Do things feel a bit out of control?Jan 01, 2022
When I start working with a founder, one of the first things I do is ask very open questions that are by and large subject to interpretation. Big ones, like: “What makes you worried these days?”
What I’m fishing for isn’t an accurate picture of the company’s financial performance (that requires a cold hard look at the numbers, which is the next step I take).
Instead, I am hoping to understand what doctors call the “chief complaint” – the issue that led the patient to visit the doctor, and which can help decide the best way to diagnose and treat the root problem. The fact that “chief complaint” doesn’t equal “diagnosis” is a very helpful concept that I think finance should adopt in some way.
Does your back hurt in the morning? Is your chest feeling tight? Do you feel dizzy?
Are you scared to hire? Are unpaid invoices piling up? Do things feel a bit out of control?
Just like in medicine, sometimes the recommendation is pretty obvious, especially to someone who has seen many similar situations. Drink more water. Get enough sleep. Watch your margin.
In other situations, tests may be needed to determine what’s causing the trouble and how to fix it. To tell you whether or not hiring is a good idea, I’ll need to run a few quick analyses. Or I’ll have to map out your existing processes to then simplify them and give you your time back.
I’m a big fan of exploring the chief complaint alongside the numbers, rather than focusing solely on the latter. Let’s not ignore that back pain just because it doesn’t mess up your blood tests.
Love and cash flow,
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