You've progressed from idea, through funding, to starting and running a business from quarter to quarter. Throughout this process, as a founder, you have heavily relied on spreadsheets for your financial modelling and forecasting. Spreadsheets have served you well on your journey; they helped to solidify your idea and earn financing.
It's easy to change an assumption or variable in your spreadsheet and watch it flow through the formulas until you reach the desired outcome. Sadly, in the real world, it's much harder to influence the financial outcomes of your start-up.
There's a saying: No plan survives contact with the enemy. This is definitely true in business. The best-laid plans always need to be changed when they're being executed, as unpredictable factors crop up.
Founders need to move beyond their spreadsheets. A 5% increase in revenue may be a simple change on a spreadsheet. Causing a change in a cell colour from red to green may be satisfying to see, but it's much harder in practice.
A key salesperson falling ill, a new competitor entering the market or even a global pandemic are unpredictable variables that will stop the cell colour from changing in the real world.
As your company progresses and grows, you need to understand the realities of business. Once your idea has entered the real world, you need to close the spreadsheet and manage within that reality. Adapt, evolve and thrive beyond the numbers you conceived in those cells.
TAKEAWAY: Founders can spend years in the fantasy world of the spreadsheet – modelling and scheming until they have created the perfect company. However, you can’t live in your spreadsheet forever; once your business is real, you need to manage it in the real world.