The U.S. small business sector is thriving. According to the SBA Office of Advocacy, small businesses comprise 99.9% of all firms, 99.7% of firms with paid employees, 46.8% of private-sector employees, and 31.6% of known export value ($460 billion).

By all accounts, it’s a great time to start a business! But launching a company is one thing, keeping it alive is another. Many small businesses go belly up in the first few years due to a lack of working capital. Without proper cash flow management, you will struggle to stay afloat.

Here’s the catch: financial planning is not a DIY project, especially if you don’t have a background in the subject. And, rookie entrepreneurs rarely have the time or skills to tackle their capital effectively.

If you’re grappling with your business finances, hiring a financial advisor should rank high on your list of priorities. Expert financial advisors help you control expenses, plan your future, and scale operations in the long run.

And the perks don’t end there.

Let’s dive into five ways your small business can benefit from working with a financial advisor.

 1. Set a Smart Budget

In a perfect world, you would have unlimited resources to fund projects, expand your services/products, and generate more income. Unfortunately, this isn’t the case. Most startups and small enterprises work with restricted assets, which is why it’s vital to make every penny count.

This is where budgeting can help. Creating a budget lets you:

• Track payments
• Make informed decisions
• Achieve business objectives
• Minimize overspending 
• Boost savings

The sooner you budget, the better. A financial advisor can walk you through the process hassle-free. They can:

• Analyze your expenses and identify red zones
• Collaborate with your accountant to set up an initial budget
• Track how well the budget is working
• Recommend tweaks along the way

2. Bank on Expertise 

As a small business owner, you’re probably used to doing things yourself to cut back on expenses. But you cannot Google your way to a solid financial plan. So, if you’re planning big business moves, you need a seasoned financial advisor in your corner.

A professional financial advisor will know the ins and outs of the market, as well as the best ways to achieve your financial goal. They’ll use their experience and wisdom to keep your finances on the right track. With them, you know your money is in good hands. 

In this regard, here are a few things you should consider before settling on a financial advisor.

• Credentials: Be sure to check the advisor’s credentials to gauge their level of expertise.
• Experience: Choose a financial advisor who has been in the business for a few years. 
• Location: Since different states have different financial laws, you need advice in line with local guidelines. For example, if your business is based in Gainesville, you’re more likely to benefit from financial advising in Gainesville. Hence, try finding a financial advisor in your area.

3. Retain More Employees

The post-pandemic labor market is up for a toss. Amidst a staggering talent shortage, employers are struggling to retain quality hires. Nearly 4.3 million people quit their jobs in December 2021.

Given the circumstances, you must pull out all the stops to keep your employees happy and engaged. Increased pay aside, consider providing them with additional perks like healthcare, paid time off (PTO), retirement accounts, and life insurance.

Of course, there are several other ways you can approach this, and a financial advisor can chalk out a viable game plan for your company. They will assess your business structure and recommend additions/alterations to your existing employee benefits plan.

4. Make Intelligent Investments

Most business owners wait for the day their revenue exceeds their expenses. But if you keep your profits locked away in a vault, you’ll lose opportunities to generate additional returns.

That said, every investment comes with its set of unique risks. Because young entrepreneurs don’t have the bandwidth to analyze investment opportunities, they often neglect long-term implications. 

A reputable financial advisor can counsel you on the right investments for your business. For example, they may suggest that you use your earnings to set up a rainy-day fund, improve marketing efforts, or repay existing debt. 

5. Save Time and Effort

Managing a business is no walk in the park. Solo entrepreneurs are run off their feet trying to wear multiple hats at a time. This usually leads to physical/mental exhaustion and early burnout. Over the past year, nearly 47% of entrepreneurs reported feeling drained of physical/emotional energy.

In this regard, a financial advisor can save you a ton of stress and time. They will help take care of your finances while you focus on your core business operations. So, that’s one less thing you’ll have to worry about!

The Bottom Line

Hopefully, this post has given you some insight into the benefits of working with a financial advisor. Remember, capital is the lifeblood of every small business. Without proper financial management, you may face dreary days in the future. An expert financial advisor will harness years of experience and extensive training to help you make the most of your money. They’re certainly worth the investment!