As your agency grows, so do your numbers. When it comes to your finance function then, how and when should you scale?
“As your agency becomes more established, usually the complexity of the business increases, you’ve got a bigger team – so there’s a good distance between the owner and the people doing the work,” says Pam Phillips, founder and MD of de Jong Phillips.
“You might start giving your management team responsibility for managing budgets, looking at profits of each division, and incentivising the team with things like EMIs, bonuses and profit share schemes.”
“But practically, how can leaders build their finance function so that they themselves no longer need to be running the finances themselves? They need to be the decision maker, but they don’t need to make payments, chase debtors, or do that day-to-day stuff.”
When figuring out your next steps, it’s tricky to decide whether it’s best to make finance hires in-house or outsource them instead.
“If outsourcing is done right, you can have a full team where you get the full spectrum of support,” says Pam. “As you’re scaling up, you absolutely need to have people in-house. But depending on your business, and the size and complexity of it, that point varies – and you don’t need it from day one, and you don’t need even need it in year three, four or five.”
“It depends on how quickly you want to grow. If you can extract yourself from the financial handling and admin, you can focus on the value you’re adding to your business through winning new biz, networking, pitching etc.”
“The sooner you can step away from the finance function, the better.”
Pam will be on hand in this month’s CFO Surgery to help you work out how best to scale your finance team, and what hires you should be making for the long-term benefit of your agency.