5 things to know before setting up your finance team
Money is the backbone of all business, so it seems rather obvious that your finance team must be made of stainless steel. Strong with the fundamentals, able to support a growing business, and always pragmatic, people on this team have the rare privilege of watching the real fruits of business come in. What should you keep in mind before hiring your finance team? Here are a few attributes you should look for in prospective members:
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- A very keen eye for detail. Can they catch an error in calculations fast enough? Can they make financial predictions that make sense? Are they a human calculator? Anyone in finance cannot get away with a lack of number crunching skills. It’s even better if they’re always looking for errors in computations.
- Brutal honesty. Very recently, I heard this account of a company that was expanding too rapidly to control. One day, the CFO walked up to his Chairman and told him that if he didn’t streamline the business, they’d stay afloat for exactly three months. This company was in business for over a decade.Having a brutally honest person at the helm of the finance team is important because when you’re soaring, you need someone to tell you about the ground realities. If they’re going to walk around the problem, you may soon find yourself sinking. Here’s what a great CFO can do for your company.
- Someone who shares your vision. When Rajnish Baweja became Flipkart’s new Finance Controller, people wondered why. Sometimes, even on a finance team, all you need is someone excited about the same challenges as you. When the ones regulating your money don’t believe in your vision, prepare for long days and nights arguing with them. If you spend so much time fighting with your own team, how will you ever convince investors?
- Someone with previous startup experience. We also need to consider that if this startup experience is a first for us, we may do well to hire someone who has already worked in a startup environment. From the money angle, this is important because someone who can manage a startup’s high cash burn rate can manage absolutely anything. So if you’re doing this for the first time, it would be great to have someone with the know-how of how cash flow works in a high growth startup.
- Someone who understands the regulatory issues. In the Indian context, what is the significance of GST for new retailers? How does tax relaxation for a startup work? What is the current financial framework for companies? Being educated is great, but being current and up-to-date is even better. So, if a prospective finance team member is a walking current affairs textbook on money, maybe that is a good thing. Else, you could probably get Aristotle to do it for you.
In general, teams that are super-efficient have very complex inner workings you’d do well to understand. Setting up a finance team presents a unique challenge though - you’re looking for long term members who have just the right combination of financial knowledge and cultural attributes that match your vision.