Here’s one nugget of truth: scaling a business isn’t a one-man show. Thriving in the business world necessitates delegating tasks to skilful professionals so that you can focus on the big picture.
Among these professionals are those adept at managing the business’s precious capital; in other words, these are your financial planners.
Financial planners are consultants who essentially offer expert guidance regarding broad financial matters. Financial planners focus on different niches—some hold expertise in tax planning, while others could help you manage your cash flow more efficiently.
Regardless of a financial planner’s specific expertise, the insights they can offer are invaluable for long-term business growth. These professionals can also work hand-in-hand with you to ensure that your future growth strategies are sound and backed up on cold, hard financial facts.
Without further ado, let’s look into the various benefits a financial planner can offer in more detail.
1) Supports Better Budget Allocation
The company budget is the lifeblood of the company’s short-term and long-term health. Without a proper budget, it’ll be increasingly difficult for companies to track and take control over their finances—which can be financially disastrous if left unchecked.
While robust accounting and budget tracking systems exist to help business owners know where their money goes, having a specialised financial planner can be an excellent way to clearly track and optimise your costs.
For instance, financial planners can find inefficient cash outflows in your business, such as paying for an overly expensive subscription service you don’t need. They can make the recommendation to lower your budget (i.g. Choosing a cheaper service) in that particular area and allocate the distributed capital into an existing or new area of the business for future growth.
Furthermore, financial planners keep track of your finances in real-time. If there’s a sudden economic or legal shift, financial planners can help businesses react fast to these changing economic conditions. This, in turn, helps keep your business competitive among others in the market.
2) Assists With Financial Forecasting
Another benefit of getting a financial planner is their ability to make data-driven projections of your business finances in the future.
These professionals are adept in using data encoding software like Microsoft Excel and Google Sheets. They are proficient in various formulas and graph designs, making it easier for you, your partners, and your staff to develop a thorough understanding of the present and future state of your business.
More specifically, these professionals can forecast future revenue streams and expenses using specific company data.
Once they’ve thoroughly inputted these empirical data points into the software, they can create profitability ratios and graphs that help you and other stakeholders predict future projections.
The information you can glean from your financial planners can pave the way for you to make informed financial decisions for your business.
For instance, it could dissuade you from introducing a niche prototype in your catalogue offering, or alternatively, it could prove to be a viable opportunity.
While they’re not the ultimate shot-caller, they can give you a numerical basis for potential decisions. This can allow you to react, anticipate changes, and reevaluate strategies based on findings.
3) Ensures You Follow Your Taxes and Obligations
The business tax landscape can be notoriously difficult for entrepreneurs to navigate, and this is especially true if you’re a first-time business owner.
While it may be tempting to cut costs by filing your own taxes, you’re more prone to making erroneous entries that way—which can significantly ramp up business expenses in the form of penalties.
To prevent this from happening, enlisting the aid of a financial planner is highly recommended. These people hold the expertise to navigate the tax landscape and make sure that your taxes are fully compliant and filed.
Furthermore, these professionals can also help your company legally lower your overall cash outflow through strategic tax filing. They can recognise existing issues with your financial reports that may affect your tax claim—and make the necessary corrections to address these potentially costly problems.
That said, financial planners who deal with taxes have ample certification before they can give out recommendations and analyses to clients. If you’re seeking out aid for your taxes, Curo Financial Services can be highly beneficial.
4) Optimises Debt Management
It’s normal for businesses who are still starting up to take out a business loan, whether it be for asset acquisition, to pad up the emergency funds, or to kickstart operations.
When a business is unable to pay off its debts on time, it can drastically worsen its financial position over time and accrue high interest costs, tarnishing the financial integrity and creditworthiness of your business.
It’s common practice for businesses to seek out various loan providers to find the best deals. Loan providers can offer varying loan options, interest rates, and repayment terms.
It’s important as a business to know what debt repayment structure best applies to you—in terms of current and projected financials. Some businesses may have the capacity to pay off a loan over a short 5-year period, for instance, whereas others may need to extend their terms to a 10-year period.
That said, it’s not easy for business owners to know the optimal debt management strategy at the top of their heads. That’s where having a financial planner comes in handy.
Besides knowing your exact net debt situation, financial planners can learn, analyse, and optimise your financial cash flow. They hold the expertise to know which debt structure is the most feasible for your business, typically basing their analysis on historical data.
This, in turn, gives you the critical information you, as a business owner, would need on how to handle debt most effectively.
5) Guides Merges and Acquisitions
While you may know the ins and outs of your business, not all of your employees are as adept at it as you. They may excel in their specific function, but when it comes to the grand picture, they could be left in the dark.
When you have to make a major decision like merging or acquiring a new company, it can be stressful multitasking all the things you need to do to get it done.
Not only will you have to gather the necessary documents from your side, but you’ll also have to evaluate whether the other company is a good partnered fit.
A financial planner can be a blessing for companies planning to merge. They can take the role of understanding the structure of the other company and learning their current financial and operational synergies.
They can then share this information with you, helping you stay informed and make the best strategic decision that maximises value while minimising risk for both companies.
6.) Facilitates Crisis Management
The sad truth is that not all businesses succeed in their respective fields. Some may face a slow and steady burn, whereas others could actually turn in profit for an extended period but lose steam over time.
When a business is amidst a turbulent business crisis, each decision the owner makes can weigh heavily on the business’s longevity.
They’ll have to make some major sacrifices, and unless you have a magical orb that can predict the future, there’s no guarantee that your decision is the right one or not.
That said, there’s one way you can keep your business steering stable in times of crisis: and that’s by hiring a financial planner.
Their expertise can be instrumental in helping you make the right decision for your business in times of financial crisis. In particular, they can provide you with cold, hard data that can influence your business’s next move: profitability ratios, cost centre reduction strategies, and so on.
Furthermore, they can also give you insights on viable business strategies to adopt in times of crisis, all the while helping create financial contingency plans to ensure that your business can weather the storm.
These plans aren’t merely reactionary; they can be long-term and stable pivots to safeguard your business’s future.
