Why Every Small Business Should Have an FD

A Finance Director (FD) or a Chief Financial Officer (CFO), will play a central role in shaping, implementing and executing the company’s strategy, that’s why no large company wouldn’t be without one. In a FTSE 100 company they will be the MD/CEO’s right hand man, combining financial and accounting skills with commercial and business acumen.

 

These needs are there, regardless of the size of the company. However, for the vast majority of SME’s, employing the services of a full time, experienced FD is prohibited by cost. But for most SME’s, the role doesn’t need to be full time, a part time FD will still provide the benefit of insight and experience, but without the prohibitive cost.

 

There are five main reasons why all companies, regardless of size, need a FD:

  • An FD impacts the whole business. FDs are multidisciplinary and can get involved in any areas of the business to make sure objectives are met, and the overall company strategy is a success.
  • Finance is the language of business. Profit, cash and return on investment are all stated in figures. Understanding how to hit those targets, and what factors affect them, is crucial. FD’s understand the figures and the language of business: “Sales is Vanity; Profit is Sanity and Cash is Reality.”
  • FD’s can help businesses raise money. They also know how to control and (when necessary) preserve it and use it to its best potential. Without a well thought through plan you may never get the cash your business needs to get off the ground.
  • FD’s understand risk, not just trip hazards in the office and factory fires that should be covered by insurance, but more subtle risks in the competitive, regulatory, economic and geopolitical environment. If you’re aware of a risk, you can take steps to mitigate, reduce or remove that risk.
  • FD’s can manage change and transformation, be that ensuring growth plans are sustainable and profitable; appraising a new investment; restructuring the business; or preparing for an exit.

 

Whatever your business, strategy, or competitive advantage – the services of an FD, be that full time or part time, on-site or virtually, will be invaluable to your business. Baird Consulting offers this service, either individually or in conjunction with any bookkeeping or accounts services you might require. Please get in touch to discuss your needs.

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