If you run a business, however early on in its development, then you’ll have someone ‘doing the books’. But at some point you might start to think (or one of your investors may suggest) that it’s time to hire your first real FD. This is a big step for you personally as well as the business (not to mention the FD), so here are the questions you need to be asking:
When do you hire? If you’re planning an exit, then the answer has to be as early as possible. The processes needed to deliver information smoothly during due diligence or a round of fundraising will take a while to work smoothly, so the sooner the better. But even if you’re not planning an exit, an FD can deliver financial discipline, scaleable systems and operational performance indicators – the kind of tools that enable you to drive growth without the wheels falling off...
What are you trying to do with your business? Expand internationally? Make acquisitions? Raise finance? What experience have they got that can help you get there? If you want growth, then hire for growth – get someone who has been in a bigger business than yours, so has seen it. But they need to balance this with a hands-on attitude – you need someone who will graft alongside you.
In an SME, you’re looking for cultural fit as much as an ability to perform the technical aspects of the role. Look for more than a numbers man/woman. Do they have an interest in your business? Can they get behind your business plan? Will they work as your peer, challenging you? And will you listen to them?
Why are they joining? Is it just because it’s a job near home? Could they be looking to hide in a smaller company? If you are going for growth then that’s what should excite them too.
How will the business react to your new addition? Make it clear how important it is to you and why – and knock any ambivalence or hostility on the head quickly. And consider how you’ll go about hiring this person – think about running a formal recruitment process.