By Hiran de Silva
Financial modelling is a term that has become fashionable, almost fetishised, in finance, consulting, and training circles. But here’s the hard truth: what is often called “financial modelling” in tutorials, courses, and off-the-shelf templates is not modelling at all. It’s labelling.
The Waxwork Analogy
Imagine you walk into Madame Tussauds and see a wax figure labelled King Charles. The only problem is, it looks nothing like King Charles. Wrong height, wrong build, wrong clothes — just a generic mannequin with a placard.
That is not modelling King Charles. That is mislabelling.
And yet this is what happens in so much of what passes for financial modelling today. Templates and courses present a generic framework into which you drop some numbers, and then call it a “model.” But modelling a business means modelling that business, with its particular quirks, drivers, and dynamics. A generic framework with a label slapped on does not capture that reality any more than a wax mannequin captures the likeness of a monarch.
The Infinite Variety of Business
Every business has its own DNA. I know this because I’ve lived it.
- Modelling the economics of a monthly magazine publishing business (at PENTHOUSE magazine media group in the UK) is utterly different from modelling baked beans. Revenue comes from circulation, advertising, and subscriptions. The drivers include cover price, distribution, advertiser demand, and reader loyalty.
- Modelling a building and interior design firm involves long-term contracts, unpredictable bidding processes, and project-based cash flows. An entirely different beast.
A real financial model reflects these nuances. Its purpose is to illuminate risk, reveal when things might go wrong, and provide early warning signals. In one of my own models, built over 35 years ago, the whole point was to flash red when the business was heading toward danger. That model wasn’t generic — it was engineered to the exact contours of the business it served.
Why “Purpose-Built” Is a Dangerous Lie
It’s fashionable today for vendors of planning tools to call their products “purpose-built.” But what is the “purpose”? If it’s a generic purpose — to handle any business — then by definition it is not modelling your business.
This is the great absurdity. “Purpose-built” ends up meaning “built to a template that ignores the one thing that matters most: the specific drivers of your business.”
To go back to the waxwork: you may have the right hair colour and roughly the right height. But if it doesn’t look like Queen Camilla, then it isn’t Queen Camilla. It’s just a wax woman with the wrong nameplate.
The Absurd Questions That Reveal the Shallow Thinking
This lack of grounding in reality produces absurdities. I see people on social media asking questions like:
- “What if your balance sheet doesn’t balance?”
- “What if the plane never lands?”
Both are equally ludicrous. A balance sheet must balance — it’s built into the logic of accounting. It’s like saying: commercial airlines take off thousands of times a day, but what if one never comes down? Would we have to send up another plane to fetch the passengers?
If you’ve studied even the basics of accounting, you know how absurd that is. Yet this kind of question is treated as legitimate discourse in the world of financial modelling training.
The Beatles Jam Challenge
This is why I created the Beatles Jam Challenge. From the start, it has nothing to do with finance. But that’s the point. It strips away the distraction of domain knowledge. It tests whether someone can model something they’ve never seen before.
Most Excel users — including MVPs, authors, and influencers — stumble. They regard it as impossible. Some even insist it cannot be done in Excel, and that a “purpose-built” solution is required.
That’s not just wrong. It’s dangerous. Because when experts say something is impossible in Excel, management listen. And that’s how organisations end up spending tens of millions on unnecessary systems.
The Mission Impossible series I’m developing will include this challenge as a future episode. The Excel IMF team will demonstrate not only that it can be done in Excel, but that thinking it couldn’t be done was itself absurd. And we’ll show how that belief exposes a deeper problem: a culture where “expert” has come to mean “template pusher,” rather than someone who understands the first principles of modelling.
The Real Definition of Modelling
So let’s strip it back.
- Modelling means modelling reality. The specific dynamics of a specific business.
- Every business is unique. There are an infinite number of possible drivers and interactions.
- Generic templates are not models. They are mannequins with labels.
- Training that teaches only completed models is hollow. It doesn’t teach you how to approach something new, only how to colour within predefined lines.
And this brings us to the final, uncomfortable question: if financial modelling is truly individual and custom, how many of those planning tools can really model any business beyond the generic?
If the answer is “none,” then what exactly are we doing when we call them “purpose-built”?
✅ That’s the myth of financial modelling. It isn’t about filling in someone else’s template. It’s about representing the living, breathing uniqueness of your business. And that requires agility, imagination, and principles — not mannequins with placards.
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