If you're brand new to running a business and you want to be a success, then it's essential to lay out your projected financial plans for the future.
While It's true what they say about surrounding yourself with experts to fill in the gaps and explain what knowledge you may be lacking, it's important to keep a close eye on the books to ensure you are meeting your bottom line numbers each quarter and maintaining enough cash reserves so you'll be able to expand your business in the future.
If you are uncertain about the integrity of your current financial partners, try these nine strategic tips that Forbes Business Development Council members have put into practice to advocate for their company's best interest.
Forbes Business Development Council members share their tips.
Photos of individual members.1. Stay On Top Of Finances
This may sound overly simple but tracking all your expenses, revenue and leads in a basic customer relationship management (CRM) or Google app for business works. Overcomplicating a business early on causes too much systemization, leading to failures. Give your financial partner a full view of the business through a shared settings feature on the CRM and hold each other accountable. - Tyler Trimbath, Trimbath Advisory Group
2. Align Cash Flow To Business Goals
Knowing your next milestone is key, whether you need cash on hand to reach profitability or to pay back a loan. Aligning cash flow to goals for the business is critical at all stages, especially at the beginning. Determine the return on spend you want to accomplish with help by matching execution to a plan and ensuring cash is being spent effectively to move the business forward. - Nate Gilmore, PandaDoc
3. Bring In A Third-Party Expert
Engaging third-party experts serves two purposes: One, it gives you the right questions to ask when monitoring cash flow, and two, third-party advisors can highlight blind spots you may have missed in the normal course of business. Third-party experts will not exhibit the potential conflict of interest or “zero-sum game” mentality that a financial partner may have or may develop. - Wajid Mirza, Arthur Lawrence
4. Review Metrics Regularly With The Board
Board presentations are a great forcing function for founders to meet with their sales and finance leads monthly to look at revenue, cash flow and burn rates. Having a consistent set of financial metrics to review together with the board helps with determining the right time to fundraise and when to hire for certain roles. - Serrah Linares, Change Healthcare
Forbes Business Development Council is an invitation-only community for sales and biz dev executives. Do I qualify?
5. Target Healthy EBITDA Goals
Try to hit your earnings before interest, taxes, depreciation and amortization (EBITDA) targets as soon as possible. Venture capitalists and financial partners like companies that have a healthy cash flow already. If you have the business coming in, they will put in more money. That's the truth! - Sayantan Dasgupta, Gramener
6. Create A Yearly Projected Finance Plan
Start with a yearly projected plan for your finances. Keep track on a monthly basis to ensure you are hitting or adjusting those numbers and you have a clear break-even point. Maintain cash reserves to expand the business and invest wherever it is required to grow. Your financial partner should understand all expenses from business expansion to operational expenses. They are aligned in terms of which expenses to cut first. - Dhiraj Chhabra, BuzzClan
7. Engage In Clear And Open Communication With Stakeholders
All stakeholders and investors need to be on the same page in terms of how much investment is likely to be needed (as best as one can predict) and what key milestones need to happen until revenue is coming in. Do this first until revenue goals are achieved and then until profitability is reached. Timelines are usually just a best guess and are always subject to change. - Lee Noble, GoodPaw
8. Define The Role Of Each Financial Partner
It is a delicate situation when you start a new business because money means power. Therefore, it's essential to clearly define each role of the financial partners, as the more money people put into the business, the more they’ll want to have a say in things. - Wayne Elsey, The Funds2Orgs Group
9. Understand Your Finances
One must be in control of their finances. Regardless of how the roles are divided up within the business, finance and funding are essential. Therefore, no matter how much you trust your financial partner, you must understand the general state of finances and cash flow. If finance is not your forte you should be outsourcing to someone who reports to you independently. Consider this an ongoing audit. - Peter Schravemade, REACH ASEA
