8. Strategic input from a Finance Director can help deliver SME growth

According to the latest Owner Managed Business Barometer published in July 2013 by the Bank of Cyprus UK, owner-managed businesses expect to see growth in their sales revenues over the next year.

Whilst this is encouraging news for the UK SME community, it is important for businesses to critically evaluate their growth strategy to ensure that they can cope with the anticipated changes and therefore grow in a sustainable way.

You are not alone

The owner manager can often be a lonely role, and as such, when considering how best to position a business for growth, finding an experienced individual to offer objective advice and be a sounding board can often be challenging and expensive.

In recent years, UK SMEs have increasingly turned to experienced finance professionals, a Finance Director (FD) for example, to provide this objective stance whilst keeping the growth and success of the business at the heart of any advice. Historically, the role of the FD has been thought of as someone focussed on compliance and audits as opposed to having a proactive input in business strategy, but the role is evolving rapidly, and many Finance Directors are now being encouraged to look beyond the numbers and provide strategic insight and direction to the owner manager, or the wider executive board.

Understanding the financial position of a business can be a significant challenge for owner managers who do not have a financial background, but a Finance Director can draw on the experience they have gained commercially to take this pain away, allowing the owner to focus their time and attention on what they do best.

An effective FD can also act as a coach to an owner manager, guiding them through the finances of the business, both current and projected, and forecasting how best to take advantage of other opportunities whilst keeping the financial security of the business at the core of any advice offered.

You don’t have to be big for a finance function

Despite the multitude of benefits that a Financial Director can offer to a small business, many owner managers feel that having a dedicated finance function is the preserve of large companies with large budgets and multiple departments. There are however, a growing number of SME owners who have already benefited from the experience and strategic input that a Finance Director can offer without the large budget required for a full time, dedicated finance function; by hiring an FD on a part time or interim basis.

By utilising the services of a part time FD, SMEs can benefit from the skills, knowledge and experience that a full time Finance Director could offer, but at the fraction of the cost, and a lower risk. Utilising a part time FD provides a plethora of benefits to owner managers of ambitious SMEs; a part time FD can not only support with projecting and managing future cash flow requirements (read our blog), but can also provide critical support in managing relationships with stakeholders (eg. HMRC, the Bank, shareholders), offer guidance on acquisition and expansion both domestically and overseas, undertake extensive competitor analysis, get the business debt ready or investment ready, or prepare for an exit. For ambitious SMEs, the added value that an FD can provide in these areas can be priceless.

Experience, knowledge and cultural fit 

Once the decision has been made to hire a Finance Director, considerable thought must be given to selecting the right individual for both the business and the owner manager. Ensuring the personality and values of the FD are a good match to those of the owner, is just as important as ensuring the experience, knowledge and network of the FD will add value to the business.

By enlisting the support of a part time Finance Director, ambitious UK SMEs can ensure that they are well positioned to take advantage of their growth potential; utilising the holistic experience of a seasoned executive, and matching it with the drive and dedication of the owner manager can create a winning combination.

Making the difference 

The challenges facing SMEs in the modern business world are vast, and seemingly never-ending, so taking advantage of the support that can be offered by an individual who has a breadth of experience, a wide network of contacts and most importantly, a deep understanding of business finance could be a wise move. A thorough understanding of the numbers, effective forecasting and an objective input to the business strategy could be the difference between the success and failure of an SME; and a part time or interim Finance Director who can provide these things, could be that difference.

If you would like to discuss how your business could benefit from hiring a Finance Director or any of the topics covered above, please contact us through the Tectona website or call Mark Nicholls on 07818 407061 or Ronnie Epstein on 07543 275902.

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