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Leaving lucrative and secure C-suite positions mid-career to build a part-time portfolio might seem crazy but many of those who’ve done it say it is one of the sanest decisions they’ve made.

Take Michael Citroen, who at 58 years old is a 14-year veteran of the part-time portfolio job world. The former Group Finance Director (FD) relishes the challenge and excitement of working with half a dozen SMEs in his role as a part-time FD. “It’s nice going into different businesses and meeting different people and having different challenges to deal with. There’s so much more variety every day.”

He particularly likes that the businesses he deals with are all at different stages of growth. Some are very new, others are more established, and a couple has been guided through a sale with his help.

Citroen had been working full-time as the Group FD of a large privately-owned company when he made the decision to go freelance.

“It was getting very political,” he recalls of his former company. “And I also wanted to be in control of my own diary,” he says.

So, in 2003, he resigned and joined FD UK, a company that offered part-time FDs to SMEs. When that company was bought out by the FD Centre five years later, Citroen stayed on and is still working with them today—part of an expanding international network of part-time portfolio FDs.

“That’s another great aspect of working within a network of part-time FDs: there’s a massive backup. If there’s anything you need to know, you just ask the network, and you’ll get answers back really fast. I wouldn’t have that if I was working alone.”

Besides the enjoyment of working flexibly with entrepreneurs and with other part-time FDs, Citroen says he values the security that being a part-time FD with half a dozen clients brings.

“You don’t have all your eggs in one basket,” he says, explaining that if one client leaves he knows he can attract and retain another, so his income isn’t at risk.

“The FD Centre is very focused on helping its part-time FDs to win new clients,” Citroen says. “I could never have done as well as I have if I’d had to do it on my own. I had no idea about marketing and the technical aspect of things like websites when I first began.”

Like many people starting out on the part-time path, Citroen had been worried about giving up a salary with perks initially. “To begin with it was a little insecure, giving up a regular job.”

He quickly discovered that the financial return you get is contingent on the amount of energy you’re willing to expend.

He realised early on the new lifestyle would enable him to spend more time with family whilst maintaining a good level of income.

“It gave me time to be with them without having to answer to anybody.”

It’s something that another part-time FD Neil Methold has appreciated about this way of working. Being a part-time FD for the past six years has meant he’s been able to play a large role in his teenage son’s life: getting him settled into senior school and being able to attend almost every one of his sporting events.

“If I’d been working full-time I wouldn’t have been able to do that. And that’s priceless,” says 53-year-old Methold.

Like Citroen, Methold has found the move into the part-time portfolio world beneficial in so many ways. Not only has he been able to enjoy more family and leisure time but he’s had the pleasure of coaching and mentoring people working within his clients’ companies.

“My greatest satisfaction comes from coaching and mentoring people within these companies so they become self-sufficient and can do more and more of the work themselves.

“Nowadays I say to clients ‘My success here will be inversely proportionate to the number of days I charge you. In other words, the more I can get your people to do the work on a daily basis the less I have to do’. I see it as my responsibility to ensure the work is done, not necessarily to do it all myself. I think that has a significant impact on client retention.”

So too does learning to adapt your style of working to each client, says Methold. It wasn’t something he was aware of when he first started out, he confesses.

“But one day, I was mowing the lawn and thinking it all through in my head. That’s when I realised I was being too harsh, too demanding, too assertive, too telling. You have to be direct in a big company because there are shareholders and high expectations.

“But that doesn’t work with SMEs. You have to use a different style—you have to be softer and more accepting that things don’t necessarily move as quickly as they do at large corporations and that there are going to be different priorities.”

It was when he began to adapt his style of working to suit each client rather than going in “full guns blazing” that he started to enjoy much better relationships. It’s why he has retained his clients for so long, he says.

“You can’t go in and be all corporate. SMEs don’t want that. They want someone they can trust and rely on and build a good relationship with. A friendly face. Not just a very clever big shot. You need to be down to earth and be (remove ‘be’) people-focused.

“When I really accepted that and started to slow down my own pace I become more accepted. You have to adjust and be a bit of a chameleon to suit how they are and not how you think they should be.”

Citroen says the ability to communicate is critical in your role as a part-time FD. “You have to have the ability to talk to your clients on a personal level and to be able to relax with them. Clients will call you late at night or on a weekend because they’ve had an idea they’re excited about and want to share with you. People who can’t handle that aren’t successful as part-time FDs.”

Both he and Methold agree that time management is key to success in the part-time portfolio environment.

“Although I’m not in contact with my clients every day, I do keep in touch with them every week, whether it’s a phone call, text, or email,” says Citroen. “It’s all part of the relationship I have with my clients.”

Successful part-time FDs need to take the initiative when it comes to client contact, says Methold. “You have to work really hard at proactive communication with your clients. It’s easy then for them to see you are valuable. I will go to see a client, and on the way home has three 20-minute conversations with three other clients who I haven’t been with that day just to keep moving them forward.

