Growing a business isn’t easy, but without experienced financial know-how, it will be almost impossible.
Most CEOs are great at disruptive thinking, growing the customer base, product development and the big picture but may need extra support with capital management and cash flow, profit margins, monitoring KPIs or fundraising, etc.
Access to the support and guidance of a seasoned finance director is an essential investment for any business looking to grow, but who can afford a six-figure salary at this early stage?
Using the services of a part-time FD is a sensible first step growing in popularity amongst ambitious companies.
- They can provide all the skills of a full-time finance director without the cost or commitment.
- A flexible resource, available as and when required; a few days a week, a few days a month or on a project by project basis.
- They will have hands-on experience dealing with the financial challenges your business now faces – and is yet to face!
- They will give an objective opinion based upon the best financial and commercial information for the business; they are independent of the company and have no internal political views.
- With corporate advisors like iFD, finding a part-time FD with knowledge of your industry sector and stage of growth is not as difficult as you might think.
- They will improve credibility with external stakeholders, and reassure investors that their funds are in safe hands and the management is focussed on growing the business.
- The CEO can continue to concentrate on company leadership, innovation and revenue-generating activities without being distracted by accounting and finance responsibilities.
- When it comes to the point when a full-time FD becomes a viable option, they can help with that transition.
Related Article | How a part-time FD can help recruit a permanent FD
When a company is growing, there’s often no need for a full-time FD; those who do bring in a heavyweight find that much of their time is spent on low-value activities.
The value that a part-time FD can add is varied but could include any of the following:
- To act as a strategic advisor and a sounding board for the CEO.
- To review the systems, processes and reporting controls to ensure best-practice accounting policies and procedures and build a solid accounting foundation for scaling.
- Prepare the business for, and initiate, a fundraise.
- Structure, monitor and optimise cash flow and capital management.
- Manage eternal stakeholders such as investors, bankers, lawyers and auditors. While jointly, your stakeholders have a vested interest in the success of the business, they also have their own priorities and requirements which need to be understood, managed and met.
- Introduce timely, accurate and relevant reporting to increase the visibility of performance and support informed decision making.
- Assess the cost drivers within the business and identify where savings can be made.
- Provide leadership and build finance function with a team that is trained and continually developed.
- Prepare the business for exit.
Whatever your requirement, before beginning the search for a part-time FD, we advise thought is given to what and who you are looking for.
Firstly, have a clear understanding of your need:
- Why do you need an FD?
- What do you expect them to deliver?
- How long do you need their services for?
For example, the brief may be to support a fundraise, in which case the arrangement will have a finite duration. On the other hand, the CEO may require strategic advice, and a sounding board and an ongoing relationship.
Arguably, the most crucial relationship at the executive team level is the dynamic between the CEO and FD. It’s essential, therefore, to determine what type of individual would work well within the business and recruit someone who exemplifies the culture of the company
In the interest of brevity, it’s a given that the part-time FD needs technical knowledge and expertise. Still, it’s also essential to consider the skills and experience that differentiates one FD from another:
- They should have the ability to provide industry insight and strategic support to the CEO.
- A track record of working with companies at a similar stage of growth, for example, an operational FD required for a business in steady-state will have a different skill set to a fundraising specialist or a turnaround expert.
- Provide experience in delivering the type of project you want them to deliver.
- We’ve mentioned this already, but it’s worth restating; they must have the right cultural fit within your business
Finally, don’t rush it. Take your time. Talk to a few part-time FDs before making the final decision.
If you think iFD can help, please get in touch.