Do small business owners need financial advisors?
As a business owner, it is down to you to make essential decisions regarding your company’s future. From hiring the perfect team, to choosing the right current account for the business, to managing your company’s expenses – most key business decisions are down to you. As a business owner, you need a diverse set of skills and the right people around you to help.
A successful small business owner instinctively understands the need to secure professional advice from time to time. After all, you may know everything that there is to know about the products or services you sell, but that doesn’t guarantee in-depth financial understanding. If your business is going to flourish and grow, you will need to take a proactive approach with your company finances. You must make the right decisions, at the right time, to ensure that your cash flow remains positive.
How a financial advisor can help your business
Busy with running your own business day to day, it is unlikely that you have time to stay up to speed with all the financial implications involved in your business.
Do you have a thorough understanding of your tax commitments? Do you know exactly how much your business is worth? Does your current insurance coverage protect your business? These are questions that need to be addressed sooner, rather than later. It almost invariably takes a financial expert to come up with timely, relevant and accurate answers.
Your financial advisor is likely to provide a wealth of useful information, helping you to navigate the complicated financial elements of your business. For example, unless you have previous accountancy experience, creating an effective bookkeeping system for your new business is likely to be a challenge. A financial advisor will get you on the right path from the offset, creating appropriate accounting procedures that will streamline the administrative burden.
Financial advisors can help with business growth
Financial advisors are not only there to help you make the most of your current situation. In addition to identifying investment opportunities, a competent financial advisor will also help with strategic planning for the future of your small business.
An experienced financial advisor can be an invaluable asset to any small business, helping you to identify potential new markets. With eyes firmly fixed on company finances, an effective and proactive advisor can help to drive your business forward. They can also maximise the potential of new technologies and markets that may be entirely new to you.
How to source a suitable financial advisor
Once you’ve identified the benefits of a financial advisor, the next question is how to source one? It is worth bearing in mind that financial advisors tend to operate in two very distinct ways.
A commission-based financial advisor won’t charge you anything initially, making this seem the obvious choice. You could potentially save money in the beginning, but be aware that this type of advisor makes money from the products they sell to you. What this means is that there is a strong impetus to push certain products, even if they are less than optimal for your business circumstances.
It may be worth looking for fee-based financial advisors who charge you for their time. Your advisor will source products and identify investment strategies that align with your business and personal needs. Your advisor will also hope to grow with you and your business. Therefore, they will be motivated to find solutions that offer you genuine value and which contribute to an effective long-term financial strategy for your business.
Financial advisors can be sourced by recommendation or online. It is always worth asking around for recommendations from friends, family and business acquaintances.