Ted Hickman

6 Critical Reasons Why Your Small Business Needs a Financial Advisor



It’s easy to see why the United States is home to nearly 32.5 million small businesses. After all, few things compare to running an independent venture. From setting your own work schedule to being your own boss, there’s a lot to cherish.

That said, entrepreneurship is not all fun and games. Since most business owners wear multiple hats, they often have very little time to plan their finances or create a formal blueprint of their legacy. 

This is where a hiring a financial advisor can help. 

Expert financial advisors guide their clients on various matters, including taxes, insurance, savings, budgets, expenses, and more. Essentially, their job is to help executives stay on top of their money-related goals, both personal and professional. 

In case you’re still on the fence, we’ve listed six ways your SMB can benefit from working with a financial advisor. 

Save Capital

Small entrepreneurs know firsthand that every dollar counts. The less you misspend, the more you’ll be able to invest into your business. 

While this sounds fairly straightforward, it’s not so cut-and-dried all the time. Businesses tend to overspend on things they actually need, like:

  • Labor
  • Technology, including the internet
  • Data management and storage
  • Software and hardware
  • Promotional activities
  • Office resources 

In this regard, a small business financial advisor can evaluate your bank statements and see where you can cut back. For example, they may suggest that you outsource specialized services to independent contractors instead of recruiting full-time employees. 

Manage Risks

Unplanned deaths, disabilities, and other catastrophes can derail your business for good. As per a September, 2020 report, nearly 97,966 businesses went under due to the COVID-19 pandemic.

You need adequate risk management to shield your company against unexpected financial hardships. But before you kick things into gear, note that this is a lengthy process involving several complex factors.

It’s best to leave risk management to a local financial advisor as they’re familiar with the advantageous financial regulations uniquely applicable in your state. If your business is set in Gainesville, for example, obtaining sound financial advising in Gainesville will help you create a watertight mitigation strategy suited to your business’s specific needs. This, in turn, will allow it to withstand any trouble that comes its way.

Retain More Employees

Make no mistake, the current job market is extremely competitive. In a recent employer survey, 47% of respondents reported a scarcity of skilled workers in the third quarter of 2021. And, judging by the trends, the labor shortage isn’t disappearing anytime soon. 

Since great employees are hard to find, you must leave no stone unturned to win their loyalty. There are several ways to do this, and a financial advisor can recommend the best course of action for your business.

For example, they may counsel you on employee benefit plans, deferred compensation with longevity triggers, healthcare, and remote employment to minimize employee attrition. 

Save Time and Energy

You’ll be hard-pressed to find a solo entrepreneur who isn’t racing against the clock. Between deadlines, administrative tasks, and client meetings, there’s seldom any time to spare. 

That said, it’s never a good idea to put off finance planning until the last minute. Hasty, unsound decisions and cash flow clogs can land you in a world of trouble in the long run.

If you’re struggling to manage your business finances on your own, consider delegating the job to a financial advisor. With them taking care of your investments, you’ll find it easier to focus on other core aspects of your business. 

Leverage Extensive Professional Experience 

Like most entrepreneurs, you’re probably used to figuring things out for yourself. However, financial planning isn’t something you can master in a day. Sure, you may be able to learn a few basic principles, but getting it right takes years of education and practice.

By hiring a financial advisor, you can entrust your business’s financial health to a skilled professional who knows the ins and outs of the industry. Not only are they experts in their field, they also have the training to deal with a wide range of circumstances.

Furthermore, competent financial advisors constantly research volatile markets, changing tax laws, insurance policies, and other specialties to ensure their knowledge is up to code. It just makes sense!

Secure Your Business’s Future

Have you thought about what will happen to your business when you’re not around? Do you have heirs or an exit strategy in place? 

You probably don’t want your company to end with you. Hence, it’s important to have a formal succession plan to keep your company thriving in your absence. This is where a financial advisor steps in.

A financial advisor will work with you to secure your business’s future. This process may include selecting and training worthy successors, discussing a sales agreement with your lawyer, or creating a business valuation. In essence, they can make sure your business continues to operate and succeed on your terms.

Parting Words 

Hiring a financial advisor may seem like a tricky bet, especially if you’re working with a tight budget. But it’s definitely worth the investment. Hopefully, this post has given you some insight into the various advantages a financial advisor can bring to your business!

Take another look