Recently started in the business world? If you’ve been on the small business grind for a year or two and are struggling with money management, it might be time to partner with a financial planner.
Managing a business is a big weight on anyone’s shoulders, so it is never a bad idea to ask for help. This article will guide you on what a financial planner can do and if hiring one is the best decision for your circumstances.
What is a Financial Planner?
Let’s take a look at what a financial planner can help you with:
1. Budgeting and forecasting
Small business owners wear many hats, and you can’t be an expert at everything. But budgeting and forecasting are crucial to staying on top of your finances — without them, things can go downhill fast. A financial planner can help you with these tasks, keeping your business on track.
2. Risk management
Before incurring any expenses, you should know if any risks are involved. A financial planner can plan for these.
3. Tax strategies
Tax can be complicated, so a qualified financial planner can navigate this for you. You might be eligible for tax right-offs in areas you didn’t think of, such as transport.
4. Loan and financing guidance
If you’re planning to take out a loan, it’s best to do this under the guidance of a financial planner. You don’t want to end up in unnecessary debt.
5. Business valuation
There may be a time when you’re ready to sell your business, or a portion of it, to an investor, and a financial planner can give you insight on what that might look like, before helping you through the process.
A financial planner also supports you with estate planning, cash flow analysis, investment risk management, and so much more.
Benefits of a Financial Planner
A financial planner can do a lot for any business — big or small — but what exactly could this look like for you? Let’s take a look at some advantages.
1. Create a succession plan
Do you want to secure the future of your business? A financial planner can properly prepare you and protect your finances.
For example, you might want to consider a new insurance policy, a contingency agreement with another business, or need assistance in valuing your business accurately. Everyone is looking for a fair trade when it’s time to sell up business. After all, your business might be your most valuable asset. It’s never a bad idea to have a plan.
2. Save time and money
Managing your time effectively is important, especially as a small business owner. A financial planner can cut back the extra time it takes to deal with money matters while saving you hefty costs in the process.
For example, you might understand more about tax right-offs (such as home internet or your work phone), so a good financial planner can slash costs in your budget for the next financial year.
3. Manage retirement plans and investments
Creating a personalised retirement strategy is important for anyone, but is especially important to someone who might be leaving a business to others. A financial advisor helps you reinvest in your business and secure your future, whatever you want it to look like.
If you’ve set up a retirement account for example, an experienced financial planner can help you choose the right investments that match your goals and risk tolerance. Afterall, you don’t want to invest in something that won’t accumulate wealth over time.
4. Assess market trends
Monitoring market trends — such as interest rates, inflation, regulatory changes — can help any small business adapt. Having a financial planner helps you keep an eye on consumer behavior and industry shifts — which can impact your company.
You can get ahead of your competition, prepare yourself for possible roadblocks, and in general just bounce ideas off a financial partner.
From avoiding blind spots such as not having enough insurance to an increase in interest or debt, an experienced financial planner can keep your business running, profitable, and secure for the future.
How do you find which financial advisor is right for you? Check that they are certified and studied the right education such as a Master of Applied Finance, their fee structure, if they specialise in your area of business, and ensure that they align with your goals.
