Once a business has reached a certain point – perhaps it’s a level of turnover or a number of employees – what was once manageable for a company’s board becomes much more difficult. Many directors feel that successful growth and development of their business actually takes them back to an earlier point in the company’s history.
That point is often the first couple of years of the business when many directors, often brand new to the role of being a director, felt that they were working for their business and not on their business.
New members of staff were then recruited to give the directors the time to drive the business forward much faster. However, businesses often then move backwards as the company grows and the directors are no longer able to be on the frontline driving the business.
At this stage, many companies appoint a part time financial director.
What do part time financial directors do and when should you bring them in?
Part Time Financial Directors During a Period of Consolidation
Part time financial directors are not only there for businesses in their growth stage. Many business people take their companies to a certain size and they then need a period of stability and consolidation.
In this situation, you have built a business that is responsible not only for your income but the income of your employees and the servicing of your customers. What you’ve achieved needs protecting and part time financial directors do that.
They can help you to improve efficiency and grow profits, even on a stable turnover. They can help you to make more profit from the same level of sales and activity, whilst also providing oversight on cash flow management, compliance and tax.
Their reports provide you and your board with a high level of detailed yet understandable financial and management information that will help to improve decision making across the business.
At agreed intervals, they work with you to update your business plan so that you can monitor performance against expectations and identify early on if you’re not hitting targets.
Part Time Financial Directors During a Period of Growth
A business plan can also be used to plan for growth. Many business owners find themselves locked out of required funding they need to expand because:
they don’t know which funders or investors are likely to back them
- they’re unable to provide detailed management accounts and financial statements
- a funder or investor may not believe that they can grow the company without experienced outside assistance
- many funders or investors do not want to go into an investment alone and would prefer to partner with another recognised funder or investor
A part time financial director will provide the financial forecasts that an investor or funder would need. They would also be able to demonstrate that detailed financial and sales records are in place and that they are routinely used in decision-making by the existing management.
Part Time Financial Directors for Exit Planning and Implementation
Many directors look at some point to sell their business. They may want to move the business on to the next level, retire to spend more time with family or perhaps want a new challenge and are looking to buy a business in a completely different sector.
Whatever the motivation, careful planning is required to maximise the proceeds from sale of the business. A lot of preparatory work needs to be done before the business is marketed to ensure that it is an attractive proposition to a buyer. A part time financial director can help with this and can also guide the company and make sure that the directors are prepared for the often-tortuous process of due diligence.
Throughout this process, you need to keep on top of your business and ensure that it is in the shape the buyer is expecting when the sale goes through.
A part time financial director will not only be there to help you prepare for the sale. They will also be there during the negotiations and will help to address any issues that arise out of the due diligence process.
Contact us For More Information
Part time financial directors will normally work at your business premises for a day or two each month, often attending Board meetings to help drive the business forward. They act as both an interested friend and a dispassionate observer, offering constructive advice and guidance to the directors.
S4B are experienced Chartered Accountants and Profit Consultants working with businesses. Please contact us to explore whether now is the right time to appoint a Part time financial director. Call us today on 01628 623444 or email us at firstname.lastname@example.org.