During the earliest stages of building a company, most founders focus on building the product. That makes sense, because without product-market fit, there won’t be a clear path forward. However, a consequence of this approach is that financial planning gets pushed back. If your team delays tackling your financial strategy until revenue starts rolling in or a raise is underway, the reality is you’ll see the effects of that decision for years to come. The takeaway? How you manage your capital in the early months and years matters, and it’s important to develop financial foundations that can support your planned product roadmap.
Most early-stage companies face a common set of challenges. They might not have enough cash, infrastructure might still be limited, and access to reliable, trusted support and guidance can be difficult to find. In fact, some of the most important financial decisions are often made without professional support or the proper financial resources.
At 5th Line, we work with companies once they’ve reached the growth stage. But the process of building a foundation for that growth starts much earlier. Whether you’re ready to engage financial advisory services or not, we believe early-stage teams deserve access to tools, ideas, and the financial resources that will help them start strong.
Here’s our guide to financial resources that will help you get organized and tips on where to turn for support when you’re just starting out.
Set the Right Financial Foundation
Before your team starts thinking about fundraising or long-term capital strategy, it’s important to set up a few financial building blocks. They’ll continue to come into play later to inform business decisions and avoid preventable problems as your company grows.
Here’s what we recommend prioritizing in the early stage:
- Setting Clear Goals: Even if your revenue is $0 today, you can start to define where you want the company to go in the next 12–24 months. Make sure your goals cover product, hiring, and financial outcomes.
- Understanding Your Funding Needs: Determine whether you’ll need external capital to reach the goals you set. If so, how much, and on what timeline?
- Building a Budget: Because you can adjust as you go, forecasting doesn’t have to be perfect right away. At a minimum, start by building a 12-month view of your expected income and expenses to help track burn rate and make hiring plans.
- Managing Cash Flow Carefully: Many startups have the potential to become profitable down the line. But if you run out of cash before you get there, you might not make it at all. Be sure to monitor cash coming in and out regularly.
- Handling Taxes Early: File properly, understand your obligations, and avoid compliance mistakes that could come back later.
- Standardizing Your Financial Operations: Get started with tools like QuickBooks or Xero to set up clean, organized bookkeeping practices from the start.
💡 Tool tip: Simple tools like Fathom, Pilot, and Bench can help early-stage founders automate parts of bookkeeping and financial reporting.
Free and Affordable Financial Resources for Early-Stage Companies
While there’s no shortage of financial guidance online, it helps to know where to look. These vetted financial resources can offer reliable support for startups and early-stage companies.
Small Business Administration (SBA) and SCORE
The SBA’s website is a great place to find free guides on budgeting, taxes, funding options, and more. Through its partner program SCORE, you can also connect with volunteer mentors or hear from other experienced founders and financial professionals.
Startup Communities and Accelerators
You might already be in an accelerator program or participating in a founder Slack group, which is a great start. Either way, community is a highly effective strategy for accessing templates, examples, and advice on what works (and what doesn’t).
Check out:
- Y Combinator’s Startup Library
- First Round Review
- Local startup incubators and pitch competitions
Fractional Financial Support
You may not need a full-time CFO yet, but you can get a lot from support beyond a spreadsheet. Consider hiring:
- A part-time bookkeeper to stay organized
- A fractional CFO who can help with modeling, funding prep, and growth planning
It’s a good idea to look for specialists with startup experience, especially if they offer flexible retainers or project-based pricing. You can gain the benefits of senior insight without committing to bringing on a full-time hire.
What Financial Readiness Looks Like
How do you know when it’s time for the next level of financial support?
You don’t need to hit $10M in revenue to benefit from professional advice, but you do need to have certain basics covered.
Here are a few signs that you're ready to start talking to a firm like 5th Line or another advisory partner:
- You’re planning a fundraise beyond friends and family and need a financial model or materials to back it up.
- You’re growing quickly and need to make the shift from financial tracking to strategic planning.
- You’re unsure how to optimize for taxes, ownership, or long-term capital structure.
- You’re looking for help with scenario planning or stress testing business models.
- Your board or investors are asking for reporting and insight you’re struggling to produce.
There might not be a system to determine the perfect time for every company, but having clean books, documented revenue plans, and visibility into your cash flow will help you get more from any future engagement.
Why the Early Stage Is So Pivotal
An impressive 93% of all successful businesses have undergone pivots from their initial ideas.
That number speaks volumes. The startup journey rarely goes as planned, which is exactly why it’s so important to maintain financial fundamentals. As your vision shifts, which it likely will, you need financial systems in place that can support quick adaptations and sound decisions.
Strong early practices create flexibility that will later position you to overcome challenges, pivots, and other unexpected events.
Final Thoughts
Every founder starts somewhere. And while 5th Line might not work with the earliest-stage teams, we believe in supporting your growth from day one.
Getting your financial resources in place early will pay off later. Be sure to check out budgeting tools, best operational practices, and community support. Then when the time comes to scale, secure capital, or get strategic about growth, you’ll already be prepared to launch.
Looking to take the next step toward financial readiness? Sign up for the 5th Line Forecast newsletter to get the latest industry insights.