You may or may not be familiar with the teachings of Peter F. Drucker, something of a god amongst management gurus. I have spent some of my holiday picking through some of his classic writing.
I love his requirements for the 3 early stages of a new venture:
- First, a focus on the market, not the product. Without this you don’t have a business. Learn from unexpected successes as well as failures.
- Second, financial foresight (see below for more).
- Third, build a top management team before the business needs one. If you wait until it does that is too late, but don’t pay full whack for them until you have to.
The lack of adequate financial focus and of the right financial policies is the greatest threat to the new venture in its second stage of growth. Management should focus on the 3 C’s:
- Cash-flow (not profit)
- Capital. Think ahead 12 months for what you need. You will then stand a good chance of raising it. You will not if you only give yourself 12 weeks or less.
- Control. Identify 4 or 5 critical areas needing control and put measures in to manage these. Think 3 years ahead and don’t overelaborate.
“Financial foresight does not require a great deal of time. It does require a great deal of thought, however”. Simple but effective advice.
If you would like to find out how Bellevue Partners can bring you financial foresight please get in touch.