Knowing when to hire your first finance director is never easy but a critical decision every founder of a growing and successful business will need to make. James Johnson shares some of the things founders and business owners need to consider when considering this first vital hire.
Most business owners will instinctively know when the time is right to consider hiring their first FD. The business will be growing, with other key hires successfully leading areas such as marketing and sales, technology and talent management. The finance team will be managing the day-to-day financial aspects of the business well but missing that valuable insight on strategy and direction.
A founder or business owner will often be looking for a critical friend and ‘right hand’ to help accelerate growth.
However, before making this critical hire, we recommend business owners first ask themselves the following questions:
- What do you want and need from your FD? This should be more than managing the day-to-day financial needs of the business.
- What is the current position of the finance function? Are there gaps in the team and can they deliver the management information you and your colleagues need?
- How will the business fund future growth, and what role will you expect the FD to play in supporting that growth?
Understand the role
This may sound obvious, but to attract the very best FD you can afford it is essential to fully understand the role, attributes and skills you require. This will likely be different from one business to the next.
Here, your accountant can help. In many instances, they may have worked as a virtual FD – a role I and many of my colleagues at Hillier Hopkins hold. We can bring the knowledge we hold on your business – and across many others – to the best effect in helping you determine what you need from an FD.
Track record
It goes without saying that your first FD will have the relevant accounting qualifications and the ability to manage an effective finance function, but a business owner should look to a demonstrable track record.
If external investment is on the cards, you will want an FD that has experience in securing and working with investors. Likewise, if an exit event is part of the business’s strategy.
Additionally, you will want an FD with the ‘X-factor’ – someone who is commercially aware and able to apply the numbers to the strategy and direction of the business.
Chemistry
Given that an FD will often be the ‘right hand’ to the business owner it is important that you get on and that you can work with them. That can be extremely difficult to ascertain in a short interview or even over two or three interviews. Consider a more informal meeting – perhaps a lunch – to better understand whether you might ‘click’.
Full or part-time
Finally, ask whether the business is ready for a full-time FD. Given the investment a full-time FD will mean in terms of salary and benefits, a part-time FD might be a sensible first step.
For guidance and help in deciding whether your business needs its first finance director, contact our specialist below. James Johnson is based in Milton Keynes and you can find out more on our Milton Keynes page here.