“You have to commit to doing that extra stuff. You can’t just go in for a day, leave and send a bill.”

This obviously takes a lot of organisation, and that’s another skill a successful part-time FD must have (or develop!), he says.

“I have various lists, so I know what I have to do and at what point each week to make sure I don’t drop any balls because when you have lots of clients doing different things, it’s very easy to forget stuff.

“You need to be aware of what’s happening with each client and what you last spoke about. You can’t go, ‘Ah, can’t remember that last meeting. Sorry.’ When they are talking to you, you are their FD.”

Being willing to deliver such high-quality service is something that makes a difference when it comes to client retention, he says.

“Clients really do value that you put yourself out to ring them at the weekend or speak to them late at night or when you’re on your holiday. That s when you and the clients really do start to cement the relationship.”

The relationships you have with clients are what helps to make this such a rewarding way of life, he says.

Citroen agrees, adding that working full-time for one company pales in comparison with working part-time across a number of growing businesses. “The job satisfaction you get working as a part-time FD is enormous. I would definitely never go back to full-time employment.”

If you would like to find out more click this link: https://www.thefdcentre.co.uk/join-the-team/

When your company is facing yet another cash flow crisis caused by late-paying customers, it can be hard to believe there might be a solution.

But there are steps you can take to overcome the problems delinquent payments cause and to avoid them happening again.

Late payments are something that hundreds of thousands of SMEs experience. Of the 1.7 million SMEs in the UK 640,000 say they have to wait beyond the agreed terms for payments, according to Bacs Payment Schemes.

Nearly 40% of them spend up to four hours a week chasing late payers and 12% employ someone specifically to pursue outstanding invoices.

Late payments can threaten SMEs ’ ability to trade, and stifle appetite for growth and recruitment, says Ian Cole, Head of Invoice Finance at Siemens Financial Services. In worst cases, it can lead to insolvency. Mike Cherry, National Chairman at the Federation of Small Businesses, said if payments were made promptly, 50,000 business deaths could be avoided every year.

So too could the problems that late payments cause. Of those SMEs facing late payments, 16% struggle to pay their staff on time, while 28% of company directors reduce their own salaries to keep essential working capital inside their businesses. A quarter (25%) rely on bank overdrafts to make essential payments, and 15% find it difficult to pay business bills like energy, rates, and rent when they’re due.

Late payments take an emotional toll on business owners and CEOs too.

Over a quarter (29%) of UK SME owners struggle with depression, anxiety, increased stress, and other serious mental health-related issues caused by the worry of late payments, according to research commissioned by The Prompt Payment Directory (PPD).

The survey polled 1,000 UK small to mid-sized company owners who all suffer from poor cash flow due to late or outstanding invoice payments.

More than a third (34%) regularly lose sleep over poor cash flow caused by clients paying late and 7% even claim to have lost their hair because of the anxiety, the PPD revealed.

Nearly a quarter (21%) struggle to pay their mortgage or rent or have been forced to sell the family home. The consequence of these late payment pressures is also destroying people’s marriage, family, and social lives.

The amount of time SMEs are kept waiting beyond their previously agreed payment terms is a big issue. Almost a third of companies face delays of at least a month beyond their terms and nearly 20% are having to wait more than 60 days before being paid.

UK businesses with a turnover of under £1million wait an average of 72 days for payment of invoices, according to the Asset Based Finance Association, the body representing the asset-based finance industry in the UK and the Republic of Ireland. By comparison, businesses with an annual turnover of between £1 million and £10 million wait about 53 days, and businesses with £500 million-plus turnovers wait about 47 days.

Solutions

Fortunately, there are measures you can take to protect your company from the worst effects of late payments and to ensure you are paid promptly in the future.

Research prospective clients

Before accepting a new client, carry out a credit check and find out if the company has a reputation for paying on time.

Agree on prompt payment terms

Get clients to sign a contract or agree to terms and conditions that specify when they must pay your invoice and late or overdue fees. Include your payment terms on every invoice.

Send invoices promptly

Don’t delay in sending out invoices. Check that the details are correct to avoid delays.

Offer a range of payment options

Make it easy for customers to pay you by offering them a variety of payment options such as Direct Debit, PayPal, and credit card. If your clients are based in a different country, accept payment in their currency.

Use invoice finance

Invoice finance will give you essential working capital (90% of the approved total invoice) while you wait for the outstanding invoice to be paid. You’ll receive the remaining 10% when your client pays your invoice.

Use an invoice tracker system

You’ll receive an alert when invoices are overdue.

Keep to a schedule

Invoice on the same date every month so that your clients knew when to expect your invoices.

Set up internal invoice reviews

Hold regular weekly or monthly internal finance meetings to review your invoices.

Don’t back down

If you have late fees for overdue invoices then make sure you follow through and charge them. By law, you can claim interest and debt recovery costs if another business is late paying for goods or services.

