The one thing that probably most small business owners share when they start their businesses is thinking that they can manage it all.
But before you know it, you’re deep in problems, juggling multiple tasks, sacrificing sleep, and barely surviving instead of making a profit.
While you can wear many hats and manage lots of things on your own, handling your finances always proves to be a tricky part unless you are knowledgeable and/or have experience with financial matters.
After all, do you really have time to deal with managing your business and keeping an eye on interest rates, investment opportunities, and your retirement fund?
Most aspiring entrepreneurs dream of growing their businesses to the point where they can retire safely and early. However, this requires a very hands-on approach from the start.
For this, not only do you need to be an expert in finances but also must have the time to devote to finance management. It takes the guidance of a professional to achieve and maintain excellent financial health and realize your goals.
If you’re a small business owner who relates to this, you could use help from a professional financial advisor.
What Exactly Does a Financial Advisor Do?
A financial advisor is a professional who provides business owners and individuals expert advice on finance.
The services they provide range from investment management and the stock market, cash flow management, tax planning, retirement planning, estate planning, profit/loss analysis, and general guidance on financial matters.
A financial advisor’s role is to maximize your capital and keep your finances healthy. They help you achieve your financial goals be it early retirement, meeting your investment objectives, boosting profits, or anything else.
A financial expert can help you allocate your assets in a clever way to maximize your returns.
Save Time
One of the major benefits of hiring a professional financial advisor is that you save a lot of time. Every small business owner is juggling so many things at the same time that it leaves little time for personal life and rest.
Having professional financial advice will free up a lot of your time since you won’t have to worry about financial planning, investment strategies, cash flow issues, etc.
This will enable you to focus on more relevant things such as business development and why not, even spare a bit more time for friends and family, all while knowing your business finances are in good hands.
Cut Costs and Save Money
Managing everything alone might seem easy in the beginning but if you’re not a financially savvy person, you could be wasting your resources by poorly allocating your financial assets or spending more than necessary on certain tools and equipment.
It is hard to see the long-term consequences when investing in something if you’re not an expert who stays on top of the stock market. These expenses and poor decisions can add up and jeopardize your business leaving you wondering what went wrong.
Financing issues are among the top reasons why small businesses fail.
However, a finance expert can help you set things straight from the beginning and will be able to give you sound advice on clever investment opportunities and overall costs.
Ensures You Stick to Your Business Plan
When you first start your business, you are quite excited by your business plan and have a clear vision of what you want to achieve. However, soon enough, this vision gets blurred due to so many issues such as cash flow problems, unrealistic goals, etc.
If you set unrealistic goals, all you will achieve is disillusionment because your idea didn’t work. Your business plan must not be based merely on where you wish to see your business go. It should be attainable and based on objective opinion and experience.
This objective perspective comes from a financial advisor who will help you set the direction for your business and execute your plan. They have already worked with similar clients, know the market trends, and can provide an unbiased opinion.
What’s more, an advisor by your side will help keep you accountable if you diverge from your plan and lose hope.
Prevent Mistakes
A financial advisor is familiar with all the relevant laws and regulations, therefore, they can help you avoid legal troubles.
Their job is not only to help you with your business goals and/or retirement planning but to review your financial situation regularly to ensure nothing is overseen. For example, a seemingly minor tax issue or negligence could result in huge fines.
This is something an expert will notice right away and ensure you catch and correct any mistakes early on.
Things to Keep in Mind
If you’ve decided to hire an advisor, it’s useful to know a few basic things to help you start looking.
Financial advisors will either charge a flat fee or work for commissions, depending on the services they provide and your agreement.
A fee-based financial advisor is often the best choice as you have full transparency and you can trust the financial advisor to work in your best interest.
You should also ensure that you’re hiring a financial advisor who specializes in small businesses and has extensive experience in the field.
Another thing to keep in mind if you’re hiring a financial advisor is to check their credentials first and make sure to hire a certified advisor.