Unless a small business generates profit that ultimately reflects in positive cash flows the business cannot survive in the long term.

The business owner will assume responsibility for the overall performance of the business, however, it should be remembered other managers with responsibilities for making products, delivering services, marketing, sales and so on will have their part to play in contributing to a profitable business.

All managers will need to be accountable for the contribution to profit their function is expected to make, and to succeed this will not only involve control of cost and/or sales pricing, but also the effective management of people, assets and liabilities.

Not all managers should be expected to feel comfortable adapting to this environment.   Not all managers will possess the skill set required to achieve the profit demands made unless they are trained how to do so and are comfortable to move ‘outside their comfort zone'.

The Finance Director will be deemed to be the financial expert and may offer guidance to other managers in dealing with these issues.

What should the Finance Director do?

There are many ways in which the Finance Director can contribute and 7 important actions are:
     1   Ensure everyone is aware of the financial goals, the forecast or budget and that all mangers ‘buy into' the numbers.
     2.  Encourage staff to be trained in identifying areas of waste that give rise to higher costs, for example scrap products, and encourage them to identify the causes of such waste and eliminate it.
     3.  Explain the need to introduce radical change that offers higher returns, rather than having more of the same.   Encourage risk taking.
     4.  Engender an environment of ‘If it was my money what decision would I take?'
     5.  Demand higher levels of customer satisfaction; not only external but internal also.
     6.  Review and improve all channels of communication.
     7.  Regularly review actual performance with managers against the plans and take corrective action if necessary to ensure the goals are achieved.