Spreadsheets

Excel for decision-makers

brainstorming for problem solutionAs a decision-maker, you probably see a lot of Excel charts. They often take the form of a dashboard that summarizes the current status. Because of this, you probably think of Excel as a tool for “number crunchers” or “bean counters.” These are the people who keep track of all those tedious columns of numbers and then summarize them in pretty graphs. Why would you be bothered with that sort of thing?

This common use of Excel fails to tap Excel’s greatest feature—interactivity. The very first spreadsheet program was called VisiCalc, short for visible calculator. It was touting its ability, remarkable in an age when spreadsheets were made out of paper kept in big books, to let you change anything and see how it changes the answer. Now we’ve lost sight of that legacy. We’re back to thinking of a spreadsheet as rows and columns of numbers, but now we can slice and dice them and show them in pretty graphs. Excel is so much more than that!

Future-focused spreadsheets

Business is not static. If you’re looking only at this month versus last month, this quarter versus last quarter, you are not looking ahead. Build a spreadsheet to look into the future, then change inputs and see what happens. Play what-if with things you can control to maximize your chance for success. Play what-if with things you can’t control so that you’re ready for whatever comes your way.

Here are some examples of future-focused spreadsheets you can easily build yourself.

  • How much start-up capital do I need?
  • How soon will my business break even?
  • Do I have enough money saved to retire?

Here are some of the what-if questions on things you can control that you might want to explore for that third question.

  • What if I move into a less expensive house?
  • What if I work another 5 years?
  • What if I take a lump sum rather than an annuity?

Here are some of the what-if questions on things you cannot control:

  • What if I live to 90? 95? 100?
  • What if inflation is high?
  • What if the stock market is erratic?
  • What if the capital gains tax rate changes?

Why would you want to build these spreadsheets yourself if there are people working for you who do this sort of thing? Because you’re the only one who knows exactly the questions you want to answer. And answering those questions will raise more questions, questions that you can answer by expanding the spreadsheet. Keep Excel open on your computer to jot down ideas or do quick calculations. Many of these doodles develop into spreadsheets that give real insights.

With just a few simple techniques you can build your own spreadsheets to answer questions like these. Excel is full of features, many of them powerful and complex for sophisticated analysis, many of them to help bean counters bring you beautiful spreadsheets and charts. It turns out that 99% of the stuff you find in those big Excel books you don’t need to know. You can quickly learn what you need from my book or my Excel workshop.

Excel is especially useful for small businesses. You can’t afford specialized programs for everything you need to manage and predict.  You need flexible tools to respond as fast as your business.

Here are the excel worksheets for the mini-workshop.

Here are descriptions of some key techniques.

If you have a lot of data to make sense of, here are key techniques for organizing information.

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