INSIGHT

Common financial planning mistakes growing businesses make 

Howie Lau • June 27, 2025

Services: Financial Planning & Analysis

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As your business scales from startup to well-funded growth stage, you’re navigating a critical transition filled with opportunity and financial complexity.  

What worked during your early days—spreadsheet-based planning, founder-led financial decisions, and reactive cash management—can quickly become inadequate as investor expectations rise, and operational complexity grows. 

Without strategic financial planning, growing companies often face unrealized revenue potential, funding challenges, and limited visibility into performance drivers. These blind spots don’t just slow growth—they can derail it.  

Let’s take a look at the most common mistakes we see high-growth businesses make (and how you can avoid them).  

Key financial challenges for scaling businesses 

The leap from early-stage startup to a well-funded growth company introduces financial complexities that many founders aren’t prepared to navigate.  

As your business scales, it’s not enough to tracking only basic expenses and revenue—you’re managing multiple revenue streams, complex operational costs, and increasingly sophisticated stakeholder expectations. You’ll likely face: 

• Complex financial operations: As you add layers of management, processes, and infrastructure to support expansion, you’ll expose your business to inefficiencies and financial blind spots, like inadequate cash flow planning, data silos, and disparate systems.   
• Larger funding requirements and investor expectations: To grow you need funding—but how much should you raise? Many startups struggle with accurate financial forecasting for fundraising rounds, which doesn’t just create a financial problem, it also could cause dwindling investor confidence.  
• Managing goals for scale with profitability needs: Perhaps the most difficult balancing act is maintaining healthy cash flow while investing in growth. Many businesses face insufficient or irregular cash flow when expenses outpace incoming revenue, leading to missed opportunities or operational constraints.  

Finding the right pace for scaling—fast enough to capture market share but controlled enough to maintain financial stability—requires sophisticated financial planning that many growing businesses lack. 

For startups transitioning to growth stage, FP&A capabilities fill the critical need to model various financial scenarios, stress-test assumptions, and develop contingency plans. This approach reduces reliance on intuition alone, significantly enhancing the quality of strategic choices through data-driven insights and reducing the likelihood of common mistakes.  

5 financial planning mistakes growing businesses make 

As your business scales from startup to growth stage, financial planning becomes increasingly complex—and the margin for error shrinks dramatically. The financial missteps that were manageable in your early days can become big threats as your operations expand and investor expectations intensify. 

Mistake 1: Ignore data-driven decision making 

Growing businesses often rely on instincts and intuition long after they’ve outgrown this approach. In fact, 58% of companies base at least half of their regular business decisions on gut feel rather than data and information. This creates a significant competitive disadvantage, as a Harvard Business Review survey found that data-driven organizations are 3x more likely to make better decisions.  

For example, a rapidly growing e-commerce tech company might rely on intuition about inventory levels rather than implementing proper demand planning and forecasting. This approach often leads to costly overstock levels or missed sales opportunities due to stockouts.  

The disconnect between available data and decision-making creates blind spots. Many growing businesses track too many metrics (sometimes 30 or more) without understanding which ones truly drive performance, diluting focus from the two or three metrics that actually impact financial outcomes. 

How FP&A helps 

Instead of falling into these traps, scaling businesses should implement FP&A processes that transform raw financial data into actionable insights. This means moving beyond basic accounting to develop forward-looking analyses that connect financial data to strategic decision-making. 

Mistake 2: misaligned budgets with growth goals 

Growing businesses often struggle to align their budgets with their long-term strategic goals, leading to inefficient resource allocation and missed opportunities. Failing to do so can result in overspending or underinvestment in critical areas. This misalignment often occurs when companies focus solely on short-term financial targets without considering their broader strategic objectives. 

For instance, a software company aiming for rapid market expansion might allocate a disproportionate amount of its budget to sales and marketing, neglecting crucial investments in product development or customer support. This short-sighted approach could lead to customer churn and hinder long-term growth, despite initial revenue gains. 

How FP&A helps 

FP&A support can help businesses build annual budgets tailored to organizational objectives, ensuring every dollar supports strategic priorities. This includes (short and long term) goal setting, corresponding KPIs, resource alignment, and regular review sessions for ongoing alignment.  

Mistake 3: lack of clear KPIs and performance monitoring 

Yes, metrics matter. But not all metrics are created equally. Growing businesses often track too many metrics or focus on vanity metrics that don’t provide actionable insights, hindering decision-making and losing sight of the numbers that actually impact their bottom line.  

For example, a subscription-based software company might focus heavily on new customer acquisition numbers while neglecting to monitor customer lifetime value or churn rates.  

Another common issue is the failure to establish leading indicators that can predict future performance. Many businesses rely solely on lagging indicators (like quarterly revenue) that tell you what has already happened rather than what’s likely to happen next. 

How FP&A helps 

FP&A teams develop customized KPIs and frameworks for proactive performance monitoring that align with your specific business model and growth objectives. With these tailored metrics in place, leadership can quickly identify underperforming areas and make data-driven decisions to address issues before they impact financial results. The right KPI framework transforms financial data from backward-looking reports into forward-looking strategic tools. 

Mistake 4: Underestimating the importance of stakeholder communication 

Poor articulation of value can hinder funding opportunities and stakeholder trust. When businesses fail to effectively communicate their financial story and growth trajectory, they risk losing investor confidence and limiting access to capital. 

Many growing companies struggle to translate complex financial data into compelling narratives that resonate with different stakeholder groups. This communication gap becomes particularly problematic during fundraising rounds, when potential investors need clear articulation of how their capital will drive growth and generate returns. 

For example, a promising technology startup might have strong underlying financials but fail to secure additional funding because they can’t effectively evidence their unit economics, customer acquisition costs, or path to profitability in terms investors can easily understand and evaluate. 

How FP&A helps 

Strong FP&A processes help businesses translate financial data into strategic stories that demonstrate value creation and future potential. This approach transforms financial reporting from a compliance exercise into a powerful communication tool that builds stakeholder confidence. 

Mistake 5: Neglecting technology integration 

Under-powered systems can limit visibility into financial operations and slow decision-making processes. Many growing businesses operate with disconnected financial tools—often spreadsheets and basic start-up accounting software—that don’t communicate with each other or provide real-time insights. 

This technology gap creates several challenges: 

• Manual data consolidation that consumes valuable time and introduces risk 
• Delayed reporting that provides insights too late to inform timely decisions 
• Limited scenario planning capabilities when quick strategic pivots are needed
• Inability to analyze data at the granular level needed for optimization 

For instance, when finance teams rely on disconnected systems, they often spend excessive time manually reconciling data from multiple sources, leading to reporting delays and potential errors. These delays mean leadership receives critical financial insights days or weeks after they could have acted on them, creating missed opportunities and reactive rather than proactive decision-making. 

How FP&A helps: 

FP&A teams can help you integrate cutting-edge technology solutions for streamlined financial management and enhanced forecasting accuracy. Tools like NetSuite enable finance teams to create dynamic dashboards that visualize complex data in consumable form. These platforms allow leadership to monitor performance in real-time, drill down into problem areas, and identify opportunities that might otherwise remain hidden in spreadsheets. 

Realize your business’s growth potential with BPM’s FP&A Services  

Don’t let financial planning mistakes derail your growth trajectory. BPM’s collaborative FP&A approach transforms your operational data into strategic assets that illuminate growth pathways, validate strategies, and build compelling cases for investment. 

Ready to turn your financial data into a roadmap for success? Contact BPM’s FP&A team today to start building a future-ready financial strategy tailored to your growth ambitions.