Gregor Cuzak

on marketing, business and philosophy

Financial planning

The other day I was with my client, an early phase startup. We needed to prepare the financial plan for 2014. Of course my colleagues there were afraid of this task, as finance often feels daunting, a place of no escape, plus a lot of mathematics.
I calmed them down by playing a little trick on them. I convinced them that the planning would mostly be about words not so much about numbers. How come?
Well, it’s true. Finance is not beancounting, the term usually applied to accounting. Finance is about storytelling, yet truly rooted in very concrete facts based on numbers. Yet the numbers mean a little if they’re not merely in a supporting role to something larger. This larger thing is the story, the purpose, the reason of being of a startup, or indeed any company.

The task I gave them was to write the complete plan in words, with no figures on the plan whatsoever, first. When this story was in place, which they found really interesting and engaging to write, I asked them to identify each and every word that bears a cost or a revenue with it. If there was a conference to be organised, this certainly entailed many various items that go together with organising. If there was a publication to be printed, it certainly is important to know the circulation. And so on.

Once all cost and revenue bearers were identified, all that was left was to assign values to them and organise everything neatly and orderly. Which is rather easy once the story and inventorising of the items is in place. It’s easy peasy.

And so, the plan was made.

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