Do you know what commercial awareness is? Do you need it? Tom McGuire, SIE Business Advisor for the East, explains what commercial awareness isy and shares 7 useful tips below.
Commercial awareness, sometimes called business acumen, is a combination of knowledge and skills. It is the understanding of how a business operates, how a company makes money, and being aware of how you contribute to that process. It is also the ability to make good judgments and quick decisions in business situations.
So who needs commercial awareness? Short answer is, almost everyone to some degree!
- It is regularly listed as one of the top skills that employers value in a graduate, and is often quoted as the one which is most often missing!
- If you want to run your own business, having a good understanding of your market and knowing how to make a profit are, self-evidently, essential requirements.
- If you have a passion for working in the charitable sector, being able to demonstrate impact is essential to attract and retain funding.
Here are my practical tips to acquiring the sought after title “commercially aware”.
- Start now: Commercial Awareness can’t be crammed the week before an interview! Its development occurs through the gradual accumulation of knowledge and the practice of skills. Make a commitment to yourself right now to consciously seek opportunities to develop these skills.
- Practice ‘Big Picture Thinking’:
- Ask yourself, where do I want to be in 5 years, 10 years?
- Stay informed about the world around you. Pay attention to social, demographic and technology trends.
- Seek out interactions with a wide variety of people.
- Build up a rich network of connections. Put social media to good use.
- Broaden your horizons: travel, try out new hobbies and sports.
- Financial and numerical literacy: Develop a good understanding of how money works and how to manage it. Brush up on your numerical thinking.
- Look for opportunities to set and manage budgets. Perhaps start with your own personal or household budgets.
- Become treasurer of a club or society. Take responsibility for other peoples’ money.
- Become adept at understand concepts such as percentages, interest, debt, financial graphs.
- Decision making: Practice making decisions in a more conscious way and learn to listen to your intuition. Become comfortable saying no!
- Learn to use tools to help make decisions in a more systematic way. Find some examples here.
- Use “5 whys” to find out of you are actually solving the right problem
- Have you ever ended up doing something with a group of friends that actually none of you wanted to do in the first place but no one spoke up? That’s called “Group Think”.
- Base important decisions on trustworthy data. Resist the temptation to cherry pick data to suit your own biases.
- When you make decisions that have positive outcomes remember how you felt at the precise moment you made the call. When things go badly wrong, what was your gut feel telling you when you made the call?
- Incorporate reflection time on important decisions. “Sleep on it” works!
- Projects/voluntary roles: Show that you are able to work with people and move a project forward from idea to implementation.
- Organise an outing or event with friends
- Take office in an established club or society or start a new one!
- Work experience: Seek out roles that expose you to the business environment you wish to work in or test the water to see if it’s “for you”.
- Look for opportunities to improve the business. How could you increase sales or improve service?
- Study how they manage cash.
- Analyse the business costs. Work out which ones are fixed and which vary with business activity.
- Start a business: Even if you intend to seek employment after graduation, starting a micro business will fast track the development of your commercial awareness like no other activity. Perhaps you have a hobby or interest that could gradually be developed into a small business? Or perhaps you want the freedom and independence that comes from running your own venture. In which case, get in touch with SIE!
This article first appeared in Ignite Magazine in March 2015.