How FMI and Ian Schnoor Are Helping Financial Professionals Build Better Models Around the Globe

One of the most important skills that we believe people need is financial modeling.

Beginning of April, the US President Trump did tariffs and we saw how the markets responded. What's the role modelers need to play?

Financial modeling is a Ian Schnur is the Executive Director of the Financial Modeling Institute and a leading voice in financial modeling education. He founded the Marquis Group, created the CFA Institute, and has trained thousands of professionals worldwide.

What's the number one piece of advice you share with people about being a better financial modeler?

Learn the modeling. Learn the technical piece really well so that you can get away from it.

Do you believe you're at the point where we should build fully dynamic models with dynamic arrays?

No.

You shared your top three tips about building a great business. What were those three tips?

First was.

Financial Modeler's Corner is the world's premier modeling podcast. It is brought to you by Financial Modeling Institute, the world's leading financial modeling accreditation organization. Welcome to Financial Modeler's Corner. I am your host, Paul Barnhurst. This is the podcast where we talk all about the art and science of financial modeling with distinguished financial modelers from around the globe. The Financial Modelers Corner podcast is brought to you by the Financial Modeling Institute. FMI offers the most respected accreditations in financial modeling and that's why I completed the Advanced Financial Modeler and I recommend you do the same this week. I'm thrilled to welcome back on the show for, I think, third time he's been on the show in. Welcome back Paul.

It's thrilled to be back. So great to be back on the show with you today.

Yeah, really excited to have you. So going to give a little bit of background about IN for those who don't know him and then we got.

A lot to cover.

You've been up to a lot since the last time we chatted, so I'm excited to get into it. So in is the Executive Director of the Financial Modeling Institute, the world's only financial modeling accreditation organization. He created the Financial Modeling Practical Skills module for CFA Institute, which is now a mandatory part of the CFA program. In 2002, in founded the Marquis Group, a leading provider of financial modeling training and consulting, which was sold to Training the Street in 2023. In is a passionate teacher who has trained thousands of students and professionals all over the world in financial modeling, valuation and excel. In teaches a course called Advanced Financial Modeling at Queen's University and is a past recipient of the professor of the Year Award in the Master of Finance program at the Smith School of Business. He began his career in the investment banking department at Citigroup and BMO Capital Markets. He holds a Bachelor's of Commerce honors degree with academic distinction, and he's also a CFA charter holder. How was that for an introduction?

Wow. That's just. Thank you, Paul. That is. You blow my mind. Appreciate that. That is kind of you. But thank you for the warm welcome and having me back.

Yeah. Excited to have you back. You know, I want to start. It'll probably be a few weeks before we release this, but the last couple weeks have been a very rocky road, as we know. Beginning of April, the US President Trump did tariffs, and we saw how the markets responded. So, you know, the general economy with that is definitely showing some signs of concern and turmoil. How does financial modeling fit into all this? What's the role modelers need to play in this very uncertain and, you know, turmoil that we're going.

Absolutely. I happened to be in Wall street in New York last week on Wall street, when the markets were crashing on Thursday and Friday. It was a very interesting and ominous time to be there. And with all the volatility, you can imagine someone saying, why the heck would I build a financial model? The markets are crazy. Everything is. It's impossible to see the future. Why should I building a model at all? I think this is the most important reason and the most important time when it's important to have financial models and people can see that. If you understand the point of modeling, modeling is not building forecasts. It's not about getting the perfect answer. We're not trying to be soothsayers. We're not building forecasts to see if we can come up with the perfect prediction and then say, after five years, aha, I nailed it perfectly. That's not the purpose of modeling. Right. The purpose of modeling is to say, if this happens on my business, what will we look like? And if this. And if something else happens, how will we fare? Will we survive? So knowing that we are going through a very rocky period, possibly tariffs, possibly no tariffs, possible changes to our cost structure, possible changes to our labor rates, it's so critical to know, can we as a company survive this sort of turmoil and this up and down? So having a good model allows us to say, well, if. If we're hit by rising costs because we know where we buy our raw materials from, if our costs go up by X percent, we can't survive or our cash flows are going to go down too far. As a result, we're going to have to make some contingency plans. We're going to have to change the rest of our operating model and change our other costs in some way or again, it allows us to know, what if these things do unfold in different ways, what will we look like, how will we perform? And then what actions could we potentially plan in advance to mitigate them? And so more important than ever to have a sense during these rocky periods, I think.

Oh, I agree. I mean, you think back to Covid and everybody was doing scenario modeling, well, what happens if it's three months that we're shut down, you know, or three weeks? Or what happens if we do this or that, or if we start restaurants, if we start delivering to houses? How much can we keep? And running a ton of scenarios and similar here. It's just different inputs.

