During a career working with a range of clients, one observes certain behaviours.
Insights from interactions with business owners tell a story. Notably, a large percentage of early-stage businesses enjoy similar characteristics. Moreover, founder teams often consist of a combination of complementary skill-sets. Importantly, a passionate and robust entrepreneur and team leader. Coupled with a product manager leading delivery of the digital platform. Accordingly, missing from the core leadership team is an experienced commercially adept financier.
Furthermore, based on my numerous engagements and mandates. Especially, during the business foundation and subsequent roll-out stages. Frequently, the absence of a finance person results in critical financial metrics being overlooked. Notably, of these being a robust, sustainable and cash generative revenue model.
Insights from interactions with business owners. Monetisation of product and service
For management, understanding how to monetise the product and service offering is key to ensuring the “best fit” revenue model. In order to, generate maximum profit and generate sustainable growth.
Insights from interactions with business owners. In particular, founder teams are vested in the functional and technical attributes of their product and go to market strategy. Consequently, they overlook the importance of key economic drivers.
Insights from interactions with business owners. A Robust Financial Model
Having a robust financial model with measurable data points provides a benchmark for business analysis and financial modelling. In addition, to being a blueprint for the customer acquisition and brand development teams. As well as, to plan, implement and execute an effective marketing strategy.
In my experience working alongside early-stage founder teams. Ultimately, management needs to have a comprehensive grasp of the key financial drivers and commercial metrics of their business model. All things considered, to optimise product development and to implement measurable marketing strategies.
The setting of measurable financial objectives and key results (OKR’s). Accordingly, creates alignment across all functional teams. Therefore, interdependencies across business functions are key to setting achievable performance milestones.
In summary, my experience working alongside entrepreneurs and investors. Coupled with, reading on the subject highlights that financial input and commercial metrics are key to setting OKR’s. Therefore, it is essential to have a commercial finance lead involved in the benchmarking process.
One of my favourite books of the year so far, on OKR goal, setting and measurement Measure-What-Matters
The relevance of the finance lead explained
www.mckinsey.com/reimagining-the-modern-finance-workforce
Insights from interactions with business owners shared
#RevenueMethodology
#Insights from interactions with business owners
