Controlling in a startup: this unknown

In the early stages of a startup, controlling is often put on hold. Amid establishment, obligations, and bureaucracy, the goal is to get everything done quickly to focus on the product and go-to-market. It is thought that the major costs are behind us and that we can think about the numbers later. In reality, many expenses are activated at the beginning—software, services, consulting—often without realizing it.

Starting right away means setting up financial governance by centralizing decisions, avoiding redundancies, and truly understanding how much the resources we are deploying cost.

What is controlling (in simple words)

Controlling is often perceived as another bureaucratic step. In reality, it is quite the opposite: it is an operational tool.

Just think that when one relies on an external consultant for accounting, it rarely includes management control: numbers are recorded and only at the end of the year do we get a snapshot of the company. For a startup, this is a huge risk.

Accounting is fundamental (and it is mandatory), but it only tells what has already happened: invoices received, costs incurred, etc. Controlling starts from that data, reorganizes it, and transforms it into useful information to understand how the company is doing and where it is going.

This is why the two are closely connected: without updated accounting, there is no good controlling, but without management control, accounting remains just an administrative exercise. From my experience, having both internally from the very beginning allows for a completely different level of control and awareness.

Why it is an 'unknown' in startups

Once the company is established, attention immediately shifts to fundraising, development, and sales. This is understandable: the product comes first. But often this leads to postponing the moment when one truly stops to focus on the numbers.

On top of this, there is the lack of time and dedicated skills: controlling is not just about looking at data; it is also about being able to interpret it. Many founders think that complex software or large budgets are needed to start.

In reality, one can start in a very simple way. In our startup studio, for example, controlling exists within an Excel file built and improved over time: it contains budgets, actuals, and cash flow that interact with each other. We built a system of tags and sub-tags (similar to a chart of accounts) that is identical across all views: budget, actuals, and cash flow. This allows us to compare historical and prospective data coherently and to immediately understand where costs and revenues are concentrated and their impact on cash.

The goal is not to eliminate all “gut feeling” decisions (they are part of the game), but to minimize them and, above all, to understand their effects. Because without structured numbers, the risk is to lead the company somewhat blindly.

When a startup should start controlling

Ideally, controlling should start right away, almost in parallel with the establishment of the company. Already at the business plan stage, to facilitate and speed up subsequent analyses, we try to structure costs and revenues using the same tags that will later feed into the controlling file. Of course, compared to the business plan, controlling is much more detailed and analytical. The business plan is a macro forecast; controlling is a continuous analytical system.

In practice, however, not everything is immediate: in the first months, the main fixed costs are already anticipated in the business plan and often do not undergo significant changes. For this reason, in our companies, controlling really begins to take shape from the second or third month, when the first post-establishment operational expenses begin: activating consulting contracts, new software, first resources.

From that moment onward, we track everything: revenues, costs, staff, and even capital inflows, such as capital increases, grants, and tax credits. It is precisely at this stage that decisions begin to have a concrete impact on the financial sustainability of the company.

What to really monitor in an early-stage startup

In the very early stages, fixed costs are generally quite clear: they have already been estimated in the business plan and are unlikely to change much in the first few months. The real game is played on variable costs.

This is why it is crucial to always have both a budget and an actuals view: only by comparing the two can one truly understand where the differences lie and, most importantly, where to intervene. Without this comparison, the numbers remain abstract.

Another central point is cash flow. Monitoring cash means keeping runway and monthly burn rate under control. With monthly updates, we can immediately catch any variation in these metrics and adjust operational choices accordingly.

Margins and revenues by channel or product may come a bit later, but as soon as they are available, they must be tracked: even if the data is not perfect, it is crucial to understand what is really working.

The most common mistakes

The biggest problem is not so much not having the data, but not knowing how to read controlling that is being conducted. The numbers are there, but they need to be interpreted correctly: skills are needed to understand what they are really saying and where they are leading the company.

It happens, for example, to see a runway of six months and not worry about it because one is confident in future revenues or in cost reductions that are not yet structured. At that moment, decisions are no longer being made based on numbers, but on feelings. And this is the greatest risk.

Controlling is precisely needed to avoid this: to transform data into concrete actions before it is too late.

Conclusion

Ultimately, the true value of controlling is not the control itself, but the clarity. Clarity on where the money is going, how much time you have left, and which decisions are really working.

There is no need to start with complex tools or perfect processes. What is needed is to start. Even with a simple Excel file, a few key numbers, and a fixed time for discussion with the team. The important thing is to build a habit right away: to look at the data, interpret it, and use it to make decisions.

Because in startups, uncertainty is part of the game. But navigating without numbers is just unnecessary risk.

*Startup Bakery is the Italian startup studio specializing in the creation of B2B SaaS companies with Artificial Intelligence. We offer aspiring Co-Founders the opportunity to develop a business idea. We create investment opportunities for Professional Investors. We help companies in the innovation process.*