Unfortunately, a lot of small business owners tend to reach out to a financial consultant the same way people reach out to a physician: Only when they’re in a pickle. There might be ways to save or improve the financial health of your business at any stage, but preventative “care” is the best. Ideally, you’ll be working with a financial planner as well as a CPA and small business attorney when you’re still in the planning stages of your business. It’s not easy to put together a business budget, save on office costs, or manage that business but a finance guru can help.

However, no matter where you are in your business journey, it’s rarely too late to bring a financial advisor on board. According to Nolo, a leading resource for legal experts, the biggest mistakes entrepreneurs make are usually financial. Starting out with a big loan, spending too much up front, expecting to make a profit immediately and other faux pas can set you up for failure. Here are a few ways a financial consultant can help your business:

1. Advise you on various capital options

A small business loan isn’t necessarily the best approach for all entrepreneurs, particularly if you can’t secure the best rates. However, all that financial jargon can be confusing, but a financial advisor can help you sort it all out. For example, crowd funding might be an option and The Guardian recently reported on yet another platform for it (compliments of Reddit). From backing yourself first to asking friends and family to invest, there’s more than one way to pad your business.

2. Minimize startup costs

There are two reasons entrepreneurs tend to over-spend in the beginning: 1) They think they need just about everything and 2) They might be sitting on a big loan and it’s just too tempting. However, the goal in the beginning should be to minimize costs (actually, that should be the goal at all times). A financial advisor can help you determine what percentage of your budget should go towards office supplies and will advise you on ways to keep them down, such as virtual office options.

3. Modest planning

It’s always better to assume the worst and hope for the best when financially planning your business. If you give your financial goals some buffer room, you’ll be more likely to reach them, less stressed, and your budget won’t take a beating. Financial advisors are very well versed in creating budget, maintaining them, and keeping clients on track (and out of Lala Land). Plus, it helps keep your growth in check because both too slow and too fast can be detrimental for business.

4. Financial reporting

You might have to offer reporting to some entities, such as the IRS and investors, but you should also be able to create and read financial reports for yourself. This should be at least on a quarterly basis, and perhaps on a monthly or weekly basis depending on your business. A financial advisor can either do this for you, and explain it in Layman’s terms, or they can show you how to generate reports yourself. It’s a reality check and also key for goal planning.

5. Helping with your business plan

A business plan isn’t a one and done process, and should be reviewed and updated on a regular basis. However, it often recommends some budgets and financials that you might not be comfortable with. An expert can help you with this, which will also impress any investors that peek into it.

Financial wellness is a critical part of any business and can’t be ignored. When done well, it does nothing but help business blossom.

Categories: General