Exactly. Back in 2018, I don't believe there was anybody on the planet that was pretty. Maybe, maybe a couple people, but I don't really believe anyone seriously was predicting a massive pandemic that was going to shut down the world for, you know, in the way that it did. And the same thing, I don't think a year ago, people were predicting that we'd be in this sort of a trade situation with. With threats of tariffs and massive stock market swings. That's not the point. We're not trying to say that we were bad modelers because we missed those events, but now that they're happening, we can say, okay, this is our world today. How do I incorporate that information to help me think about what might happen into the future and how can I properly navigate it to, you know, to get through this turbulent time?

Yeah, I mean, as you point out, it's not about being exactly right. It's about helping the business make better decisions and provide as much clarity as you can. Because if any of us forecast perfectly, we wouldn't be sitting here. We would have made a fortune on the stock market.

I would hope so. I would hope that if you could forecast perfectly, you would not be doing this job. You'd be, you know, sitting somewhere in Hawaii or in the Caribbean and just sipping your margaritas and buying the stock that you knew was going to go up the next day. And that's not the point. Exactly. So we're trying to say, you know, gosh, if. If tariffs do hit, we're going to have to shut down our highest cost division or we're going to have to lay off 20 people because we won't be able to keep them or whatever, etc. Etc. But let's build some plans around, you know, and then, as you know, the days and the weeks and the months unfold. We'll see where we're at. And. And which plan do we follow through with exactly.

So I think we covered on the tariffs. I'd love to know. Just kind of stepping back. What have you been up to since last time we chatted? I know there's been a lot going on. So tell us what FMI has been doing and what you've been up to.

Yeah, listen, as I said, first of all, thrilled to be back. Thrilled. First of all, that this podcast and the. Your show has been going so well. You're getting better and better as a host, which I love to see as well, and it's been awesome. And FMI has a financial modeling institute, has, as you know, been a proud sponsor of your. Of the show since day one and very proud of that. My life has been exciting and busy. I have been working with our team. Our team at Financial Modeling Institute keeps growing every year, and we are, as you talked about earlier, building the world's only financial modeling accreditation organization. We have candidates in more than 120 countries all over the world that are looking to learn, you know, work really hard and then prove through rigorous examinations that they have exceptional financial modeling skills. So we've been building and elevating our operational practices and our sales and marketing and our digital presence and really growing into this role as the world's only financial modeling accreditation body. Last week, I was attended Quinnipiac University's Game Forum, a massive student finance conference in New York. And FMI was invited to have a booth. CFA Institute was there. The Kaya organization was there. Garp, their risk management body, was there. We were all on a panel discussion together. So really nice to be building and growing our name all over the world. It's been a lot of fun.

Yeah. And what are you hearing from employers now? That it's been out there long enough, it's starting to become more well known. Right. Seven, eight years ago, when you first started, it's like FMI and accreditation. What is this? I've never heard of it. What are we starting to hear from employers? How do you think that that side of it's growing, right, of getting that recognition to say this means something?

Yeah, absolutely. So on one hand, it's going very well. On the other hand, we still have a lot of work to do, and these things take time. I mean, building an accreditation organization is not something that happens overnight. In fact, other accreditation bodies will tell you that if you're less than 10 years old as an accreditation, you're still a baby and we're, you know, 8ish years old now and definitely getting a lot more traction. Two examples, you know, PwC and Deloitte in many of their offices all over the world make the, the afm, the Advanced Financial Model accreditation. The one that you said. A lot of PwC and Deloitte offices make that mandatory for people who want to work on a deals team. Why? Because they know if their employees have better modeling skills and are more confident with their modeling, that it will allow them to build better tools, make better decisions and support their clients better. And we are starting to see traction with more and more organizations wanting to de risk their processes and elevate their, truly elevate their teams. So again, this is part of our, you know, our five year plan is to continue to build awareness, traction and interest. At the end of the day, one of our big goals, our big motivations for doing this is to truly elevate the discipline of modeling and elevate people's skills and de risk a lot of what happens in the capital markets. And we believe that we're on track for that.

But I love something you said, a de risk because you know, if I'm hiring somebody, I want to know they're good at modeling. And I see one resume where they've set for and passed the Advanced Financial Modeler and another where they haven't. It does give me some comfort. You know, there's somebody based some tests. The one who didn't take it might be better, but at least I know the one who took it has a certain baseline. It's really hard to determine that from a resume, right? 100% other one have that baseline.

100%. You're absolutely right. I mean getting the AFM accreditation is not the only way to become an excellent modeler. There are a lot of people that are excellent modelers without an accreditation, but it's hard to necessarily convey that or prove that. And a lot of people. Here's the thing, you know, as you know, we've talked about financial modeling is a, is a discipline. Part of my frustration in getting in getting together with a bunch of people, you know, almost 10 years ago and dreaming this up was it frustrated us that in, in the world of professions, right. If you think of all the, you know, key professions out there, if you need a lawyer, you can't hire me to do your legal work, you can't hire me to do your accounting work. I mean you could, but you don't know what you're going to get Now, I can't represent you as an accountant or an engineer or as an architect. I don't have a certification in those areas. I might be a smart guy and understand those topics, but I'm not allowed to do that work. But anyone has been historically allowed to build financial models, which does incorporate a lot of risk into the system. So getting a recognition from a globally recognized badge as it's becoming more and more does signal that this person will have excellent modeling skills. And we're very proud of that. Yeah.

