Tucker Mathis — December 10, 2019 Most businesses are born from a great product or service and strong leadership. Unfortunately, many fail because of poor finances. Companies that struggle with cash flow, delayed vendor or employee payments, or mismanaged bookkeeping understand the importance of a company’s financial health.
Still, six out of ten small business owners have not consulted with a financial advisor, according to a study by The American College.
Small business owners that handle all the back-office tasks themselves often feel that financial analysis should remain their responsibility as they grow. In fact, the longer your company operates or the larger it gets, the more difficult you’ll find it to manage your finances without seeking outside help.
The 40% of small businesses that seek expert financial advice benefit from a second set of eyes that can help take tasks off of their plate and free up time to plan for long-term growth.
Unsure if your business has reached a point where it will benefit from a financial advisor? Consider these three benefits:
Reclaim Valuable Time
As a small business owner, you expect to wear many hats — especially in the early stages of your company’s growth. However, when you start to get pulled in too many different directions, other areas of your business often begin to suffer. If you’re spending too much time on accounting and finances, it may be time for a change.
Your time is too valuable for simple bookkeeping and accounting tasks. While integrated cash flow management, accounting and payroll software will go a long way to help you streamline the management of your company’s finances, problem solving and personalized planning require the insight of an expert financial analyst.
As your business grows, your financial concerns will also grow more complex. If you didn’t have time before, you certainly don’t have time to gain the financial expertise necessary to deal with these new challenges. Instead, your time should be spent focusing on what you do best for your business.
Benefit from a Wider Experience Set
The problems your business may face will often require expert guidance from someone with a deep understanding of the common financial pitfalls that frequently confront small businesses. A qualified financial analyst is backed by years of experience working with a variety of different businesses that have experienced a vast array of challenges.
This wider experience set will help the financial expert see things that you can’t, and suggest creative solutions to your problems. Having a second, objective set of eyes for your financials can also help you find new solutions to problems, or help improve expenses in ways you didn’t see before.
Plan for Your Financial Future
The most important benefit of expert financial advice is the ability to plan for your company’s future. Once you aren’t spending time doing your own accounting and you have the benefit of expert advice, you can make use of:
- Projections
What are your objectives for the next 3-5 years, and how do you plan to reach them? Having accurate financial projections on your business growth is a major step to turning your business goals into real, measurable objectives with a clear timeline for success. Knowing the true financial health of your business and the likelihood of meeting your goals will help you put together a realistic, attainable plan for your future. - Market Insights
The decisions you make for your business can be greatly affected by how the overall market will perform in the next few years. A financial analyst can provide insights into what the rest of the market is doing and what other companies in your industry or similar industries are doing to prepare for any possible market fluctuations. - Formal Financial Plan
How will you transition your business to a new owner? Do you plan to sell your business or pass it on to a family member? Having a formal financial plan for how to manage income and expenses during a transition, and how to set yourself up for retirement is extremely important. A financial expert can help you with your exit planning to make sure you and the business are in good financial shape when that time comes.
There are a number of other benefits your business could see from gaining expert financial advice. The truth is, many of these benefits won’t be clear until you tap an expert to provide an unbiased and honest look at your financials. What issues are you dealing with that you aren’t even aware of? Where are you losing money?
This article was originally published on the author’s blog and reprinted with permission.
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