In the world of personal finance, “financial advisor” is a bit of an unregulated term. As a point, if you’re approached by a financial advisor on LinkedIn, it’s probably someone trying to sell you life insurance.
Good thing this isn’t a personal finance site.
In the world of small business, a financial advisor is a professional who helps a company ensure comprehensive financial health. More than a “bookkeeper” or “accountant,” a small business financial advisor can help your company achieve financial stability amid the myriad challenges inherent to a growing enterprise. Keep reading as we explore the various times when it comes time to bring a financial advisor to help your firm achieve its long-term goals.
Cash Flow Management Issues
A business that burns more cash than it generates is sick. No amount of fancy bookkeeping can hide the fact.
As such, cash flow management is the first place to start for a turnaround strategy performed by a financial advisor. Correcting cash flow problems may involve:
- Creation of financial forecasts.
- Optimizing accounts receivable/payable.
- Implementing strategies to control expenses.
- Taking actionable steps to build cash reserves.
Through their expertise in budgeting, cash flow forecasting, and opportunity analysis, a financial advisor can help your small business optimize cash inflows/outflows for seamless operations in both the short and long term.
Crisis Mitigation
It starts with “C” and ends with “19.”
That dead horse has been beaten to death when discussing business’ being unprepared for a crisis.
One that’s a bit more contemporary: the explosion of GLP-1 medications, traditionally prescribed to diabetic patients for blood sugar management but now approved for otherwise healthy adults to control hunger cravings, is threatening snack food giants such as Pepsi and Coca-Cola.
That’s right. These seemingly indestructible global brands are having to scramble to adjust their business models due to a diabetes medication.
Who would have called that a decade ago?
It goes to show that crises don’t send invitations in advance. They come from the least expected places and catch you at the most inopportune times.
A financial advisor can be a great resource for taking these kinds of crises in stride. First off, they will ensure that you have an adequate contingency plan in place, identifying potential threats and having alternative strategies for managing cash flow through the difficult times. When the crisis arrives, they can help your business achieve operational efficiency. They will help your business adapt swiftly to the new circumstances, securing new funding sources, tapping emergent revenue streams, and reducing costs to help your firm emerge from the crisis better than ever.
You’re Struggling with Scaling
It’s not intuitive, but growth is one of the biggest threats to a small business’ ongoing solvency.
Growth causes myriad issues. The need for more real estate. More complex staffing and payroll. A loss of identity and core values.
The list goes on.
As many small businesses are woefully unprepared for these types of scaling concerns, it is the perfect opportunity to partner with a small business financial advisor. Their expertise can offer:
- Data analysis and interpretation – monitor historical financial data to identify trends and create more accurate growth forecasts.
- Robust financial models – realistic financial roadmaps that include projections for revenue, expenses, and cash flow for the expanding enterprise.
- Opportunity assessment – evaluate the financial feasibility of growth initiatives, such as expanding into new markets or launching new products.
This type of strategic guidance, along with their ability to offer dynamic and ongoing financial consultation, make financial advisors a key resource for any small business looking to scale.
Capital Management Expertise
“It takes money to make money.”
Yeah, that old chestnut.
A sticking point for most small businesses is that they simply can’t “do what they need to do” with their revenue streams alone.
When you’ve tapped your personal spheres of influence to the maximum, a financial advisor is a great tool for helping secure new funding. They are a great intermediary to help your business raise and manage capital responsibly. From navigating bank loans to cultivating angel investors, your advisor can help you get the money you need as judiciously as possible.
Business Is Going Suspiciously Well
“The moment you’re satisfied with where you’re at, you’re not there anymore.”
This pithy statement is attributed to baseball great Tony Gwynn, but it (and similar maxims regarding complacency) should be heeded by small business owners.
Savvy entrepreneurs know that success is only temporary without ongoing financial due diligence. If making money feels a bit too easy, it may be time to exercise some caution.
A financial advisor can be the perfect solution to keep the good times rolling. Through proactive risk analysis, they can identify and evaluate financial vulnerabilities that may not be readily apparent to you as the owner. They can use financial data and macroeconomic trends to forecast regulatory changes and other types of threats lurking beneath the seemingly calm waters. They can help you build a contingency plan to keep cash coming in if conditions unexpectedly change.
Don’t Wait: Consult a Small Business Financial Advisor Today
Beyond basic bookkeeping, a small business financial advisor is a trusted professional who can help your company achieve financial stability amid the diverse concerns of a growing enterprise. If your operations are getting bogged down by increasingly complex financial challenges, contact a financial advisor today for a consultation. For more of the latest trends in the small business landscape, explore the content at Businessing for additional thought leadership!
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