Hard financial consultant in a startup is a godsend for any team
. But if you have no one, save this article and use given advice! 1. Draw up a financial map
First of all, create an Excel document, where you can plan and fix all firm's cash flows. The design of this document is not important, but all of the following points must exist in it:
place on record exactly the sum, which you consider as feasible (it can be revenue or profit). In the next step, forecast the number of goods and services that you are able to sell during one billing period.
- Time horizons:
create a budget for the long run (5–7 years), medium run (1–5 years) and short run (less than 1 year) periods.
- Income and Expenditures:
describe all sources of revenue and planning costs. Budgeting is a good disciplinary tool, which allows you to see clearly how much the company earns and spends from month to month. This method helps you to find the bottleneck in the company's performance and change the strategy. 2. Always cut the costs!
Why is it important to minimize costs? The answer is that at bad times, where revenue will draw down, you cannot cover the company's costs and just become bankrupt. So, the KPI for all employees should include the cost minimization strategy. 3. Keep a record of a team's working time
During my work time in Deloitte I have observed the company's attitude toward staff time. Every employee must record the time, which he/she spend on tasks and projects. And you can ask me: for what? The point is that this method allows a team to understand how much this project (or task) will cost them on average in case of repetition. Moreover, it stimulates workers to work faster. 4. Analyse the "cost and effect" relationship
Create an Excel file with the table for each month, which consists of all main expenditures and income items (in case of absence of revenue, it is possible to use another effect, for example — the growth of users' base). Having identified the absolute and relative difference, it will be possible to understand what decisions became the most efficient. 5. The workers' efficiency table
One of the most effective manager's decision is the organization of conditions, which increases labour productivity. It is highly important to work with the system to keep a tab on workers' efficiency. Try to start with the simplest formula: Labour productivity = Net profit/Number of workers 6. Use the rule "x-1", where x is the necessary number of workers
When you determined the necessary number of workers for this project, hire one worker less. This lifehack makes teams more efficient, because of them … and higher productivity. In this case, the good advice is to incorporate the efficiency rating system and encourage the best of workers. 7. Visibility of finance in a startup
Create the documents, which we considered earlier, using the following templates (here's the download link
). Order in company's finance is the caution of right decisions and in the same time a good controlling tool.
The secret of a healthy company is a healthy economy and finance!