Systems & Controls in Owner Managed Business & Small Medium Enterprises – Maturing models

July 21, 2023

The UK has many many fantastically successful Small & Medium Enterprises (‘SME’s) and Owner Managed Businesses.

Despite this however, there does come a time where external support is often needed, for example, to:

  • Mitigate risk;
  • Improve Performance; and
  • Obtain additional funding.

The advantages of such Businesses tend to focus around:

  • Control & Speed of decision making – this tends to be quick and much less bureaucratic than larger firms; and
  • Often these Businesse have deep and broad client relationships, where the client is often at the heart of everything that is done.

However, such businesses do tend to have some drawbacks and or limitations. These include:

  • A heavy responsibility on the Founder(s) from a work life and indeed mental wellbeing level. Often making Owners / Founders feel that they cannot let go and or let people down; and
  • Absence of a strong management team and or detailed succession plans extend these risks further.

Generally, we find that firms get to a pivot point where the status quo needs to be challenged, this is notable in a number of live cases in the Challenger Bank sector in the UK today.  Namely, the need for FinTechs and others to see past the Investor drive for hyper-growth to good governance and controls before embarking on Banking or similar applications.  Without such considerations the valuations of these firms can and have shrunk considerably.

More and more today, we are seeing firms be more inclusive at an earlier part of their growth cycles, acknowledge that they can not or should not build packages that are available off the shelf (which are more secure, more scalable and do not pull much needed resources away from the business of usual of the firm).  However, these systems (and sometimes people) have higher short term costs.

Given the vast array of services required in a small business we have established a group of highly experienced and skilled individuals to support growing firms. We plan to release more information around this product offering in the coming months, but, for now, we provide this support via our own networked clients.

Our services typically include support around the following Framework:

1 Risk appetite

Determining a firms markets, products, financial targets and similar items with them.

2 Governance models

Helping firms define, recruits dn retain an appropriate Board, and relevant committees (if required), IT systems and or staff target operating models.

3 Risk assessments

This is sector specific, but often looks at our core framework together with both macro and local risks that impact the business.

4 Policies, processes, and procedures

Again this is sector specific, however we maintain models that focus on pragmatism, commerciality and general implementation ease / understanding.

5 Training communication and awareness

Defining with firms the need to train their staff, supply chain and or other parties and may be required.

6 Incident and intelligence management

Understanding how markets are working, the challenges faced, and available opportunities –  and dealing with incidents as and if they happen (health and safety breaches, thefts , frauds)

7 Internal and external reporting

We support firms with managing reporting to the Board and also those instances where there are also external reports that need to be made to external stakeholders.

8 Monitoring and testing

We assist firms with their own (or outsourced) quality checking, quality assurance and oversight controls to ensure that quality is maintained, staff learning is captured and reduced costs/ risk.

9 Data management

Under guidance our client firms understand what data they are allowed to request, capture, retain, use, and dispose of.

In conclusion, we believe SME and Owner Managed Businesses provide significant value to UK PLC and we want to ensure we continue to support these clients today, tomorrow and on an ongoing basis.

Our mission within the Operating Partners Practice of gunnercooke llp is simple: to help Investors, Owners, and Leaders grow and improve their businesses.

We offer pragmatic solutions that fit your specific requirements, building a toolkit of practices that support performance improvement and the adoption of change.

We look forward to having a conversation with you!

Should you require further assistance and wish to have a conversation to explore more, contact the author as follows:

Mark Winters

Risk, Regulation and Financial Crime

Operating Partner

T: +44 7903148524