As the businesses grow, its financial needs become more complex. Engaging a finance director in a timely manner can make the difference between success and failure of a fast growing business.
A good finance director needs to be someone who has good business acumen and can look at the business as a whole and not just the financial aspects. These attributes are more important than the qualification. The current economic climate makes it even more important for ambitious businesses to seek proactive financial advice to stay ahead of the game and ensure appropriate funding is in place to help them survive through turbulent times.
It is extremely important that the business owners receive timely and accurate management information to monitor performance of the business as a whole and avoid making financial decisions based on gut feeling instead of financial facts and figures.
Hiring a finance director on a part-time basis who can offer value for money is more important than ever before. Identifying Key Performance Indicators (KPIs) for the business to help board of directors understand what management information implies is one of the primary role of a finance director.
Identifying and interpreting margins and trends, introducing measures for better pricing, cost control, cashflow forecast and budgetary controls are all part of the value for money offering that a finance director should be able to bring to a business.
As the business grows it becomes important to have formalised procedures and controls in place, there is an element of cultural change that is required to move the business from owner managed to corporate environment. A forward-thinking finance director would lead this cultural change to allow the business to grow in a controlled manner and reduce dependency on key individuals within the organisation.
Survival of business through a difficult economic period requires analyzing and predicting the impact of what is going on in the business and the market place on the business's financial results and taking appropriate steps to minimise the risk. This is where a part-time finance director can bring real value for money and help board of directors ensure business continuity and stability irrespective of the economic climate and allow other directors to concentrate on their respective roles.
The services of a good part-time finance director are not cheap and therefore it is essential that their time is spent on strategic matters and not carrying out routine accounts preparation tasks. Instead a good finance director would consider outsourcing day-to-day routine tasks to achieve operational efficiency gains.
In order for a part-time finance director to be effective it is essential that they have access to up-to-date financial information, otherwise the cost advantages of employing a part-time finance director can disappear rapidly.
Having a part-time finance director who can not only forge relationship with the board of directors, but can also develop relationships with shareholders, banks and other lenders in the business, can help develop a strong team. Aligning personal objectives of the business owners to corporate objectives and putting a plan together to achieve corporate objectives can help gel the team together.
For those businesses that can develop this team during difficult economic climate can seriously cash in on the situation once the economic climate improves and the business is ready to move forward. Whether the business requirement at that time is to raise money through venture capitalists, via a flotation on AIM or by evaluating an organic vs acquisition strategy, a shrewd finance director will have a business plan ready to help your business take off.
Hammad Farooqi is managing director of Azure Global. For more information visit www.azure-global.com