And I have those conversations regularly with people. I have people all the time reaching out to me, what certifications, what should I do? And kind of walk through and I.

Go, look, if, especially if you're wanting.

You know, in FPA three statement models or table stakes for smaller companies, larger companies, you may never build one. So I tell someone, look, if you want to do any FPA in, in a smaller company, you want to give them comfort that you can build a model, this is a great way to go. Now, if you want some training, different courses, here's some great courses. But if you want that validation or accreditation, then look at this. And a lot of people are like, oh, that's a good idea. And you know, what I found is right, very reasonable from a cost standpoint as well.

So there's a lot of. Yeah, which. And by the way, the secret sauce, the secret sauce to the AFM accreditation is really just that by putting an exam date in the calendar, we're forcing people to study and to practice. Right. I mean, as, as you know, and you mentioned in my bio, I mean, I was a trainer, a financial modeling trainer for 20 years. I had a training firm that I sold to a private equity firm in North Carolina. I love training and I love teaching and I've taught 20 or 30,000 people. But as a trainer, I never knew if that person would become good or not because nobody gets good at anything in life by watching the course. I could watch eight hours of golf videos. I would learn a lot about golf in eight hours. I'm not going to be a good golfer after watching those videos. Or I might do a weekend course on a golf course. I might go do a weekend session on a golf course with a pro and swing club for a few hours and learn a lot about golf. But what's going to make me a strong golfer is going every night for two hours to the driving range and, you know, playing two or three full rounds a week and then three months later being able to golf around of 85. So I'm not a professional yet, but I'm a good golfer. And that's what accreditation does. It forces people to show up when no one's looking, do the work when no one's looking. Put in the time, roll up your sleeves, have fun with it, Practice, practice. And you will become. So having a date in the, in the calendar for an exam is just a way to force you to actually internalize it and learn.

There's a lot of truth to that. I mean, so when you have that date, all of a sudden you're like, oh, wait, I have to do it. I gotta find time. It's easy to procrastinate, but dates often force us. They're a forcing function in many ways.

Exactly, exactly. It. It really is. You know, how many of us buy videos or buy tutorials or sign up for something with good intention and then life gets in the way and you don't do it. But somehow when you have an exam in your calendar for whatever it is, we tend to, we tend to get there. Most of us tend to get there and, and get to the finish line.

I think the prime example. Have you ever bought a digital course that you didn't finish?

Yeah, I've bought digital courses that I barely started. Right.

And I think 90% of those that are bought are never finished.

Sure. You get through a couple, you know, you get through kind of great, but we all need a bit of a kick right in the backside to get us there because otherwise we get distracted. It's just human nature. And so having an exam just forces you to internalize it and learn it. And, you know, people are so proud when they get through, like you. The AFM accreditation, we love. There are four days a year at FMI that we love. Those are the exam relief release dates, when the results dates when the results go out. Because we, our team follows people whose results have been released and incredible LinkedIn posts go up all over the world. People are so thrilled and pleased and, and not to us. They're pleased with themselves. They're so happy that they managed to climb this bit of a mountain and learn this skill. And they feel so good about it. And, you know, we take a lot of pleasure by, by seeing people feel very, very, very proud of themselves for getting there.

Yeah, no, and you should. I mean, it's, it's a big accomplishment. I'm curious, as you look forward to, you know, the future of fmi. This is about eight years old now. What has you most excited or what, what are you looking at and going? I just can't you know, can't wait for that or, you know, kind of as you look forward.

Well, I mean, and I see, you know, I know you were going to talk about these things a little after. A couple things get me really excited. First of all, solving this riddle that we had started with, right, is why is it that if you want to be an architect or a lawyer or a doctor, you can't just do it. You need to kind of learn, but then prove to a board, some sort of a standards body, that you actually have those skills. And we're trying hard to elevate this profession of modeling and have it viewed on the same plane, the same playing field. And I see us on the trajectory, you know, of, of getting there. So that's really exciting to see it. And we're building this as a community platform, meaning we want this to be as inclusive. Anyone who wants to participate in the world of modeling is welcome in the community. We are trying to make this a very open, inclusive space, a safe, comfortable space. And that's working well. So very, very proud of that. And where do I see the other thing that makes me very proud is, you know, you touched on it because, you know, as the value of the badge continues to grow and people recognize that, you know, that AFM badge really means something. It means that wherever you are in the world, you can put yourself on equal footing. We have a lot of candidates. A lot of our candidates come from developed countries like the US and Europe and Canada. But we have a lot, a lot of candidates coming from developing parts of the world in Africa, in Nigeria, in, you know, we signed a partnership with the stock exchange in India. I was in China last year, which we'll talk about in. I get excited thinking about the idea that people in these parts of the world that are really working hard to differentiate themselves can elevate their skills and put themselves on a level playing field with someone in New York realizes, oh well, this person obviously has excellent modeling skills because they got this recognized badge.

