Today I want to explain to you why you should consider talking to a part time Finance Director if you have a business of about twenty or more employees
The World Is Changing Rapidly
I am back from holiday after a week without seeing any news so it was a shock on Sunday night to fly in and be greeted with news that the Bradford & Bingley bank was to be nationalised (on Monday 29 September), that agreement had been reached in the US for a $700 billion financial rescue package which has now been rejected by Congress.
I went away thinking that the credit crunch was over and all we had to face in the months ahead was a "normal recession" as consumers cut back on their excessive spending finance by debt that they couldn't afford. Now the world seems much scarier and the credit crunch is back with us.
So Who Should Owners Of Small Businesses Turn To As In This Scary World?
My view is that any small business with ten or more employees need to have proactive financial controls and financial management in place and for me, that means that you should be looking at the part time finance directors market.
Part time finance directors are experienced financial managers and qualified accountants who are experienced in industry and commerce and are used to justifying their costs based on the added value they bring to the business by thinking about current and future financial performance.
I wrote a long blog on Part Time Finance Directors and the benefits they bring to small and medium sized businesses so I won't retread old ground..
The Part Time Finance Director Market
The market is generally fragmented with many experienced accountants seeing the need for their services in the 10 to 100 employee businesses (or supplementing the existing finance skills in larger businesses.
Several franchises have been established which take away the pain of marketing (or at least some of the pain of marketing) although the ongoing fees have been high.
The FD Centre & FDUK Merge
Two of the largest franchise networks, The FD Centre and FDUK announced that they were merging under the FD Centre banner.
See FD Centre press release
The FD Centre/FDUK merger is an interesting move strategically as my experience has been that these two companies have helped keep fee rates high (necessary because of their franchise fees) which has helped independent finance directors with effective marketing earn a good income either by under-cutting or by competing on a like for like value basis.
Do Smaller Businesses Appreciate A Finance Director?
Many smaller businesses rely on their professional accountants for financial management advice but in my experience, having been on both sides of supply and as a customer of both, there is a world of difference in the mental approach and attitude between reporting on what has happened and influencing what will happen.
Monthly management accounts and an annual forecast or budget are the beginning for effective financial management and not the end. It is the actions that matter that you take based on the results reported in your accounts and how you plan to close the gap between "where you are" and "where you want to be".