What Can A Finance Director Do For My Business?
Having a part-time FD will bring you a different perspective and a multitude of benefits that will enhance the value of your business and your personal wealth.
Let’s look at just a dozen examples of these.
The benefits of ensuring the business is optimized for tax cannot be over-emphasised and often the tax strategies of the owners have to be aligned with those of the business.
Never forget the old adage that every additional £1 paid in tax and eating into profits is ultimately up to £10 off the value of the business!
What is a great tax strategy without a business strategy that ensures profitability and growth?!
Good business planning will cover everything from the short term priorities of keeping the cash flowing and doing business legally through to longer term objectives such as exit strategy.
Your FD will identify the key elements of the business plan, the best way to build it such that it can be used thereafter as a simple tool for business focus, and get the team aligned such that everyone is working towards common agreed goals.
Having tip top internal systems allows you to be fully in control of your business and creates time for the senior team to drive the business forward without the daily distraction of resolving minor issues.
Better still, good systems can be a great aid to maximizing pricing and cash flow as well as illustrating your business in the best light by showing it to be efficient and helpful to customers and suppliers alike.
What you can measure you can manage!
But what are the really important things in your business you simply must measure? Your FD can help you identify the KPIs you need to run your business and guide you on how to implement and interpret these as well as the key financial statements.
Ultimately you will reach the stage where you actually look forward to receiving the financial information and know the decisions to make from them that will help your business to grow.
There are any number of reasons that a business makes less profit than it is capable of.
Working in conjunction with your FD, you can identify those areas of the business that are under-performing and capable of becoming more profitable. Together you can then devise the plan of action for increasing profit whether it be increasing customer purchase frequency, altering pricing, reducing costs or simply devising methods of selling more.
Deficient productivity of one sort or another is invariably the root cause of most failings in a business.
Efficiencies can often be realized by identifying those parts of the business that can be outsourced. Sourcing the right talent and expertise to focus on these important priority areas can be the most cost effective way of fixing the problem.
Given the reams of legislation that a business has to deal with these days, it is no surprise that a disproportionate amount of owners’ time is spent on largely non productive compliance matters.
Having an expert on hand to take care of ensuring that the business is always compliant will free up time for the owners to spend on more useful things as well as guaranteeing less sleepless nights!
A cash flow problem is the number one reason why businesses fail.
A good FD will manage Working Capital to the optimum to avoid any danger of running short of cash and will show you how to find cash in places you may have never considered!
Maintaining a good banking relationship can be hard work at times. Bank managers are frequently driven by metrics and a sound understanding of the financial principles of the business.
Trying to understand why banks lend to some businesses but not others and how you can secure lending from your bank may best be left to an expert more able to speak their language.
Having satisfied any immediate requirements, your FD should then be able to help you secure preferential rates and better terms and manage the ongoing banking relationship so you don’t have to.
Should you need to look further afield than your immediate banking relationship, your FD can outline the main sources of funding available to SMEs, the advantages and disadvantages of each, new funding sources making funds available very quickly, and be able to walk you through the process of applying.
Above all, your FD will be able to present your case in the best light providing the greatest chance of success.
Ultimately a business owner is working towards maximizing the value in equity. De-risking wealth diminution should therefore be a priority although it is often easily over-looked.
Your FD can show you how savvy business owners manage this risk so as to free up their time to focus upon growth drivers such as creativity and innovation.
This may involve a full risk assessment process being undertaken identifying major risks and building a strategy to avoid them.
A lucrative exit is what those hours of toil and sweat have all gone in for! However, the best exits are those planned for well in advance and a good exit actually has a lot to do with running a good business.
An FD who has prior experience of selling businesses can show you the things that need to be done early in the process to plan the exit and how to make the business as attractive as possible to acquirers.
On top of that, you will be guided on how to maximize sale value and how to make the due diligence process as painless as possible.