Becoming FC of an SME (Part 2)
Becoming FC of an SME Part 2…
Through this range of articles we will explore the typical career journeys taken for those individuals looking to secure their 1st FC position within an SME. We hope the discussion areas / advice and pointers are useful and welcome any comments / feedback.
So, Situation 1; you are working within a chartered environment and seek a step to Commerce and Industry as head of finance within an SME.
Your best bet is stepping into the business of a client that you already know – someone you produce accounting for currently or audit within your current portfolio. You know their business 1st hand – they will have built trust and you both have a baseline understanding of the possible cultural fit.
It will be easier if you can confidently do the three things below: demonstrate experience of producing management accounts. Demonstrate experience of completing statutory accounts. Managing / leading others. This may seem obvious but one of the stumbling blocks can be your practical experience and the application of your theoretical knowledge. For example, if you have qualified ACA and have spent your career to date within audit business owners will need reassurance that you can swiftly find your feet with the practicalities of a standard month end.
You need to have examples that demonstrate your commerciality. Have you given advice to business owners around strategies for growth, cost reduction, profitability enhancement? Have you spent secondments within any of your clients? You will need to bring more to the table that your ability to ensure robust financial controls exist… they know you are technically strong… likely you will need to impress your business acumen before you will get the job.
If you have friends / people within your network that may appreciate this input from you then volunteer your services – the more true business exposure you have had the more confident the MD of your prospective employer will feel and the less ‘greenness’ you will be perceived to have.
Become best friends with Excel. You may not have had exposure to the software you client has, you may even be expected to implement accounting software for them as part of your remit… however it plays out you need to know your way confidently and completely practically around Excel. There is no excuse for weak excel skills in the current day within your specialist area.
Give plenty of thought to the sector you choose to move into. If you have become a champion of a particular sector within practice then you are more likely to be able to understand the nuances of that sector more easily as an FC within a business operating there. You will likely add value and gain credibility more swiftly and the transition will be easier. However if you have ended up a manufacturing specialist but hate the thought of working in that environment daily then don’t do it! It can be easy to become pigeonholed which if you enjoy the sector is no major issue but if you don’t it can a more slippery stepping stone that you may have expected. Research your local region – if it is dominated by businesses within a niche then it may be a good time to start to gain some client exposure that marries to the network on your doorstep.
Consider your salary versus the market. Many larger practices reward their managers well to secure them and you may find your basic salary and benefits suite is marginally above the benchmark offered by the roles you are looking for. Typically entrepreneurial MDs will reward their senior finance team as they see them adding value. They also reward loyalty. You may need to consider taking an initial hit on your annual income for the reward of year 2 onwards.
You will probably inherit a small transactional finance team. They will be experts in what they do and they are a great asset in helping you understand the processes within the finance function of your new business. The MD will want to be given confidence that you can secure their buy in, keep them engaged while making change and develop and lead them. Have you led audit teams? Have you mentored clerical finance staff / bookkeeping staff within your practice / client base?
You should be able to anticipate the challenges the business broadly may be facing and you should have sensible answers prepared… for example I have never met a smaller business that to some degree or another wants support from the FC / FD regarding cashflow. A good tip would be write IMPACT CASHFLOW in the centre of a blank sheet of paper – balloon out any strategies you would take to get a better handle on the cash position of the business. You may not do this now but you should be able to apply technical knowledge to succinctly describe what you would do when you arrive (e.g. upskill credit control team, build strong relationship with the bank, review the current facilities, improve the speed and accuracy of reporting, improve the invoicing processes, review and negotiate supplier contracts and terms of payment where possible, take personal responsibility for the aged debt if there is any, etc.).
Know your gaps. Ask your consultant for a detailed SME FC job spec. Diligently review the remit bullet by bullet. If you haven’t done budgeting what have you don that is closest? Can you gain exposure to it tomorrow? Have you done payroll? Can you do it tomorrow? Etc. etc. The aim is n=to not be found mouth agape in the interview feeling pressured and caught off guard. You have an incredible skill set to bring to the table – you need to attend the interviews knowing exactly what clubs you do and don’t have in your bag and which ones you can use for each challenge on the spec.
Play to your strengths and don’t be bashful in communicating them confidently. It is likely the MD / business owner will be meeting other potential candidates. Some if not all may be already working in another SME – potentially even in a role of this nature. You might be the ‘curveball’. This is good. Your profile is refreshing to them – you need to be able to explain what you bring to the table that others in the race may not… so try not to blush but here it is – you have brilliant technical accounting skills and the ability to produce bulletproof auditable accounts. This means that you can offer the business owners complete peace of mind that their balance sheet will be free of any black holes. You can help they become hugely tax efficient because of your experience and your network in practice.
You are qualified and have the certificate in your hand and have up to date knowledge of changes to accounting policy and legislation – more peace of mind for them. You have had exposure to lots of SMEs in lots of different situations and sectors – you have versatility and broad knowledge.
If their business changes direction, becomes acquisitive, builds a group, hits a purple streak, takes a tougher turn and becomes cash tight – at some point you have likely had exposure to a business in somewhat of a similar scenario and you will be able to adapt with them and steer the ship accordingly…. It isn’t about blowing your own trumpet and humility is an attractive trait but you have to turn up to the job process knowing where you may have the edge.
In our next article we will explore 2) A step up the rungs of the SME ladder – staying within the same business and stepping into the shoes of your former boss.
If you have recruitment needs within your team / are considering your own career we would welcome the chance to speak.