Sachin Sharma shows CFOs how to balance growth with disciplined spending by evaluating investments through hard questions and realistic ROI. He uses examples like SEO experiments and AI hype to show how to spot waste and funnel cash into the most promising levers.
Here's how to cut cost without impacting the growth of your company. So CFOs have, among many of the job functions, one main priority and that is to balance companies growth with the money they spend. Right? So controlling, making sure you're spending the money at the right place and spend management is a great way to do that. So the more you understand your spend, the better you are in a position to, you know, allocate the capital where you need it. So let's take some examples. Let's say you're a small startup trying to grow and like us, right, you have multiple opportunities in front of you to invest your capital, right? There's no shortage of opportunities. But how do you go about vetting which opportunities to kind of, you know, go spend money on? Right now you can do all your analysis you want in terms of, on a spreadsheet, right? You know, start in the morning till the evening, build all the scenarios, whatever you want, right? In the ROI and all. But there is, there's no replacement of sometimes doing it and seeing the investment, you know, return on it really quick. So when you're thinking about balancing growth and cost control is you're nourishing a tree, you don't want to limit the water and the nutrients, but at the same time you want to give the right nutrients so there's no weed growing up along with it. That's a close analogy on how you want to think about that. The weed in this case is the wastage and the money that you can avoid not spending. And the right nutrients is the finding the opportunities where you want to funnel in your, you know, from a cash standpoint and focus on that. Now there are different opportunities from, you know, there are different strategies. I would say in this case, right, in terms of a CFO might look at it and say, okay, maybe we'd rather than trying to grow the business, we'll just acquire a business. They already have the customers, we have the opportunity, you know, so that those are inorganic. But when you think about organic growth standpoint, it just helps a lot when you start questioning why we're spending and what is the outcome we're going to get and what is the past history of this tactics that we have used. So a lot of times the, there's a lot of wastage from a, you know, especially in marketing, right, because there's a lot of opportunities. You go after and then you know, you see somebody else doing something and then your marketing leader might want to do the same thing. Okay, we want to invest in SEO because everybody does it. Right. In today's term, it'll be generative AI. Right. Everybody should do something about it, because I want to run a campaign or whatever the case is. Now, sometimes you don't have the answers, and that is where the CFO can ask the right questions to make sure that has that person done their homework to really know what they're doing, or they're just doing it because it's a fad and they want to, you know, be part of it. Right. Are they doing it for formal reasons? But the other way to think about is, if you have done something like that closely in the past, what was the outcome at that time? And if we did not achieve the outcome, why that was the case? So let's. Let's make it more practical. Take with the SEO example. I want to invest in SEO. Okay. Have you done that in the past? Yeah, we did a small experiment for three months. What was the outcome? And did we looked at it like how competitive the market is? You know, how much time it'll take for us to get into that? So you become more realistic when you ask this question and then you say, oh, gosh, you know, our market is highly competitive. You know, there are so many other players. If you really have to do this, we have to 10x the investment, and we had to do it for two years. And now all of a sudden you're asking about a question and said, okay, should we then even do it, or is there a better opportunity available to kind of do that? So it's understanding what we have done in the past. And CFO is taking the role more of not questioning why you're spending, but understanding more in terms of lean in and understand and say, okay, great, let's figure it out together. Is this the right opportunity or not? And once you find the right opportunity, you funnel your cash there.
