If you’re a small business with big ambitions knowing you need a FD is only part of the problem. Navigating the logistics of actually hiring one, and the costs that this involves is tricky for any small business.
So, I guess we better get down to the nitty gritty. The cost implications of hiring a full time Finance Director can be intimidating, considered unnecessary or simply just not achievable for a young business with ambitions for growth.
Experts and senior team members do not come cheap, that’s a fact. Yet, their understanding and specialist knowledge is an essential part of your business going places. Full-time FDs regularly earn in the region of £80-120,00 a year, often with benefits on top.
It’s a lot for a small business.
However, a trend that is growing amongst smaller businesses is to hire these specialists on a part-time basis, therefore maximising the value and keeping costs low. A part time FD can still advise on all the same matters and perform the same duties. Their objectives for the financial health and future of your company still remain the same but crucially there’s often a pay-as-you-go or consultancy style payment model. This means you aren’t employing someone full time until there is enough work for them to be kept occupied for 40+ hours a week – and – crucially, it’s a fraction of the cost. It’s a great solution.
These employees are on call for advice when you need it but can come into your office and function like a permanent FD when you need them to. As a ballpark figure it would cost your business about £1,000 a day, but if they are working on site for just a few days a month it’s a huge saving
There are now quite a few of websites online who act as a middleman to help you source a part time FD, local to you.FD works, who describe themselves, as providers of ‘a kind of surrogate FD’ service are an example of one such company. They’re keen to work with companies who want to grow, providing advice for businesses at all stages, from concept, start up stage to more established businesses. Their suitability for the role and their skills and expertise will already have been scrutinised, but should you wish to look for someone they out to have the following attributes:
- You can comfortably work closely and who you feel you can trust
- Has a genuine interest in your business and small business growth – they need to get to know you in detail so must understand your USPs
- They need to be an expert – don’t cut corners, choose someone with experience
- They must understand smaller businesses but it’s great if they have worked for large end customers too
- Ensure that they are flexible enough to offer you the support you need with both fixed full days and one off meetings and calls – they should ideally have experience working part time or for several companies simultaneously
It’s also a good idea to clearly outline your desire for their input in the strategy and financial planning of your business. We heard the term ‘quasi-pseudo business person with expertise in finance’ and that really does cover it.
Ultimately, needing and employing an FD is a great sign of natural business progression. It can ease your workload and with new part time solutions is achievable much earlier in your growth journey than ever before.
Okay, occasionally their advice may be hard to hear- the best advice often is. An FD that restructures your systems and procedures is a good thing.
That type of objective opinion is exactly what you’re paying for and will make your business go from C-list to A-list.
It’s all constructive criticism too and if you follow the tips to choose the right FD for you we’re sure it’ll be a successful partnership.
If you missed out on part 1 of this series, click below and find out exactly…