This indicates the importance of high quality financial expertise to even smaller businesses, which should come as no surprise as sound financial advice can really benefit SMEs, particularly if a financial director (FD) can be involved from the start.
My Business FD specializes in bringing highly skilled part-time FDs into SMEs to provide them with the benefit of their experience gained while working for blue chip companies, but at a cost that is accessible to a small or start up business. This access to a wealth of corporate skills can really give an SME the edge in a competitive environment.
As an SME develops and grows it will undoubtedly encounter problems and pitfalls that are new to the founder, but are likely to be issues that a blue chip FD has encountered many times in the past.
Joint MD of My Business FD, Chris Chapman, explains: “Good FDs have dealt with most types of business transactions so they have good instinct of what works and what doesn’t, always looking for alternatives, for improvements or a different structure. Whether its pricing strategy, negotiating terms with a large customer, analysing a potential acquisition, assessing a new joint venture or preparing a business for an exit, an FD that has worked in a larger environment will usually have dealt with something similar before.”
Of course translating the experience gained at a large corporate to an SME is an ability that not all FDs possess, which is why My Business FD has a rigorous selection policy, only hiring FDs who can leverage their experience in an entrepreneurial environment.
“An entrepreneur needs a finance director who can roll up their sleeves and wants to delve into the details, but be equally at home developing the general business strategy and commercial direction of the business. They don’t need someone who has always relied on a team of people doing everything for them. The right FD will know the differences between managing a large and a small business, such as the importance of effective cash flow management and be aware of tax breaks and government initiatives that can significantly benefit the company”, explains Chapman.
An expert FD can help entrepreneurs to unlock the potential of their business and also enable them to set in process systems and controls that ensure they are in the best position to grow the business, win finance or to ultimately sell their company.
“What we see with companies who wait too long to hire an expert is that they really struggle with the transition from start up to even moderate growth. But hiring in a part time FD from a blue-chip corporation means you have an expert on board who will look at process, controls, systems and reporting from day one, so that as the SME grows it is easy to cope with increased volume and a more complex business model”, explains Chapman.
As a business grows it will often mean dealing with a whole range of professionals from lawyers to accountants and financiers, but this can pose problems for owners unversed in dealing with these experts. A part time FD can help you to connect with these professionals and ensure your company gives the best impression to any potential investors.
“Founders of SMEs often do not have the strong relationships with professional advisors and financiers that are needed to unlock the maximum potential of a company and often feel they are on the back foot because they speak a different language. An experienced part time FD can open those doors for a SME to have discussions that may have previously been impossible to initiate,” says Chapman.
The message is clear. An FD with experience of working within a blue chip corporation can bring significant practical advantages to an ambitious SME. Hiring a part time FD is the simplest and most affordable way to fast track the business through its growth phase to develop the business successfully and also achieve maximum value at exit if required.
Chris Chapman
www.mybusinessfd.com
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