How your business fits into your life, whether it is responsibilities or expenses-is a critical part of planning for your future. Sometimes, it can feel overwhelming to think about all your business-related concerns. The good news is that a financial advisor can offer strategic benefits to your small business so that you do not have to feel so stressed. Here are some of the benefits that a financial advisor can bring to your financial life, as well as some specific examples of the tasks they can help you to tackle.
Skills that a Financial Advisor Can Offer
Financial advisors are people who specialize in helping others make decisions about their money. When it comes to investing, they are able to actively manage your investments, but they do not necessarily do things for you, but they offer their wisdom and expertise to guide your choices and shape your strategies. For business owners, this is particularly important; you may need to navigate, for example, how your personal finances overlap with the business’ finances, how to keep them separate and more.
A financial advisor can help you by offering:
- An unbiased outsider’s view of your finances
- Suggestions for saving, investing and managing your money
- Assistance creating a business plan
- Years of experience in the financial realm
- Help crafting a plan for what to do with your business after you step away
These are just a few examples of the many hats that a financial advisor can wear for your financial house. More specifically, consider the following tasks that financial advisors often undertake for their clients as examples of how your own business might benefit from this guidance.
Assistance When Creating a Budget
Whether or not your own personal money is used to operate your business, you should have a budget in place to ensure that everything is accounted for. A financial advisor can help you establish a budget that suits your needs and goals without stretching your money too far.
A good budget for a small business will consider not only your fixed expenses and average income, but also protections for unexpected downturns, safeguards against random expenses and strategies for what to do if your profits suddenly soar. While a financial advisor is not in charge of enacting your budget, they can help you make changes along the way according to developments in your overall financial picture or help you take the first step in crafting a budget that is right for you.
Planning for Retirement for Small Businesses
While large companies might offer perks such as pension plans, your small business probably does not include that option among its financials. An advisor can help you to plan for retirement-whether that means relying on the business after you leave or using some of the profits to fund your own retirement accounts. If you have employees, helping them be secure in their own retirement is another concern to add to your plate.
A financial advisor can assist you in picking and funding a retirement strategy that suits your goals and your plans for the business. Maybe that looks like a SEP IRA-a specific retirement vehicle for self-employed individuals-or maybe you need a strategy for pulling from business profits after the business has been transferred to someone else, like a child or sibling. An advisor can offer suggestions.
The Business’ Legacy and Transfer
Speaking of granting the business to a family member, it is important that you have a plan in place for succession if you do not want the business to cease operations when you stop working. If you have no plans for passing the business on, that is also acceptable, and an advisor can help you navigate how to make that financial shift.
Maybe you would like to transfer the entity to another member of your family, or perhaps a particular employee. To successfully navigate this process, you may need to work on certain additional steps, such as getting a business valuation or creating a buy/sell agreement. A financial advisor can point you in the right direction and help you to prepare for these potential changes. Many will even help you to coordinate the many experts you will need in order to create a robust succession plan.
Trust the Experts to Help You Make the Right Choices for Your Business
Whether you are still in the early stages of your small business or you have found that your business has grown such that you cannot handle the financials on your own, be sure to trust the experts. The professionals at Inflection Advisors work individually with clients to offer personalized guidance. Reach out to schedule an appointment to discuss your finances and goals.