1. Quantify and Benchmark Performance

While most startups have developed a strategic business plan with goals for where they foresee areas for growth, they are usually limited in their ability to understand what exactly is driving their over or underperformance. Financial professionals can work with management teams to analyse existing data or collect new metrics to build out KPIs directly linked to their goals and identify high performers in their organisation.

For example, in a sales focused SaaS company, this can come in the form of analysing sales pipeline conversion data to provide goals to salespeople and design compensation structures around them. These insights can inform managers where they have been successful in the past and compare against new performance to understand the impact of their decisions, reducing blind decision-making.

2. Enable Agile Strategic Decision-Making

Once an organisation has built out KPIs to assess performance, the true power comes in the form of having updated data available when decisions are actually being made. Financial consulting firms with strong business intelligence skills can help by setting up direct links to the organisation's existing databases. Once that data is collected, the consultants can build consolidated dashboards with the metrics most critical to business success, which can be automated to update as often as needed. This equips managers with the critical metrics they need on a timely basis without burdening the internal team with working through manual data updates. These metrics should always be unique to the business application and the areas of concern.

For example, a retailer would benefit from SKU level sales information while a manufacturer would be more concerned about quantities produced or inventory-level KPIs to better plan for additional production runs.

3. Achieve Operational Efficiencies

Beyond building automated data solutions, financial specialists can also play a key role in other types of ongoing or one-off project engagements. Whether it's through building in-depth costing models to understand cost drivers, analysing underlying trends in historical costs or another bespoke solution, a financial consultant can likely help unlock hidden insights into where cost savings are possible. Hiring financial consultants to fill roles where work is cyclical can also be a cost-effective solution.

For example, engaging a modelling specialist for annual budgeting and quarterly forecast updates comes at a significantly lower cost than hiring a full-time CFO or Director type role, allowing startups to allocate their spending to their key growth initiatives.

4. Uncover and Remedy Kinks in Financial Controls

Often the goal of early-stage companies is to build revenue as fast as possible to either become profitable or raise additional capital to fund the additional growth. While this isn’t necessarily misguided, it often leads to gaps in controls that will eventually be spotted by investors performing their own due diligence down the road. These represent red flag risks that can lead to complex and expensive remedies or, more consequently, the investor passing on the opportunity. The most common issues in this area include mistiming the recognition of revenue/expenses and the miscalculation of accrual accounts. Financial consultants have seen these types of issues time and time again, allowing them to spot these gaps early on while the impact is minimal and efficiently implement best practice solutions to get ahead of the problem.

5. Guide Exit Strategy

Ultimately, founders are looking to maximise their return on their time and money investment in their business, whether it be a full or partial exit. Financial consultants are experts at forecasting business metrics and translating those into a full set of financial statements and return calculations by investors. Part of that work includes building out capitalisation tables, showing ownership by investors, and sometimes considering complex dilution structures. Cap tables are a key requirement for any buyer, and by building a comprehensive financial model at business inception and maintaining it throughout, founders can stay on top of how their issuance of additional equity will impact their exit returns. A financial model provides new and existing investors with an idea of how much value the business has captured to date, how much upside is left, and in turn, when it’s potentially time to start thinking of an exit. While a financial model can be built when presenting the business to potential buyers, it can also be used as a tool to get company insiders to buy into the business's potential, such as by showing employees the return potential of their stock options.

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