Your leadership team inarguably plays a critical role within your company. You place your utmost trust in these individuals, because they possess the power to take your company to new heights – or run it right into the ground.
So, what are you doing to instill financial discipline into your leadership team?
Here are the seven things we believe will help get your leaders thinking critically about the numbers behind the business so they can create efficiencies and help it grow.
1. Adopt an “Under-Promise, Over-Deliver” Mindset
Your leadership team’s mantra needs to be “under-promise and over-deliver,” particularly when it comes to investor relations. While not easily done, under-promising and over-delivering is a positive way to build trust with investors. Proving you’re a reliable, consistent performer that delivers beyond expectations can ultimately help pave the way to your company’s growth.
2. Spend Below Budget
Spend your company’s money like it’s your own. It’s advice that seems simple enough, but many companies fall into the trap of spending more than their budgets allow—and falling short when unforeseen circumstances occur.
It’s wise to work on your allocation so you have a cash reserve when you need it. Your leadership team should be analyzing your company’s actual spend and tidying up the budget on a quarterly basis to ensure your business is consistently spending below budget.
3. Hire Behind the Curve, Not Ahead
When you hire “behind the curve,” you bring a new set of hands on deck as the work demands. You have a true understanding of the roles and responsibilities that need to be filled, and you’re in a solid position to hire the perfect fit for the job.
Alternately, when you hire “ahead of the curve,” you anticipate a future role and fill that position ahead of time—possibly with the wrong gal or guy for the job, and perhaps for a role you’ll later find you don’t need. Especially when you have limited funds, as most startups do, hiring behind the curve is the way to go.
4. Review Large Expenditures Periodically
Budgeting for capital expenditures is essential for a business to operate and grow from a sound financial position. Your leadership team should be reviewing your company’s capital expenditures (like equipment and company vehicles) periodically to make sure your investments in those assets are worth the cost. Are they helping your business generate profits? Do they coincide with your long-term goals?
Keep in mind that large expenditures don’t have to come directly from company funds. Leasing is an option and may be appealing when purchasing assets like computers and technology, which become quickly obsolete.
5. Be Cautious of New Software, as Small Contracts Tend to Add Up
Software exists for everything you can imagine, from cybersecurity, to manufacturing, to project management, to restaurant point of service, and the list goes on.
Although you may feel the need to have access to many of these tools (because they promise to make you better, faster, smarter), be sure to pick and choose wisely. Having several small contracts can add up quickly in terms of spending, and you may be paying for software that isn’t being used. For example, are you paying for sales software your sales force never uses? It’s important for your leadership team to evaluate the small contracts you have in place and determine what’s truly adding value. Keep only what’s helping you to achieve your business goals and ditch the rest.
6. Review your People Periodically & Ensure They’re Still Needed for the Job They Perform
As startups grow, they often adapt into something different in order to fulfill their customers’ needs. As a result, roles and jobs within your company itself may shift change, and you may no longer need to skillsets of some of your employees.
Encourage your leadership team to review each employee periodically to make sure they’re still the right fit for your firm and, if they are, that they’re performing at peak levels.
7. Assess Salespeople Productivity
Without sales, you’re without a company. Because your salespeople are the lifeblood of your business, training is vitally important and can mean the difference between a return on investment in a sales rep, or a loss of that investment.
Encourage a high rate of interaction among your leadership team and salespeople, and have your leaders regularly assess each salesperson’s productivity. Putting metrics in place can help to formalize the process while measuring each salesperson’s productivity fairly.
Let’s talk about how our team can help your team create efficiencies in your company and position you for growth.
Contact us for a free consultation today.