Not all customers are alike and financial analysis is required to avoid pitfalls. A part-time finance director puts this in reach of even small businesses. This example from the water cooler industry shows that hidden costs can make the difference between a small but profitable customer and a large one that makes you no money. Local Business Partners provides part-time finance directors, part-time HR directors and part-time marketing directors to growing businesses wwho need high performing skills but want to access them flexibly and with low risk.

1. How a part-time finance director can help
you make better customer decisions
Oli Randell
Local Business Partners
Manchester
Choose your customers, don’t let your
customers choose you
The advantages of employing a
part-time finance director are to
do with sharing the
risk, efficiency of investment
and making significant
improvements to profits.
.

2. Part-Time Directors of Finance, HR & Marketing
www.localbusinesspartners.co.uk

3. The Discipline of Market Leaders:
- Choose your Customers
- Narrow Your Focus
- Dominate Your Market
Treacy, Michael; Wiersema, Fred. 1995

4. Three Value Disciplines
• Operational Excellence
– Middle market, best price, least inconvenience
– Dell – Easyjet – McDonald – Hertz - Toyota
• Continuous Product Innovation
– Best Product Period
– Nike – Harley-Davidson – Swatch – Apple
• Customer Intimacy
– Cultivate Relationships & satisfy unique needs
– No renowned examples

5. Successful companies know and choose which
customers best fit their business based on
financial analysis and disciplined application of
activities

6. • The water cooler market – a clear example of
how choosing customers can have a huge
influence on profits.
• Little product differentiation between suppliers
• A universal product need means that the
customer base ranges from multi-nationals to
smallest SME
A part-time Finance Director is completely focused on
making best use of their time and adding value by
concentrating on making changes that justify their
contract, whether that is renegotiating significant
contracts, analysing where cost and value efficiencies can
be made or working with the business owner on strategic
changes.

7. Finance – Revenue per Customer
• Volume of Bottles
• Price per bottle
• Cooler Rental
• Cooler Cleaning
• Cups
• Coffee, Teabags & Sugar
50% < €497
10% < €295
A part-time finance director is an efficient way to add valuable
high performing skills into your business. Manchester based
part-time finance director

8. Finance – Revenue per Customer
• Volume of Bottles
• Price per bottle
• Cooler Rental
• Cooler Cleaning
• Cups
• Coffee, Teabags & Sugar
€569
A part-time finance director provides high performing
insights efficiently and cost effectively enabling business
owners to focus on operational issues

9. Finance – Direct Costs
Manufacturing
• Product Costs
Distribution
• Limiting Factor = Time
– Distance from Depot
– Density
– Type of Building
A part-time finance director provides high performing
insights efficiently and cost effectively enabling business
owners to focus on operational issues

10. Finance – Distance from Depot
A part-time finance director provides high performing
insights efficiently and cost effectively enabling business
owners to focus on operational issues
Distance to Depot (km)
0
50
100
150
200
1 21 41 61 81 101 121 141 162 182 204 241 301
Distance (km)
NumberofDrops
50% > 58km 10% > 150km

11. Which Customer Costs 5x As Much to Service?
A part-time finance director provides high performing
insights efficiently and cost effectively enabling business
owners to focus on operational issues
A part-time finance director provides high performing
insights efficiently and cost effectively enabling business
owners to focus on operational issues
A part-time finance director provides high performing
insights efficiently and cost effectively enabling business
owners to focus on operational issues
A part-time finance director provides high performing
insights efficiently and cost effectively enabling business
owners to focus on operational issues
A part-time finance director provides high performing
insights efficiently and cost effectively enabling business
owners to focus on operational issues

12. Cost to Service Each Customer
£6.50 £11.36
£32.47

13. Finance – Same Type of
Customer, Different Building
Traditional hospital –
long corridors
Modern hospital –
compact design
A part-time finance director in Manchester will cost
£100 per hour and you might need them for about 10
hours a week.

14. Finance – Indirect Customer Costs
A part-time finance
director will cost
£100 per hour and
you might need
them for about 10
hours a week.
Complexity of order
process
Customer
interaction: volume
and type

15. Design Your Customer Map
• Revenue €497 per cooler
• < 80km from Depot
• Trucks = 140 Bottles
• 35 Customers per Route
A part-time finance director in
Manchester will cost £100 per
hour and you might need them
for about 10 hours a week.

16. Designer Your Customer Site
• No Entry Restrictions
• Easy Delivery Access
• Compact Location
with high volume per
drop
• Pricing mechanism for
non-standard
A part-time finance
director in Manchester
will cost £100 per hour
and you might need
them for about 10
hours a week.

17. Financial Analysis of Administration
• Clients with unique or
unusual invoice
requirements
• Clients with special credit
terms
• Opportunity for
Premium Service
Offering
– Last Minute Order
Premium
– Add-on services
A part-time finance
director in Manchester will
cost £100 per hour and you
might need them for about
10 hours a week.

18. Financial Analysis of Existing
Customers
Strategic Options
• Client in Pyrenees
Delivered from
Montpellier
• Local Delivery
Partner?
• Customer Swap
With Rival?

19. Financial Analysis of Service Options
Operational Options
• Drop at the door
• Delivery partner
• Site Premium
• Find an Alternate
Supplier

20. Summary
These examples from a market widely served by
small and medium sized businesses show that a
financial analysis of potential and existing
customers can fundamentally affect the way a
business operates and performs.
A part-time finance director undertaking this kind
of analysis can save the company significant sums
and prevent the company from wasting precious
resources in pursuing customers that would be
expensive to service.

21. The Broader Benefits of a Part-Time
Finance Director
• The advantages of employing a part-time finance director are to do with sharing the risk, efficiency of
investment and making significant improvements to profits.
• A full-time finance director is likely to cost around £8,000 to £10,000 per month in
salary, car, benefits, bonus, NI and other costs of employment. They may also have equity.
• But how many business owners evaluate their performance on profit contribution or seek a step change in
business performance?
• Every FD in small and medium size business will tell you that their effective time each week gets eroded
with dozens of tasks that have cost implications but need not end up on their desk. Everything from
problems with the cleaners to leaky gutters somehow end up needing half an hour here, an hour there.
• A part-time FD is completely focused on making best use of their time and adding value by concentrating
on making changes that justify their contract, whether that is renegotiating significant contracts, analysing
where cost and value efficiencies can be made or working with the business owner on strategic changes.
• Our finance business partners all have one thing in common – they have a proven background in high
performing and blue chip organisations and have gone on to work successfully for smaller businesses
because they get satisfaction from getting stuck in and making a visible difference.
• Above all, they buy in to our approach of sharing the risk with our clients. It is our way of demonstrating
that we understand how business owners think and behave. We don’t want equity but we have ‘skin in the
game’ because if you are not happy you can walk away and until that business partner is assigned to a new
client, we are losing out.
• Efficient, focused, and motivated by risk – is that a good enough reason to explore further the profiles of
our finance business partners?
Oli@localbp.co.uk
0161 871 4600

22. Part-Time Directors of Finance, HR & Marketing
www.localbusinesspartners.co.uk