Have your first sale then hire a finance person!

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Have you watched Shark Tank or Dragons Den?  The entrepreneurs that come on the show are sometimes inspirational and other times, down right sad.

I have lost count how many times a person with a business get in front of the Sharks and has no idea what their numbers are.  They all believe that they have a great business and they just need the connections provided by the Sharks to make it a big success.

A sale starts a business, but the finance function keeps it growing healthy.  Without knowing your margins, costs to acquire customers, lifetime value of customers and other metrics, how do you know if you are making the right sale for your company?

Successful business owners and sales staff work closely with their finance counterparts to provide insights into what the market is doing and where the business is going.  In turn the finance team provides insights into what sales and promotions will give the business a solid financial foundation.

I love when the Sharks ask a business owner, what their numbers are, and they don’t know.  The Sharks come right out and tell them to get themselves a finance person or CFO so they can truly know the value of the company.

Most companies that have get a deal have a combination of things but they first two are:

1)      Sales

2)      Financial Metrics

Unlike the dotcom era, most businesses cannot build something and try to figure out how to monetize it profitably later.  Remember the old mantra that still rings true today, cash is king!