As an SME grows, there often comes a point when sales and commercial decisions become too important to remain just one of the many responsibilities of the business owner.
The company may have established customers, a sales team and a healthy level of turnover. There may also be opportunities to enter new markets, develop key accounts or improve profitability.
But there is an important question growing businesses eventually need to answer:
Who is actually responsible for the commercial direction of the business?
For many SMEs, the answer is still the owner or Managing Director.
That may have worked well when the business was smaller. But as the organisation grows, commercial management becomes more complex. Sales performance, pricing, profitability, forecasting, key accounts, new business development and team management all need greater focus.
At this stage, the business may need experienced commercial leadership.
But that does not automatically mean employing a full-time Commercial Director.
What is a Fractional Commercial Director?
A Fractional Commercial Director is an experienced commercial leader who works with a business on a flexible or part-time basis.
They may work one or two days a week, several days a month or for a defined period during a stage of growth or change.
The business gets access to senior commercial experience without immediately committing to a full-time director.
However, fractional commercial leadership should involve far more than simply giving advice.
The role should be about improving commercial performance and helping the business turn strategy into action.
That can include:
- Improving sales strategy;
- Reviewing pipeline and forecasting;
- Developing key accounts;
- Reviewing pricing and profitability;
- Supporting or managing the sales team;
- Identifying new markets;
- Improving accountability; and
- Helping implement agreed commercial priorities.
Has the owner become the Commercial Director by default?
One of the most common situations I see in SMEs is an owner who has gradually become responsible for almost every important commercial decision.
They may still manage major customers, approve quotations, negotiate deals and support the sales team.
At the same time, they are also managing employees, operations, finance and the wider direction of the business.
Eventually, that becomes difficult to sustain.
In many successful SMEs, the owner is still one of the best salespeople in the business.
The objective should not necessarily be to remove them from sales.
Instead, the aim should be to build a stronger commercial structure around them so that growth no longer depends entirely on their personal involvement.
Do you need another salesperson – or stronger commercial leadership?
When sales growth slows, recruiting another salesperson can appear to be the obvious answer.
Sometimes it is.
But adding more salespeople does not automatically create stronger sales performance.
A business may have a busy team without having clear commercial leadership.
There may be lots of meetings, quotations and activity, but limited focus on which opportunities are most likely to generate profitable sales.
Some useful questions to ask are:
Who owns the sales forecast?
Who reviews the pipeline?
Which customers and markets should be prioritised?
Are key accounts being developed properly?
Are prices and margins being managed consistently?
Who is accountable for improving overall sales performance?
If those questions do not have clear answers, the issue may be commercial leadership rather than simply sales capacity.
Growth creates new commercial challenges
Growth is positive, but it also creates complexity.
The systems and processes that worked when a business was smaller may no longer be enough.
The next stage of growth may require a more structured approach to forecasting, account management, pricing, profitability, sales-team leadership and market development.
The challenge is often not knowing what to do.
Most business owners I meet already have plenty of ideas.
The problem is finding the time and resource to implement them.
That is where a Fractional Commercial Director can add value.
Their role should not be to produce a strategy document and disappear.
It should be to work alongside the owner and management team, agree priorities and help make sure those priorities are delivered.
When might a Fractional Commercial Director make sense?
It may be worth considering when:
- the owner is still heavily involved in sales;
- sales performance is inconsistent;
- the sales team needs stronger leadership;
- the business wants to enter a new market;
- profitability needs more attention;
- there is no clear ownership of the commercial strategy; or
- the company needs senior commercial expertise but is not ready for a full-time Commercial Director.
For some SMEs, fractional commercial support may be needed for six or twelve months.
For others, it may become an ongoing part of the management team.
Commercial strategy needs implementation
Throughout my career, I have worked across sales leadership, national accounts, market development and route-to-market strategy.
One lesson I have learned repeatedly is that identifying an opportunity is only the beginning.
The real challenge is turning that opportunity into profitable business.
That means establishing clear priorities, creating accountability and ensuring agreed actions actually happen.
If your business is growing but sales still depend heavily on you, it may be worth asking one simple question:
Do we need another salesperson, or do we actually need stronger commercial leadership?
At E&M Strategic, I work with SME owners to improve sales performance, develop new markets and create stronger commercial structures.
If your business needs more commercial leadership but you are not ready to appoint a full-time Commercial Director, a conversation about fractional or interim commercial support may be a useful starting point.
Phil Edwards
E&M Strategic Ltd
enquiries@eandmstrategic.co.uk