Using a Business Simulation to Overcome the Fear of Finance
eliza hl
Published Date
Many people struggle with fear of finance—students, investors, even business owners. We’ve met a surprising number of entrepreneurs who delegate the finance portion of their business entirely to their accountant.
Over the past few months, we’ve worked with several universities to examine how business simulations help overcome Fear of Finance.
Testing the Impact of Business Simulations
In August, we used the Entrepreneurial Challenge (now Better Business Decisions)business simulation in the opening residency of the Executive MBA program at Vanderbilt’s Owen College of Management.
- The 3+ hour workshop took place on Day 3 of the program, immediately following 6 hours of accounting lectures from Quon Associates.
- To measure the impact, we conducted surveys immediately before the simulation (Before) and the following morning (After).
- While this wasn’t an ideal time frame, we wanted to isolate the effect of the simulation as much as possible.
How We Measured Fear of Finance
We approached Fear of Finance from two angles:
- Comfort with Financial Concepts – How comfortable did students feel reading and interpreting a Profit & Loss statement, a Balance Sheet, and explaining Retained Earnings?
- Perceived Business Acumen – How did students see themselves compared to their peers? We hypothesized that those uncomfortable with finance would also perceive themselves as lacking in business acumen skills.
Key Findings: The Power of Simulation
- For students with finance backgrounds (about 25% of the class), there was no significant change in their comfort level.
- For non-finance students, the simulation had a dramatic impact:
- The number of students who felt they could explain and interpret Retained Earnings increased from 10.8% (Before) to 47.8% (After).
- Initially, 30% of students felt their business acumen skills were below their classmates; after the simulation, this dropped to 20%.
These students will be studying finance intensively over the next two years. We will continue to explore whether the simulation smooths the learning process and helps them gain confidence in financial decision-making.
Interested in Reducing Fear of Finance in Your Organization?
If you're looking for ways to help employees, students, or executives gain confidence in financial concepts, we're here to help.
Contact us today to learn more about how Income|Outcome business simulations can build financial confidence and business acumen.
