Whenever we are asked business questions the most common is whether or not a business should hire a financial advisor. We know that it can be difficult for small businesses to work out where they should be spending their capital, especially given that there usually isn’t a lot of it to go around in the early days. We caught up with financial advisor extraordinaire Scott Tominaga to find out when businesses should hire financial advisors, and what they can expect from a service like this.
When Should You iHire a Financial Advisor?
The answer to the question as to when you should be looking to hire a financial advisor is as soon as you possibly can. This is an expense but in the long run it should be viewed as an investment rather than a cost. A financial advisor will provide the business with a huge amount of benefits which over the duration of the company’s existence will help them to save money, paying for their services time and time again.
What Can a Financial Advisor Bring?
If this is your business then you will make financial decisions for it based on a mixture of reason and emotion. Unfortunately however any decision which you make, especially financial decisions, which are based in emotion are not going to result in the best decision being taken. When you have a financial advisor on-board they will have no skin in the game, this means that they will be able to make decisions based on numbers alone, and not emotions. There may be times when you have to lose in the short term to gain in the future, or even having to sell certain aspects of the business in order to push for growth. If you are emotionally invested in your business then you won’t make these calls, which could eventually harm the company.
Businesses large and small should have a financial advisor on-board not only because of the expertise that they can bring, but also to fill in the gaps when it comes to your own expertise. A great many business owners understand there speciality and the business’ speciality, but many go into it without knowing about the world of finance. There are worrying statistics about the amount of companies who fail after the first 3-5 years and this is almost always down to poor financial management. If you hire a financial advisor then you can be safe in the knowledge that any financial decisions which are made for the company will be done to the best of your ability.
And so if you do have a business and you haven’t yet consulted a financial advisor, now is the time to go out and find one, arrange a consultation and talk through the company’s finances to ensure that everything is in good shape and that you have a clear financial plan for the future.