It can be an immensely challenging and often risky strategy, but can lead to high satisfaction and a lean business. To achieve this you need to be really focused and plan intensely.
- Who are you target customers? What are your lead generation strategies? What conversion rate can you achieve?
- What is the average lifecycle of your product or service?
- How long is the cash cycle, where are the pinch-points in your cashflow projections?
- What funds do you need to invest in working capital, new projects, research and development?
- What key milestones do you need to manage? For example, when are you going to need to recruit a team, an e-commerce website, or a facility to hold stock?
How can a Financial Director help?
Accountability:
Hold you accountable to those stringent, lean plans and let you know if they need tweaking, resetting or (hopefully) celebrating.
KPI’s:
Select and manage relevant and meaningful Key Performance Indicators (KPIs). These could be obvious profitability or cashflow metrics, but also customer retention, staff performance, wastage, budget variances, etc.
Decision making:
Support your decision-making with financial modelling, demonstrating potential outcomes.
When is the right time to seek alternatives, such as SEED investment, asset finance or borrowing?
This depends on your industry, ambition and ultimately your appetite for growth and risk. Not everyone starts a business to make them a millionaire. Many are happy with slow, steady growth and maintaining a great work-life balance with minimal stress. Others love the adrenaline of building big and fast.
It’s not an FD’s role to tell you what is right for you or your business, but it is our place to help you build a business plan that helps you to achieve your ambitions and then support you in driving the business towards your goals.