5 Ways Finance Directors & CFOs can add value to SMEs

Written by Paul Mendelssohn on Jan 30, 2017

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What can an interim Finance Director bring to SME business?

As Associate Director of the global executive search firm EO and Head of the Finance practice, I get to work with some amazing businesses. Additionally, working in partnership with their senior stakeholders/business owners to identify and consult on a whole host of business issues and opportunities.

The best thing for me is that every opportunity is completely different and bespoke to each organisation. The company could be in an embryonic state, high growth, hitting maturity, decline or even re-inventing themselves. Regardless of which stage of their life cycle a business finds themselves in, there is almost always an area where interim professionals (Finance Directors), can add immense value and be the difference between growth and decline.

Some business owners are even facing challenges they do not recognise as a finance problems. What may seem like a sales challenge could in fact be a finance problem. For example, if the business isn’t aware of what products it should be selling and at what price to achieve strong margins, it could cause huge constraints on a company’s cash flow and inevitably create inefficiencies.

Having worked in the finance space for the past decade, I am well networked with some highly talented interim finance professionals, having placed them into several different roles. For me, an Interim Finance Director should partner with the CEO/ MD/ Business owner to manage the future of increased profitability and enhance cash flow, whilst ensuring the business is both effective and efficient.

So, in what areas do Interim Finance Director’s /CFO’s truly add value?

1. Working Capital

80% of business (4/5) fail due to poor cash management. To prevent this an interim Finance Director/CFO will put a rigorous cash management system in place, which will allow the business to trade more effectively.

2. Raising Finance and Managing Banking relationships

An interim Finance Director will be able to help business owners when liaising with the bank to secure funding. They usually have strong networks within the finance industry and come with their own relationships; this allows them to negotiate the best rates.

3. Exit Strategy

To ensure a successful exit is achieved an experienced Interim Finance Director will know what steps are required in the process. They will also thoroughly analyse the business, ensuring the vision can become an investable proposition. At the same time this ensures the best price is achieved and sets out the blueprint early on.

4. Growth by Mergers & Acquisitions

An Interim Finance Director can also assist business owners in identifying and targeting potential companies to acquire or merge with. During this process the Finance Director will have the role of performing the due diligence on the company target to ensure the integrity of the sales value, and drives past sales integration of people, systems and processes.

5. Tax Management

An interim Finance Director will ensure your business is optimised for tax covering corporate structures, capital expenditure and employee benefits. They will also ensure there are share schemes, share buy-backs, tax planning for expansion, acquisitions and mergers exit strategies in place.

Having placed finance directors and CFOs into several SMEs, I have seen first-hand how these industry professionals can add tremendous value to fast paced, growing businesses, often generating ROI of over 5:1.

If you are planning to review the strength of your current finance function and would like to some free market insight, why not leave a comment or get in contact with directly at: paul.mendelssohn@executivesonline.co.uk .
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