate (the term “garbage in, garbage out” applies. If , for a public co., no project/transaction exceeds the co.’s cost of capital, stock buybacks may ensue Payback period is how many years does it take to recoup the cost of the project/ transaction?

It is important to know where your business is in the economic cycle and which industries are impacted first by changes to the economy. This allows a business owner to prepare for trend changes to their own company.

Develop analytical skills that can be applied in corporate finance. Your ability to drive strategic decision-making is one of the most valuable assets you can bring to any company. Be sure to hone in on your core skill set for day-to-day tasks (data visualization, forecasting, financial modeling, scenario analysis, etc.). Having a strong analytical toolkit allows you to comfortably pinpoint trends and mitigate potential future risks for your organization.

Understand how to identify short and long term financial risks. Varying environment factors makes it impossible to predict so always be prepared with multiple financial forecast scenarios (worst-case, base-case, best-case). This way, you have a contingency plan in place that allows you to be proactive and not constantly reacting to market conditions.

One long-term planning strategy is to monitor a few KPIs. On average, a small business should have about five KPIs. The first should be related to sales, and the last should be related to profitability. The other three should fall into the expense categories. Be sure to measure your KPIs based on activities and not some arbitrary numbers.

Corporate Finance can best contribute to the mission of the enterprise by ensuring that resources are in place to take the best advantage of the unknown opportunities the future will present. Please communicate clearly to teams that want to fund projects that they need to show the point at which the project will make the enterprise stronger and better able to fulfill its mission. Finance professionals can explore options for funding and quantify likely outcomes, but if the sponsors cannot clearly articulate the better future state, why are we considering the project?

To foster long-term strategic thinking, start with the department head and then move to the department. Each department head will need to have only one learning objective per quarter, and that's it. Each department head will then work with their staff to develop their own learning objective each quarter. Re-visit, review, and adjust quarterly. The key is one learning objective per quarter per person.