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Is It Smart To Have a Financial Advisor As a Small Business Owner?

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Let’s start by sharing this simple statistic provided by American Express Open Forum with you: the results of a survey revealed that 30% of all small business owners don’t have a realistic retirement plan and have no idea how much money they will need when they are finally retired.

You would think that if 70% of small business owners calculate how much money they will need for retirement, then financial advisors might not be that necessary. But here’s another stat that American Express Open Forum provided: less than 25% of them actually have a formal plan of transferring their business to a new owner when retirement approaches.

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Now the answer to our question today might be much simpler, right? Especially when knowing that only 40% of small business owners have consulted a financial advisor during their career.

So, do small business owners really need financial advisors? Our answer would be a definite yes.

While most small business owners have a strong sense of independence and capability of taking control of multiple things, it often becomes quite impossible for a human being to do everything equally well. Even if a very capable and smart small business owner might have thought about his plans for future, if he wants to make his golden years really golden, he’d probably want to invest some money by purchasing stocks of great value.

But would a small business owner have enough time to spend on researching the market, keeping an eye on his investment and calculating the risks? With all the personal finances, decisions, capital allocations, and family issues, we surely doubt it. That’s why hiring a financial advisor might leave to a small business owner much more time and energy for the business itself and help him make strategic moves that will make his business grow.

In our opinion, hiring a financial advisor would be a great business investment, as having a money management expert in your team can surely bring you multiple benefits and help you manage your funds much more efficiently.

But what does a financial advisor take care of?

Simply put, a financial advisor is a person that suggests a provides multiple financial services to its clients.

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These are the most common services offered by financial advisors:

  • Managing taxable income
  • Establishing business valuation
  • Implementing an employee benefits program
  • Creating a business succession plan
  • Setting up an IRA
  • Choosing the right insurance plans for your business
  • Helping you plan a smart investment strategy

When starting a business, all these services might be crucial to get you on the right track. So as soon as you feel that you’re financially ready to invest in a good financial advisor, definitely do so.

Once you bring a money management professional, you will likely experience these benefits:

Avoiding Rookie Money Management Mistakes

By hiring a money expert, you will be able to skip that learn-as-you-go approach that can often result in many mistakes that can seriously impact your business.

Saving Money and Time

Since a financial advisor will now take care of important financial issues of your business, you will have more time to dedicate to what you do the best – the core of your business. Time equals money, so you’re also saving money this way.

Preparing Your Future

With a financial advisor, you will have a much clearer idea of what your retirement will look like. He will also help you to make the right decisions for either your retirement plan and your business’s future.

Balancing Personal and Business Finances

Not only will your financial advisor keep your business finances regulated, but he might also help you in making sure your personal finances are in order too.

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