Only about 40% of small business owners have consulted with a financial advisor. About 30% haven’t calculated how much money they will need for retirement, and less than 25% have a succession plan in place.
Most small business owners want their business to succeed and to be passed down to a successor. But it’s difficult to handle all financial aspects of your personal and business life when you’re busy running a business.
A financial advisor can help. Here’s how:
1. Prepare Your Business for Future Growth
It’s difficult not to get emotional when thinking about the future of your business. A financial advisor can look at the situation from a third-party perspective and provide some clarity. The right advisor, one with your best interests in mind, will help you move in the direction of stability and growth.
Financial advisors can put things into perspective and tell you – realistically – if you can achieve your goals on schedule. Advisors can also help you succeed in a congested marketplace by discovering untapped niches and future developments.
Law firm Meyer Wilson suggests choosing an advisor who will work well with your goals to ensure your vision is realized.
An advisor may suggest growth opportunities for your business that you weren’t even aware of. These recommendations can help you reach your goals faster or set new goals you never thought you could achieve.
Additionally, a financial advisor can help you plan for the future by creating a succession plan for retirement.
2. Improve Efficiency and Profitability
A financial advisor can help you find ways to make your business more efficient and profitable. Advisors bring expertise and experience to the table, helping ensure that your business isn’t mismanaging money or running into cash flow problems.
In addition, an advisor can provide you with accurate projections to establish and grow your business. They bring an objective, professional perspective that is invaluable at every stage of growth.
3. Help Your Business Save Money
A financial advisor will save your business time and money by offloading non-core financial tasks to a professional.
Financial advisors can establish an internal accounting system that monitors expenses to help your business keep costs down.
4. Plan Personal and Business Finances
Many small business owners launch their businesses with the intent of improving their financial future, but they often get so caught up in the launching and running of their business that they neglect their personal finances.
An experienced financial advisor will help ensure that both your personal and business finances are in order. An advisor can coordinate with your business attorney, bookkeeper, accountant, estate attorney and insurance broker to keep everything on the right track.
Hiring a financial advisor can alleviate stress by helping you make important decisions and lending expertise that will help you reach your goals. Many small business owners forgo the hiring of an advisor due to the costs, but their services should be viewed as an investment. Look for advisors that offer reasonable fees and specialize in the services that you require.