If you haven’t already agreed when the money will be paid, the law says the payment is late after 30 days for public authorities and business transactions after either:

• the customer gets the invoice
• you deliver the goods or provide the service (if this is later)

You can agree to a longer period for payments from one business to another—but if it’s longer than 60 days it must be fair to both businesses.

Hire a part-time FD

For a fraction of the cost of a full-time FD, the FD Centre will provide you with a highly experienced senior FD. Your part-time FD will assess your company’s cash flow position and take the following steps:

• Identify and address all the immediate threats to your business. It might involve chasing late-paying customers, using invoice financing to give the business an immediate cash injection, or arranging short-term loans or overdraft facilities with your bank.
• Determine where improvements and savings can be made.
• Instigate the use of regular cash flow forecasts. This way you’ll know in advance if your company is going to face a cash shortfall and can make arrangements for extra borrowing, or take other action.

End your late payment and cash flow problems now by calling the FD Centre today. To book your free one-to-one call with one of our part-time FDs, call 0800 169 1499 or just click here.

The story of how LEGO, the family-owned toy company went from teetering on the brink of disaster and hemorrhaging cash to delivering the highest revenues in its entire history and being voted the 2017 Most Powerful Brand in the World makes for a truly inspirational tale…

 

Fourteen years ago, LEGO’s Head of Strategic Development Jørgen Vig Knudstorp delivered the kind of assessment that most managers would gladly superglue their own ears shut to avoid hearing.

“We are on a burning platform, losing money with negative cash flow and a real risk of debt default which could lead to a break-up of the company,” warned Knudstorp at that meeting.

He’d discovered during six months of examining the company that there was a lack of profitable innovation, according to David C. Robertson, author of ‘Brick by Brick: How LEGO Rewrote The Rules Of Innovation And Conquered The Global Toy Industry.

“LEGO had plumped up its top line, but its bottom line had grown anorexic. All the creativity of the previous few years had generated a wealth of new products, but only a few were actually making money,” wrote Robertson. “To make matters worse, the LEGO Group’s management organisation and systems, shaped by decades of success, were poorly equipped to handle a downturn.”

The company’s management team—twelve senior vice presidents who oversaw six market regions as well as such traditional functions as the direct-to-consumer business and the global supply chain—didn’t collaborate but instead operated in their own silos.

The result was that the LEGO Group was expected to suffer a thirty percent fall in sales with £193 million in operating costs. It had a negative cash flow of more than £124 million.

By the end of the year, it was likely to default on its outstanding debt of nearly £620 million. Its net losses were likely to double the following year.

Knudstorp’s stark assessment should have come as no surprise. Something was going badly wrong at LEGO HQ Denmark: in the years from 1932 through to 1998, the company had never made a loss but from then on, the losses had increased year by year. First, there had been a little lost in 1998 but by 2003—the year of Knudstorp’s no-holds-barred assessment—that had grown to something deeply worrying.

Much worse results followed a year later when the company recorded its biggest-ever loss of about £217 million. By then, Knudstorp had been appointed CEO.

“In 2003, we pretty much lost thirty percent of our turnover in one year,” he told Diana Milne in ‘Business Management Magazine’.

In 2004, the company had a further ten percent fall in turnover. “So, one year into the job, the company had lost forty percent of its sales. We were producing record losses and cash flows were negative. My job was how to stop the bleeding.

“We had to stabilise sales and cut costs dramatically to deal with the new reality of selling forty percent less than we had done two years earlier. We had too much capacity, too much stock. It was sitting in the wrong countries. The retailers were very unhappy.”

Knudstorp, a former McKinsey analyst, told James Delingpole of the ‘Daily Mail’, “We had a dress rehearsal of the world financial crisis: a strong decline in sales and a massive increase in our indebtedness.”

The losses were partly a result of the company’s attempt to diversify in the late 1990s, in the belief its brightly coloured building bricks were losing appeal and were under threat from computer games and the internet.

It was coming under pressure from other toy manufacturers since the last of its plastic toy brick design patents had run out in 1988 and the monopoly it had enjoyed for so long in the plastic toy brick market had begun to erode.

LEGO’s diversification saw it expand the number of theme parks it owned in a bid to help increase the visibility of the LEGO brand across key markets. This was despite it having little hospitality experience. Unfortunately, these capital-intensive developments didn’t provide anywhere near the expected returns.

And the company had dramatically expanded the number of products in its portfolio, according to the ‘Brick By Brick’ author. In the years 1994 through to 1998, it had tripled the number of new toys it produced.

“In theory that was a good thing: experimentation is the prelude to real progress,” wrote Robertson. … “Problem was, the LEGO Group’s once-famous discipline eroded as quickly as its products proliferated.

“Production costs soared but sales plateaued, increasing by a measly five percent over four years,” Robertson said.

The company had little idea which products were making money and which were failing to produce an adequate return on the sometimes-heavy tooling investment, according to a case study from John Ashcroft and Company.

