Thought you might like to read my article published today in Outsource Magazine. Which “Shore” is the right “Shore” for the SME: onshore, nearshor or offshore?
Posts Tagged ‘Interim FD’
Onshore, nearshore or offshore?
Friday, January 6th, 2012A Very Inventive way of Raising Investment
Tuesday, January 3rd, 2012Just before Christmas I caught up with a client who was looking to raise a not inconsiderable amount of funding – $70m. Given, the current dearth of investment money I was delighted to hear he had negotiated and secured the full amount. The source of funding is so inventive I thought it was worth sharing this raising investment story with you.
The investor is in fact a Chinese province and the investment was negotiated by the province’s very entrepreneurial Mayor (do the words Mayor and entrepeneur usually go together?). This Chinese province is looking to acquire and control the intellectual property, move our client’s manufacturing to China and provide gainful long term employment to the workers within the province.
It is truly a sign of the times when a growing UK technology company is unable to find funding in Europe or America! Sadly in this situation the IP, the jobs and the future profits are all going to China. I suspect we will be reading a lot more about inventive funding in the decade to come.
When is the RIGHT time to outsource accounting?
Tuesday, October 11th, 2011I am often asked “how will I know if outsourcing my finance and accounts is right for my business?” This question is akin to “how long is a piece of string?” – there are no hard and fast rules because of the variables of each individual business. There are however tangible business drivers and it will be one of these which, probably subconsciously, has provoked the questioner to ask this question in the first place.
If you relate to one of the following, now would be the right time to outsource part or all of your finance and accounting function:
- Rapidly growing or contracting businesses (quite often wanting to vary the costs of finance and accounting)
- You want a smaller highly focussed team concentrating 100% on developing great products and services and delivering these profitably – all the other clutter of business you want someone else to take care of.
- The business cannot afford a full-time Finance Director so the CEO is trying (and often failing) to fulfil this role – whilst also trying to grow the business
- Lack of, or poor quality, management finance and accounting information
- Experiencing high rates of staff turnover or skills shortage
- The business needs to generate operational efficiencies
Incidentally outsourcing doesn’t require firing existing staff and starting again, or binning the in-house finance systems. At Isosceles we provide our service at our site or yours, on our web-based systems or yours, using your personnel and/or ours. We also deliver a service tailored to each clients individual requirements – this is not a ‘one service fits all’.
Isosceles Opens Northern Office
Wednesday, October 5th, 2011
Dave Eaton, Manager Sheffield Office, with Claire and Aiysha
I am delighted that we have opened our second office, in the very welcoming city of Sheffield.
We have successfully supported over 100 ambitious companies from our South West London Head Office but we are now ready to implement the next stage of our growth strategy.
I haven’t used the term ‘welcoming’ lightly in my opening statement. I cannot thank Ann Allen and her team at CreativeSheffield enough for their welcome, guidance and the quality of their city briefing and information pack. They were without doubt instrumental in our choice of Sheffield.
If you are not familiar with CreativeSheffield, they are the city’s economic development function, funded by Sheffield City Council with business growth its core activity. Between 2008 and 2011, CreativeSheffield leveraged over £75 million of private sector investment and assisted in the creation and safeguarding of 5,000 jobs. Not bad eh?
Growing to America
Tuesday, May 24th, 2011I had the pleasure of attending the strategic sales meeting of one of our clients in Denver last week.
These guys and girls have an incredibly difficult task, they operate under a geographically distributed model. They operate in small teams that might see each other once a week, they may only come to the head office a few times a year. In addition they operate in an environment where they are often having to educate their customer as to why they have a problem and then sell them a solution with sometimes radically new software products.
I was amazed to see the level of entrepreneurialism within the team. Each sale person, presales and inside sales executive worked like a chess master to unpick the sales objections and shared ideas and strategies readily with their colleagues to come up with the optimum strategy. How much of the behaviour was driven by company culture or US culture and how much was driven by necessity is probably the stuff of books. Looked like the ingredients for a successful year from where I was sitting.
