Jeff Nock is CEO and founder of Prescient Consulting, LLC, which helps companies achieve their growth goals. He has helped numerous organizations big and small, develop cash flow initiatives.
Jeff explains, “When new businesses are launching, it’s an exciting time, and everyone involved is geared to succeed and make their mark on the world, but during these ramp-up months and first few years, it’s important not only on revenue growth but also cash flow management.
Not always an easy task, it’s essential to have a plan and to stick to that plan.”
Jeff Nock’s 5 Tips
#1 Know When You Will Break Even
Many startups are led by visionary, goal-oriented people. By having goals for the company that include when the company will be cash-flow positive and break-even to profitability, founders will not only focus on top-line revenue growth but also cash flow management
#2 Keep Your Eye on Cash-Flow Management
During the startup phase, it is important to monitor spending not only monthly but even on a weekly basis. This doesn’t mean that founders should micro-manage the team and create a miserly culture, only that founders should have a very keen understanding of where cash is going when and make sure that both revenue and savings opportunities are achieved.
#3 Hire or “Outsource” Finance as Soon as Possible
Even if financials are a core competency for the founders, you shouldn’t handle the finances for your business. Many early-stage startups outsource the finance role to CPA’s who can come in a few hours a week and handle accounting and cash flow management. Once cash flow allows it, hire a controller and eventually a CPA. Founders should focus on growing the company and delegate to specialists.
#4 Utilize Smart Hiring
Often, those who have never been part of a successful startup and are financially focused, recommend that founders don’t hire people until they absolutely have to do so. In many cases, this is the exact opposite of what should be done. Smart hiring allows early-stage companies to bring on the talent they need to gain early market share and win the fight for early adopters. If founders can hire “smart” at this early stage, they can often recruit top talent that is highly skilled and often capable of taking on the role of two people in the company.
#5 Always Make Use of Technology
So often early-stage companies keep their financials on their hard drives or a plug-in. This makes the company very vulnerable to losing data entirely or having it stolen. Today, the best practice is to store all company data, including the financials, on a secure cloud platform. Not only will these platforms keep data safe from local file corruption/loss/theft, but it will also give your company secure access to your data anywhere in the world.
Jeff Nock is an experienced executive, consultant, and world-class leader who has demonstrated a history of growing startups, nonprofits and established companies. He is skilled in areas such as leadership development, strategic planning process, financial oversight, marketing, business development, and presentation development.