Every business needs to present its financial performance, so it’s important to tell a compelling and credible financial story. Although specifics vary by company, a good financial story will include the following key components. First, be clear about your objective. Then, focus on that objective. Once you’ve decided your objective, develop a financial story that can reach it.
A typical financial story begins with revenue. It provides an indication of the size of the business, and the rate at which it changes over time. For example, revenue for Saunders Construction declined substantially from FY2014 to FY2015, stabilised during FY2016 and FY2017, and reversed significantly in FY2018. This change was caused by the general decline in commodity prices, which caused customers to delay capital expenditure.
In financial storytelling, a financial advisor must help prospects overcome their fears and motivate them to invest in their financial future. A financial advisor must be able to explain how the market works, including risk perception and recency bias. It also needs to show that money is meant to serve people, not vice versa. In addition, a financial story should also give people a sense of empowerment.
As a business owner, it’s important to understand your organization’s financial health and present position. This means understanding how the company’s revenue, expenses, and assets are used. By understanding your organization’s history, you will be able to present the financial story more clearly. Once you’ve developed a solid story, it will be easier to convince others that your organization’s goals are worthwhile.