I wasted millions of dollars…

Lessons from some of my big mistakes

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Costly Mistakes

Throughout my career I have unknowingly helped companies waste many (many) millions of dollars.

Hindsight is 20/20…

Below are 5 of these costly learnings:

1. Lots of People Mistakes

Since 70%+ of costs are people, everyone has wasted money on people-related stuff. I put this as #1 because most of the other mistakes would not have happened (or to a much lesser extent) if the right people were involved.

The biggest issues for me fall into three buckets:

1. Hiring too early. I get you don’t want to slow things down if things are going well, but…let the team suffer a bit first before you hire more bodies. Often they will find creative solutions to do more with less (and that’s what you need). Throwing bodies at problems often slows things down actually.

2. Firing too slow. Everyone knows you need to fire fast if it’s not working but it almost always happens to slowly. I admittedly have said something like, “we just need to get through project ABC and then I will fire them”. Almost every time I regret waiting.

3. Bad hiring criteria. There is lots written on this, but make sure you know what criteria is the most important to be successful over the next 18-24 months. That is the time period you need to hire for.

2. Big 4 Auditors

I have wasted HUGE amounts of money by hiring Big 4 auditors too early.

I have worked at both early stage and very large companies. During all of this time I had Big 4 auditors, but I wish I didn’t for the earlier stage companies….

MANY companies (and their finance leaders) are led to believe that they need a Big 4 audit because it means you are legit and an IPO is in your near future.

Big 4 audits cost ~2x more than a tier 2 or tier 3 audit firm. And even more importantly, Big 4 audits take A LOT more of your time and resources (indirect costs of needing more people, outside technical accounting resources, etc).

It is rarely worth it if you are <$100M in revenue (and/or aren’t growing fast). You aren’t going public anytime soon for it to be worth the cost. The most likely exit is M&A and they almost never care if you are audited by a tier 2 firm.

Don’t chase prestige and be realistic about your company’s near future. IPO is the dream for most companies but it’s ok to take smaller steps to get there. It’s the same for software, people, etc - you don’t need the tool/person/thing that is able to take you public (or some other milestone) right now. You need the best thing that will get you through the next 18-24 months.

3. Salesforce Implementation & Maintenance

Almost every company I talk to wastes an embarrassing amount of money on their Salesforce implementation and related customization.

I have talked to maybe one company that has ever said that their Salesforce is set up exactly how they want and it works great. Nothing against Salesforce…a lot of stuff goes into it.

By far the biggest issue I see here is the wrong people are involved who are trying to reinvent the wheel. Make sure you have at least one person who has done it before - and 80%+ similar to your specific needs. Needs can vary greatly.

4. M&A

You have all heard the statistics of how most acquisitions fail (don’t justify the acquisition price). A very underappreciated aspect of those failures is the toll it takes on the acquirer - distracted team, wasted time on integration, etc.

Make sure you understand the full (direct and indirect) costs of M&A when evaluating it. M&A will ALWAYS be expensive if you don’t have the right team (and budget) in place to make it successful.

5. Slow to adopt AI

I (like MANY finance folks) have been slow to adopt AI. And it has been a costly mistake…

I am actively working to fix my ways though.

We are in a period of time where you must be quick to adapt or die. As leaders you must be adaptable and not slow things down with excuses (AI hallucinates, people want a human touch, etc). Lots of companies are going to get wrecked because they were too slow to adapt.

Errors of Omission

Most of the big costly company mistakes people talk about are things they did that became painfully obvious later was a giant waste of money.

But errors of omission can be just as costly (often more).

• We should have went multi-product sooner

• We should have experimented with pricing

• We should have released our AI product sooner

Regularly evaluate both things you should stop doing AND things you should start.

Personal Costly Mistakes

On a related noted note….also don’t forget what’s most important. I saw the below image of the top 5 regrets of people that were near death. It’s a great reminder…

Happy Mother’s Day to my wife and mom!

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Footnotes:

• Check out Brex’s AI-powered automation guide to see how to automate more in finance

• Join the next OnlyCFO Webinar on how the definition of ARR is change and how you should adapt. You won’t want to miss it!

• Check out OnlyExperts to find offshore accounting resources. They have some amazing talent for 20% the cost of a U.S. hire