Have you hit the hockey stick?
Perspectives from InnoVergent CEO Paul Cammisa
You don’t have to go far to find companies going through a transition. With an influx in funding through venture capitalists, venture equity, small business administration, FinTech, etc., companies are able to grow very quickly by other means than a traditional bank loan. As a Canadian and hockey player, this type of growth on a graph always reminds me of a hockey stick.
Based on my 30+ years of experience consulting and implementing financial and accounting software for growing businesses like these, I have two main worries for these types of companies:
- What is that organization doing to ensure that the funding and capital requirements are being met to really accelerate the growth?
It’s paramount to have good accounting practices. Even if the company is small, they should be thinking about being GAAP compliant instead of only running on a cash basis. The way that your CPA wants your books to file for taxes is different from how you should be reporting on your business to investors.
We’ve had clients in the past that have over 500 employees that still run their finance / accounting on QuickBooks and Excel. Once their business hit a growth spurt and were halfway up the hockey stick, they hit the proverbial brick wall. Don’t be the player who exhausted themselves and then couldn’t get to the bench to regroup the overall strategy. They could no longer manage the business in the way their business now demands of them. When they started out, they conceptually knew what they should be doing for their finance and accounting, but as the company expanded, they neglected to build the infrastructure before they built the business.
Don’t make this mistake. Find the right technology solutions that will both build a foundation to support your growth and has the capability to grow as your company expands. As you travel up the hockey stick, you want to shoot to score. You do not want to miss the net.
- How is the organization preparing their infrastructure to support those funds and create the ability to ethically report on the use of funds to investors?
We’ve seen software and some services companies get tripped up time and time again because they view accounting as overhead, not as an investment. They don’t realize that by creating a strong accounting and finance foundation, the runway for a successful business is laid before them to then focus on growing the business and not have to go back retroactively to change the foundation later or get lost in Excel hell. Don’t position yourself or your company to be hit from behind, it’s a major penalty with severe consequences.
Be a strong team leader with your business by setting your organization up for greater success. That will take the funding you receive and propel you even further forward up the hockey stick and straight to the goal. Be a difference-maker in your business and set up the winning goal for your team.
