If you’re running a start-up or small SME, hiring additional senior team members might be the last thing on your mind. With wages to pay, client work to deliver and invoices to chase, it doesn’t seem like an obvious priority. However, getting a non-executive director (NED) – to provide an objective opinion on business matters – could be the thing that takes your business to the next level.
“Lonely at the top” is a phrase many SME business owners will relate to and together with a desire for growth, is significant reason why small business owners should search out well-rounded, mature advice; to have a sounding board and a sympathetic ear. Having your NED at the end of a phone for advice and guidance (as well as meeting them face to face monthly) will not only help you steer your company in the right direction, but it will also help you sleep at night!
For a start-up company, NEDs will often be entrepreneurs themselves – simply because this stage of a business is of more interest to them and more within their direct field of experience. For a growing SME, having external objective input can help them ‘see the wood for the trees’ and support the management team to ‘grow up’. When searching for a NED, a SME business owner should look for an individual who they connect with and is committed to the business. If this key ingredient is missing, the appointment will fail.
Fees vary greatly but generally they are cheaper than a consultant – typically around £10-£18k per annum. At this price it’s hard not to get value and considerably cheaper than hiring a senior director.
Non-executive directors are usually mature with credible personal business expertise and more often than not are financially smart. In most cases, they will offer inexpensive strategic advice and bring with them excellent business contacts (especially if the NED is familiar with the industry in which the business operates).
In my next blog post I am going to discuss 5 key reasons why creative businesses should hire a NED.