Going solo and setting up a small business is no mean feat. Yet, every day, a good proportion of new entrepreneurs take the leap without any real plans in place. While it may be manageable in the short term, it’s not a viable way to manage any long-term growth plans; not without it costing a lot of time, energy and money.
The only certainty in business is change. And the most successful small businesses are those that plan for the future and foresee changes or growth hurdles that may affect the business journey along the way.
No one is a fortune teller though. The ability to predict and plan comes with experience. And that’s where bringing in external third-party support is invaluable.
Cue financial advisors.
At the very least, a good advisor will have the knowledge and experience to maximise your initial capital investment. But on a wider scale, they will be able to assess the viability of your business model against your long-term objectives and help you to outline strategies and timelines to achieving a profitable (and sustainable) business.
Here are just four ways a financial advisor can support, accelerate and improve your business success:
- Niche expertise
Financial advisors help plan and manage your long-term financial needs and prospects. That’s because cash is king, and all businesses need rock solid finances – or easy access to finance – in order to navigate through the various challenges that arise along the way.
Cashflow problems is one of the single biggest killers of small businesses. So, mismanaging your cash can easily lead to things going horribly wrong. Lose the ability to pay employees or supplier invoices and your day-to-day operations are very vulnerable.
If you consult with a financial advisor early in your journey, they can help you to predict, plan for and mitigate any issues which may arise.
They can also provide insight (and advice) into key milestones when your exposure to risk may increase; from taking on your first employees to becoming VAT registered, moving or buying new premises, investing in more kit and so on. They help to identify where you can economise through difficult periods and when you might benefit from looking at investment opportunities.
This unconnected, experienced viewpoint is invaluable to helping you make the most of financial circumstances that you don’t always have the experience to predict in advance. If cashflow is an ongoing worry in your business, it’s worth looking at ways to address the issue, such as ‘Credit management tips for controlling your cashflow’.
- Valuable cost savings
Financial advisors like nothing more than to look at a set of financial statements. By simply looking at your balance sheet and P&L they will quickly be able to identify where you are spending money each month and, more specifically, which cost centres are proving to be a drain on your finances. Armed with this information, they are able to offer some useful and relevant advice.
This may include the introduction of new processes to streamline the way you work, opportunities for you to cut your staff costs and operate a leaner team, more strategic ways to engage with suppliers and buy more efficiently or simply ideas as to how you can best manage your tax responsibilities.
When you have someone looking for these opportunities on an ongoing basis, your business ultimately benefits. You can focus your attention on what you do well – the running of the business – while your trusted advisor can use their expertise to help steady the ship and plan the journey.
- Business preparation
A robust business doesn’t survive on great ideas alone. You need to back these up with good financial future-proofing. To achieve this, you need to keep your goals realistic and attainable. A good financial advisor will be able to focus your vision and provide much-needed clarity around the planning and placement of cash – be that to manage growth periods, seasonal fluctuations or the side effects of poorer credit control.
You might also be faced with unexpected situations such as new competition, tighter regulations or the need to diversify your product. Having expert advice on tap could help you to plan your finances and adapt your business as required.
Planning for the future is also key to growing a sustainable business and a common oversight for many entrepreneurs is how they will eventually make their exit. Regardless of whether it is going to be sold or transferred to a family member, succession planning can take years of preparation and needs to be considered from a financial and practical aspect.
- Planning for funding
Most small business will need a cash injection at some point. This could be a strategic and planned route to accessing finance or an unexpected urgent need. Either way, the type and level of finance secured needs research and careful planning. This is where the expertise of a financial advisor is invaluable.
The funding solutions for small businesses are ever-growing and there’s key decisions to be made around whether you opt for traditional or alternative finance, and whether a debt or equity solution best meets your needs. There’s also knowing how to approach lenders and investors and what needs to be done to make your approach or application successful. As a minimum, you will need a comprehensive business plan as well as a robust set of financial statements. This is a different set of documents you may produce for internal planning purposes and the best placed individual for producing these is a financial advisor.
If you need some guidance, you can download our white paper on ‘How to write a winning funding business plan’.
There’s no doubt, having an experienced external resource on hand gives you direct access to an invaluable insights and knowledge. It puts you ahead of the competition in many ways!
Here’s a quick round-up of the ways in which they can add real value to the strategic direction:
- Managing cashflow
- Financing growth
- Securing investment
- Budgeting for income fluctuations
- Business acquisitions
- Estate planning
- Sale of the business
- Succession planning
So, if you’re looking to grow your business but need some advice on how to get there, including preparing your business to access finance and the available funding solutions on offer, then speak to one of our advisors for some expert guidance on how we could help.