The Outstanding Finance Director
Thursday, April 7th, 2011Without doubt the role of the modern Finance Director has changed, no longer are they expected to simply just ‘count beans’ or be a ‘safe pair of hands’.
If you didn’t receive a copy of Grant Thornton’s recent report What Makes and Outstanding Finance Director you should download it and read it. This is an excellent piece of thought provoking research which reveals that “today’s outstanding FD has emerged as a much more rounded, commercial business leader than his or her counterpart of 10 or 20 years ago. He or she is a great communicator who can win the trust of colleages across the buisness and he or she is a partner to the CEO – very often a CEO-in-waiting”.
In my life time I have met some phenomenal finance directors, but also a good many average ones as well, and dare I say the odd one or two who should have made an alternative career choice!
But an ‘outstanding finance director’ is very difficult for an SME to be able to justify on a full time basis. Often in SME companies where a full time FD is in situ, they feel unfulfilled or worse, live in conflict with the rest of the management team?
This is often a more acute issue in Venture Capitalist (VC) backed companies. The VC quite rightly wants a solid controller of funds and someone with experience to manage the company’s finances from small to medium to large to exit. However, the problems comes in the length of time it may take for a company to become successful.
When the spectacular growth occurs, no problem, but what if the market or product is not quite ready yet and there is a delay in execution? After a while our FD starts to become a little bored and in a vain effort to add value starts to become the salesperson or marketeer. When these efforts fail, the FD becomes de-motivated and can no longer implement the strict financial and budgetary measures necessary in the same cheery and light-hearted way they once did. In short the FD gets in the way.
We have had clients who have had as many as four full-time FDs in two years. That’s four sets of recruitment fees, and four handovers.
This situation partly explains the rapid growth in part-time finance director and interim finance director services. These services have prospered not only because the client gets access to the higher finance director skills they need in a cost effective way, but because the concept of running a portfolio of clients where the financial processing and controller elements are covered within one team has attracted outstanding finance directors.
So when the FD gets in the way what is the solution? Half an FD.
Sign of the Times
Wednesday, February 16th, 2011Since the turn of the New Year many of our clients (particularly retail clients) have been complaining about significant price rises in their product costs. The rises are way, way above the headline 3-4% inflation rate and way above the 2.5% increase in VAT. It remains to be seen how long it is before these rises translate into increased salary demands. Most staff are acutely aware of the circumstances of their employers, but none the less people are not immune from increases to their cost of living.
I was fortunate to attend a family celebration over the weekend held at a restaurant. From the time the event had been booked two weeks ago the restaurant’s fixed price menu had increased by 25%!
Perhaps the most significant sign of the times is that I recently filled up with my first tank of fuel of the New Year. I like to use the “pay at the pump” facility, but instead of the normal cap of £60.00 per user imposed by the petrol station, I was amused to see that this had been increased to £100.00. What do the petrol stations know that we don’t?
Accountancy Age Award – Third time lucky?
Thursday, September 9th, 2010
I am delighted that Isoscles have been announced as finalists for the Accountancy Age Award ‘Small Firm of the Year’. This is the third time we have been shortlisted for an Accountancy Age Award – I am REALLY hoping its third time lucky.
Our first nomination in 2008 recognised our significant investment in our state of the art service platform. Our second in 2009 celebrated the success and difference we brought to our clients. This year’s nomination acknowledges the exceptional quality of our people, the support we give them and how they have brought success to our clients. In a nut shell these nominations have recognised our people, processes and systems – our ingredients for enduring success and the reason our outsourced accounting and other are amongst the best available. Don’t just take my word for it talk to our clients.
