Owning and operating a small business is a big job and takes a lot of work. From the creation of a product or service, to marketing it, to manufacturing it are all unique challenges that need to be faced. However, one of the most difficult parts is dealing with all of the finances.
Between dealing with invoices, paying taxes, managing cash flow, measuring costs and several other things, the financial aspect of running a business can be difficult. Even a thing like taking care of your credit score is extremely important. While you could attempt to handle this all on your own, you can also enlist the help of a financial advisor.
A financial advisor is not “needed” per se, but it can certainly make your life a whole lot easier. No matter what sort of business you own or operate, there is a good chance that you could benefit from a financial advisor. Let’s look at a couple of the different reasons why it makes sense to have a financial advisor as a small business owner.
They Can Help Prepare For Growth
All new business owners have the same idea and goal, to grow their company. This could be to make more money, to help more people or to raise awareness for a certain cause. Of course, growing and scaling a business is far from easy. It involves a lot of hard work, and planning. This is especially true when it comes to finances.
Expanding your operation can cost a significant amount of money, and you want to be sure your company can handle that before diving in head first. A financial advisor can work with you to identify the steps that need to be taken to reach your goals relating to growth.
Also, people tend to get overly emotional when growing their business and thinking about the future. Many of them will try and do too much, too quick, or act on impulse. It is valuable to have an unbiased third-party financial advisor on your side who can help steer you in the right financial direction. Growing a business is all about making a plan and sticking to it, and your advisor can help you ensure the plan and steps you come up with make sense.
They Can Assist in Reaching Profitability
Just like growing a business, reaching profitability is another goal that most small business owners have. Unfortunately, reaching profitability isn’t something that every company gets to experience. It involves not only growing sales, but also keeping your various costs under control. Trying to manage this all on your own, especially if you’re not well-versed in finance, can be tough.
A financial advisor can help you identify techniques to better monitor expenses, avoid mistakes that could be costly and ensure that you are not mismanaging the money you are making. Four eyes are better than two, and an advisor might be able to spot some issues that slipped right past you.
They can also help you identify areas where you are overspending, to make your journey towards profitability a little bit easier. Sure, hiring a financial advisor may cost you a little, but the expertise and assistance they can provide is generally worth the cost.
They Can Help Manage and Coordinate Your Personal Finances
When many people start a business, they are all in on that venture. While showing this determination is admirable, it can often leave their personal finances forgotten about. Thankfully, many financial advisors can also assist in managing your personal finances. They can ensure that both business and personal finances are in a good spot, and can even work hand-in-hand with your lawyer, bookkeeper or accountant to keep everything in order.
Having an advisor can help your finances be coordinated and ensure that you are covered both personally and professionally. This goes for filing and paying taxes, dealing with investments and making sure to protect personal finances from business risks.
These professionals can also help you make decisions that could impact both your business or personal finances. They can give you the freedom to work on the core of your business and build it up, without being bogged down with your finances as much.
Having a financial advisor as a business owner is a good idea. They can help you grow your company, reach profitability and manage your personal and professional finances, along with several other helpful tasks. While they are not necessarily needed, it’s smart to at least consider the benefits they could provide your business.
