When and how does a business need a Finance Director?



Some businesses we work with are eager and exciting fledglings. To a layperson, they appear limitless in their enthusiasm and energy. They believe their product or service will change the marketplace, but they haven’t yet become fully immersed in their sector. They haven’t yet had to deal with complicated contracts, market competition, public relations strategies or selling to the mainstream.

The fledgling stage of a business is exciting, albeit often messy in management. Founders and senior executives will often still be spending much of their time on business administration. Business owners should also not overlook the aesthetic of their commercial property. Thankfully, companies like aluminum shop fronts Manchester exist.

You must not hold your business back. At some point, your business and financial management practices must scale up. The founders and senior executives should be a company’s most valuable resource – but they might not have the skills or experience needed to help ensure your office and financial transactions run smoothly.

Their time should be focused on delivering what they’re best at. This means they shouldn’t be answering general enquiries, arranging transport or raising purchase orders and invoicing. Once your business can afford to, consider employing internal staff with the skills you need.

Smart Business Growth Tip #1: Employing An Office Manager/Bookkeeper

There are smart routes to growth. Combining roles within one staff member can help ensure you don’t bite off more overheads than your cash-flow can chew. Employing a skilled office manager with strong administrative skills adds many strings to your business’s bow. Efficient officers would know what is ot cyber security and would be able to manage cyber security risks involved in financial management.

If chosen right, they should start tidying your business processes. This way, they not only ensure your office runs smoothly: but your business does as a whole, leveraging in greater revenue and providing stronger stability.

It’s this process, where a business’s processes become more strategic, that a start-up metamorphoses into a serious business. Businesses should start focusing on supporting their staff to be more efficient, rather than allowing founders and senior executives to continue having free reign in changing processes and choosing what they put their efforts into.

However, a smart office manager will only help a business in the initial stages of tidying processes. As businesses blossom, they must search for a trusted financial director to take control of the financial management wheel.

Smart Business Growth Tip #2: Employing A Finance Director

It is not always necessary to review, and for many businesses, unaffordable, to employ a full time Finance Director.  However whether you take on a part time FD, or place the responsibilities of financial management with an existing senior member of staff: your candidate should understand the needs of your operations, and how their actions can help or hinder business growth. In other words, your Finance Director needs to be operationally focused.

For fledgling businesses, core financial responsibilities often still lie with the founder. It’s difficult for them to let go of this responsibility: but let go of it they must, if they are to free-up their valuable time – and be able to spend it on developing and strengthening business operations.

In order to let go, they need a Finance Director (sometimes known as ‘Chief Financial Officer’) they can trust. Whilst some of this will be based on their character, and the strength of the relationship between the finance director and other senior business executives – much of it depends on their skill-sets.

A good Finance Director should provide your business:

Budgeting and planning: Finance Directors should know his or her numbers, not just for budgeting purposes: but for helping plan business development. It’s their job to ensure you’ve got enough income to cover your overheads now and into the future, by understanding the costs of acquiring new customers – and how they synchronise with the business growth costs of acquiring new assets and staff.

Leadership: They should not be afraid to challenge the chief executive, founders or other senior executives. Their role is to ensure decisions are informed by the best financial knowledge of the company. They can often ensure processes are developed and implemented across the whole or entire sectors of business, helping businesses stay efficient as they grow. Not only can they have great input in board meetings, but they can also help prepare them: providing financial information, analysis and recommendations.

Legal and HR: a great Finance Director shouldn’t just bring knowledge of financial processes and how they relate to your business. Ideally, they should have good knowledge of legal and HR protocols. This provides that efficient combined-role again, helping your business run smoothly and adding strengths to multiple areas of your operations under one hat.

Monitoring success: different businesses are suited to different monitoring metrics. If designed and established well, they’ll produce the most informative of analysis. For the strongest of foundations, finance directors should be highly skilled in monitoring, understanding what metrics best measure your business – and using them to inform all of their other actions.

Find out how your business could benefit from a SouthWestfd Finance Director resource.