Well, my background is in FP&A. I am also passionate about financial modeling. Like many financial modelers, I was self taught. Then I discovered the Financial Modeling Institute, the organization that offers the advanced Financial Modeler program. I am a proud holder of the afm. Preparing for the AFM exam made me a better modeler. If you want to improve your modeling skills, I recommend the AFM program podcast listeners save 15% on the AFM program. Just use code podcast. Yeah. You know, one thing that's fun for me when you talk about the different countries is there's a lot of people who take advantage of the podcast discount and sign up from listening to the podcast. It's always fun to see all the different countries. I love singing. Oh, wow. That's somewhere I wouldn't have expected. Or how many different. I mean, I think just from the podcast, we probably had 30, 35 different countries signed up for the program. And so that is fun to see. I definitely know what you're talking about.

Yeah, it's incredible. Like, I do. You know, every month I do a Q and A session for people that are preparing for the exam. We did one this morning, and we always go around and ask people to say where they're from. And it's amazing. There will often be People from 30 or 40 different countries in the webinar from all over North America, South America. Today we had, you know, someone from Bolivia and from the Caribbean and from the US and Canada and from Europe and Africa even. Sometimes people show up in Singapore or Australia when it may be like one in the morning, and I'd be like, what are you doing? You should be sleeping. But, yeah, I know, it's amazing. It's amazing to watch. You know, it's one of the few skills as well that is truly global. And literally, it is almost identical anywhere you go in the world. So when you know how to build a model, you can literally model an American company, a British company, a Chinese company. It doesn't matter, because financial statements look almost exactly the same anywhere in the world. So the art and science of forecasting, it is the same. So it truly can take you anywhere.

No, it's a good point. I mean, right. The three statements apply globally. It's not like you go to China and they have this, you know, two statements, or you go over to Africa, it's like, well, you have six statements.

They have one state six. Yeah, exactly. Oh, what are your. What are your additional three or four statements? Yeah, I know it is. With the convergence of accounting standards, most countries in the world, of course, as you know, use ifrs. US does not US Uses US gaap. But US GAAP and ifrs have become very closely converged. And then, of course, in India, they use ias, the Indian accounting standards, and China is Chinese accounting standards. But they're very similar. They're very similar. So when you look at a public company's historical financial statements, oh, you'll. You'll be, oh, the cash line is a little lower down. Or, oh, they move this year. But if you understand US Gap, you will in a Moment understand the financial statements of any company in the world.

Great point. So I want to ask a couple questions. Some of the things you've been up to, I know some of them, I've seen them from LinkedIn, we've talked a little about them. But I think our audience would find interesting. So first, you've attended the Financial Modeling World cup the last two years. I know you've given some training sessions on that. Maybe give your thoughts on what that experience has been like. What's it like being there with a bunch of Excel nerds?

Oh, gosh. Well, I love it with my people, which has been a lot of fun. Actually. I will lump in a couple things in the since the end of COVID two fantastic events that your listeners might be interested have popped up. There is the Financial Modeling World cup which has for the last couple years hosted. What do they call it there? It's every December they run a training camp. It's been in Las Vegas and in the training. Yeah, exactly. And it's been Las Vegas and we're. They're a partner of ours as well. And they do a two day kind of training camp and then they use the third day to run the finals of the Financial Modeling World Cup Championship. The reason they do in Las Vegas is because there is an esports arena in, in the, in the Luxor Hotel that they have used and it's been fun catching up with you there. There is a another event which has been in London last couple years which is the Global Excel Summit which I've had the privilege of speaking at and participating in. And that's also a fantastic event. There's been some overlap and there's a lot of different people. That's just a conference. There's no competition as well. But also I love being at both of them because the attendees and if your listeners are thinking about maybe attending one of them, I highly encourage it. You'll learn a lot. You'll realize that you're part of a community of people who use Excel, people who use spreadsheets, people who do planning work for forecasting work, modeling work. You'll meet some great people. It's a wonderful community. There's a lot to learn and I have really enjoyed. What I've taken away is just the passion of people who go of really wanting to, no pun intended, but to excel in their craft and to become better and to. And to share. You know, I think you'll agree with this. People in the community are very, very eager and keen to share their knowledge and to help Others learn and it's been very validating and really, really a lot of fun to be part of that.

Yeah, no, I agree with you. The community is definitely willing and open and they want to share. And so, yeah, I agree. If you want to improve your Excel skills, be around other Excel people, build a network in that area. Either of those events are great. So another thing I know you did, and I think it's been almost two years now when CFA overdid the Level 1 and they added a practical skill section, the financial modeling, which I know you guys were involved in with them for that. What's been the feedback on that? What have you heard? Kind of how people have embraced that change?

