Finance and profitability for founder led lower-middle market companies

This page is for founder led lower-middle market companies with 5 to 50 million in annual revenue. The goal is clear control of margin, cost, and cash with simple reviews you can run every month.

Questions and short answers

What gross margin should I target in my industry

Set targets by segment and offer. Start with your last four quarters, peer benchmarks, and mix. Aim to lift margin through price, mix, and delivery changes rather than volume alone. Track a simple margin bridge that shows price, cost, and mix effects each month.
Choose the right gross margin target

How do I build a simple model for unit economics

Define one unit. A product unit, a project, or a contract month. List revenue per unit, direct costs, and contribution margin. Add acquisition cost and payback if revenue repeats. Use this to test price, discount, and cost scenarios before you scale.
Build a unit economics model

Which costs scale with revenue and which should not

COGS and some selling costs will move with revenue. Delivery labour, materials, shipping, and partner fees are common examples. General and admin should grow slower than revenue as you scale. Set simple guardrails for each function as a percent of revenue and review them each quarter.
Design a cost structure that scales

When do I move from a controller to a CFO

Make the move when the work shifts from close and compliance to strategy and capital. Triggers include bank covenants, M and A, complex pricing, or a need for planning and investor communication. Many firms feel this between twenty and thirty million, but the real signal is complexity and risk.
Decide when to hire a CFO

What financial reports should I review each month and each quarter

Monthly. Income statement, balance sheet, cash flow, AR and AP aging, and a short cash forecast. Add a margin bridge and a pipeline summary that ties to revenue next quarter. Quarterly. A board pack with trends, unit economics, cohort or segment performance, and a forecast with scenarios.
Set your monthly and quarterly financial reviews

Finance and profitability for founder led lower-middle market companies

Questions and short answers

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