I have met a few founders in the past few months. Its great seeing most of them driven with passion onwards to building something big. There is also a phase in their journey when they can see their business potentially make money in so many ways. For example, one founder explained their business model to me, initially presenting what seemed like four distinct revenue streams. It turned out these were just different facets of a single revenue model. In addition, its not always very easy to tell how to prioritize amongst all the different tasks at hand.
To founders sailing in the same boat (or at least realize that they are), this is where a CFO can be a great partner to you in your journey of building a great company.
Planning is of essence in achieving anything. The more detailed the plan, the greater the probability of success! Financial planning in business is no different. How well can the strategy be articulated, and how does this plan actually translate into numbers can provide one of the greatest tool for a founder into steering his or her business towards maximizing shareholder value!
The process of financial planning not only helps with setting revenue and profit milestone, but also in quantifying lead measures for both cost and revenue drivers. To provide an analogy to that of a student appearing for an exam, the lag measures would be the marks she scores in every subject. A lead measure such as number of hours spent in studying, the marks earned in practice exams, etc., helps ensure she puts in the right amount of efforts in targeted areas thus ensuring success! Financial planning for businesses works along similar lines. A CFO can play a major role in quantifying such lead measures, track it on a regular basis, prioritize on projects, and help founders achieve success.
Siddharth Dani, CFA
Pranay Bagdiya
