Whether you’re self-employed or a small business owner, the chances are that you’ve found yourself encumbered by rising debt levels over the course of the last few years. In fact, some findings have found that 49% of self-employed people currently manage debts of £10,000 or more, whilst SMEs are also struggling to cope in a strained economic climate.
It’s important that businesses take a proactive approach towards servicing this debt, whilst also taking steps to manage their finances more effectively going forward. From unsecured business loans to credit cards, it’s important that firms manage their debt in line with their total earnings.
In addition to unsecured business loans and credit cards, another aspect that small businesses should consider is implementing open accounting practices. Open accounting can provide greater transparency in financial management, allowing you to make better-informed decisions and monitor your financial performance. By combining the use of business loans with open accounting, you can effectively manage your finances, maintain healthy cash flow, and establish trust with investors and other stakeholders.
In this respect, there are several benefits of hiring a financial advisor as a small business owner. Here are a few of the most important:
1. Financial Advice can Trigger Cost Savings and Future Profits
Regardless of the nature of your business or service, the ultimate aim must always be to generate a viable profit.
This is one of the main areas in which a financial advisor can lend their assistance, as they’ll review your business’ spending highlight potential opportunities to reduce costs. These can then be considered in further detail, as you look to make savings without compromising on the quality of the products and services that you sell.
This can translate into superior profit margins over time, enabling you to drive concerted growth during challenging economic times.
A financial advisor can also help to establish internal accounting processes, which will help you to monitor expenses in greater detail in the future.
2. Financial Advice can Prepare Firms for Future Developments
On the subject of future development, it’s important to note that a business’s growth path can be derailed by emotive decision making.
Hiring a financial advisor can help you to avoid this issue, as they’ll adopt a dispassionate approach to your money management and consider all potential growth decisions with a greater sense of perspective.
Remember, all business growth requires an objective and a clearly-defined plan, whilst stakeholders must also determine the tactics that will make this vision a reality.
This plan should be formulated by a seasoned business advisor, in line with the input and information that you provide.
3. Financial Advice Helps you to Plan your Personal Finances in Conjunction with your Business Assets
Whether you employ one or 50 people in your SME, it’s important to remember that you can’t rely on a workplace pension scheme as an entrepreneur.
With this in mind, it’s important that you plan your personal finances in a way that optimises future savings, whilst also balancing this with investment into the business venture.
Due to the consuming nature of launching a new business, you may want to consider liaising with a financial advisor to help to balance your personal and business findings, whilst also optimising cash flow and minimising tax liabilities.