Why A Strong Finance Function Gives Start-Ups a Competitive Advantage

There are a lot of responsibilities involved with being a start-up leader, from generating new business to developing products and services. The to-do list can feel endless at times, meaning it’s easy to overlook important tasks and business opportunities.

However, there’s one area that every start-up leader should be focusing on, and that’s building an effective finance team.

If a finance set-up is neglected, start-ups can often end up struggling to kickstart growth and scrambling to fix urgent accounting issues.

On the other hand, if a competent finance team is nurtured and developed, start-ups can quickly find themselves driving profitability

What are the benefits of a well-rounded finance team?

Every business will require different financial expertise depending on their growth stage, but financial hires bring a lot to the table for start-ups, including:

• Helping to build long-term plans for fundraising and investing.
• Freeing up valuable time and resources for start-up founders.
• Accurately forecasting revenue, profits, and business expenses.
• Compliance and accounting.
• Growing a network of expert finance contacts.
• Controlling high-level investment decisions.

A solid finance team is indispensable for start-ups looking to expand in the near future. In fact, according to Jeff Jordan (Partner @ Andreessen Horowitz):

“A good finance executive almost always pays for themselves immediately, whether it’s through a better fundraiser, optimized company spending and cash flow, or more revenue due to key insights.”

The bottom line is that quality finance hires are incredibly important for modern start-ups.

But what should your first hires be as a small business? And how do you know which skill sets you’ll require to achieve sustained growth?

Let’s take a look at some of the key early finance hires that start-ups should be pursuing.

What should your first finance hire be?

Finance professionals fill a wide range of roles and responsibilities, so it’s important to understand which hires are right for your start-up.

Below are three of the best options for early finance hires in start-ups:

CFO

If you’re in the early days of running your startup business, then you’ll need to plan for a transition from outsourced financial support to a full-time CFO.

But why is a CFO so valuable for start-ups in their formative stages?

For one thing, if you’re looking to drive growth, then you’ll need to attract investment and progress through funding rounds. A CFO can help you to straighten out your finances and present a compelling argument to potential investors, meaning you can unlock the vital funds you need to expand.

An experienced CFO will also help you to keep business performance on the right track and develop a long-term vision for your start-up.

By establishing and monitoring key metrics (i.e., cash flow, pricing, cost per acquisition, customer value) a CFO will be able to identify opportunities for improvement and facilitate informed strategic decisions. A CFO with their finger on the pulse of your business can be a game-changer for your growth.

Finally, your CFO should be able to help you build a wider financial dream team. They’ll know exactly what they’re looking for in new hires (e.g. senior accountants, controllers, analysts) which means you can build a rock-solid platform for the future.

Controller

If a CFO will help your start-ups attract investment and skyrocket growth, then a controller will help you to nail crucial compliance and accounting tasks.

A capable controller will be able to lead your entire accounting team. A hands-on Controller will be happy to manage all day-to-day accounting needs, they’ll have a clear overview of the department and understand how to manage individuals to meet key deadlines.

Your controller will also be able support your future CFO in streamlining your finance function and contributing towards high-level decision-making.

For example, an experienced controller will be able to increase efficiency by automating laborious processes, expanding the accounting team, and taking charge when audits are ongoing. A good controller hire is someone that can oversee daily responsibilities while also offering value to strategic business conversations.

Finally, your controller can assist you in navigating tricky compliance requirements, ensuring that various teams are operating in line with financial standards.

FP&A Manager / Director

For start-ups with a need for improved financial analytics, an FP&A hire can be invaluable.

An FP&A manager will be equipped to produce all of the models and forecasts required for annual reporting. These hires will be able to establish and analyse key performance metrics, and can also transform raw data into actionable insights and visual charts.

FP&A directors, on the other hand, can be relied on to provide in-depth financial analysis at the highest level. Directors will stay up to date with day-to-day performance insights, but they’ll also be able to support CFOs in using these insights to guide strategic decisions.

Any FP&A hire should also be in a strong position to assist multiple teams and departments across your start-up.

These analytical experts can help you to calculate ROI, forecast revenue, and even deliver boardroom presentations to executive business leaders. When you need to get to grips with the implications of your financial data, your FP&A hires will offer critical support.

Finance Org Chart (To get a copy of the full Finance Org chart, please email [email protected])

Recruiting finance professionals with the right skills and expertise is essential - but you should also ensure that your new hires are a solid culture fit. Any new members of your start-up need to align with your core values and slot neatly into your company structure.

This is where we differentiate ourselves at Harmonic. We don’t just focus on recruiting skilled talent - we focus on recruiting skilled talent that will embrace and elevate the culture of your business.

Assembling a strong finance team is absolutely crucial for start-ups.

Not only can finance experts help you to generate investment and increase revenue, but they can also contribute to strategic planning and free up valuable team resources.

If you’re looking for guidance on finding the best talent for a growing finance team, don’t hesitate to reach out to [email protected]. We specialise in sourcing experienced finance experts who can fuel your business growth and offer long-term value to your start-up.