As per a survey by American Express, 60% of the small businesses have never consulted or hired a financial advisor. 30% of the SMEs haven’t calculated how much money they need for retirement, and 75% of entrepreneurs of small and medium businesses have no formal blueprint of passing on their legacy to the next generation, in case of their retirement.
And this is a big problem.
Any business purpose and objective are generating profits, continuity of their enterprise, and making money in the long term. If these factors are not managed professionally, then that costs dearly for the business, employees, and the very idea behind launching a business.
How to avoid this scenario?
All you need is an expert in financial matters, a professional who can guide you towards financial planning and make financial sustainability a critical business goal. And help you navigate the slippery, complex world of finances and money.
In other words, small businesses need financial advisors, as plain and simple as that. We will explain why small business owners and SMEs should select a financial advisor in India and what they will lose out on if they don’t. And how you can select the best financial advisor, what are their main traits and characteristics.
Who is a Financial Advisor?
A financial advisor helps and advises you on all matters related to finances and beyond.
Financial advisory services include not only consultation on taxes and insurance-related matters, but also savings, budgets, spendings, and, more importantly, financial goals of the small business and their long-term goals in terms of profits and revenues.
Learn more about – What Is Financial Discipline? How Does Financial Discipline Help Your Business?
Why Does Your Small Business Need a Financial Advisor?
What is the reason that 60% of the small businesses surveyed by American Express haven’t ever consulted a financial advisor service, ever in their entire entrepreneurial journey?
Lack of awareness seems to be the biggest reason.
Here are the 3 reasons why your business needs a financial advisor:
1. Dedicated Attention Towards Finances
An entrepreneur cannot do everything, and the sooner they can accept and acknowledge this fact, the better. They are entrepreneurs because they have a passion for business, but most of the entrepreneurs don’t have the professional expertise of finances and money. And even if they do try to do this job, their core business suffers.
They need a dedicated person whose only job is to handle the financial matters, and once this happens, things start to change.
2. How to Make Money from Money
To make money from an enterprise, you need to know the art and science of generating money from money. You should be able to know which investment plan needs to be chosen, at which stage, and how to use savings to save on taxes and expand business operations.
Which expenses to be cut, and where to focus more. How to separate personal finances and company finances and ensure that they both don’t clash with each other?
3. Future Development Plans & Blueprint
Amidst the business’s day-to-day operations, most of the entrepreneurs of small enterprises tend to get distracted from the long-term goals and future development of the company.
A dedicated financial advisory service will solve this problem.
An expert financial advisor will have the entire financial picture of the business in front of them, and this enables them to create and advise plans for the future rather than the present.
Learn more about – Why Does A Business Need Financial Planning? How To Create An Effective Plan That Yields Results
How to Select the Best Financial Advisor for Your Small Business?
The selection of a financial advisor service should be laser-targeted and goal-oriented as every business is unique and different. However, there are some necessary qualities and traits which you should be able to identify in a financial advisor for your business, which can help you make a better selection.
Romance with Numbers & Passion for Wealth Management
One of the most significant qualities of a good financial advisor is their unbeatable love for numbers, analytics, and their insane passion for wealth creation.
Both are necessary since the business and finance world’s methodologies and protocols keep on changing (for example GST in India, since 2017), but the love and passion won’t.
Exceptional Analytical & Logical Skills
Your financial advisor should connect the financial dots and present the bigger picture of your business and future.
And this can only happen when they can map out the finances with your goals, using analytical, logical, and financial skills. The ability to read between the lines and derive the future from your financial numbers is a skill they must have.
Sharp Financial Skills
Some of the financial skills which every financial advisor services should have are cash flow planning, investment management, retirement planning, real estate planning, insurance management/planning, stock market trading, balance sheet, business predictions and more.
Decision Maker Who is not Afraid
The financial advisor should be able to make decisions and be not afraid of them. There is always a risk associated with financial matters, especially investment, but what matters is how quickly that risk is mitigated, and how fast the financial plans are put back on track.
This whole relationship between risk and returns is based on the ability or skill to make decisions when and where required.
Mutual Interests Should Be Aligned
There cannot be any relationship without aligning the interests of both parties. And the same goes for the entrepreneur’s relationship with their financial advisor as well.
A good and expert financial advisor will be the one who always puts their client’s well-being and success as the foundation of their service. Entrepreneurs should be able to trust their financial advisors and share their plans and goals without any hesitation.
There are many options and choices when you are searching for a Financial Advisor for Indian businesses and SMEs, and there can be confusion.
MSMEx can help you find the best, most experienced financial advisor for your business without any hassles and complications. All you need to do is book a slot with our experts and take it forward from there. Refer to our YouTube video below for a quick overview.
Related Read About –
- Key Factors Of Financial Planning In Business – Financial KPI Examples, Common Misconceptions & Importance Of Financial Plan
- Financial Planning Checklist (Business) – A Complete Guide To Key Factors & Elements Of A Financial Plan in Business
- Why Do You Need A Business Advisor For Your Business?
- How To Streamline Business Processes? 4 Ways To Manage The Workflow & Processes Of Your MSME
- Decoding Profits: How To Find High-Profit Margin Business?
