1. Finance for SMEs Stephen Hill stephen@fd4.co.uk

2. FD4 FD4 is a team of experienced finance directors who work on a part time basis for a number of companies in the £2m to £40m turnover range. They are very experienced Finance Directors who know what success looks like and have held leadership positions in companies with £100m+ turnover. FD4 finance directors have worked in arrange of business sectors including Consumer Goods, Logistics, Care Homes, Financial Services, Franchising, Trade Associations, Aerospace and Defence, Recruitment Services, Bio Pharmaceuticals, Digital/Gaming, Building facilities. The team extends to trusted partners with whom we have lasting relationships: - Accounting Firms, Lawyers, Web & Digital Marketing professionals, IFAs, Banking and Finance Providers, Tax Advisers, Insolvency Practitioners, HR Service providers.

3. What is an SME? EmployeesTurnoverAssets UK (Companies Act 2006) <250<£25.9m<£12.9m Europe (2003/361/EC) <250<€50m<€43m Generally 2 out of 3 conditions to be met

4. What is an SME? Better definition? Companies that are generally: Smart Motivated Energetic

5. Financial challenges for SMEs What are the CORE financial challenges that SMEs face?

6. Financial challenges for SMEs What are the CORE financial challenges that SMEs face? Cash flow Organisation Restructuring Exit planning

7. Cash flow 90% of small business failures are caused by poor cash flow. Dun & Bradstreet SMEs failing due to cash flow issues - estimated that 80% of business failures were down to poor cash flow.80% of business failures were down to poor cash flow Simply Cashflow Limited

8. Cash flow What does cash flow mean for recruiters? Invoice discounting T&Cs Advance % Concentration limits Aged debt and credit control Pay when paid clauses Billing frequency/self bill

9. Cash flow What does cash flow mean for recruiters? Other funding arrangements Payment terms to contractors Perm vs Contract Contract margin % and net profit %

10. Organisation The financial aspects of organising people, processes and systems

11. Organisation People Reward schemes - short, medium and long term Career planning and OTE

12. Organisation Processes Front office – data validation and contracts Accounting operations - in-house vs outsource Monthly profit reporting Budgeting and forecasting

13. Organisation Systems Front, middle and back office

14. Restructuring Changing the size and shape of the business over time

15. Restructuring Growth through expansion New team New office New country

16. Restructuring Acquisitions Strategic plan Identification of target/use of broker Due diligence Execution

17. Restructuring Downsizing Redeployment/redundancy

18. Exit Planning The when and how of selling the business Trade sale PE involvement MBO/MBI

19. Summary SMEs by their very nature change rapidly and this is particularly true in the recruitment sector Finance must be on top of these changes, balancing short term and longer term needs Remember the CORE financial challenges - Cash flow, Organisation, Restructuring and Exit Planning

20. Any questions? Stephen Hill stephen@fd4.co.uk