Yeah. I will share this with you. It's been fascinating. So we've had a long standing relationship with the CFA Institute. We started working with them in 2018. The former CEO, his name is Paul Smith, he's a British gentleman, but he's been living in Hong Kong for, you know, 30 years. He, his term ended and then he joined our team. So he's on our board and I talk to him all the time. He wanted us to get closer to cfa. But then Covid hit and they, and then I maintained a close relationship with the current executive team. They reached out to me a couple years ago and said, ian, top secret, you can't tell anyone, or, or you got big problems on your hands. But they basically said, we got a secret. We're going to make the biggest change in, in 30 years in the CFA program, and that is we're going to start including practical skills. So everybody who goes through the CFA program will have to do the standard body of knowledge, the standard, you know, academic knowledge. I did, I have my CFA charter. It's great. Did it a long time ago. It's, it's. It has always been a multiple choice exam. And they said, you know, technical skills are getting really important. So. So we're going to make it mandatory for everyone going through a CFA level to also do a technical program. And one of the most important skills that we believe people need is financial modeling. They basically asked if we would take. If they could use the videos, the video Tutorial Learning Series, part of the Advanced Financial Modeler, our own AFM accreditation. If they could use those videos on the CFA site, I said, sure. Then they asked if I could rerecord them, so I did. So the exact same videos live effectively on the CFA portal. There's no exam. There's no exam, but candidates have to go through it, otherwise they will not Release your CFA exam results. So they're very serious about it. So now we've got about a hundred thousand people a year, all over the world doing their CFA studies and then doing this, going through our learning materials afterwards. The feedback has been fantastic. The feedback has been incredible. And I was at a CFA internal conference in the fall, and they told all the CFA leaders all over the world that it is now the top rated, the number one rated component of the entire CFA program is the practical skills module. So I'm very proud of that. I'll actually read you something here. You're reminding me. I just jumped up. So I'm getting a lot of great feedback. But the CFA is very proud that this is now very, very well received. I got. I just pulled this up. If you're watching this, I got a card in the mail from. From someone in Austria, a holiday card. And I'm very proud of this. And the CFA loved it. He wanted to write me a note at the year end just to say how grateful he was for the practical skills module. And basically, he said the skills he learned played a really important role in his achievement professionally. It allowed him to build a much better financial forecast for an investment project that got approved by the investor and by the relevant authorities.

And.

And it would not have been possible without the psm, the practical skills module. So I was very proud of that. And this is why I say that modeling is important, not just for people. So the AFM program, of course, you learn to build a three statement model, but it's not about the three statements, as you know. It's so much about design and communication and the organization of it and the layout. So you might not need a balance sheet or a cash flow statement specifically, but you do need to have flow and organization. And, you know, he was saying that because he did that he believes his project got approved and went through. And I really took a lot of. Very, very proud to hear that and very pleased now.

That's awesome. Thank you for sharing that. And that's amazing that it's, you know, the number one program there, that people love it. I mean, I'm not surprised, but just great in such a short time that it's become so popular. You've done a great work there with cfa. And kind of speaking of that, I know that you've also, a few months back, you went to India looking at launching a partnership with their, I think their stock exchange academy over there, if I remember right. What was that like? Tell me, tell me about that.

I mean, incredible. I'll lump a couple together. I mean, I spent most of August in mainland China, and then I spent a good chunk of November in India. In China, we struck up a partnership with the department that manages the CFA relationship right now in the country. So, you know, they work closely with the government, they manage the CFA relationship in China, and they will be managing the FMI partnership relationship in China. The country is very, very keen to elevate the modeling skills in China. And so we have an incredible partnership there. That was a phenomenal trip. By the same token, we struck a partnership with the National Stock Exchange. They have an academy, a learning academy in India, to launch and to roll out FMI's accreditation programs in India. You know, being in those two countries is so eye opening. I had never been to either place before. First of all, love talking with the people, meeting the people, experiencing the cultures, but seeing the real passion and hunger. And, you know, you know, I'm in Canada, in Toronto, and I know you're in the US and a lot of listeners, I loved seeing just the real, the real hunger. Not that we don't have that same passion in Canada or the US right now or. But in some parts of the world, that passion feels like it's burning a little brighter. They're trying really hard to kind of elevate themselves and get to a different spot. It's not hard for them to remember they themselves, you know, were impoverished or their parents were, and they're working really hard to kind of get to a different spot and in their lives. And they know that having this, this globally recognized skill that they know that having this important excel skill and being able to build models is a tool that will help them. And it's really fun to work with people that are so passionate about improving their lives.

Yeah, I could see where that would be really rewarding. And if I remember right, I think they gave you a name in China. Chinese name. How do you say it?

Do you want to say it?

No, you go, I'll let you say it.

