Nobody said owning and running a business was easy. There are so many aspects involved – not only do you have to be an expert in whatever service your business provides. But, to be truly successful in the long term, you also have to be an expert in business itself. If this sounds like a tall order, that’s because it is. Luckily, business owners have the option of hiring a financial advisor to ease some of the burden. Have you thought about hiring business financial advisory services?
Having a business financial advisor by your side can be incredibly helpful, especially for business owners who may not have the capacity to plan for their business financial future. In this post we will discuss the benefits of hiring an advisor for your business.
So What Exactly is Business Financial Advisory?
Financial advisory includes the services of financial professionals, often part of a larger financial advisory firm, whose job it is to help you best utilize the capital that you’ve invested into your business. They will analyze and assess your business plan and model, and advise you on how viable they are, as well as the best path to personal and business financial gain.
How Do I Know if I Need Business Financial Advisory?
Frankly, any business owner likely needs a business financial advisor. In some rare cases, business owners will have the bandwidth and expertise to act as their own financial advisor, but this is rare.
And even if this is the case, it is highly desirable to have someone with an objective viewpoint. Someone like a financial advisor is another set of eyes to review your business finances and help plan for your financial future.
Business owners typically have so much on their plates. They are thus not able to set aside the time to take care of the critically important business financial planning aspect of their company.
According to American Express Open Forum, 30% of small business owners do not currently have a calculation of what they need their retirement savings to be. And even more staggering, over 75% do not have a formal plan for passing their business onto the next owner when they enter retirement.
If you fall into either of these categories, we highly recommend hiring a business financial advisor.
Every business matters
Bringing on a business financial advisor is also highly recommended for young and new business owners.
Many businesses fail within their first three years in operation. And yet this is where a financial advisor can be critically important, especially if you don’t have much experience in starting a business. These professionals will fill in the business knowledge gaps that you may lack. Advisors will help you come up with sound, sustainable financial plans for your business.
Business financial planning is not only for newcomers to the world of business, though. This service can also be incredibly valuable for business owners planning to make major changes to their business.
Is your business:
- going through a merger?
- beginning the succession planning process or retirement planning process?
- aiming for viable growth or is shifting its goals and mission statement?
All of these are reasons to bring on a financial professional’s guidance.
What Services Are Included with Business Financial Advisory?
The short answer is that business financial advisors are able to cater their services to whatever exactly it is that you and your business need, financially.
We can certainly speak for our business financial advisors here at Saddock Advisory. And these experienced professionals have provided a myriad of services in this realm.
But to be specific, what follows are several examples of the types of services that a business owner might look for from their financial advisor.
Helping you set achievable goals.
Business owners like you often have so much going on that they have a hard time stopping and making a list of goals. And even if they do have goals, prioritizing them and laying out specific, detailed action plans for achieving them oftentimes doesn’t happen.
But the main goal is usually to grow your business!
This is where your business financial advisor comes in. They are experts who have gone through this process many times with many different businesses. Therefore, they know how to work with you to make your goals as feasible as possible.
Helping you plan for retirement.
As mentioned earlier, effective retirement plans are something that many business owners fail to construct. And clearly, they are something that is incredibly important to your long term financial health. The beauty of hiring a business financial advisor is that their advice and services are not limited only to your business finances.
Instead, they see where your business and personal finances intersect. They provide you with customized advice and financial plans to put you at ease in terms of both your business and financial future.
Retirement planning is the perfect example of this: the amount you save for retirement, and when you plan to retire, is very dependent upon how long you want to retain control of your business. Therefore it is impossible to plan for one without planning for the other.
Succession planning.
Succession planning is planning for the next person, or entity, to take over your business when you are ready to step back. Every business owner knows that the time will come when they will no longer run the business they started. But planning for what that transition looks like often gets pushed to the back burner.
Your financial advisor will make sure that this important plan does not get neglected. They will help you outline the steps to handing your business over, whether that transition occurs “on time” or more suddenly than anticipated. This plan, in turn, will aid you in creating a full proof retirement plan.
Cash flow and investment management.
One thing that people don’t always realize about financial advisors is that they also function as investment advisors.
They are able to consult with you about your business’ cash flow options, projections, and goals.
They can also provide investment advice, including:
- investment opportunities
- advice on the level of risk you are taking in your investments
- areas of your business in which you can save money
All of this advice, of course, will contribute to your business plan. By hiring a business financial advisor, you will be putting yourself ahead of the curve in terms of financial planning and investing for your business’ future.
Business Financial Advisory: An Investment Well Worth It
A business financial advisor will save you money in the long run. We often hear from business owners who are reticent to hire on a financial advisor because of the expense. And sure, business financial advisors aren’t free.
But they are guaranteed to save you money – and you probably won’t even have to wait long term.
Many business start saving money immediately once they bring on a financial advisor. This is because an experienced objective professional can observe exactly where the inefficiencies in your business are, and advise you on how to alleviate them. They then are able to make expert recommendations based on your specific business.
In addition, they see opportunities for both cash flow and investments. As a result, their guidance could save a significant amount of money for your business, even when you factor in the expense of the advisor.
It’s not too late
Financial advisors will help carry your business through any changes it may be going through.
We always recommend hiring a business financial advisor to any business owner going through a major (or minor) change in their operations.
This could mean:
- acquiring another company
- downsizing
- growing
- moving locations
- expanding operations
- hiring new staff
- introducing new products
- changing ownership
The financial side of these transitions can be complicated, so why not devote your time and energy to the business side and let a professional take on the financial side?
By having a financial advisor on board for whatever change your company may be going through, you are giving your business the best possible chance at a smooth and successful transition.
We Can Help
There is so much more to talk about when it comes to working with a financial advisor, and that’s why our door is always open. We know it’s hard work to own business, and we’re here to help. Our trusted team of business financial advisory experts are ready to work with you to figure out the best plan for your business.
At Saddock Advisory, we can help determine if your business is financially healthy. Get in touch with us here to find out more.
Sources:
https://www.investopedia.com/articles/
