Building the Basics

By Megan L. Thomas
June 24, 2009 02:19 PM

When you first start out on the business beat, sorting through financial statements, digging up sources and explaining business concepts for the average reader can feel overwhelming. Often the best place to seek help is right inside your newsroom.

Veteran business reporters are familiar with navigating the challenges of the beat and understand what it’s like to start from scratch. Bend their ear and learn their secret tips and mistakes. Soon enough you too will cover business with authority.

Here are some tips from top business reporters to get you started:

Conquer your number fears

Journalists have long been stereotyped as number-phobic. Admitting what you don’t know and then passionately educating yourself can conquer numeric fears. Diana Henriques, a veteran financial investigative reporter for The New York Times, believes that journalists in every beat should embrace numbers to enhance their reporting.

“Just get over it,” Henriques said. “I think what holds more business journalists back more than any other thing is this reluctance to demand a mastery of numbers. A willingness to tackle numbers is, in most newsrooms, what distinguishes the business reporters from everybody else.

“Every reporter ought to be able to manage the world of numbers, they ought to be numerate and have some literacy in basic finance…you’re just shooting yourself in the foot if you don’t just get over this notion that you do words, not numbers.”

Henriques encourages new business reporters to take an introductory accounting class or business workshops. The Donald W. Reynolds National Center for Business Journalism offers tutorials like Using Numbers Effectively and seminars like Understanding Financial Statements to endow budding biz reporters with confidence. The Center for Investigative Reporting also offers resources online to help you in mastering sourcing and basic reporting tactics.

Or pack in some extra reading. Try “Math Tools for Journalists” by Kathleen Woodruff Wickham as a refresher for basic math you’ve gotten rusty or check out this article on the ten things every reporter should know covering the business beat.

For an overall primer, the Federal Reserve also offers an educational Web site outlining the basics of the Fed, economics and finance.

Admit you’re a newbie and keep learning

From interviews with chief executives to sorting through unfamiliar language in financial documents, the business beat is packed with intimidating scenarios. Business reporters must fight the daily urge to pretend they know it all.

An ego keeps you from learning, increases your confusion, and threatens your accuracy and credibility.

When you don’t know something, ask, says Jack Gillum, an award-winning business reporter who now works at USA Today. Gillum said that he learned fast that admitting ignorance is often the smartest move.

“I think the biggest mistakes I made weren't necessarily in terms of corrections, but rather in not appreciating the nuance of financial statements or asking people to explain things clearly,” Gillum said in an email. “In business reporting, it's easy to be intimidated by big financial types, but I got the courage to ask even the dumbest of questions. When I started doing that, things went much more smoothly.”

Adam Bell, a business reporter for The Charlotte Observer, said journalists should never stop learning about available reporting tools and information sources.

“Try to take as many different approaches to gaining information on somebody whether it’s researching, going through SEC documents or building a database to track things,” Bell said.

Bell and other expert business journalists encourage reporters to take advantage of public records, company Web sites, LexisNexis, Google Scholar, Yahoo Finance, Investopedia and SEC documents as rich sources for stories. They can also be great educational tools.

Excel and Access are effective tools for database-building and tracking of business data over long periods of time.

Say it simply

Business is notorious for its use of complicated, often obfuscating lingo.

Firmly grasping the concepts behind complex business terms and then relaying that information to readers in a digestible format is essential for business journalists. Breaking down terminology will keep you from becoming a mouthpiece for companies and help provide clarity and context for readers.

Binyamin Appelbaum, a national banking reporter for The Washington Post, said many journalists fail to cut to the heart of what’s being said to the detriment of their reporting.

“People stop short of translating things into English,” Appelbaum said. “As complicated as the stuff that we work with can be, it can all be boiled down to the point where you can understand it…It seems to me that a lot of what goes wrong in business journalism is a function of reporters parroting things that have been said to them rather than understanding what those things actually mean.”

A dictionary of common business language can help you cut through terminology and convey ideas clearly for readers. Veteran reporters recommend these: “Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor” and “The American Heritage Dictionary of Business Terms ” by David L. Scott.

The Washington Post also offers a searchable online business glossary. And AllBusiness.com also has a voluminous online glossary sorted into categories like Insurance, Real Estate and Accounting here.

Learn to read financial statements and find expert readers for accuracy

Financial statements are the cornerstone of businesses reporting and detail the truth behind a company’s annual reports. Understanding how to navigate even the basic elements of a financial statement deepens your reporting and the context of your stories.

Appelbaum urges reporters to find experts and second readers to help check for accuracy in financial calculations and other assumptions.

“Find someone, it doesn’t need to be someone involved in the story, in fact it often shouldn’t be someone involved with the story, to walk through your calculations with and to say to them ‘am I doing this right?’, ‘does this make sense to you?’, ‘if I gave you these raw numbers would you reach the same results I did?’,” he said.

Economic/finance professors at local universities as well as independent accountants and bankers can all be sources to help your understanding of business concepts. Holding informational interviews with these sources is a great way to increase your knowledge of business. Experts can also aid in verifying company data and financial statement calculations.

Check out this list of top business professor blogs. It’s a good resource for sources and story ideas. CNN Money also offers a list of top entrepreneurial professors.

Three thing to keep in mind

Henriques recommends journalists should always remember these three elements when reporting on a business:

• The Risk/Return Ration: The risk/return aka risk/reward ratio states that the greater the risk, the greater the reward and vice versa. There cannot be small risk with great reward, and it can often indicate financial wrongdoing if a company or individual claims to have achieved as much.
• Conflicts of interest
• How the people you are reporting on are getting paid

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Copyright © 2009 Donald W. Reynolds National Center for Business Journalism