All right. So as you've mentioned, my name is in English is Ian Schnewer. Ian Schnewer. And when I was in China, our partners had sort of a bit of a light bulb moment. And I will say it for those who can actually, you know, speak Mandarin. I, I hope I say it in a way that, that you can understand. But Ian Schneur in English, they realized a great Chinese name would be Ying. So it starts with Y I N G. Ying Ying Cheng Nua. So Ying Cheng Nua sounds Kind of like Ian Schnur and what they. Ying Cheng Nua means sort of a hero or a prominent person that comes, bringing, Bringing promise of future success, something like that. I'm probably missing it a little bit, but they thought that based on the way it sounded similar to my, you know, my English name and you know, what we were building there together, that that was fitting. It's funny, we had a lot of meetings with government officials when we were in China, and I would introduce myself as Ying Cheng Nua. They loved that. And many of them kind of their mouths opened and they said to me, oh, my gosh, your Chinese name is so much better than my Chinese name. And so I was definitely honored. Do not ask me to write it, because I can't do that yet. But I do know how to say it, and I can recognize it. But it was fun to be embraced that way.

We won't ask you to write it, but love that. Thank you for sharing that story. I want to switch gears here a little bit.

So we've talked about some of the.

Things you've been up to, but I know recently you shared your kind of top tips about building a great business. And I think a lot of our guests, I know a lot of the people I interview do run their own consulting, sometimes training.

Right.

A lot of people to do modeling. You go out on your own. So I'd love for you to maybe share that advice. I know you've run several businesses over the years. What were those three tips? Can you share that with your audience?

Absolutely. You know, I mean, I've now had a great honor and the great opportunity in my life to build a couple businesses. You know, I, I, I view, like, for me, Excel and modeling have been a means to an end. Yes, I like modeling. I don't do much modeling anymore. Um, I, I used to love tinkering and building, and, you know, I still do like to play around with that. But it's been an opportunity for me to teach, to become, you know, to help enable other people. It's been an opportunity for me to help build a couple businesses. And, you know, in hindsight, I put up the post, I put up a post about a month ago talking about. Because I get asked all the time. I know I, I had been asked at, I was running, I was, I was at a CFA event speaking, speaking at a CFA event, and someone came to me and said, I really like, you know, the businesses you've built and you have any tips. I'm thinking of starting a business. I thought a Lot about what, what have I done and what do I like, what do I stand for? And you know, that I think works in any. But now this might not resonate with everybody, but this, you know, I think resonates with me. And it kind of boiled down to three things. First was, you know, I talked about excellence in everything you do, right? Like in excellence in everything, in the way you write emails, in the way you respond and, you know, just showing up on time and you know, in the quality of your product, in how you speak it and in the packaging of your product. And if try to, try to put yourself, that doesn't mean things have to be super expensive, but go the extra mile, spend the extra 15 minutes being really honest, being consistent. So to me, that's what excellent means. Very important. And I second one was care. I said care is try to take care of your clients. And then even better, if you have team, a team, even better care of your team. I mean, I mentioned in that post that it was a fun fact that nobody probably knew that I had a chance to meet Richard Branson when I was in university. He had come to my hometown to receive an award. And after the awards ceremony, all of the, you know, the older gentlemen in tuxedos wanted to go out with him, but he didn't have one any day. He wanted to go out with the table of students that were there. So he took us out to a local bar, a pub, and we couldn't get in because it was, it was full. So he spoke to some bouncers at the side door and before we knew whatever got exchanged, we were all going in and we hung out with him, you know, at, at a bar for a couple hours. But you know, he's known for saying, take even better care of your employees and then they will take care of your business, take care of your people, take care of your people, your clients. Right? Thank yous. Being empathetic, listening to them, it goes a long, long way. Turnover is brutal of turnover of clients, turnover of employees. And, and the third one is, is, is to be clear, clarity, right? Make sure that you are clear. What does your business offer? What do you do? What's your expertise? What's the businesses? Make sure everyone can speak to it. What's the purpose, the mission? What are you out there to do as an organization? Because it's not always clear, sometimes it's confusing. We all must see businesses at times and scratch our heads and say, what are they doing? What is their business? And I get to websites and I don't understand what they do. And I just feel like if you're clear, if you care, and if you try and show up on time and be excellent, you're. You got a pretty good chance. You got a. You got a better chance than if you don't. So I, I shared that and I, you know, those things go a long way with me.

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1 1.

Okay, so what's the most unique or fun thing you've created a model for or built in Excel for your personal life?

