Hiring a part-time financial director – A good idea?

Hiring a part-time financial director (FD), and thereby effectively outsourcing the function, may not seem like the best or most prudent of ideas for a business owner.

‘It’s not going to be right for every business,’ admits Tim Denison, director of knowledge management at retail analyst Solution Product Systems (SPS). Quite aside from issues of confidentiality, it could be easy to assume that part-time equates to half-hearted and uncommitted.

Denison would disagree. He says hiring a part-time FD works extremely well for his company: ‘We had a bookkeeper, a financial controller and around 20 employees. It was apparent the business had grown quite nicely, reaching a point where a line of managers needed to be put in place.’

The dilemma for Denison and the two other directors at the company was that ‘as a small business you can’t really afford to buy the best, and you don’t really need a full-time FD’.

Anthony Cook, the managing director of phone specialist Mobile Fun, tells a similar story. His company was at a transitional stage and it became apparent that a person was required to get a grip of the numbers.

Since bringing in a part-time FD 18 months ago, turnover at Mobile Fun has gone from £3.5 million to £7 million. While an FD coming in for one day a week is obviously not
the sole reason for the company’s performance, Cook is adamant that ‘it has aided the growth of the business’.

Financial freelancing

Michael Citroën, business development director at FDUK – a supplier of part-time FDs – explains: ‘The size of company we work with ranges from start-ups to companies with a turnover of £25 million.’ The rate for a part-time FD ranges from £700 to £1,000 a day, although it is unusual for someone to come in more than once a week.

Sara Daw, regional director for Thames Valley at the FD Centre, comments, ‘We tend to be called upon at a stage in a company’s growth where there are opportunities and challenges. Owner-managers are reluctant to let go because being involved with the financials is important to them, but they know they are not really concentrating on what they should be doing, like generating new business.’

Daw says that companies may want wider strategic input from an FD, like guidance with raising finance or a management buy-out.

Both SPS’ Denison and Mobile Fun’s Cook advocate using a part-time FD for the independent views that are provided. Cook likens it to having a non-executive director, noting that there are ‘no office politics and no employment issues to worry about’. Denison observes that ‘the emotions aren’t there so much. The FD can provide impartial advice that we all respect’.

The essential point to keep in mind is that this can be a useful business tool to assist your company’s growth. Cook states that the aim, going forward, will be to recruit a full-time Financial Director. Even then, he notes that the part-time FD will probably help in the recruitment process.

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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Financial Management