Rory H D Cooper
SMEs - too small to benefit from retaining a finance director?
When cash is tight, when the banks are being less than supportive, when customers are more difficult to attract and retain, why should a hard-pressed SME owner even think about hiring the services of a finance director? Surely the FD role is of benefit only to larger, more complex organisations.
Let's look quickly at just 8 simple reasons why an SME might consolidate its position by having direct access to expert assistance and trustworthy advice on improving financial management.
An FD can be outsourced on a part-time basis to collate, interpret and report management information and liaise with stakeholders in ways that align effectively with the business's budget. That is to say, expert advice on improving financial management can be obtained at an affordable price.
Business planning, essential when economic conditions continue to be turbulent, can finally be given the priority that experience has taught the SME owner is really required; a knowledgeable FD can listen to, evaluate and assess plans and ideas to ensure that the overall strategic vision can be carried through.
Budgets can be set to help the owner monitor performance, identify progress towards goals and personal ambitions or, just as importantly, highlight when something is not going according to plan.
An FD can suggest the key performance indicators that should be measured to identify quickly if the business is on target to achieve its financial, operational and reputational targets.
Business reviews can be carried out not only by someone with an independent, objective focus, but also with an understanding of the importance of the contributions made by the other key functions in an enterprise.
Forecasting becomes a core financial management tool for the business - having a reasoned idea of where you likely to be in the future is better than realising that opportunities have passed you by when it's too late.
If refinancing is required to be able to keep a business going, an FD can help you gather the management information and prepare applications to existing and prospective funders and investors.
Having a person accessible with financial management expertise gives the owner someone else to bounce ideas off, seek assurance about current performance or ask for critical appraisal whenever they feel it is required.
In conclusion, SMEs have to do nearly everything big and complex businesses do when it comes to managing their finance function efficiently and effectively. Having the support of a dedicated FD - even on a part-time, temporary or contract basis - can bring assurance to the small business owner that the vital task of managing the money is under expert control. And with the financial management box ticked, attention can be turned towards attracting more customers, growing your business and achieving sustainable profitability.