3 Mistakes Business Owners Make When Hiring a Finance Director
As a small business owner, you’ll know the feeling of wearing too many hats. You have, at some point or another, been responsible for everything from sales and marketing to customer service and product development. Now, your business has scaled and you have hired experts in every department - except for finance.
SME owners often make these mistakes when hiring a finance director for their business.
But if you're like most small business owners looking to scale and grow, you probably don't have the time or expertise to manage your finances effectively. You may struggle to keep up with manual finance tasks such as cash flow forecasting and profit and loss reporting. This can make it difficult to make informed financial decisions about your business.
So you’ve decided to hire a Finance Director - a step in the right direction! Hiring a Finance Director can help your business to:
Develop and implement financial strategies
Manage budgets and cash flow
Prepare financial reports
Provide financial advice and support
There are so many benefits to hiring a Finance Director and ultimately, they’ll give you the strategy and support you need to move forward with your business. However, there are some common mistakes SME owners make when it comes to hiring for this role. In this article, we’ll explore what those mistakes are and help you understand how you can avoid them.
Hiring a finance director is a huge step in the right direction - if you find the right person for your needs.
Mistake #1: Hiring full-time when your business only needs a part-time or flexible solution
Many business owners assume that they need to hire a full-time FD, even if their business is relatively small or new. However, this is not always the case. In fact, many businesses can benefit from hiring a part-time or flexible FD.
There are a number of advantages to hiring a part-time or flexible FD, including:
Reduced costs: Hiring a part-time or flexible FD can save you a significant amount of money on salary and benefits.
Access to a wider pool of candidates: By opening up the position to part-time and flexible candidates, you'll have a wider pool of talent to choose from.
Greater flexibility: Part-time and flexible FDs can offer greater flexibility in terms of hours and location. This can be ideal for businesses with seasonal fluctuations or multiple locations.
If you're not sure whether you need a full-time FD, consider your business's current needs and future growth plans. If you can identify specific tasks or projects that would benefit from the expertise of an FD, but you don't need a full-time employee, then a part-time or flexible FD may be a good option for you.
Mistake #2: Hiring an FD when you actually need the skills of a Financial Controller (FC) or Finance Manager (FM)
Another common mistake is to hire an FD when you actually need the skills of a financial controller (FC) or finance manager (FM). While there is some overlap between these roles, there are also some key differences.
An FD is responsible for the overall financial management of a business. This includes developing and implementing financial strategies, managing budgets, and reporting on financial performance to the board of directors.
An FC is responsible for the day-to-day management of a company's finances. This includes tasks such as accounts payable and receivable, payroll, and financial reporting.
An FM is responsible for managing the financial operations of a department or business unit. This includes tasks such as budgeting, forecasting, and financial reporting.
If you're not sure which role is right for your business, consider your specific needs or get in touch with our team. If you need someone to develop and implement high-level financial strategies, then an FD may be the best option. If you need someone to manage the day-to-day finances of your business, then an FC or FM may be a better fit. Perhaps a blend of both might be a viable solution for your business.
Mistake #3: Focusing too much on industry-specific experience
Many business owners believe that it's important to hire an FD with industry-specific experience. For example, an owner of an e-commerce brand would like an FD with e-commerce experience. However, this is not always necessary. In fact, it can be more important to focus on the candidate's skills and experience in the role, as opposed to their industry-specific background.
An expert finance director should have a strong understanding of accounting, financial reporting, and financial analysis. They should also be able to think strategically and develop financial plans that support the company's overall goals. While industry experience can be helpful, it's not essential. A good finance director should be able to learn the specific nuances of your industry relatively quickly.
If you're looking for an FD, focus on finding a candidate with the right skills and experience in financial management. Don't be afraid to consider candidates from outside of your industry.
Don’t make these common mistakes when hiring a finance director for your business.
Hire a part-time FD near you
By avoiding these common mistakes, you can increase your chances of hiring the right Finance Director for your business. Remember to consider your business's specific needs and future growth plans when making your decision. And don't be afraid to think outside the box when it comes to industry experience.
Ready to take the leap and hire a part-time FD to provide the strategic financial guidance you’re looking for? Get in touch with our expert team. We’ll partner you with the right FD for your business and work with you to achieve your business and financial goals.