All right, here's what I actually I just thinking of the most unique thing. All right, let me share with you the problem and then I'll tell you how I solved it. So many, many, many years ago, my wife ran, she had purchased a very small business that made personalized baby blankets. Okay, I'm creating a bit of a case study here and I'd love to know how you or others would think about it. She had a business that created personalized baby blankets. So let's say you had a friend that had a baby. You'd go on the website, there were four color options basically for the blanket there were two kind of boy colors and two girl colors. But in theory you could order whichever one you want. So you chose which of the four blanket colors you wanted and then you had to tell the name of it. And each blanket had like a different animal on it. Okay. But then you would put like if the person's name was Benjamin or Paul, you'd put the name in and then they'd get orders every day. Now a blue blanket. If you ordered a blue blanket Then the order of the letters it might be, you know, if it was a six letter name or Benjamin, then the order of. On a blue blanket, the letters might be a red followed by yellow followed by a green. Like it was always the same pattern of letters on a blue blanket. Whereas if you ordered a purple blanket, the letters might be, you know, white, pink, gray, black, and then follow that sequence. So they had a problem because they, they knew that they would have, they would order, you know, 100 stock of each blanket. But it doesn't make sense to cut a hundred A's and 100 B's and 100 C's and 100 D's. Like, they needed an inventory of letters. It doesn't make sense to cut, you know, the same number of letters in a dozen different colors because you don't use many X's, you don't use as.

Many, you know, there's not as many X's and Q's in people's names as there is an A or an I.

Exactly. So they wanted to make sure that they weren't wasting. And they had, you know, bins and buckets with a reasonable number, you know, of A's in red. And so, so I created a tool for them that allowed them to say, okay, at the end of every week, type in all the names that were ordered. So I had four Paul blankets and six Rebeccas and nine. And of the Rebecca's, one was purple, one was pink. And then it would go through with an engine and figure out, okay, and then what it would tell them and their sewers is that the sewers needed to cut 17 red A's and six, you know, white A's and, you know, no B's and et cetera. So they knew exactly how many letters they needed in every color in order to have the right inventory. So that was something that's very different than financial modeling of a company. But the approach was the same. It was a communication tool. It was built using cleanliness in a way that could deliver the right message to the people who needed it. And that was a fun tool.

Fun, I love that one. That's a fun one. We get some great ones we've had.

What else have you had that was interesting?

We had someone that we had built a bathroom tracker. Somebody had linked it to a TV show where it counted how many times it was using swear words because they said the show had more swear words than they'd ever heard and they wanted to find out how many were there. So they built an API and tracked it Another one to build a connection to a concert they wanted to go to, to keep track of the flow and calculate how long they needed to stay on the phone, they did get tickets. When someone who built a marriage dashboard to report on before they got married, like, what their goals were and how well they were aligned and all this, and I asked him, I go, how well does that work? Like, we're not using it anymore. My wife didn't see it the same way I did.

Yeah, it's funny, Excel resonates with people in different ways. So mine was called the Letter Tracker. It got used really, really for a long time, as long as they ran the business. But yes, some people have a bit of a visceral, as you probably know, a visceral negative reaction to using spreadsheets to manage certain, you know, elements of their lives that they feel maybe should be more intimate. I mean, it's just a tool. But listen, at the end of the day, I love the creativity. I love your question because what it demonstrates is Excel is just a piece of white paper. Right. It's just a piece of paper that can manage and give you insights into words, numbers. You can do whatever you want with it. There are people out there in the world that use Excel to create art because you can. And it's just a nice whiteboard that has a lot of power behind it. And I do encourage your listeners to be super creative. It's a great way to learn Excel skills and elevate your skills and your design and principles around clarity by just messing around and playing with it. Doing that will help you in more professional uses when you need it of Excel.

Very true. A lot of times, the things you do for fun, you'll. You learn things you wouldn't learn in the professional. And then you're like, oh, wait, the supplies.

Exactly.

So we're gonna do what I call a shortened rapid fire.

Yeah.

You've answered most these questions already. So if somebody wants to know circular references, vba, all that, they can go back and listen to episode one. But there are four questions I want to ask that we've added.

Okay.

Last time you were on. Okay, you know the rules. No. It depends. I know you're going to want to say it for all of them. So we'll get your answer, then you can elaborate on one or two. So the first one is, do you believe you're at the point where we should build fully dynamic models with dynamic arrays?

No.

Okay.

And do you want clarity?

Or we can add clarity at the end. I'm going to run through all of them first.

No.

Should financial modelers learn Python in Excel?

I'll say no, not for financial modeling.

What about Power Query?

No.

Power bi? Power bi.

I'll go no, just to, just to stoke it up and then I will start now.

You can elaborate however you want on those.

Sure. Those are all great skills. They're all so. Again, to be super clear and not trying to be cheeky, I am not suggesting people shouldn't learn those skills.

Sure.

