Being the finance director of a new economy business is challenging.
There is steep volatility in the markets, new competitors launching daily and investors expecting immediate returns. Added to this are the costly ‘creatives’ who moan about the strip lighting in the office and programmers who think little of customer service. Life as a dot.com is never boring.
The expectations placed on dot.coms are high. There is a belief that barriers to entry are low and that running a website is easy. Create a web business and cash will flow. These are the fallacies of the new economy.
Starting a business in any economy is tough. Hard work, focus and planning enable the entrepreneurial vision to succeed. That is why there is little difference between the new and old economy. This is true for the role of the FD.
Tight budgetary controls, robust security procedures and intelligent cashflow forecasting are key to running a dot.com. Teach the ‘creatives’ the value of cash and importance of it to your business and you will gain respect. Focus cash spend on targeted customer acquisition and quality of service and customers will return. Automate procedures to allow your business to run 24 hours a day, 365 days a year. These are the goals of a new economy finance director.
All too often articles appear on the demise of the FD in this type of business, the lesser role that finance is given. They are seen as boring, stifling the creative activity. Why have an FD when you can go that bit further with your marketing drive or hire another designer?
The failure of dot.coms is not that they don’t recognise the importance of finance, but they do not recruit the right type of FD. The new economy FD has to be multi-disciplined and must have skills of the traditional accountant, and project management skills to link the accounting system with the site, or legal skills to negotiate a share option scheme, or the understanding of technology to challenge programmers.
The new economy FD is integral to the success and growth of the company.
Ultimately, like the old economy, it is they who control the cash, the lifeblood of the business.
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