The Problem‘I’m losing control!’ is a phrase we hear a lot from business owners.

Businesses have a strange habit of growing faster than the systems which keep them in check.

Pressure to create, develop and innovate means that old systems can quickly become redundant and need rethinking and rebuilding. This is really one of the biggest headaches a business owner faces. Creating products is comparatively easy. Creating internal business cintrols, which are the systems and frameworks that allow all departments of the business to keep up to speed with changes is plain hard work.

To some extent this hard work is simply a part of building a fast growing business. That said, a lot of it can also be avoided by understanding business growth cycles and by designing an architecture which means your business is able to grow at a steady pace rather than allowing it periodically to outgrow itself (as you struggle to put out the fires).

Our ‘Internal Controls’ architecture enables our part-time FDs to remove a lot of the burden from the CEO or MD (who often try to manage all the systems and information themselves).

You have probably experienced a shift from knowing every last detail about the inner workings of your business – in the early days – to losing a lot of control over the processes which allow the business to operate.

In other words you have become removed from the day to day operating procedures.

This means you probably can’t see what is going on in the way that you would like to, or at least you can’t see as much as you would like to see.

This can manifest in different ways. It may be that customers not paying you, but you are continuing to service them as your systems have failed to notify you. It may be that certain staff are incredibly unproductive (this is a major issue for most growing businesses) and you just don’t know because you haven’t the tools or time to do anything about it.

You probably end up becoming frustrated with your staff because you want them to fix the problem (using their own initiative) whereas they are getting frustrated with you for not doing what a ‘good boss’ would do and offer a clear job description and responsibilities.

If you feel guilty about this, you shouldn’t. This is normal even for businesses which are well beyond start-up stage. The key is to recognise it early and devise a set of internal business controls to help you manage your business effectively.

It may be that your cashflow is very poor or you are accumulating surplus stock. It may be that you are always turning up for meetings unprepared because the work it would take to uncover the information you need to run a good meeting would simply take too long to collect.

You probably initiate a lot of the activity in the business (creating policies, signing HMRC documentation, sending off legal forms necessary for compliance) but you may not have the systems set up to manage these various projects going forward. This means that your head is full of concerns which fester in the background and rear their head at the very point at which you have the least time to deal with them and when the problem has escalated.

All of this leads to a feeling of being disorganised and overwhelmed. If you were able to delegate the work out and could feel confident that your business was building a stable framework , you would feel much happier about redoubling your growth efforts (a lot of business owners we work with hold themselves back because they instinctively know the business lacks the systems and structure to grow in a manageable way).

Putting in place a set of what we refer to as ‘internal business controls’ leads to the creation of  a framework with the ultimate objective of creating time and freedom for the principle player(s) in the business.

The Solution

The sense of losing control of your business is the beginning of a slippery slope. Different businesses will have different tolerance thresholds concerning the point at which it becomes critical to implement the right set of internal controls to stabilise the business and prepare it for the next phase of growth.

One thing is certain though, every business will feel the pain of not being in control at some point in the growth cycle and therefore implementing internal controls in a measured and methodical manner (it can often be difficult and counter-productive to do this in-house, especially with limited resource) will become essential at some stage.

To create the necessary controls framework in our clients businesses our part-time FDs work with you to:

• Explain what ‘internal controls’ are and how they will benefit the business going forward
• Share proposals about the delegation of duties and responsibilities to employees
• Build a plan which creates more time for the CEO and/or MD to devote to his/her strengths
• Work closely with CEO/MD to suggest the most appropriate role/responsibilities for him/her to take on
• Create systems across the business for managing various procedures
• Install systems for monthly control accounts
• Establish monthly KPIs (Key Performance Indicators)
• Establish processes for creating monthly management accounts
• Review computer systems and software to ensure that they are robust and will allow for growth in line with the plan
• Establish a system for expenditure and associated authorisation/sign-off
• Design systems for investment approval
• Design systems for new customer approval
• Implement control procedures to ensure customers are paying you correctly and on time
• Design systems for meetings, including board meetings
• Create report for customer and product profitability analysis
• Create system for cashflow forecasting and monitoring , including early warning system for peaks and troughs
• Establish and review budgeting forecast
• Review government grants and incentives regularly
• Design system for receiving quality advice from third parties regarding e.g. tax, HR, IT and H&S on a regular basis
• Review insurances to ensure best possible cover to limit risk
• Establish HR systems
• Design and implement relevant Shareholders Agreement
• Design and implement credit control procedures
• Translate all figures and data in a way which makes sense to the CEO/MD
• Ensure brands and IP are protected
• Oversee the installation of new systems

Benefits Of A Part-Time FD To The CEO, MD and Senior Team

A number of the programs used by our part-time FDs which constitute our 12 Box Architecture deal with ‘structural’ or ‘planning’ issues which fast growing businesses are often unable to implement.

The over-riding objective here is to restore a sense of control and as a result create more time and freedom for the business owner/CEO/MD as well as enable you to manage and control the business rather than allowing the business to control you.

Putting the right systems in place allows the business owner to see the business from a much clearer vantage point. Decisions to grow the business can be made in the knowledge that the underlying model is scalable and robust.

We will help you give your business a ‘deep clean’. If your business was a house we would be building you fitted wardrobes, a chest of drawers and cupboards and creating space you didn’t know you had. By having a place for everything you will be able to find all your belongings quickly and because you will soon know where everything is, you will be able to free your head of all the clutter and get on with the things you really want to be doing with your time.

Our aim is to go beyond simply being a ‘strategic finance resource’ for your business. We will work with you to redesign your company’s architecture and give you some space to move in. We’ll help you go from working in a job to managing a business.