Like you were talking in the context of financial modeling and when you and I talk about modeling, we're talking about building forecasts. And if you're talking about building a forecast of a project or of a company, you know, one of the things that I stand for a lot, because I know clients stand for it, is simplicity, cleanliness. Python's phenomenal at managing massive amounts of raw data. And if you happen to need to manage large volumes of raw data and to visualize it, fantastic. You should, you should understand it. But I don't see the place yet for Python as a forecasting tool. Maybe they'll change, but I don't see that yet. Same with dynamic arrays. I love it. I love that there are certain people in our community pushing the envelope. They are the pioneers. Challenge with dynamic arrays and models right now is that certain things are actually a lot more complex. They enable an inherent circular reference. Like there will be circularity in the circular reference as a result of it. It's not quite. I don't think it's ready for prime time yet. I love that people are pushing the envelope and I think it will, but I feel like it's not there yet. Power BI again, Power BI is a great add on if you want to visualize some data in Power bi. Again, Power BI I think is still better for big data. Managing and organizing sales data for a million rows, attaching it to the model, I mean, I don't see a need for that yet. And the last one was you talked about dynamic array Power Query.

I think Power Query is the other.

Yeah, Power Query, phenomenal tool to clean data. But again, you know, I'll end with the point with this. There are really only two reasons that I've ever seen people use spreadsheets. Okay. Truly. One is to manage data, big data, big volumes of raw data. And I believe that all of those tools that you talked about, knowing how to use the tools in Excel and when is so important. I believe that the tools you just mentioned are optimal for managing big data. You want to manage data. Power BI is great. For visualizing and power. Python is fantastic for helping you pull the data, extract the data, organize the data, do a lot of things with it. Also visualize it. Power Query to clean it. And the dynamic array capability. Phenomenal capability to automate so many things. Right. To spill data, you know. Incredible. But again, each of these I think still has more of a place in the world of data as opposed to in building a forecast for a project or a company. That's my view.

Appreciate that. Thank you. And I could totally see where you're coming from. They're definitely more used in big data. Power Query is the one I would probably. That's the one I say yes on. But that's also power.

Which one?

Power Query. My, my view there is especially FP and A. The models I'm building. You have a ton of actual data you need to bring in. It's often from multiple systems and it's always messy.

Okay. And so power. So Python, sure. In a FPA world you're talking about connecting. So you're talking about the connectivity piece between the actuals to help you get into the forecast piece.

Correct. Right. You got to update it every month typically for doing a budget or a rolling forecast and updating those actuals. Power Query is hugely helpful to get to all the different data sources.

Oh, sorry, did you see Power Query or Python?

Power Query.

Oh, Power Query. Got it. Yeah.

Okay.

I can, I can.

So that's kind of where I say yes is I think so many. Especially if you're, you know, dealing in certain areas of modeling, you're dealing with so much messy data. It's really helpful to kind of be able to do that. I get what you're saying. It's more of a data thing than a modeling thing.

Correct. I still, I would still, I would still say that you're right, that that's more of the cleanliness and getting like to me, the modeling still is the future looking portion. Right. I mean I know that the full modeling tool does include and base off the historicals and so cleaning that historical data and organizing and rolling it. Sure. I view that as sort of a clinical. And yes, I can see a spot for that. That's not needed in all models, of course, in more project oriented models. But yes, if you're dealing with an FPA world and you're constantly pulling in. Yeah, love that.

So, yeah, so just have one more question for you and then we'll, we'll be done here.

But super.

If you could share one piece of advice to our audience. What's the number one piece of advice you share with people about being a better financial modeler. What's the advice you'd give?

Yeah. Is getting. Is learn the modeling, learn the technical piece really well so that you can get away from it. Right. The great success in life. I mean, listen, are, are there. I just really believe that as I said earlier, modeling is a means to an end. I mean there are people that like to kind of lock themselves in a room and you know, in a somewhere and just keep their heads in a spreadsheet all day long. And if that's what you like to do, great. But in terms of I tell people all the time, modeling, I believe is one of the world's great leadership development skills. You can elevate your career and become a tremendous leader through modeling, but not through the technical spreadsheet portion of it Modeling, you know, as you know, and this is why I love it requires you to know how to think, how to interact with people, how to lead teams, how to ask questions. Asking questions is not always easy. How to push back on people, how to collect data, how to organize it, how to design your flow of your file, how to be able to communicate it and present it to inspire confidence and help people lead decision, make decisions through a clean and a clear lens. That skill is going to elevate you throughout your career and an organization. So I'd say is if you, if you get the fundamental technical skills but then recognize that that's going to be the slingshot to elevate you up. I think I would, I would encourage people to focus a lot on, on that side of the equation.

Great advice. I really like that. And you know, we'll put your, we'll put the link, the FMI, we'll put your LinkedIn profile in the show notes so if somebody wants to reach out, they can get a hold of you and keep up the great work. I love what FMI is doing and look forward to doing this again in a couple years.

Amazing. Thank you, Paul. It's always a thrill and a great honor to be here. I love what you're doing as well. So congrats to you and I look forward to being in touch soon. Thanks again for having me back.

Yeah, thanks for joining me and look forward to seeing you again soon. Thanks. In Financial Modeler's Corner was brought to you by the Financial Modeling Institute. This year I completed the Advanced Financial Modeler certification and it made me a better financial modeler. What are you waiting for? Visit fmi@www.fminstitute.com podcast and use code podcast to save 15% when you enroll in one of the accreditations today.