When you are in the midst of growing a business, you often log into the bank account. You look at the number and pause for a second, then you keep moving.
I have seen this with many of the founders I have worked with over the years. It seems to me like a state of mind that says, “I would like more cash to be in there, but there is enough, so we push on.”
If customers are buying, the business is moving. Thoughts are always on unlocking growth through a new hire or increased sales and marketing activity. There are the usual bumps a business faces, but nothing feels like it is spiraling out of control.
The setup most businesses at this stage have:
- bookkeeper keeps Xero up to date
- accounts get produced each month
- the accountant handles the tax
Founders and CEO’s in growing businesses are across the numbers, they just don’t live in them. They are not the finance person. Their job is to sell, deliver, hire, decide and manage.
What I find is founders focus on the number that feels real, the bank balance. It answers the question they care about, “Are we okay?” and the answer, “Yes, we are fine.”
At this point, most founders assume something simple. If the business is going well, cash should go up. It makes sense.
The challenge is when that assumption gets tested. Nothing breaks or dramatic happens. There is just a shift and things feel tighter than they should and nagging questions arise.
We will explore why that happens in the next article.
