Jiří Vízek, financial manager of the Prague Integration Centre and one of the mentors of the PrusaLab hardware accelerator
Accelerator, Accelerator mentor, Interviews

Cash flow vs budget: What will decide the survival of your startup?

Many startups fail not because of a bad product, but because of financial unsustainability. How do you set up financial management so that your project survives (not only) its first year? Jiří Vízekcan help you with that – financial manager of the Prague Integration Centre and a mentor in the PrusaLab hardware acceleratorprogramme. In the interview, he presents his expertise in financial management and strategic planning and explains how he helps startups avoid key mistakes and create a sustainable growth plan.

What do startups often overlook?

According to Jiří Vízek, startups put far too much emphasis on the budget and underestimate cash flow. As he himself says: “The budget can change dynamically from week to week, but if you run out of capital, in most cases it will mean the end of the startup.”

Key mentoring areas

Vízek offers startups three basic blocksto help them find their way around a company's financial management:

  • Fundamentals of financial management: employment law, managerial accounting, controlling and administration setup.
  • The practical side of finance: budget preparation, cash flow management and organisational structure.
  • Strategic planning: PEST analysis and preparation for the Accelerator Demo Day pitch to investors.

Everybody does everything, but is that a good thing?

Startups start out in small teams, where the founders often take on less specialised tasks such as handling administration, invoicing or bookkeeping. But that means less time for the product, business and growth. “Consider what you are strong at, consider where your place is in the company, and do not be afraid to invest, even through outsourcing, in areas where you are not strong.”

When you don't know, ask

Vízek points out that many founders are afraid to admit that they don't know something. This can come back to bite them once the company is actually up and running. “Whenever I'm not sure, the accelerator is exactly the environment where someone will always help me – and if they can't, because the expertise isn't here, at least the problem gets identified and can be dealt with.”

PrusaLab hardware accelerator offers startups not only technological facilities and a development team, but also comprehensive mentoring in key business areas. Besides product development itself, we help with finance and growth strategy, logistics, the legal framework and related areas, so that their business is sustainable and scalable from the very start.

In the previous video we talked to Luděk Drnec, CEO of DHL Express Czech Republic, about how startups often underestimate logistics.

Follow our mentor series and discover how the PrusaLab hardware accelerator can help your business too!