LEGO had even created its own lifestyle clothing range and brand shops and launched TV series, DVDs, and video games.

So, by the time Knudstorp delivered his assessment, the company was in serious trouble.

The Turnaround Begins for LEGO…

This is why with the help of Finance Director, Jesper Oveson (former Chief Financial Officer of one of the largest banks in Scandinavia, the Danske Bank), Knudstorp began to make sweeping changes.

Oveson discovered there was an inadequate degree of financial analysis within the company. While there was a profit and loss account by country, there wasn’t product analysis or line profitability, according to John Ashcroft and Company. In other words, the company didn’t know where they made or lost money. Likewise, the theme parks were a massive cash drain but no one knew why.

The two men decided on a short-term life-saving action plan rather than a long-term strategy for LEGO, which would involve managing the business for cash rather than sales growth. Key moves included:

• Setting financial targets. Ovesen introduced a near-term, measurable goal of 13.5% return on sales benchmark and established a financial tracking system—the Consumer Product Profitability system. It measured the return on sales of individual products and markets so the company could track where it was making and losing money. Every existing or proposed product had to demonstrate it could meet or surpass that benchmark.
• Cost-cutting (including cutting 1,000 jobs)
• Improving processes (many processes were outsourced which meant employee numbers could be cut by another 3,500)
• Managing cash flow
• Introducing performance-related pay
• Reducing the product-to-market time.
• Selling the theme parks and slowing retail expansion.
• Cutting the number of components from almost 7,000 down to about 3,000.

The result of these and other changes was that LEGO recovered and went on to become the most profitable and fastest-growing toy company in the world. During the worst of the recession in the years 2007 through to 2011, for example, LEGO’s pre-tax profits quadrupled. Its profits grew faster than Apple’s in the years 2008 through to 2010.

LEGO the Super-Brand

LEGO’s success has continued. Earlier this year, LEGO (now being run by Bali Padda as Knudstorp has moved into a role where he can expand the brand globally) announced its highest ever revenue in the company’s 85-year history.

And it overtook Ferrari and Apple to be voted the world’s most powerful brand. Each year, Brand Finance, a leading brand valuation and strategy consultancy, puts thousands of the top brands around the globe to the test to find the most powerful and most valuable of them all. This year, LEGO won.

“LEGO is the world’s most powerful brand,” it announced. “It scores highly on a wide variety of measures on Brand Finance’s Brand Strength Index such as familiarity, loyalty, staff satisfaction, and corporate reputation.”

Its appeal to children and adults in this tech-centered world also garnered praise from Brand Finance.

It continued, “The LEGO movie perfectly captured this cross-generational appeal. It was a critical and commercial success, taking nearly $500 million [£338 million] since its release a year ago. It has helped propel LEGO from a well-loved, strong brand to the world’s most powerful.”

This goes to show that even when disaster seems certain, it is possible to revive an ailing company. Of course, it helps to have a top-level financial advisor working with you to ensure the changes you’re making are the right ones.

What To Do If Your Company Is Suffering A Cash Flow Crisis

If your company is in dire straits, take action now—don’t imagine you can wish the crisis away or continue to do whatever you’ve been doing in the hope things will get better. They won’t.

Until you identify and fix your cash flow problems then put systems in place for managing cash flow, your company is at very grave risk of insolvency.

Without well-defined and well-managed strategies to avoid running into cash flow problems and a plan to improve cash flow if such problems should arise, your company will continue to flounder.

Fortunately, you don’t have to do it alone. The FD Centre will provide you with a highly experienced part-time FD with ‘big business experience’ for a fraction of the cost of a full-time FD.

He or she will assess your company’s cash flow position and take the following steps:

Identify and address all the immediate threats to your business

Prevent cash flow problems from recurring and

Instigate the use of regular cash flow forecasts.

Having control of your company’s cash flow will allow you to operate within your means, and move away from a ‘feast and famine situation that plagues even the largest companies.

Having the right cash flow management processes in place and being able to spot peaks and troughs in trading to improve cash flow is one of the most critical components of any finance function.

Put an end to your cash flow problems now by calling the FD Centre today. To book your free one-to-one call with one of our part-time FDs, just click here.

 

Sources

 

‘Brick by Brick: How LEGO Rewrote The Rules Of Innovation And Conquered The Global Toy Industry, David C. Robertson & Bill Breen, Crown Business, 2013

‘How LEGO Became The Apple Of Toys’, Jonathan Ringen, ‘Fast Company’, August 1, 2015

‘How LEGO clicked: the super-brand that reinvented itself’, Johnny Davis, ‘The Observer’ magazine, June 3, 2017

‘LEGO Annual Report 2016’, www.LEGO.com

‘The LEGO Case Study 2014’, John Ashcroft and Company

‘When LEGO lost its head- and how this toy story got its happy ending’, James Delingpole, ‘The Daily Mail’, December 18, 2009

What do Sir James Dyson, the Mercedes F1 team, Pixar, Google, and the airline industry have in common? Failure.

