How to address growth in your startup: talk a lot to your team’s finance member!

Unless you are running a NGO, the financials behind your startup look like pretty much closer to the one’s of a big corporation rather than the ones behind a group of flatmates who split payments. Well… in real early stage your financials may look like a group of college flatmates paying for their costs at the same time they ask parents for more money every month!

First thing you should make clear before trying to grow a business-to-be is to find out if there is a real business opportunity behind your flashy edgy idea. Let’s say in other words: is people willing to PAY for your stuff?

If your have already found out that what is said above os true, then you need to ask a very serious question: am I building a viable business model on the costs I’m running into and over the forecasted revenue I want to generate?

Quicl test for CEOs: if you aren’t able to understand and make a decision on almost all of these financial metrics about your startup particular case then you should talk and listen more to the finance memeber of your team… seriously.

In a recent survey among CFOs from EY in the US, these are the priorities assigned to CFOs:

Managing costs and profitability 43%
Setting budgets/costs 39%
Financing 33%
Measuring performance 27%
Building the business case for new initiatives 23%
Resourcing and human capital 22%
Determining the level of ambition and risk appetite for new initiatives 21%
Setting the agenda for change 21%
Ensuring value realization 20%
Change management 17%

Guess what? The main role of a CFO is not keeping the business that you already have running, but to forecast every financial aspect of the growth for YOU to make the right decision!

As seen in

As a reminder, here are a few reasons every entrepreneur realizes of AFTER failing somehow at any point:

  • Poor or outdated business plan (a definition of your business model, not a hundred-page nonsense).
  • Pricing strategy is not working.
  • Investing in a ton of technology that is actually not producing revenue (time devoted to delevope is money invested, my friend!)
  • Avoiding tough decisions… and the toughest ones always depends on money.
  • Conversion rates are too low: people is interested but they’re not paying as you expected
  • Dependence on Do-It-Yourself everything = you are a bottleneck in your own company.

You will notice many of them are ultimately related with how you spend money in order to make a revenue… so talk to your finance guy or girl as soon as you can!


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