You’ve taken the plunge and bet it all on black by launching your own company. The entrepreneurial spirit is pounding in your heart and you’re excited to bring your new concept to the market. But hold on. Let’s take a step back for a moment and reality check your assumptions.
Did you prepare a solid business case before your launched your new adventure? Did you consider the financial implications? Maybe you did and maybe you didn’t. After all, Finance is not your strongest suit and it certainly wasn’t the reason you became an entrepreneur in the first place.
The truth is just like anyone else you need help when it comes to covering areas where you don’t have any competencies and starting a whole support function is way too costly for a start-up. So instead of paying a lot of money for it you can turn to friends who are in Finance, hire a consultant to take a quick look at the business case or even just outsource the whole thing so you don’t have to deal with it but just get an assessment in return to see how solid your new venture is.
You thought you didn’t need a finance guy but you do
So why is it really you need a finance guy taking a look at your startup or even be a part of launching the company all in all? Here are 4 reasons why you need a finance guy and why getting one on board will put your mind at ease.
1. Reality checking assumptions
You might have gotten too excited when you prepared your business plan to launch your new company and made way too optimistic assumptions about how it would work out. Having an objective or outside person go through your assumptions will ensure that they are more realistic and will help you avoid nasty surprises.
2. Be a guardian of your burn rate
The burn rate is one of the most crucial numbers for a start-up or a growth company and is the rate at which your company is losing money. Typically a start-up will be losing money in the start-up phase and while you’re plowing ahead on trying to get some customers someone has to make sure you don’t go bankrupt in the process. Having someone who knows the money side of your company will help you avoid this.
3. Help land more investors
Sooner or later you will need someone to invest in your start-up because you were so successful that you’re growing like crazy or due to lack of initial success you’re running out of money. In either case, you need someone that speaks the language of investors and is comfortable presenting in their midst.
Naturally, you can’t leave this completely to the finance guy as the investors will likely want to meet the brain behind it all but the finance guy will help you secure these much-needed funds.
4. Be a sounding board for new ideas
You’re a pretty smart and creative guy that keeps coming up with new ideas on how your start-up can become even better. Some ideas are great and should just be executed while others need more thought and some will just be plain bad.
But how do you know when you’re on your own? A finance guy probably thinks somewhat different from you and will provide another angle on your idea that you didn’t think about yourself. Together you will agree on which ideas are great and which are for the dumpster.
Your finance guy won’t save the world for you but help make it better