They’re hugely successful, yes, but the thing that links them is they never shy away from the ‘F’ word—Failure. Instead, they face and learn from their mistakes, errors, and mishaps. So says Matthew Syed, award-winning Times journalist and best-selling author of ‘Black Box Thinking: Marginal Gains and the Secrets of High Performance’ (John Murray).

“We have an allergic attitude to failure,” he says. “We try to avoid it, cover it up, and airbrush it out of our lives.

“For centuries, errors of all kinds have been considered embarrassing, morally egregious, almost dirty.

“This conception still lingers today. It is why … doctors reframe mistakes, why politicians resist running rigorous tests on their policies, and why to blame and scapegoating are so endemic.”

This notion of failure needs to change, he writes. “We have to conceptualise it not as dirty and embarrassing, but as bracing and educative.”

That’s because success in business (as well as in sport and in our personal lives) can only happen when mistakes are confronted and learned from and there’s a climate in which it’s safe to fail.

It’s what the airline industry has done so successfully, he says. Instead of concealing failure, the aviation industry has a system where failure is inherently valuable and data-rich, says Syed.

In fact, his ‘Black box thinking’ refers to the black box data recorders that all aircraft must carry to provide information in case of accidents. One box records instructions that are sent to all onboard electronic systems and the other records the voices in the cockpit.

“Mistakes are not stigmatised, but regarded as learning opportunities,” he says. After a crash, an independent team investigates.

“The interested parties are given every reason to cooperate since the evidence compiled by the [independent] accident investigation branch is inadmissible in court proceedings. This increases the likelihood of full disclosure.”

What’s more, after an investigation into an accident is completed, the report is made available for everyone.

“Every pilot in the world has free access to the data,” writes Syed. “This enables everyone to learn from the mistake, rather than just a single crew, or a single airline, or a single nation.”

Syed gives the example of United Airlines Flight 173 which took off from JFK International airport in New York on December 28, 1978, bound for Portland Oregon.

Just before the airplane went into land, the flight crew became convinced the landing gear hadn’t locked into place. They then spent so long trying to fix the problem that they ran out of fuel and had to crashland into a residential area, killing eight people on board.

An investigation discovered that the flight engineer hadn’t been assertive enough in telling the Captain the fuel was running low. The Captain meantime was obsessed with trying to fix the landing gear problem and avoid giving passengers a bumpy landing.

As it turned out there had not been a problem with the landing gear in the first place.

Afterward, new protocols were put in place and training methods were revised. As a result, nothing quite as bad has happened again.

So much so that flying on airplanes is now safer than any other form of travel because the industry investigates and learns from its mistakes.

“Openness and learning rather than blaming is the instinctive response – and system safety has been the greatest beneficiary,” Syed told Director magazine.

Dyson Vacuum Cleaners

Sir James, the designer, inventor, and entrepreneur, is committed to learning from failure.

He made 5,127 prototypes of his bagless vacuum cleaner before he got it right. This practice has obviously paid off because Sir James is now worth more than £3 billion.

“Creative breakthroughs always begin with multiple failures,” says Sir James. “…True invention lies in the understanding and overcoming of these failures, which we must learn to embrace.”

Without them, innovations won’t happen, he says. “Failures feed the imagination. You cannot have the one without the other.”

Great inventors always develop their insights not from an appraisal of how good everything is, but from what is going wrong, Sayed wrote in the Daily Mail.

Using Failure To Grow Your Business

Obviously, failure is only useful if it’s acted upon. “You can build motivation by breaking down the idea that we can all be perfect on the one hand, and by building up the idea that we can get better with good feedback and practice on the other,” says Syed.

Some of the world’s most innovative organisations like Pixar, the Mercedes F1 Team, and Google “interrogate errors as part of their strategy for future success.”

Take Google’s decision to test which shade of blue in its advertising links in Gmail and Google search worked best, for example.

Rather than ask its designers to choose the shade of blue for those links, Google decided to run tests known as ‘1% experiments in which 1% of users were shown one blue and another in which 1% of users were shown another blue. Then Google went further and ran 40 other experiments showing all the shades of blue.

It paid off: Google found the perfect shade of blue (the one that users were more likely to click on) and made an extra $200 million a year in revenue.

Why Don’t Companies Embrace Failure?

One of the biggest problems in business is the collective attitude we have to failure, says Syed.

“We love to think of ourselves as smart people, so we find mistakes, failure, and sub-optimal outcomes challenging to our egos,” Syed said in an interview with Director magazine. “But the reality is when we’re involved in complex areas of human endeavour—and business is very complex—our ideas and actions not being perfect is an inevitability.

“If we’re threatened by our mistakes, and become prickly when people mention them, we don’t learn from them. We need to eradicate the idea that smart people don’t make mistakes.”

To really be successful, businesses need to encourage a company-wide failure-embracing culture which in turn will create a “process of dynamic change and adaptation”.

