Why You’re Doing ‘Finance’ Wrong, and What You Should Do Instead with Nate Littlewood

Why founders avoid the ledger and what that avoidance costs

There is an odd intimacy to the stories people tell about the things they avoid. A Brooklyn dog-park anecdote about untreated arterial calcification becomes a mirror for entrepreneurs who refuse to open their books. The impulse is the same: avoidance protects a narrative. It spares founders the uncomfortable reconciliation between mission and math, but it also steals options. That tension — between the storytelling that propels a business and the sober accounting that sustains it — is the hinge Nate Littlewood hangs his work on. His message is simple and stubborn: finance is not a moral meter; it is a navigational instrument.

Finance as a navigational tool

When finance is treated like a GPS rather than a verdict, decisions change. Small, deliberate financial rituals reveal where a company is really headed and where it can afford to go. The act of forecasting — both profit and cash flow — becomes less about proving worth and more about choosing a route: minimize cash burn, reduce risk, open up selective growth corridors, and preserve founder energy. That shift in perspective reframes accounting from punitive audit to strategic planning.

From P&L forecasts to cash-flow roadmaps

Profitability and cash flow are siblings, not twins. Littlewood presses founders to separate the two exercises: a profit-and-loss forecast shows potential earnings over time; a cash-flow forecast shows actual runway and liquidity. For product-heavy companies this distinction is the difference between bragging about margins and surviving month-to-month. Physical inventory extends the cash conversion cycle, and extended cycles tangle capital into stock that doesn’t pay dividends until sales convert to receipts.

Time as the scarcest capital

One of the more counterintuitive arguments is that time often outweighs money as a scarce resource. Founders commonly invest years of highly valuable labor while funding their businesses with relatively small financial capital. Littlewood calls this opportunity cost: the foregone salary and market value of the founders’ time. When hour-by-hour tasks are priced at trivial freelance rates, the math doesn’t support million-dollar outcomes without delegation or prioritization.

Track time to reclaim leverage

Simple tools change the conversation. A time-tracking exercise using calendar-integrated utilities exposes where founders spend their labor — customer service, inventory fulfillment, or low-value admin — and reveals whether those hours are aligned with the company’s growth thesis. Once visible, time becomes an invested asset: either redeploy it toward high-leverage activities or outsource the rest.

Inventory, debt, and the hidden cost of carrying stock

For many direct-to-consumer and ecommerce brands, money is stored in boxes. Excess inventory drains liquidity and amplifies financing costs, especially when debt, not equity, funds operations. Littlewood urges founders to quantify the cost of carrying inventory and model the cash conversion cycle so stock becomes a deliberate choice rather than accidental ballast. That modeling uncovers practical levers: reduce reorder quantities, shorten lead times, or negotiate supplier terms to shrink the time capital sits idle.

Ruthless prioritization and the subtraction principle

There is a through-line connecting time, inventory, and finance: subtraction. Littlewood champions doing less, better. Fewer SKUs, one marketing channel optimized, clearer product margins, and a pared-back roadmap can produce more predictable results than sprawling experiments. This subtraction is not austerity for its own sake; it is a practical lens for improving ROI on both dollars and hours.

Practical habits that change the balance sheet

• Run parallel forecasts: keep a P&L and a rolling cash-flow model to understand profitability and liquidity separately.
• Time-track for 30 days: measure where founder hours are spent and flag tasks that can be delegated for low hourly cost.
• Audit inventory weekly: calculate cash conversion cycle and financing costs to free trapped capital.
• Be ruthless with offerings: eliminate low-margin SKUs and marketing channels that dilute attention.

The role of a fractional CFO

Littlewood’s work as a fractional CFO reframes finance as a collaborative translation: numbers become narratives that inform choices without shaming the founder who built the engine. For early-stage brands, this role can be catalytic — providing templates, cash-flow models, and frameworks that convert opaque risk into actionable decisions. The objective is not to create bureaucratic control; it is to hand founders a clean dashboard so they can steer with confidence.

Founders tend to be storytellers by trade, but stories need scaffolding. Accounting provides that scaffolding in the form of runway, return, and risk. When finance is approached as a planning instrument and time is treated as a scarce, measurable asset, a different kind of entrepreneurship emerges: one that preserves curiosity while ensuring the business has the oxygen to grow. That balance — between creative ambition and disciplined planning — is less dramatic than a breakthrough product, and yet far more determinative of whether the venture survives to tell its next story.

A closing thought on clarity and courage

Confronting the ledger takes courage because it forces alignment between narrative and reality. The hard work is not in spreadsheets but in deciding which stories to keep and which to retire. Clarity about cash flow, inventory, and time creates room for the bravest acts: focused growth, meaningful delegation, and the freedom to build something that lasts. In the end, sound finance is not a constraint — it is the quiet architecture that allows purpose to endure.