Why All Growing SMEs Need a Super Hero

Published, 5 years ago

The holy grail of any small business when starting out is to grow turnover, take on staff, and steadily increase marketing activity with the aim of driving their business to the ‘next level’.

What this means in practice can be very different from business to business, but usually means such things as:

– Having a turnover at a target level.

– Formal office environment.

– A number of staff to allow the business owner to be less involved in day to day activity.

– Sufficient cash in the business to ensure that expenses can be paid easily with some profit remaining that can either be reinvested or taken out by the business owner.

Why all Growing SMEs Need a Super Hero

Super heroes come in all shapes and sizes, and Clark Kent is not the only one who wears a suit during office hours.

Finance Directors are in many ways the super heroes of a business. Their job is essentially to understand the founder or owner’s vision, and then to deliver practical and tangible changes and identify risks and growth opportunities, in order to provide a platform to improve profitability and business value.

For many SMEs, the thought of taking on a full time super hero finance director is both too costly and risky.

However, having a part time finance director can be instrumental in reaching the “next level” and make a profound difference in accelerating growth, on a much more affordable and flexible basis.

10 Reasons why all Growing SMEs need a Part Time Finance Director

A part time finance director can be instrumental in reaching this “next level” and make a profound difference in accelerating growth. The job of the Finance Director is essentially to understand the business, the founder or owner’s vision and objectives and to deliver practical and tangible changes to provide a platform to improve profitability and business value.

Below are 10 things you can expect a Financial Director to help your business with:

1. Analysis of Future Risk & Needs: The Finance Director can help you look into to the future to see what the future financial needs of the business will be. Equally highlighting areas of concern or potential risk and advising on means of mitigating these risks.

2. Ensure Compliance – A Finance Director can help you to ensure regulatory and financial compliance, thereby reducing admin time so you can focus on more important things.

3. Improve Credit Control – A Finance Director can help you implement a formal structure and weekly/monthly process to achieve successful credit control, thereby improving your cash flow and eliminating bad debts.

4. Improve Cash Flow & Profitability – A Finance Director can help you improve your overall cash flow by improving credit control or identifying ways to reduce costs and improve profitability.

5. Help You Reach Goals and Grow through Budgets & Forecasts – A good Finance Director will make sure you have a clear growth plan with achievable targets by setting financial goals in advance.

6. Improved Decision making through Management or Operational Reporting – A Finance Director will ensure accurate and timely reporting of management information ensuring better decision making via identification of business KPIs and improved financial analysis.

7. Profit Analysis & Improvement – A Finance Director will review margins, opportunities for additional billings, up-selling alongside cost management and control.

8. Establishing and Mentoring of an In-House Finance Team – A Finance Director can help you establish the right team and mentor them to make sure they are in the best position to help your business grow.

9. Evaluate Growth Opportunities, Commercial Projects & Expanding Your Business in the UK or Abroad – A Finance Director will provide you with a clear overview of potential financial implications of expansion and show you practical approaches to better manage your risk and spend.

10. Business Exit & Business Planning – If you are thinking of selling your business, a Finance Director can help by managing a programme of internal change to better prepare for challenges as part of an exit and/or due diligence process.

As an added ‘soft’ benefit, having a part time finance director on board will also provide your business with additional credibility when dealing with other third parties such as banks, lawyers, some larger clients or prospects and with HMRC.

Which type of SMEs Can Benefit from a Part Time Finance Director?

Our experience to date indicates that SMEs with some or all of the following characteristics tend to be in the optimal position to benefit from a Virtual Finance Director role in the business:

• Turnover: SMEs with an annual turnover of £500,000 and above.

• Growth Accelerators: Businesses experiencing significant growth and who want to be proactive in managing and driving that growth within their business.

• Businesses in need of a separate finance role: Businesses owners or founders who already sense that the business needs a separate finance role to help drive change in internal processes, management/operational reporting better cash management and cost control to affect profitability.

• Planned Business Exit: Business owners or founders who have a medium term goal of exiting or selling their business and are keen to improve business focus on this goal.

Sound like a win-win situation?

We think so. Larger SMEs reflect these benefits within their business on a routine basis where they have invested in an internal finance resource, however seeing that SMEs have bigger growth potential, we believe that accountants to many SMEs should advise on and help to implement similar strategies as these larger businesses but at a more affordable price.


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