“Success happens through a willingness to engage with, and change as a result of, our failings. Get that right and everything else falls into place,” he says.

If you would like to download the FD Centre’s report on Risk you can do so here

You can also arrange a complementary 1:1 Finance Breakthrough Session with one of the UK’s top FDs here

Hear the words ‘corporate espionage’ and you might think it’s only something that corporate giants need to worry about.

But that’s not the case. Corporate espionage is something that can affect companies of any size. And despite what you might believe, the threat is highly likely to come from within your organisation.

The corporate spy could be a dissatisfied or disgruntled employee, a manager, or a supplier, according to Rick Orloff, CSO at Code 42, a leading provider of cloud-based endpoint data security and recovery.

Case in point: an employee of Siemens, a leading European manufacturer, was arrested in the Netherlands last month on suspicion of leaking patents and other company secrets to a Chinese competitor, according to Reuters news agency.

“Individuals can easily syphon off sensitive corporate information and pass it to unauthorised third-parties,” writes Orloff in Info Security magazine. “Systems can also be infiltrated by those that wish to do your business harm or gain a competitive advantage from your data.”

And it’s a huge mistake to assume you only need to protect your company from cyber-attacks, according to Bruce Wimmer, G4S’s Senior Director and Leader of Counter Business Espionage.

He warns that business spy that doesn’t involve cyber intrusion is on the rise and is one of the greatest security risks to businesses, dwarfing the threat from cyber-attacks.

G4S’s corporate risk service division estimates the cost is as high as $1.1 trillion annually. By comparison, the impact of business-critical data being stolen remotely is estimated to be $400bn a year, G4S estimates.

“Many businesses consider the threat of a cyber-attack to be their biggest security concern and at their peril, they ignore the threat of data loss where corporate spies uncover serious shortcomings in physical security arrangements,” says Wimmer.

“Disgruntled employees, competitors, foreign governments, and suppliers can act as an insider threat, over short and long periods of time, with little chance of detection if the business is only focusing on external cyber threats.”

The corporate spy will home in on weaknesses, knowledge gaps and human frailty and there’s little point in monitoring systems if your company doesn’t also monitor the people who can access them.

“While a cyber-attack can bring down a company’s systems or access confidential information, there are many more ways that competitors or other corporate spies can attack a business,” warns Wimmer.

Worse, these methods can make an in-depth cyber-attack possible.

How to Protect Your Company’s Sensitive Information from a Spy

Wimmer recommends doing the following:

• Conduct a security audit of your premises. Identify and test the rights of access and rights of way for all your employees as well as service providers (cleaners, engineers, IT professionals, etc.).
• Assess the processes you have for new employees, external suppliers and visitors. Share the information with relevant employees.
• Instigate a Clean Desk Policy and make sure it’s always enforced.
• Establish a process for the secure and timely disposal of sensitive printed material.
• Introduce a policy to protect sensitive information that covers how it is shared (or not) in conversations, meetings, telephone calls and paper documents.
• Ensure business executives who travel to meetings or conferences stay vigilant.

“Business executives are extremely vulnerable to spying when travelling,” says Wimmer.

“Travel security programmes address terror threats, criminal threats, potential political instability, even health and natural disasters, but they rarely cover business espionage threats – even though the business espionage threats almost always pose a more serious adverse business impact.”

Managing All The Threats and Risks To Your Business

Of course, corporate espionage is just one of the security risks your company might face. Besides security risks, there are risks involving finance, legal and regulatory compliance, operations, reputation, service delivery, commerce, internal and outsourced projects, safety, stakeholder management, strategy, and technology.

It’s no wonder that business owners and CEOs get overwhelmed when it comes to managing risk. Fortunately, we can help. The FD Centre will provide you with a highly experienced senior part-time FD with ‘big business experience’ who will work with you to understand the risk profile of your business and of the shareholders.

By managing the company’s risk profile and the risk profiles of the shareholders the whole business can be brought into alignment and can operate as a unit rather than as a set of individual parts.

This is actually one of the most critical roles in any business and your part-time FD will support and guide you through the process.

We have an intimate understanding of every conceivable risk growing businesses face.

This means that we can help you build a much stronger business by knowing how to navigate through the growth stages of the business cycle confident that you are equipped to meet the challenges as they present themselves.

Lower Your Risk Today from a potential Spy

Let one of the FD Centre’s part-time FDs help you with business risk analysis. You can download a free report on Business Risk Assessment here or you can book a free one-to-one call with one of our part-time FDs—just call us now on 0800 169 1499 ot go to: www.thefdcentre.co.uk/financebreakthroughsession/

Check out CNBC’s interview with Sara Daw, Group CEO of The CFO Centre on the rise of the part-time CFO:

It might look innocent enough but your office shredder machine actually poses as much a threat to your business as the most virulent computer virus.

What?! How?

How could something that was bought to protect your business be as harmful as a computer Trojan?

