I grew up in a family that ran restaurants. I often view start-ups and scale-ups like the food business.
So, what does this have to do with your own fast-scaling tech or physical goods business?
You are serving up SaaS solutions, consumer products, or other business or consumer services - not filets and asparagus.
Most CFOs are looking primarily at the outcome of the business’ efforts - not what’s on the plates or in the freezers or who’s working on the floor.
Most CFOs today rely on Excel spreadsheets or other systems designed specifically for financial reporting.
What they look at (and share with investors and board members) is simply a snapshot of performance over the course of a month and what forecasts might look like for the weeks to come.
These tools don’t take into account hiring patterns, seasonal trends, or deal flow.
In other words, they understand at a human level the many factors that impact business performance.
Following my restaurant analogy…
If a business knows that seasonality will have an impact on sales, they must plan to staff-up several months before “busy season.” In the restaurant world, that would be the equivalent of a beach resort barbecue joint looking for qualified team members months before the summer rush and looking at their cash flow projections in terms of when vacationers start pouring in.
The business also needs to allow time for onboarding and engage in smart contingency planning.
If a CFO were looking at an Excel spreadsheet for that restaurant, they would simply see that July and August were strong sales months and that December was weak. Knowing what’s behind those numbers is simply not a function of spreadsheet reporting.
That’s where more robust tools and teamwork come into play.
I developed BurnRate because I saw that the tools that the “front of the house” and the “back of the house” were using were entirely different and not really compatible.
While the accounting systems used by CFOs clearly show a snapshot of business performance, they don’t accurately reflect the WHY and HOW of performance.
Smart CFOs partner with other business leaders to better understand the nuances of deal flow and human performance on results.
They can still rely on spreadsheets for reporting, but other cloud-based tools are needed by businesses to do accurate capacity planning and forecasting. Plus, factoring in the human element of the sales process allows businesses to project when a new hire will hit their stride and close valuable deals.
Think of BurnRate as that incredible POS system in a restaurant that enables the owner to see popularity of specific dishes, the seasonality of the business, and which waitstaff is delivering the highest sales per check.
Excel will always have its place in business management for the CFO. It gives leadership and investors a concise and often graphic view of how a business is spending and making its money.
But the contributors to that story are complex. The product, the timing, and (most important) the people behind the business are what ultimately has an impact on sales performance and the company growth trajectory.
Make sure that the right reporting and forecasting systems are on YOUR company's “menu.” Schedule some time with us to find out how BurnRate can help your business.