Building an FP&A team from 0 to 5

Last week, somebody asked me about how I would build an FP&A team from 0 to 5. Here is how I would approach it.

𝗛𝗶𝗿𝗲 𝘁𝗵𝗲 𝗥𝗶𝗴𝗵𝘁 𝗙𝗶𝗿𝘀𝘁 𝗧𝗲𝗮𝗺 𝗠𝗲𝗺𝗯𝗲𝗿
Start by hiring someone with a broad skillset who is eager to learn and comfortable taking on everything. Strong financial modeling skills and the ability to build relationships are also important.

𝗗𝗲𝘀𝗶𝗴𝗻 𝘁𝗵𝗲 𝗥𝗶𝗴𝗵𝘁 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝗙𝗼𝗿 𝘁𝗵𝗲 𝗙𝗣&𝗔 𝗧𝗲𝗮𝗺
Over the years, I’ve seen various ways to segment the FP&A team. Here are a few approaches:

• Core versus strategic
• Across P&L line items: Revenue, Gross Margin, R&D, S&M, G&A, etc.
• Corporate vs operational, with support for each BU

These options are helpful starting points, but the right structure will depend on your company’s unique needs and goals.

𝗞𝗲𝘆 𝗙𝗣&𝗔 𝗗𝗲𝗹𝗶𝘃𝗲𝗿𝗮𝗯𝗹𝗲𝘀 𝗮𝘀 𝘁𝗵𝗲 𝗧𝗲𝗮𝗺 𝗚𝗿𝗼𝘄𝘀
FP&A deliverables evolve as the team grows. A 1–2-person team won’t cover everything below, but with 4–5 people, most of this should be addressed, at least loosely. The order will depend on your company’s priorities.

1️⃣ Build 12–18-month financial model
The first goal with the model is not to run out of cash. Start with a P&L + EBITDA forecast, if working capital and capex are not material (if they are, then a full cash flow is needed).

Additionally, the model should help the CFO identify key drivers, enhance financial performance, and communicate expectations with the BOD and investors.

2️⃣ Manage Reporting Carefully
Reporting is critical, but it can easily become overwhelming. The goal is to provide enough reporting for leaders to make decisions without overloading the FP&A team. Add reporting carefully—it’s much harder to scale back once it’s in place.

3️⃣ Build the Planning Process Over Time
Early on, the finance team will likely create a centralized budget. As the company grows, the budgeting process becomes more complex and political, involving more leaders. The finance team is often seen as ‘the budget people’ in the early days, so this is a way to build goodwill across the org.

Also, adding a formal strategic planning ahead of budgeting can add a lot of value.

4️⃣ Lay the Foundation for Financial Systems
Finance team scalability is often an afterthought—until things start breaking. However, clean models that integrate smoothly with accounting actuals make future forecasting systems easier to implement, and improve FP&A efficiency in the near-term.

5️⃣ Drive Value with Strategic (ad-hoc) Analysis
This category is one of the most important, as one of FP&A’s main goals should be to help the company make better strategic and financial decisions. This work often stems from the strategic planning process or informal conversations, but it’s where FP&A can truly drive value—if they have the capacity.

What did I miss? Are there other key priorities for early-stage FP&A teams?