Founder Burnout Can Be a Big Problem for Entrepreneurs
Founder burnout is a real thing. And it’s usually a result of one person trying to do all the things for far too long.
There will be a point in your business where you have to do everything because you are the primary stakeholder and maybe even the only employee. But there will also come a time in your business that if you don’t have somebody else helping you, your business is going to be in trouble. Why? Because you’re going to burn yourself out. Or you’re going to be drowning in so many details that the important things don’t get done.
Finding a Solution to Founder Burnout
What’s the solution to founder burnout? Well, a lot of management consultants and business coaches that I have read or talked to over the years say that the real key is taking a 50,000 foot view and figuring out what core competencies you need to be doing, you are good at and are not super draining for you.
This doesn’t mean ignore those aspects of your business or never look at them, it means delegate the day-to-day operations of those tasks to someone with the ability or more time to do them and focus on managing the outcomes of those tasks.
Back office, which includes things like taxes, payroll, legal structure, bookkeeping or accounting and financial forecasting, can be one of those draining items for many founders. Even if you are competent or capable of doing the books or building the financial model or filing all of the legal and payroll entities, it may not be the best use of your time.
It’s not because you aren’t capable, it’s because if you spend more time on other activities in your business such as sales or improving operations, your business will grow more quickly and serve customers better.
Outsourcing Your Back Office to Lighten the Load
So how do you outsource your back office in a way where you still have control over it? You don’t want to put it in a black box and have no idea what’s happening and then open that box in a couple of years when you go to fundraise and realize you’ve got a mess on your hands.
The goal is to have a transparent system for monitoring and to take an active role without it taking up a significant portion of your brain power or time.
This means having someone do the more basic tasks of setting up your chart of accounts (with your input, of course) and categorizing your financials into operations and tax-appropriate buckets (with your feedback on what expenses actually are). And this doesn’t have to take a considerable amount of your time, a good bookkeeper can queue up a list of expenses or categorizations that you can approve and get feedback on a weekly or monthly basis. That way they will only be asking you in the future for one-off or new expense or revenue categorizations.
Over a few months, you can turn something that may have taken you 12 hours on a Saturday into a 30-minute follow-up and confirmation conversation or a once-weekly categorization email.
For financial budgeting and forecasting, you can hire a professional to build you a financial model and then work with that person to periodically update that forecast monthly or quarterly, check your cash flow forecast and make sure that you are on target for both of your income and expense goals. It doesn’t have to be a painful slog every month or every quarter to figure out how your business is doing. With the right team, clarity is possible without hours of prep work. AND you don’t have to spend distracting hours worrying about whether you did this entry or whether you will have enough cash to make payroll next month.
Outsource Your Back Office, But Don’t Ignore It
- Help you scale your business
- Help you understand when and why you may need to expand your team
- Keep you on track for financial and operational goals
- Make sure you better understand your cash forecast
- Allow you to plan accordingly for fundraising, pursuing debt opportunities, and additional investment in your business
Straightforward Financial Data for Founders
The real secret to the success of serial entrepreneurs is that they have excellent teams to help them understand the financial side of their business and organize it in a way where it is meaningful. That way they are able to check in and pursue meaningful metrics on a consistent basis.
Financial data can be hard to gather and put together, but once it is packaged in an accessible format, understanding it—with the right partner—can actually be a very straightforward process. You already know everything about the operations and the ins and outs of your business, your financial statements are just a summation of everything that is happening and a result of the profitability or cash burn or cash flow of your business.
When they start out, many business owners build a very simple Excel spreadsheet to understand revenue versus costs. At the very beginning of a business, this is perfect, this is really all you need. But inevitably, as your business grows the operations of your business become more complex and the financial information tied to these operations becomes more complex. That doesn’t mean the fundamentals change, revenue is still revenue, and expenses are still expenses, but the complexity has increased and the clarity has diminished. Having a partner to help you navigate that complexity is the key to staying on top of your business without burning out.
Find your financial partner today, talk to a CFO and see if we might be that perfect partner.