Why it’s important for founders to work with finance business partners

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A successful enterprise is made up of several great business decisions and a few bad ones to sharpen the saw. But this is easier said than done nowadays due to tighter competition and a very agile business landscape.

Are you making the best business decisions? 

That’s my opening question to all of my startup consulting clients. It’s a question that founders need to consider whether they plan to play the endurance game or the short position.

Great business decisions focus on three key aspects: strategy, operations, and finance.  It’s the balance between these three that make a business decision great.

1. Strategy: Business decisions have to be in line with the company’s overall business strategy. It’s easy to make a decision that’s executable and makes financial sense, but making it consistent with your company’s objective and image is important.
2. Operations: If decisions can’t be executed, they don’t have any meaning. Focusing on this aspect means aligning all operations of business—from human resources to marketing, development, and production.
3. Finance: When actions do not make financial sense, even a strategic one means nothing. Financial benefits need not be immediate, but some results should show up after a series of executed actions.

I’ve seen a lot of companies execute business decisions based on instinct or executability alone. What they fail to take into account is the resources available to the company, how investors see their decisions, and whether those actions help create any foreseeable financial benefit. In a way, they focus on the first two aspects but ignore the third.

How can finance actually help you?

With the advent of affordable accounting software, our startup colleagues are slowly coming to grips with finance. However, accounting software dashboards are very limited, as they only present the financial position and performance of your company at a single point in time. These do not help in creating better business decisions other than assessing your current status.

The involvement of finance professionals in strategy, operations, and finance itself evolved from large corporations that understood that businesses needed better financial information from people who understood their business.

This sounds intuitive, but in most businesses, especially for startups, entrepreneurs focus on planning the strategic action and executing it; there’s little or no involvement in finance at all. That’s where finance business partnerships (FBP) comes in handy for a lot of startups.

Startups need trustworthy business advisors who know their business, understand their strategy, are aware of their capabilities, and are, of course, financially savvy.

So how does FBP help in making better business decisions?

There’s no one common practice when it comes to FBPs since the services performed can be very different depending on the organization. When it comes to startups, it mostly involves providing strategic financial advice and mentorship. In short, FBPs are trusted business advisors.

So how do FBPs help startups create better business decisions? It’s a challenging question, but let me highlight a few advantages.

Working as part of management

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Key takeaways