It’s simple really: it’s not fit for purpose. Yes, it cuts your unwanted documents into thin strips. But—and this is the important bit—it leaves your company exposed to all kinds of trouble because those strips can be reassembled.

All it takes is a little bit of patience to reassemble those bits and read your documents.

Now, you might think this all sounds far-fetched, a little too James Bond/Jason Bourne for your circumstances but unfortunately, it’s not.

In fact, there’s even software that runs on Windows whose very purpose is to reassemble shredded documents.

Called ‘Unshredder’, it automates the reassembly of torn or shredded documents, thus saving ‘even novice computer users’ the tedious task of doing the job by hand.

What if those documents reveal your company’s strategic plans for the next five years? Or the details of your next big ‘secret’ project? Or the names and personal details of your customers or clients?

Even office memos can reveal valuable information in the wrong hands.

And let’s face it, people who take the trouble to reassemble shredded paper to find sensitive company information aren’t doing it for benign or charitable reasons.

No, they’re most likely doing it for nefarious purposes: to expose your company’s plans via social media or traditional media; to sell the information they find to your competitors; to blackmail your company, or to commit large-scale identity theft using your customers’ details.

The impact of your company’s secrets being revealed could be devastating. But the impact of your customers’ or clients’ details being revealed could be just as bad.

Here in the UK, for instance, companies that collect customers’ or clients’ personal details are legally obliged to protect those details under a law called the Data Protection Act 1998.

The same law also states that companies are legally obliged to carefully destroy customer records when they no longer need to retain them.

Not doing so results in severe penalties.

Like the £100,000 fine handed out to a local council which was found guilty of dumping the personal records of 100 people in a building, it had once used as offices. The personal records were found stuffed inside 45 bags of rubbish left by the departing council employees.

So, allowing your customers’ details to fall into the wrong hands could result in your company ending up on the wrong side of the law.

And it doesn’t matter how healthy your turnover is, few companies can take a £100,000 hit to their monthly cash flow without hurting.

There’s more. If word gets out that your company doesn’t protect your customers’ details, think of the public relations implications. Who will want to risk buying from your company again?

How can you avoid this kind of disaster?

Simple, you outsource your document disposal to companies that offer paper shredding services. These companies use industrial-scale paper shredders with blades capable of transforming your documents into tiny, uneven bits of paper that can’t be reassembled.

Just as importantly, these companies will provide you with proof of destruction so that you have an audit trail, should you ever be in a position where you need it.

And as with all kinds of outsourcing, there are many other benefits too.

One, you save on overheads. You no longer need to pay for the repair, maintenance, and replacement of an office shredding machine that, like a photocopier, has an unfortunate habit of breaking down when you most need it.

Two, your employees no longer need to waste time slowly feeding one document at a time into the office shredding machine. Instead, they can do the job for which they were employed.

Three, you save space. No need to allocate valuable office space for the mountain of documents that need to be fed one page at a time into your office shredder.

Four, you save money. And five, you help save the environment, because most reputable professional paper shredding services recycle what’s left of the documents they process.

So, as you see, although outsourcing has attracted its fair share of negative press in the past, it is often a force for good in a company.

It not only allows you and your employees to focus on your core competencies but saves you money and time.

Paper-shredding is just one example of what you can outsource in your business. You can in fact outsource all your technology services and business processes such as HR and finance, which allows you to operate a leaner, more efficient business and use the savings to drive growth.

Enlisting the services of an experienced part-time FD, for example, can add value, increase efficiency and maximise opportunities in your business.

You get access to an FD with the experience and knowledge to help you plan, manage and control business growth and who can organise both your in-house and external accounts functions.

Many business owners don’t realise the breadth of the role of a part-time FD. For instance, a part-time FD will not only become an unofficial ‘sounding board’ for the often-isolated CEO or owner of the business but can also help devise an efficient outsourcing strategy for the company.

If one of our part-time FDs helps you to create an outsourcing strategy, for example, the process will include:

• Evaluating your company’s current and future requirements.
• Discussing a company-wide strategy/protocol for taking on outsourced providers
• Investigating specific outsourced providers (starting with our national network of trusted providers) with proven track records
• Evaluating providers’ core competencies to ensure they find the right match
• Discussing cost implications in detail and uncover any hidden costs before contracting the supplier
• Interviewing providers and ensure they will be a good cultural fit
• Ensuring that the provider will be able to deliver the service on time and to the right standard
• Challenging providers about their data security and integrity
• Asking providers to share their contingency plans in the event of serious problems
• Evaluating providers’ training programmes and ability to support your business in the event of staff sickness or absence
• Discussing providers’ compliance policies to ensure that they will take on the responsibility (where appropriate) to adhere to laws and regulatory requirements.

