Almost every time I give a talk, I am asked where founders should start when it comes to managing their company’s finances. Every time I give the same answer: if you’re not doing it already, start by just looking at it.
Engage with the main numbers. See what’s going up, what’s going down. If you don’t understand what something means, ask your accountant. (And don’t worry too much if you don’t understand everything straight away; it will become clearer as you go.)
The next question usually is, how often should I look at it?
At bare minimum, every founder should look at the main figures once a month. Doesn’t matter if you sell face creams on Etsy, run a hotel, or manage a law firm – once a month is pretty much mandatory, otherwise you may miss big problems before it’s too late.
If you do find that the figures are changing rapidly (in whichever direction), you may need to start reviewing them weekly; in some cases, even daily. A lot of venture capital-funded startups will be in this boat – if you run a marketplace that’s growing 10% week-on-week, you don’t want to wait until your monthly finance review to spot a sharp drop in GMV.
Love and cash flow,
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