Cracking Finance With Stories
Many years ago I tried to help two couples who were 50/50 partners in a struggling real estate business. Their business was out of money and needed a cash infusion to survive.
The one couple had money to invest but wanted a larger ownership percentage in exchange for their investment. The other couple felt they were getting the short end of the stick and wanted the wealthier couple to loan the fresh money to the company without any change in ownership.
Things were at a stalemate. I connected more with the wealthy couple’s mindset because without a cash infusion, everyone would lose everything. I felt the other couple would be ahead to give up some ownership in exchange for keeping part of their investment alive.
At a loss, I finally went to my old boss and mentor. Throughout my career he has been a wellspring of solid, practical advice. I explained the situation. Without much thought he gave me advice I will not soon forget:
“Scott, don’t focus on finance theory. Think of an analogy people can relate to. Maybe you could tell a story about four people going on a long trip in a car they bought together. Along the way, the car runs out of gas. Only two people have money to buy gas for the rest of the trip. The other two are flat broke. The ones with money offer to pay for the gas but ask to own a greater percentage of the car in return. The two people without money understand they can’t go on without gas and agree to the deal.”
Simple, right? A complex situation now seems reasonable and relatable.
The next time you need to convey a difficult business point to a partner, employee, or customer, consider an analogy instead. Story-telling is a hugely underrated skill that every entrepreneur and accountant should try to hone.
