Running any business can be a bit difficult, but hiring the best financial advisor can be very beneficial for your business.
Having specialized financial management expertise and understanding, a financial adviser is the lifeline of any business ecosystem, shepherding business entities on their way to success.
These experts in reality help business owners assess their business model and planning exercise feasibility, developing effective custom-built tactics and their expected timelines to optimize their capital investment.
Read this article, here you will know why you need a financial advisor for your business. And we also cover the benefits of financial advisors.
Who is a Financial Advisor?
A financial advisor or financial adviser (FA) offers a range of crucial financial services to businesses. Financial advisors are mandated to complete specialized training in many countries worldwide and register with a regulating body before providing advisory services to their clients.
A financial advisor can help business entrepreneurs chalk out a blueprint to minimize financial riskiness and create wealth over the long term. However, these financial advisors could be expensive hires, they can help the owner with financial planning, including retirement savings and financial budgeting.
Here are the vital functions of a financial advisor:
- Prepares financial statements such as the cash flow statement, profit-and-loss statement, and balance sheet.
- Analyze financial statements to identify cash flow leaks and areas where business spending can be reduced to increase profitability.
- Efficient Cash Flow Management and Insurance Planning
- Creates a Cash Reserves tactic for unforeseen business situations
- Manages Payment, Tax Reporting, and Legal Compliance frameworks
- Recommends specific financial services and products that are beneficial for the business
- Charts a long-term growth tactic for the business
- Carries out research and comes up with resolutions to financial intention
- Legacy Planning – retirement plan and Succession to transfer business ownership
- Provide an Independent, Third-Party perspective on business finances
- Conceptualize a financial business plan that provides an overview of current and historical financial data and future projections considering business growth, investor consolidation and potential exit strategies.
- Develop successful investment strategies that contribute to the company’s valuation and attract investment capital.
How Financial Adviser Accelerate Business Success?
Role of a Financial Adviser – Essential to the success of every business, hiring a financial adviser leads a business owner to the following benefits, below.
Help run the business
Asking the right questions about the financial health of your business can help your financial advisor make the right decisions quickly. A growth strategy that delivers desired results. Through their expert observations and accurate financial forecasts (in terms of spending budgets, asset allocation, cash inflows, cash outflows and financial statements), businesses can get on a rapid growth trajectory.
In the first few months of helping your business, our financial advisors can provide timely insight into your risk exposure, areas where you can save and reduce costs, and potential investment opportunities. A financial advisor can also help you design and revise your existing business plan (the business process roadmap for your organization).
Save time, and money, and ensure profitability:
Unless the business owner is a financial expert, it makes great business sense to hire a financial advisor to save valuable time and money to help prevent financial mistakes.
With expert assistance covering the full spectrum of corporate finance, you can make all the important financial decisions, including spending management.
Financial advisors can effectively monitor the internal processes of finance and accounting departments, ensure day-to-day transaction controls, and implement compliance measures.
Prepare your company for future growth at various stages of the business cycle
Setting financial goals, visions and mission statements with the help of various tools and software helps shape the future of the company. Suppose your business is not doing well due to market congestion. In this case, financial advisors can assess and avoid problems by recommending and developing new niche markets, technologies, product mixes and strategies.
Balance personal and business financial goals and objectives
Business owners often plan to start their business in line with their future personal financial aspirations, unapt to do so due to time constraints. Personal finances are therefore neglected at the expense of corporate management. Our experienced financial professionals ensure that your personal finances as well as your company’s finances are in order.
Both should always be consistent with cash flow, investment, and tax considerations. Financial advisors serve as key senior program managers alongside other financial professionals such as accountants, corporate lawyers, accountants and insurance brokers.
Do Small Businesses Need Financial Advisers?
Small business owners may prefer to manage their business finances themselves without hiring a financial advisor. However, finance professionals can help small businesses to.
Financial Management for Timeless Business Owners:
Small business owners are expected to multi-task while single-handedly managing functions from marketing to product development to IT support. It has been. He may also be responsible for other functions such as packaging, product delivery, and direct customer contact. Therefore, you are always under time pressure.
In such a situation, Financial may hire his advisors to independently manage and plan the company’s finances and strategy, and avoid potential financial mismanagement, cash flow problems, vendor neglect of his accounts, etc. It is best to avoid such bottlenecks.
Financial professionals can help busy business owners allocate financial assets (interest-bearing bonds, certificates of deposit, money market funds, stocks, retirement accounts, etc.).
Small business owners must also plan for reasonable financial risks arising from unexpected death, disability, illness, infirmity, liability, and property-related losses.
Risk-based issues faced by owners include disruption/closure of business due to disaster or adverse business conditions (the COVID-19 outbreak is a prime example), death or Includes failure, and loss of business assets. , litigation due to negligence or defective products.
All of these issues require professional risk management and coverage and can be managed and overseen by financial professionals.
Technology Transforms businesses under the new normal
The Financial Adviser 2.0 – Technology and the sudden outbreak of COVID-19 in early 2020 have changed the way financial advisors work in the new digital business normally. Advisors are increasingly turning to digital tools to work with business clients in immersive, real-time virtual environments.
Face-to-face meetings have decreased due to social distancing requirements. Like most business professions, Financial Planning and consulting services are now rapidly evolving from a traditional consultant-centric, product-centric approach to an agile, service-centric, client-centric model.
To stay more relevant than ever, financial advisors are incorporating the latest technology tools into their portfolios. Commonly used tools and software systems (including examples) are listed below:
- CMS – Content Management Systems & Website Builders (Joomla, WordPress)
- CRM – Client Relationship Management (Salesforce, HubSpot CRM, Zoho CRM)
- Email Marketing (Mailchimp, Sender, MailerLite, HubSpot Email Marketing)
- Messenger & Video Conferencing or Meeting (Google Hangouts, Zoom, Skype)
- SEO – Search Engine Optimisation (Ubersuggest, Google Analytics & Search Console,)
- Online Scheduling, Project & Team Management, Automated Workflow (Microsoft 365, Google WorkSpace,ProofHub, JIRA, Trello, Microsoft Project)
Financial Advisors vs Robo Advisers: Who is Currently Ahead?
A new trend in business and finance, Robo-advisors or Robo-advisors are low-cost digital platforms or chatbots that provide automated, algorithm-driven financial planning services that require little or no human supervision. , Betterment, Wealthfront, and Nutmeg.
A typical Robo-advisor collects client information and future goals via an automated online survey form and uses that data to provide investment advice and portfolio management services to clients.
Robo-advisors are an efficient, low-cost alternative based on a highly-rated investment model, aimed at new business owners and investors. However, unlike its human counterpart, it still lacks the key human element and its 100% personalized experience.
It enables financial advisors to communicate, educate and coach clients to provide dynamic and customized advice on financial and cash management, debt mitigation strategies, and wealth creation.
To remain competitive, all organizations must challenge new business paradigms dictated by the new normal and rapidly changing business environment. In the future, entrepreneurs will always have the backing of a financial advisor to deftly navigate uncharted territory and volatile waters, giving owners complete freedom to focus on other key business issues.