10 Things To Include in Plan B
Tuesday, July 27th, 2010Previous blog Plan B
Here are 10 things to consider when developing ‘Plan B’
- Honestly and rationally assess where your product or service is in its lifecycle. Is it really a product fit for mass production and marketing or is it an early stage prototype requiring more investment? This will help prioritise resources.
- Define the core skills and processes required for the business at this stage. Do you need an expensive business development director if the product is still only a prototype. Likewise, do we need a fat development department if have with a mature product? Do I need a full time FD when a part time FD will suffice?
- Identify which members of the management team are appropriate for the business at this stage? Who are the fighters? Who can roll their sleeves up? Which members of the management team can perform multiple roles?
- Determine which one or two key markets have the lowest barrier to entry – i.e. where are you likely to get the easiest and earliest success? Investors often take more confidence from a small and growing pipeline rather than one or two big deals.
- Swift and decisive communication with staff is paramount. Staff usually know exactly what is going on within their company. They know sales are down, suppliers are complaining. They see the investors in the office. They will take confidence from knowing management understand the situation, are taking decisive action and are truthfully keeping everyone in the picture.
- Identify areas for cost cutting and cut costs as early as you can. Try to do it so deep that you do not need to repeat the activity. Don’t forget that management also need to be seen to make sacrifices not just the staff. Avoid extravagant demonstrations of spending in order to buy staff goodwill.
- Change the shape of sales deals. Get some cash up front or agree staged payments. Consider software rental, maintenance holidays, trade reduced maintenance for longer terms – be as light footed and as flexible as you can.
- Pay very special attention to cash flow and debt. Work hard to reduce your aged debt – incentivise your credit controller and sales people. Renegotiate with suppliers and debt providers for example agree staged payments with HMRC for PAYE. Get all allowances in early, e.g. R&D tax credit.
- Now may be a good time to collaborate. It takes a brave management team to actively seek out potentially competitor companies and strike up a relationship. Yes you may have to give up a little margin. But in times of crisis more imaginative ways of getting your product to market are required. Few companies are truly identical. Few have the same technical strengths, the same scale and geography of operation.
- Develop Plan B before you need it. Be clear on your KPIs (key performance indicators) and how you measure performance. Agree the point at which you will execute Plan B and stick to it.
Invariably the development and execution of ‘Plan B’ is easier (less painful?) with expert help. Isosceles have guided many small and medium companies through difficult times. It’s not without its challenges but with positive action at the right time, it is possible to shape your future!
Demanding Service
Wednesday, June 2nd, 2010As the generations pass we have become ever more demanding and exacting, especially when we are spending our own money. If we are buying a service we expect it to be fit for purpose and high quality. We expect a degree of expertise from our service provider. We expect a better job than if we did it ourselves.
If we engage a builder, plumber or decorator we find it is easy to generate an expectation of the result we want and to measure the output against this expectation. We can be a very exacting customer indeed. If we buy a product off the internet, we now spend hours reading reviews comparing prices and again make an exacting purchase – the best quality for the money we can afford.
I find it interesting to contrast this with how businesses generally measure the output of their employees. How many companies set out a detailed SLA for each employee? How many companies measure the performance each month against that SLA before they pay an individual’s salary?
In the world of accounting we may agonise before buying a software product for a few thousand pounds say to help with accounting or reporting, but if a Financial Controller spends a month building a spreadsheet do we really acknowledge that the model costs thousands. What about the ‘opportunity cost’ of what they should have been doing?
As an outsourced accounting services provider I find the process of defining an SLA and invoicing every month means that my customers ask themselves (and me) “What is the real cost of the finance department?” “What value has finance brought to my business during this month?” “Why did it take that length of time to deliver that task?” “Why did that activity cost that much?” “Are we monitoring and measuring the right things?” This level of scrutiny is a positive thing, in my opinion, it keeps our standards high and I genuinely feel that out outsourced accounting service gives a better value for money service than an in-house team where the monthly cost of finance has not been monitored for a long time and gets washed into the general bucket of all the other salaries.
