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Outsourced Finance Directors – outsourcing to manage growth – October 2008

DBI GROUP OUTSOURCES FINANCES TO MANAGE GROWTH

Environmental cleaning group finds the solution to having an experienced financial director working on your side but not on your payroll

The DBI Group has built a reputation as innovators in the field of pipe and vessel cleaning, surveying and repair. Working throughout the Environmental, Industrial and Offshore sectors, DBI’s highly experienced teams utilise the widest range of specialist equipment within the industry.

Having experienced significant growth for a number of years, during 2001 it became clear that DBI faced a problem familiar to many small businesses. The company was turning over about £5 million and growing rapidly, however, responsibility for both finance and business operations still remained with its managing director. DBI needed dedicated expertise to manage its finances, raise additional finance and implement an effective business management system.

Matthew Byrne, managing director, DBI Group explains: “I had grown the business to where it was but recognised that we needed an extra level of expert resource to take us to where we wanted to be. As with many business managers, I found that you can drive your business to a certain level but to go further requires specialist financial skills and experience. However, like many other businesses it was impossible for us to afford such an individual working for us full time.”

“Clearly we had to find an outsourced solution, which we could use as and when we needed. Equally, we needed access to strategic business understanding coupled with solid financial experience. Not the easiest combination to find. I spoke to our bank manager who suggested an outsource option and gave me contact details for the FD Centre.”
The FD Centre is a resource of talented, business-experienced finance professionals able to deal with business issues and provide strategic perspective. Its clients are, in the main, business owners, managing directors and financial directors. All FD Centre principal consultants have been finance directors in business, all have formal accounting qualifications and many have managing director level experience to supplement their financial skills.

Initially, DBI engaged the FD Centre to handle a three-day project to review its existing accounts processes, systems and business position from a financial perspective. The FD Centre examined how DBI was functioning and produced a report that identified weaknesses and areas that needed attention. That report formed the basis of a presentation to the board and acted as a mechanism to evaluate the FD Centre and identify areas where it could add value to the DBI Group.

Byrne continues: “I had a pretty good idea where the weaknesses were but it was good to have a third party view. It gave me the confidence to engage the FDCentre on a wider remit and take the relationship further. Following their initial report, I asked them to come in and correct the current financial deficiencies and help me to raise the necessary finance to support the growth of the business.”

“Although the FD Centre’s independent view reinforced my thoughts and identified problems I already knew, they inevitably brought other issues to the surface. It would be fair to say that although I was aware of them, in many cases I had not considered them in precisely the same way as the FD Centre.”

“It’s reasonable to say that they put things into context. Their consultant brought his experience of looking at the financial and accounting side of a business and brought his skills to bear on implementing improvements.”

The FD Centre’s approach gave DBI’s management more time to run the business, which is one key reason why business owners recruit an outsourced service. An outsource option enables business owners to access experience in dealing with problems and opportunities, without impact on payroll or headcount, and the business is only charged for the days worked – which may only be a few days per month.
Byrne confirms: “I was bogged down with the finances and being pulled in all directions. As a result, I was unable to devote the time required by the finance and accounting functions, equally I was doing half a job on the business development and operations management side. What I needed was a safe pair of trusted hands to come in and pick up the finance function.”

DBI also commissioned the FD Centre to look at its management information systems, and handle implementation of a new system. The FD Centre identified DBI’s needs, reviewed the software solutions available, narrowed the field and matched the solution to the business need. This included meeting vendors, evaluating systems and presenting the best tenders for DBI to consider.

Byrne states: “Once the FD Centre had completed the business information systems project, their consultant became our de facto financial director. He is part of the business, sitting in on board meetings, working as our FD but still a consultant. He advised us on financing and negotiated new finance deals for the business.”

Many business owners consider negotiating finance deals to be something of a minefield. When they begin searching for finance to fund growth, most businesses find it difficult to put the right case and hard to speak to potential sources of finance clearly and in their own terms.

Byrne explains; “The FD Centre presented financial providers with the information they needed. The FD Centre knows what lenders want to see, which enables them to present a more professional image of our business. We were able to borrow increased amounts at rates we had previously been unable to secure.”

“The increased credit limits they negotiated on our behalf gave us more financial borrowing headroom, and decreased our cost of our borrowing. They added measurable value to the business.”

Byrne maintains that part of the success of any outsourced relationship is making the most of the skill set on offer. “The FD Centre has the ability to talk to banks and financiers in their language, yet still use the business language I need to understand. The FD Centre gave me everything I expected and more. Their consultant’s knowledge means that in addition to an outsourced skill set that I can call on when needed, I have a resource that understands the issues and can act as a sanity check on both me and the business.”

 For more information on outsourcing finance directors, contact the FD Centre.

 

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