Finance is more than just numbers. It is more than just accounting. It is more than just setting a budget.
What does this look like in action? Earlier this year, I gave a presentation where I went through a company’s income statement and used it to tell the story of not only where that company had been, but also, where it was heading into the future. Afterwards, the audience was actually excited to dig into their financial statements and models—suddenly, finance didn’t seem so scary. With a little guidance, it’s actually simpler than you may think, and the benefits to you are invaluable.
Too often it can be tempting to simply “get things done” to check the boxes of your accounting and finance duties. However, by taking the time to really consider what these numbers illustrate about your performance, you can make better decisions, be more compelling to boards and investors, and make your data really work for you.
All you need to get started is a 5 year functional income statement—2 years looking back, your current year, and 2 years into the future. With this, you’ll be able to answer and explain the following questions:
Over the next series of posts, I will explain how to use your financials to answer these questions. I’ll also talk through some of the common mistakes I’ve seen in company’s financial projections that may make your story less believable. At the end, you should have the confidence to talk about your financials and what they mean with potential investors, team members, and your board.
P.S. I’ve helped over 30 founders and CEOs tell their story with data.. If you have any questions, feel free to comment or schedule a meeting here.
Looking for the rest of the series? Check out our latest installments: