We all want to be able to better communicate our ideas.

But when it comes to financial statements, how do we do that?

Today I address how you can become a better financial storyteller.

But first, our sponsor (me).

A MESSAGE FROM SMB Financial Fundamentals Cohort​

MASTER THE FUNDAMENTALS

This week is the last week to enroll in my cohort, SMB Financial Fundamentals. Over four weeks we’ll help you:

• Learn how to decode your financial statements
• Identify key results drivers for your situation
• Select, track, and act on your key metrics
• Use your numbers to make better decisions and tell your story

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Enrollment closes Sunday, so this will be the last reminder you get to join.

I hope to see you inside!

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PS. use the code EMAILCREW to get $100 off.

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THE LINK BETWEEN SHOTS ON GOAL & FINANCIAL STORY TELLING

Steph Curry is one of the best shooters of all time. How did he become that? Because he put in the reps.

500 shots a day
3,500 shots a week
14,000 shots a month
168,000 shots a year

In his 15-year NBA career, he has shot 2,520,000 shots… in practice.

The number is likely much higher, but you get the point. This is only counting shots he takes after practice sessions.

I like to call this the “shots on goal” principle.

People see success and assume that it came because of luck or natural talent.

But in almost every example, when you dig in, you see that the unreal success was born out of an unreal drive to practice and get better.

Almost everyone who learns about my success on social media asks “how did you do it?” It seems like a mystical, unattainable thing. Yet every time I give the answer, they’re disappointed.

They see my content and say “that’s so good… I could never do that.” (if you’ve never thought that, just shut your mouth right now)

They see the viral piece and say “that hook is so good… I couldn’t stop reading.” (see above)

The problem is we only see the successes of others, but we see both our successes and failures.

We compare the imperfect image of ourselves to the perfect image we have of others.

What people didn’t see were all that came before the “success” of Twitter and this newsletter:

1. During middle school and high school, my mom would ruthlessly edit my writing. I hated it.
2. In college I wrote content and started a “podcast” on a basketball simulation website.
3. I blogged on a personal website, sharing all sorts of drivel I wish I’d never put online.
4. I started 5-6 different “side hustles,” a few of which hardly existed outside the domain.
5. I wrote 17,461 tweets and 56 Twitter threads before my first viral piece of content.
6. I had 3 failed proposals in my fractional CFO business before getting my first acceptance.

Behind the “success” I have here, I have tons of failures. “Shots on goal” means continuing to try, even when it doesn’t make sense. It took 2 years of tweeting before I made $10,000 as a result of the effort.

There is a fine line between stupidly ignoring the writing on the wall and having the perseverance to finally break through.

But why “shots on goal?” Why is that so important?

Bruce Fraser says all those shots pay off in unlimited confidence. Bruce says “Steph’s confidence comes from the work he puts in and the results that he sees from the work.”

Yet when I talk to business owners, it’s all too common that they don’t have a regular routine for reviewing financials and thus lack confidence.

So, how do we get “there” to the destination where we can get financial insights and start telling financial stories?

Embrace the learning curve

Just as Steph Curry mastered his shooting through relentless practice, getting well versed in financials only comes through seeing a lot of different scenarios. This means a consistent state of uncertainty, which requires requires patience and continuous learning.

Embrace and gamify the learning to keep it exciting. Do fake and real world experiments to see the impact of certain changes.

It’s only when we embrace being a newbie that we can truly become an expert.

Reps, reps, and more reps

So many businesses don’t have a consistent financial review process. This is where it starts. Steph Curry became the best shooter because he took a lot of shots, reviewed his shots on video, and continued to improve.

It’s important that you regularly review your numbers.

Start by setting up weekly, monthly, and annual reporting that’s consistent, but try one new thing each time. Through this testing and iteration, you’ll find you more deeply understand the business and what’s driving it forward.

Too often I see people get super excited and start tracking too many things too early, which means they lose the ability to focus and more deeply understand that thing.

To accelerate your learning even more, seek out financials of public or private companies to analyze. View the quarterly reports of your favorite public companies, listen to earnings calls, and follow them quarter after quarter.

Ask questions of their financials and then see how they’ve addressed what you noticed. Over time you’ll get a feel for what’s most important and be able to apply it to other businesses too.

These practices will help you easily identify trends, see the key drivers in the business, and start understanding the financial health of the business. This all helps you make better strategic decisions in the long term.

Set benchmarks and goals

Without a goal, the numbers are almost meaningless.

A 10% drop in revenue is much different when you lose a big client versus when you have a big one-time bump. How you tell that story determines how you feel about performance.

And just the same, a 10% increase on a one-time contract should mean you’re slow to add staff, whereas a 10% increase supported by a 3-year contract should make you more willing to spend a little as you grow.

By setting benchmarks and goals you’re forced to think through those scenarios and determine what a realistic outcome is.

When you talk through results and frame them based on expectations, you start to tell a story that makes sense.

Share with your peers

Money is a taboo topic that no one wants to talk about. I do get it.

But when you can start sharing your numbers openly with your circle of business friends, you can start learning how others around you are thinking and accelerate your learning curve.

Add in the level of accountability that can come from that and you start to realize how much growth you’re missing out on because you desire to be secretive.

I’m not a big fan of sharing financials within your business for a number of reasons, so don’t label me as the “transparency guy.” But owning a business is isolating and you need to do whatever you can to push back against that isolation.

I was once a part of a peer group where we had to present our financials and strategic plan for the next year and it was one of the most transformative things. People gave real feedback that changed the approach of people within the group.

Wrapping up

Over the last few years, I’ve realized I’ve become passionate about making sure business owners and leaders understand how to read their financials.

And my cohort provides me the opportunity to continue that education.

In it, we’ll provide you all the things I mentioned here:

1. A safe place to learn
2. Reps, reps, and more reps
3. Systems for setting benchmarks
4. Peers to get feedback from

Enrollment closes on Sunday, so you have a limited time to enroll. Don't forget to use the code EMAILCREW to get $100 off.

I hope you’ll join us!

Enroll Now

Thank you for reading!