And that’s just outsourcing. For a fraction of the cost of hiring a junior member of staff, our part-time FDs will work with you to resolve all of the 12 major challenges your company is likely to face:

1. Exit Planning
2. Risk Assessment
3. Implementation Timetable
4. Strategic Funding
5. Internal Systems
6. Reporting
7. Profit Improvement
8. Cash Flow Management
9. Compliance Reporting
10. Tax Planning and Legal Issues
11. Outsourcing
12. Banking Relationship

And because it’s a part-time role, there’s no impact on your payroll or headcount.

What’s not to like?

Conclusion

So, if you want to keep your company safe, outsource your paper-shredding. And if you want to free up your time, save money and accelerate your business growth, hire a part-time FD.

To find out more about how a part-time FD will help your business, book a free one-to-one call with one of our part-time FDs now by clicking here or call us on 0800 1691499.

Coffee is one of the most sought-after commodities in the world but even that fact doesn’t make coffee traders immune to economic turbulence.

Such was the case for family-run green bean coffee merchant D.R. Wakefield. During one particularly volatile period, the UK-based business was subject to some tough grilling by its bank but just didn’t have the wherewithal to supply the answers.

“We simply didn’t have enough background information, data, and statistics collated in a manner required by the bank,” recalls CEO Simon Wakefield.

It was then that he and his management team realised they needed someone with sophisticated financial expertise to help them.

Hiring A Part-Time FD

Hiring a part-time adviser was the last thing Simon wanted, having had unfavourable experiences with part-time employees in the past.

“In my previous experience of part-time employees, I found they would come, they would freelance, and they would go and it didn’t work with us.

“I like to have people in-house that work with us and understand our business.”

D.R. Wakefield, set up in 1970 by Simon’s father Derrick, supplies both specialist and regular grade coffees to the UK trade, small private roasters, and large multinational companies alike.

“It sounds simple but when you start drilling into the way we work with multiple currencies, multiple countries, it becomes quite detailed.”

Then Simon discovered the UK’s FD Centre and how it provides part-time FDs.

He changed his mind about part-time employees and made the decision to hire a part-time FD, Nick Thompson, from the FD Centre.

Nick had more than 15 years of experience as an FD in entrepreneurial businesses and had worked at FD level in retail, restaurant, property, and auctioneering sectors both in the UK and overseas with such companies as Conran Restaurants, The Conran Shop, Early Learning Centre, and Bonham’s Auctioneers.

Why the FD Centre?

“The FD Centre offered us something: if our first FD didn’t work out they would quickly replace him with another one,” explains Simon. “If the FD we took on wasn’t able to support us in the way we expected they could replace him with another FD.”

He was delighted to realise that his new part-time FD would do far more than look after the company’s finances.

“I initially thought an FD would just look after your finances. Naively I didn’t realise how many extra subjects and areas he would cover.”

Nick provided Simon with daily financial reports when the coffee market was exceptionally volatile. He recommended the company change auditors and helped the accounting team to update its accounting software packages and credit control procedures.

That all helped the company’s cash flow position to improve, says Simon.

Nick also helped Simon bolster his relationship with his bank by bringing in a permanent in-house management accountant to take care of the finances.

Five years on and Simon credits those monthly and sometimes weekly financial reports as playing a crucial role in the company’s growth.

“I have the figures at my fingertips. It’s not a gut feeling like I had before: it’s presented in data to me on a monthly basis or as often as I want it. This means I can make plans and can justify them. For example, if we want to install some new hardware.

“It gives you confidence when you know what your figures are and it doesn’t come as a surprise.”

Nick also helps Simon with strategic planning and even his personal finances as well.

“The improvements and suggestions he’s given to us have helped our business develop. These include some of the ideas he came up with when he first spoke to us. Once he started settling and grasping what we were about we could begin to implement these ideas. He was quiet, unassuming, and unflustered.”

The company flourished at a time when so many other companies floundered.

“In the five years Nick’s been here we’ve grown about 30%,” reports Simon.

There have been other important benefits from using the services of a part-time FD, admits Simon.

“As an owner, manager, someone working in the business I needed to be able to trust him. Nick built my trust very quickly with his experience and suggestions.

“I can sleep better. I’m not quite so cranky when I go home because I’m not only confident but comfortable in what we are doing here.

“He’s added revenue because he’s made new suggestions. For example, he’s suggested that we look at taking on a marketer which has taken that role away from me. He’s also suggested I join another business group, which has meant I’ve been able to benefit from other skills and other experiences. It’s given me a lot more confidence in how I can move forward and develop the business.”

The management team has also benefitted from having an FD on board, says Simon.

“The rest of the team have confidence that they know we’ve got an FD overseeing us. He’s brought in targets for them and it’s made the whole team come together.”

The only regret Simon has is that he didn’t hire a part-time FD earlier.

“I wish I’d done it sooner as it’s really helped. Nick’s brought in a lot of value to us as a company, he’s brought a lot of value to me as an individual. I think they’re the key things you can expect or hope from anyone.”

To discover how a part-time FD will help your company to scale up, please call us on 0800 169 1499 or contact us here.