Telling the truth about SME life today

Financial and Funding Business Contingency Planning with Kevin Harfield – MD JamesField Executive Limited

Perhaps one of the biggest challenges for directors/ business owners and entrepreneurs face is being aware of both financial and funding options to safeguard the business during periods of growth, consolidation, and difficult trading periods, particularly during economic downturns, but also unexpected challenges. Kevin Harfield, Founder of James Field Executive, has over thirty years of experience supporting business owners across many sectors to protect their businesses by advising them commercially with clear financial and funding strategies, and many innovative and bespoke solutions for that business/sector.

After enjoying a highly successful career as a Senior Corporate Relationship Director, heading up corporate teams in high street banks, Kevin launched his independent financial advisory company, James Field Executive over ten years ago.

What was the motivation behind starting your own company?

“I started working in banking when I was sixteen. After twenty-seven years, I became disillusioned with the inefficiencies, poor levels of service, and poor advice I encountered across the banking sector. Working with so many different businesses over so many years, I wanted to apply my knowledge commercially to help business owners consider both financial and funding solutions to ensure they protect their businesses in the longer term”

“Whilst I’m not an engineer or a true entrepreneur, my skills complement the business owner who often struggles to consider the funding and the financial planning they need to support and build a robust business. Often, the owner creates an amazing product or service, however, if they ignore, or receive poor advice, then by not planning the financial/funding aspects of running a business, they may struggle. Often, I’m working with businesses to protect their cashflows and better understand their Management Accounts, how profits are generated at what margin and how these profits turn into free cash. Where cash is locked up in the balance sheet – the old adage ‘Cash Is King’ has never been truer. Businesses need to be proactive when implementing contingencies to fall back on in times of growth, or periods of slow down.”

Do you think many businesses, especially SMEs, have safety plans or emergency funds to survive unexpected events?

“I would say that the vast majority do not have contingencies in place, that’s not a criticism as business owners can’t be good at everything or keep up with innovative financial and funding options. Even if a business enjoys good margins and profits and cash flows, there is always a risk that can impact the business, that needs mitigating. Contingency plans aren’t always about cash planning and funding options. It can be taking advantage of key tax allowances, like R&D Tax Credits which are continually not considered, particularly in the construction sector. My advice and experience help owners become more aware of the options available to place their businesses in the best possible position for any future challenges, considering robust strategies that give them peace of mind.”

Has it become more of a priority for businesses to build these contingency plans, especially in the wake of COVID-19?

“I think businesses are certainly more aware after dealing with the financial impact of the pandemic. For businesses considering a financial or funding contingency, they will have a lot of questions and uncertainty: “where do I go, who do I speak to?” In 2022 they have limited options where they can turn for honest, independent, commercial advice. Do ‘Brokers’ always have the business’ best interests in mind? The good ones yes, but they are hard to find. At James Field we’re not brokers, so we are not in any way commission-driven. I’m able to present the best product or service for that individual business.”

I understand that a few of your clients moved with you when you started James Field Executive: how important is it, particularly in finance, to build those customer relationships, to become a trusted advisor?

“It’s hugely important. Sometimes, for my new clients, it can take one or two years to gain their trust but also demonstrate the value that I can deliver across areas of the business that the owners don’t have the skills. Initially, we will go through the Commercial Business Review (‘CBR’) together and identify the areas of the business that require review or could represent risk. Through regular review and challenge, the owner will come back with more questions or areas that we hadn’t initially considered as they buy into the strategy. That’s typically how I build trust with my retained clients. Often something as simple as setting in place a shareholder agreement can save significant stress and uncertainty later should a shareholder seek an exit as either a good leaver or a bad leaver. Also incentivising key senior management through an ‘EMI’ share option scheme (HMRC approved) can help retain talented staff. So as important as funding options are, it’s also important to future proof the business against future events, having ‘hindsight’ today if you like.’’

Why do businesses struggle to find funding and why is the information not widely available?

“There are so many growing pains in the life cycle of a business and at some stage, most businesses will need to access a working capital solution. Twenty years ago, businesses would be able to dip into their bank overdrafts. Now, banks are reluctant to consider overdraft requests of any meaningful value and even then, personal guarantees are often insisted upon! There are other options available too, release locked up cash, support growth, investment in fixed assets, shareholder exit, acquisition, etc.’’

“The main issue when considering alternative funding options is that, ideally, you need to set them in place when the business is trading well with a defined plan on how the owners/directors want to take the business forward that can be articulated to a lender. It can be said that traditional lenders will always give you an umbrella when it is sunny, but it is much harder to gain their support when things are challenging, i.e., it’s ‘raining’. Businesses need to continually think ahead: securing funding early, generating a track record with the lender, so that they become an advocate for your business.”

“Planning any lending or working capital for a business should be considered from a proactive position, rather than a reactive one, or you will limit your options.”

Do you think you would have been able to give such extensive advice and knowledge to support businesses if you had not had your previous experience in Business/Corporate Banking?

“No, I couldn’t deliver the quality of service I give my clients today if I had not started my business with the level of experience I gained from my career in business/corporate banking and taking my banking exams. Also, the experience of working within businesses, with the owners/directors has been invaluable over the last ten years, in many cases as a retained non-exec. I’m now able to deliver advice and best practice to all my clients from a position of practical/commercial experience, presenting products, services, and solutions, that are commercial and bespoke for the business, whilst clearly mitigating the risks of running a successful business.”

“You can build trust when you have thirty years of experience and sit on numerous boards, and not forgetting I’m also running my own business. Clients, trust our recommendations which come out of the completion of the Commercial Business Review (‘CBR’) which as highlighted is part of our initial consultation (free with no obligation). It helps showcase how many different options there are for business, and it helps me create a bespoke financial/funding plan of actions that we deliver on together.” 

Would there be any changes you would like to see in finance as an industry?

“There probably should be more regulation in the broker space when dealing with limited companies. I’ve come across quite a few clients who have been recommended a certain product or service that just wasn’t the best solution for the business. For example, instead of taking out a high-interest loan, the business should have considered an Invoice Discounting Line to unlock cash in their debtors. Without the support of traditional high street banks, it’s difficult for businesses to know where to seek reliable advice.”

What advice would you give to a new entrepreneur, just starting their own business?

“Be open-minded to surround yourself with advisors and or/key staff that have the skills to do the ‘stuff’ you don’t understand, don’t know about, or don’t want to do. As the business owner, you can then drive the business forward. Good people will take the burden off your shoulders. Invest in your staff, through training and incentives, don’t take them for granted, create a can-do culture and you will enjoy running your business and it will grow strategically and becomes more profitable and importantly cash positive.”



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