Every profitable business has a Money Guy. Sometimes it’s the CEO, sometimes it’s another member of the exec team. Money sticks to this persons hands for reasons unknown. They know how to get the best deals for anything they buy and they have a habit of making more money than they lose. If you don’t have someone like this in your business then you are almost certainly not profitable and never will be.
Often this persons title is Chief Financial Officer or Chief Operating Officer. They are the ones who update the cash flow plan and know how much cash the business has on hand at all times. They are the money guy. You’ll know your money guy rocks when you wake them up in the middle of the night and they answer every one of these questions as if it’s a reflex:
- When do we run out of money?
- What is our next revenue target date and amount?
- Are we going to make our target or are we slipping?
- What are the two most effective things we can do to increase revenue?
- How are we doing with regards to implementing those 2 most effective things?
- What are our top two sources of customers?
- Are either of those sources at risk of disappearing overnight?
- What are our two biggest expenses?
- Have we done everything we can to lower those expenses?
- Are we at risk of facing a large bill in the near future?
- Now that you’ve been woken up, is there any current or future problem in the business that will make it hard to go back to sleep?
Other awesome Money Guy attributes:
- Your Money Guy discovers surprising ways to save significant amounts of cash on big expenses.
- Your Money Guy isn’t constantly moaning or complaining, but occasionally will assemble the team and lay out hard facts that put some acid in your gut.
- Your Money Guy always has your important financial data on hand, often memorized for impromptu brainstorms or planning sessions.
The culture I’ve described here is unfortunately not what you find in most nascent businesses which is why most of them fail to make that critical four year mark. Also not that this does not apply, or put differently it is unable to be applied to the paralel universe of West Coast Technology Startups in the USA. But it’s something I’ve observed in businesses around the world including profitable USA businesses.
Often Money Guys are seen by tech entrepreneurs as people with green eyeshades who work under dim green lamps and aren’t fun at parties. But without the Money Guy, the parties end, entrepreneurs become employees and the innovation ends. Your Money Guy is the person who makes sure your business has enough oxygen to dive deep, take those big risks and come up for enough air to do it again.