Some people question whether small business owners need the support of financial planners. The answer is yes, they do. Most small business owners do not have plans in place for their financial security. Let’s look at some statistics.
- 30% of small business owners haven’t even calculated how much money they will need for retirement
- Less than 25% have a transition plan in place or a plan to transfer the business to a new owner when they retire
- Only 40% of small business owners have spoken to a financial advisor
The numbers show that most small business owners have not made adequate plans for the future. Even if a small business owner has a plan in place, dealing with personnel decisions, cutting costs, growing sales, capital allocation, and more makes it extremely difficult to invest strategically.
One of the biggest reasons that people choose to start their own business is to have control over their work life. So, it is easy to see why they also want their business, their future, and their children’s future to be in their control as well. That perspective is certainly understandable.
Financial Planning Questions Specific to Small Businesses
However, if you are hyper-focused on the business and expending all your energy there, who is looking out for your finances? Running a business is often hard work and very time-consuming. There may not be time to check if the US dollar is depreciating or appreciating and considering how that might affect investments this quarter.
There isn’t time to look into 10-Qs and 10-Ks, follow interest rates, track foreign exchange movements, plan for retirement and stay up to date on Federal Reserve statements. How are changes in the political landscape likely to affect your business and your own finances? What’s the latest research and analysis say about what to expect in the market over the coming months, years?
In addition, it’s important to consider life insurance or key man insurance to protect your business as a sole proprietor. As well as a buy-sell agreement if in a partnership. A good financial advisor will point out weaknesses in your current situation and suggest ways to improve your planning.
Choosing a Financial Planner
This is where financial planners can help. They can work with you to plot out your financial goals and help you make the best decisions for your future and your business. You can’t do everything alone, therefore, you delegate. Consider hiring a financial advisor to provide you the support and expertise you need. So how do you choose? Check out our tips for finding the best financial advisor.
A study showed that the factors people feel are most important are:
- Knows My Needs: 27%
- Respect/Know Brand/Company They Work For: 26%
- Easy to Talk With: 26%
- Colleague Recommendation: 23%
- Friend/Family Recommendation: 23%
- Existing Personal Relationship: 22%
People want an advisor that they can trust. Someone that respects their wishes and understands their needs. Someone with whom they can have an on-going professional and trusted relationship with. Having a good relationship with your financial planner is the key to long-term success in achieving your financial goals.
Financial Planner for Small Businesses in Northern Virginia
To reaffirm, small businesses should engage with a financial planner. If you are ready to speak to a professional about your financial goals, contact Argent Bridge Advisors today. Our team is ready to work hard for you and to help you achieve your financial goals.