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Working in an SME

Dale Storrer is a qualified ACCA who began his finance career in a four-partner accountancy firm, before moving into the sector of commerce and industry.

Between 1994 and 2009, he worked for several large corporations within the fields of IT (Microprocessor Services), telecoms (Kingston Laboratories), manufacturing (Trianco Redfyre) and media (Northcliffe Newspapers).
Since 2009, Dale has been Finance Director at Essex Safety Glass, one of the UK’s leading independent glass processors. Here, he shares his experiences of his first year working for an SME.

When considering moving from a large organisation to an SME, what originally appealed to you?
Whilst I was studying for my ACCA, one of my first roles was within an SME, which was part of the Kingston Communications Group based in Hull. I thoroughly enjoyed being so hands on, having involvement in all aspects of the business. When you work for a PLC you can find the scope of your role limited and you can spend a great deal of your time struggling through red tape. Working for a large organisation at a senior level certainly helps to significantly expand your skill set. After many years in this kind of environment, I decided I wanted a change and wanted an SME to benefit from my range of skills and experience.

What was the biggest challenge you faced during your transition into an SME environment?
Probably the culture shock of being so hands on after being distanced from the detail for so long. I had to undertake a wide variety of tasks such as writing VBA scripts within Excel to produce output files for submission to our BACS system, and journal input sheets which could again output files directly into our accounts system. Jobs that would traditionally have been dealt with by a member of the IT department in my previous organisations or having to arrange alternative methods of finance for the business, which traditionally would have been handled at a group level. I am also responsible for the payroll for the company, which required me to get up to speed again very quickly. It's been quite a while since I've had to actually prepare a payroll!

What have you enjoyed the most about this career move to date?
The diversity of the role. I’m involved in all aspects of the business, such as IT, health and safety, marketing and HR, as well as finance of course. After moving from a large organisation you can see the impact that your decisions have on the business very quickly, which gives you a great deal of job satisfaction.

What are the key factors, which are limiting your organisation's growth at present?  
Probably access to working capital. We have significant growth plans over the next few years and the recession has been difficult for a lot of smaller companies. You can't emphasise the importance of cash flow management enough when working in an SME. You have to constantly keep looking forward for times when you may have a cash crisis and plan accordingly whether that be raising new finance through loans, government grants or other means such as invoice financing. Another limiting factor is availability of skills. Although I'm also Chartered Institute of Marketing (CIM) qualified, I just don't have the time to carry out the marketing function in addition to my own role, so I'm currently looking to bring in a graduate through a government-funded scheme to fill that gap.

What are the key opportunities for your organisation?   
The growth opportunities for our business are limitless. Our immediate growth areas are in new product development. Throughout 2009, although trading conditions were difficult, we invested heavily in R&D, again the majority we can reclaim through the government R&D tax credit scheme. This was in order to position the business to take advantage during the economic recovery. We are currently looking to specialise in technological innovations within the industry, which will allow us to increase our margins and gain production efficiencies as opposed to being busy fools making high volume, lower margin products whilst working at full capacity.

In addition, we will also start exploring overseas opportunities and I'm currently in discussions with corporate financiers and high street banks for the most effective method of achieving this.

Aside from cashflow management, which skill sets have you called on the most in your new role?
Moving to an SME has called upon all of my skills whether that is marketing, IT, HR, management and so on. It's far too easy to become pigeonholed in one role within a large organisation and stop communicating with the rest of the business. Communication skills are essential within an SME as you have to be comfortable talking to suppliers, customers and financiers and other business contacts. Networking events are a good idea as you can make some valuable contacts that you might need to call upon at some point. I think the one danger of working in an SME is that you have to wear many different hats and it's easy to become overwhelmed as your job list gets longer. Effective time management, planning and prioritising are valuable skills as well as the ability to be able to say "no".

Have you had to build a closer relationship with your bank in your new role?
It's inevitable that you must have a much closer relationship with the bank working for an SME. Within larger organisations you're likely to never speak to anyone from your bank but for the SME, cash is the lifeblood of the business and you can't afford to alienate your bank. On the flip side, you'll find that the main high street banks are clamouring for your business and if you speak to the right people you can find that you can get valuable business support and advice from them. Since working with Essex Safety Glass, I've established a new line of credit for asset finance with one bank (other than our main bankers) and am speaking to another who can assist us with setting up two new overseas operations. Banks aren't just there for bankrolling your business; they can provide so much more.

Have you got any advice for someone aspiring to become a Finance Director in an SME?
You need to be up for the challenge and appreciate the importance your decisions can have on the business. You also need to remember that within an SME, the management team is more likely to heavily rely on your ability to provide them with advice and guidance. Your decisions can really help shape the business. Communication is key to success: if you find a problem you have to communicate it, if you don't it can be costly. You have to be able to network effectively as gaining contacts can be a valuable exercise, although it can be time consuming and may overlap into your personal time.

Being a Finance Director in an SME is hard work; you shouldn't embark on such a role thinking it will be easy. Even with effective planning you can find that from one day to the next you'll probably be doing something you couldn't have foreseen and didn't expect to be doing, but it's worth it.

Are there any sources or websites that you would recommend to Finance Directors within an SME?
There are so many useful websites it's hard to know which to suggest. A very useful start is Business Link, which provides a lot of information on all aspects of business. Business Link also holds a series of free regional business briefings, details of which can be found on their website. You can also speak to your own Business Link advisor, who can assist with a wide array of differing business matters. Then of course there's HMRC for all matters VAT and payroll related. Try getting involved with local Chambers of Commerce as these are often a useful way to network.

Look out for network events through your professional associations. As a member of the AAT, ACCA, CIM and the Chartered Management Institute (CMI) these are very useful, not just for CPD requirements but also a lot of network events are highly relevant to an SME. The websites of these organisations are again very useful reference points. Probably the best single source of information is a good search engine!