Steering entrepreneurs in the right direction

by Catherine Woods - Friday, 1st February 2008 -

Working with an entrepreneur can present a different set of challenges to working with a CEO who doesn’t have an emotional attachment to the business.

Eden Brown FD Michael Sterling explains: “The challenge as an FD is to read the finances and direct the entrepreneurs running the business in the right way.”

Sterling, together with the original owners of Eden Brown, helped steer the £180m recruitment company through its acquisition last June by Hamilton Bradshaw Human Capital. Hamilton is an investment fund specialising in the staffing sector.

Negotiating such a deal is tricky at the best of times but this transaction was complicated by the fact the company had almost grown too big and wasn't as profitable as it needed to be.

“The best advice I’d give a FD in the same position is to choose your moment and the price you want for the business. To get that price, you have to hit a certain level of profitability,” he says.

“You need to understand that you’ll never get the figure you want if you’re not profitable. The entrepreneur, who’s running the company, is still in a growth phase and not concentrating on profit figures.”

Picture source

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