As the chief financial officer of a startup, driving continual growth is a critical component of the job. In addition to managing accounting, finance and other areas, focusing on scale is just as important. One of my early mentors said it best when he asked, “If you don’t think about scale, who will?”
From optimizing your resources to figuring out how to grow revenue while keeping operating costs low, scale is something that any entrepreneur must carefully consider while launching and growing a startup. As a CFO, a big part of my role is helping to guide the constant questions that arise when thinking about scale. Here are five factors to keep in mind as you embark upon scaling your business into the best version it can be.
It’s critical to have an overall and cohesive vision for all of the important staffing, systems and process decisions that you implement. The impact these decisions will have must be kept in mind for the implementation of your overall business strategy. Hiring a great team or selecting a great ERP won’t ensure success unless there is a crisp vision for how everything will be implemented and managed. Essentially you want to make sure you’re always seeing the forest, and not just the trees.
It’s essential that you evaluate staffing plans for the next 12-18 months on a constant basis. Hire “A" Players who understand your vision and are just as excited about achieving its success. You want to have this enthusiasm in your employees, as there are peak periods of time, such as during fundraising rounds, where the whole team will have to support that effort in addition to performing the normal job requirements.
Beyond talent and enthusiasm, the other key dimension when it comes to building your team is to make sure your staffing plan is aligned with the company’s culture and values. If you are a data driven company, for instance, you need to ensure that you are building a team that embodies that spirit and embraces that approach.
Related: 4 Tips for Rapid Startup Growth
Similar to your staffing plan, you have to have a plan for all of your internal systems that will cover the next several years. Evaluating when to upgrade your ERP is the most critical decision you can make. The key is balancing where you are in the growth cycle, as you don’t want to wait too long to upgrade. The later you decide to upgrade, the more complex and costly it can be. Remember that your business management systems should help -- not hinder -- you. If they aren’t scaling along with you, it’s time to find a better system.
You also need to have an overall plan for all internal accounting and finance systems. The key part of the plan is to ensure that all other internal systems across all departments will integrate well with all accounting and finance systems. Having a regular dialogue and standing meetings with cross functional teams can help ensure that decisions are made with full company wide alignment.
As you scale, you’ll undoubtedly need to add to your team. Learn what works, and change lots of things along the way. Adapting to the everchanging needs of a growing startup requires a certain amount of pivoting and modifying along the way -- culture being no exception. Maintaining a values-driven work culture becomes increasingly difficult the more you grow. Stay true to your core values and culture as you grow, and make sure that everyone on your team understands that building for scale is an essential part of your success plan.
In order to increase the probability of success and minimize future blockers to supporting the growth of the company, you must obsess about scale! Remember that decisions that are made in the early days can have a far reaching impact in the future.
Pricing is a great example of an area that can have a broad impact on the company as it gains traction and attracts a larger customer base. Having a focused and straightforward pricing strategy can help to ensure consistency and alignment between sales, marketing, product, customer success and finance/operations. This is essential to help drive positive interactions with customers on an ongoing basis.