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How a Small Business Financial Advisor Can Help Guide Your Business


Consulting a small business financial advisor may be one of the most important actions a startup founder or business owner can take to safeguard the future of their business. Surprisingly, many are reluctant to do so. In a study conducted by the American College, six out of 10 small business owners noted they have not met with a financial advisor, and three out of ten of these individuals haven't calculated the amount of capital needed to ensure "a comfortable retirement." The same study pointed to an alarming minority of small business owners who have actually developed a financial plan for how to transition their business to new ownership when they decide to retire.

Obviously, managing money and planning for the future weigh heavily on every small business owner's mind. While your accountant or bookkeeper plays a key role in keeping your financial house in order, they may not have the same "future-oriented" perspective a financial advisor has. In developing a relationship with you and gaining a clear understanding of your financial objective, this professional can help alleviate your concerns and help you make decisions that may ensure a profitable future for you and your business.

The right financial advisor can provide answers to questions concerning:

Your tax situation—How can you consistently manage your taxable income as conditions change over time?

Your business valuation—Do you have a precise assessment of the value of your business? How does a valuation assessment affect your personal financial status?

Your employee benefits program—What benefits strategy best suits your business and will help attract and retain quality employees?

Your insurance and protection—What kind of insurance and protection plan helps to safeguard your business in the event of disrupted operations or the loss of a valued employee?

Your business succession plan—What's the most effective strategy for either selling your business or handing it over to a family member?

Your retirement—How do you plan to save for retirement? Are there ways to eliminate wasteful spending now that could favorably impact your retirement later?

Your investment strategy—Is your stock portfolio suitably aligned with your level of risk tolerance? How can you reorganize your portfolio to achieve specific investment goals, such as retirement, your children's college funds, etc.?

Putting a comprehensive investment plan in place is just the start of a financial advisor's responsibilities. If you're willing to invest in a long-term relationship, this individual will closely monitor that strategy over months and years, adjusting elements of the plan as changing conditions demand. They will also respond to changes in your personal needs and desires. Planning is an important part of what they do. The purpose of consulting with this professional is to ensure you're not leaving the future of your business (and your life) up to chance.

To find the right small business financial advisor, experts suggest asking friends and colleagues for recommendations. Your accountant or attorney might also be able to steer you towards the right person. This way you can enter a discussion knowing something about their financial management style and the value these individuals provide.

As you narrow your search, always research the financial advisor's credentials, qualifications and experience. Professional certifications like CFP (Certified Financial Planner) demonstrate a certain degree of experience and knowledge, as does membership in the National Association of Personal Financial Advisors. Look in particular for financial advisors who specialize in the concerns of small business owners.

A useful tool for checking credentials is BrokerCheck® by FINRA, which shows prospective brokers employment history, certifications, and licenses, as well as any regulatory actions, violations, or complaints.

In business as in life, the future is coming much faster than we expect. A qualified financial advisor can help you face the challenges ahead, as well as the opportunities, far more effectively than attempting to do so on your own.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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