Elements of Effective Business Writing (relevant to FIN 404)
1. 2. 3. 4. 5. Have a clearly defined purpose Know your audience KISS principle Logical organization and transitions Effective/appropriate formatting

Clearly-defined purpose
Most business writing is done either to request something, make a recommendation or direct an action. In any case, make sure that your writing sticks to the topic. If you include extraneous information, the reader may become bored, confused, or feel that you are wasting their time. Always make the connection between your point and the purpose crystal clear.

Know your audience
Have a good idea of what the reader already knows (don’t make the reader feel like you are lecturing them on things that they already know) and, more importantly, wants to know. Anticipate questions that the reader has (or may develop as they go through your writing) and answer them. Some of the most common questions deal with alternatives - present other potential courses of action and explain the advantages and disadvantages relative to your recommendation. Other common questions relate to uncertainties – providing results of sensitivity analysis (or other “what-if” analysis) helps the reader to see just how robust the results supporting your recommendation might be.

KISS principle
“Keep it short and sweet.” (Berry Writing Group) This might not be the most common application of the KISS acronym but it is most appropriate to business writing. “Clear and concise” is also often used but it doesn’t have a nice acronym. Most business managers are very busy and often do not read everything they are given, especially if it is long. Instead, they skim, trying to get the gist of the idea quickly. This has several implications. First, don’t overinflate your writing to make it look like you did more. Think about what your writing would look like if you had to pay for every word. Also, the reader doesn’t need a step-by-step description of everything that you did. Instead, the reader cares about the results (and the key inputs that generated the results) since that is what the final decision will be based upon. Second, don’t use jargon or buzzwords unless absolutely necessary. These make you look like you are desperate to sound smart. Standard industry terms such as “return on investment”, “acid test”, or “hurdle rate” do not count as jargon if used appropriately and the audience is familiar with such terms. Third, think carefully about exhibits. We’ve all heard the saying “A picture is worth a thousand words,” but this is true only if it helps the reader to understand your point. Whenever you include a graph, chart, or table, you must discuss it to help the reader understand how it is relevant. Even something as simple as “The firm’s ROE declined substantially in 2009” may be all that it takes to tie the exhibit back to the text. Including an exhibit without any sort of explanation dumps your responsibility to analyze the data and explain the result into the reader’s lap. If it is something the reader needs to know, be sure to explain it. If it is not vital to the reader’s understanding, why include it? After all, incorporating something unnecessarily violates the “short” part of KISS.

Logical organization and transitions
Many students start writing by putting whatever is in their minds first on the paper first. This is fine as long as you later revise and edit your work to meet the needs of the reader. In keeping with earlier

principles, start off with the conclusion since this is what the reader is most interested in. This may sound backwards to those of you that learned Introduction, Body, Conclusion used in academic writing but this is one of the ways that business writing is different. In many longer documents, you may see an “Executive Summary” or abstract that provides the key information in a shorter form. After giving the recommendation, you may want to provide some background information to provide some context. Be sure to keep the audience in mind so that you don’t explain things that the reader already knows all too well (this would violate KISS.) Discuss key assumptions/inputs and methodologies but don’t get bogged down in step-by-step descriptions. Explain the key results and their meanings/interpretations. For example, if you have done a ratio analysis, don’t just state the numbers (“the current ratio is 1.3”). If you do, you are, again, dumping the real work in the reader’s lap. If there are a lot of assumptions or results to discuss, use some sort of logical outline to progress through them. You may group ratios into groups (leverage, asset management, profitability, etc.) and then discuss each ratio in the group before moving on to the next group. You want the reader to understand where you are going so (s)he can get a sense of the big picture but the reader will only get confused if you just jump around in a haphazard manner. Often, following the structure of a standardized financial statement is a good way to help the reader follow along. Use transitions to help the reader understand when you have moved from one idea to the next. This can be done with word choice (“First”, “Second”, etc.) or paragraph structure.

Effective/appropriate formatting
The formatting of a business document serves two purposes – to help the reader understand the content and to look professional. Standard layouts help the reader in much the same way as a logical outline. The memo format is such a standard layout. (We will be using the memo format even though some of the documents you produce in this course may more accurately be considered as white papers rather than memos.) Remember that, as long as you maintain professionalism, substance is much more important than style. The tone of the writing is also important. In general, most business writing is “formal” and should not sound like the dictation of a casual conversation. Don’t use rhetorical questions. Also, avoid slang and loaded words, whether they are emotionally-charged or exaggeration words. Finally, keep in mind that you are not a cheerleader – if there is a problem, it is better to identify correct it than to pretend that negatives don’t exist. Spreadsheets Organization and formatting is just as important for spreadsheets as it is for written documents. If you are going to be the only one to use a spreadsheet (i.e, you get to distill the results and make exhibits for inclusion in a document), then you may be able to get away with sloppy organization. However, a logical layout and professional formatting is absolutely necessary if your spreadsheet is shared with other people, used directly as exhibits or if you use the spreadsheet intermittently and can’t afford to review in depth each time you re-open it. Useful sites Purdue Online Writing Lab: http://owl.english.purdue.edu/owl/section/4/16/ Business Writer’s Free Library: http://managementhelp.org/businesswriting/index.htm UW-Madison Writer’s Handbook: http://writing.wisc.edu/Handbook/index.html Writing tips from Berry Writing Group: http://berrywritinggroup.com/writingtips.html Class of ’41 Writing Studio at Clemson: http://www.clemson.edu/centers-institutes/pearce/studio/