Why Businesses Should Consider a Financial Advisor?
Sitting at home, if you get the sudden urge to take your car out for a spin, what do you do? Mostly, you pick your car keys and take your car out for a spin! It is as simple as that. Now, what if you feel like visiting a friend’s home? You possibly will call him/her to ascertain that they are at home and then check if it’s okay for you to come over before actually starting off. The planning gets a bit more detailed if you want a weekend getaway. But what if you are planning a week-long vacation? Now, imagine the thought process and planning necessary if you are planning to migrate to another country!
In short, the longer the journey and stay, the more intense the planning that is necessary. It’s the same logic and story with the finances in your business. Whether the business is small, medium or large, if you are planning a long journey and stay in the market, you better have intense planning. It is here that the role of a business financial consultant becomes critical.
Do even small businesses need a business financial planner?
It is worth reiterating that the investment advisory business is not so much about the size of the business but the planned tenure of it. No owner would start a business for the short term and so, a financial planner for business is almost a non-negotiable need. A registered business financial consultant possesses knowledge and skills to help you optimise the company’s initial capital investments. He/she can also assist you in assessing your business model while creating plans and outlining timelines to achieve profitability.
While most large businesses have an entire financial team, small businesses tend to reduce costs by the owner/founding team multitasking. Trying to save costs by eliminating the investment advisory business will prove costly in the long term.
Benefits of a Financial Advisor
- Experience and Expertise – The business financial consultant has the ability to regularly review your finances to advise making the best investments and preventing mistakes and bad monetary decisions. Additionally, your business financial planner knows the laws and the ways of working of the UAE government and markets. Trying to cut out such expertise and experience by using DIY financial planning will harm your business more than benefitting it.
- Business Planning – Like any long journey, the financial journey needs to ble planned with short-term and long-term goals along with the ways to get there. Contingency planning based on scenario analyses is also important for the success of the business. A good business financial planner will create a comprehensive plan to assist you in running your business in a more efficient manner, preparing you for anomalies that arise.
- Investing – Profitability is the ultimate fuel on which every business journey is based. How a company ploughs back its profits affects future profitability. It can directly plough it back through expansions and building assets or indirectly through investing in multiple equity and debt instruments, precious metals, cryptocurrencies, art etc. Your financial planner for business will handpick investment options that are tailored to your business.
- Savings – It is the tiny drops that make up an ocean. We do not realise the power of small savings combined with the power of compounding. Though the investment advisory business that is consulting for your business will charge a fee, you should look at that fee also as an investment for better savings.
- Unemotional perspective – As a passionate business owner(s), you will be highly attached to the business. While this intense involvement is good for the company, a dispassionate third-party viewpoint also is very useful because the effort involved in the daily grind can sometimes blind us to the big picture of making profits. The world is fast changing and new trends emerge every 5 years. It would be advantageous to the business to be on top of these trends. Here also, the business financial consultant brings in a unique perspective along with expertise.
- Succession Planning – A business can be carried on by the founding entities or it can be sold at a profit to potential acquirers. Based on what you wish to do with your business beyond your tenure, the business financial planner will chart options on how to proceed.
- Business Continuity Planning – One thing that has become clear in the post-COVID world is that despite the best planning, there needs to be an additional plan which gets activated in the event of a disaster or catastrophe. This strategy that your financial planner for business will assist you in continuing the business if a disaster strikes.
Starting off with a Business Financial Consultant
Now that you are convinced about having a business financial planner, start off by setting up an in-person meeting to check whether the objectives and goals are aligned and are a good fit. The initial consultation will always be complementary and the advisor will assess your complete financial picture. Based on your risk tolerance, they will propose a preliminary plan of action with pros and cons. This preliminary meeting is also the time to discuss the fee structure after ascertaining the business financial consultant credentials, certification and qualifications. Once you choose to go along with the business financial consultant of choice, chalk out the communication structure. You should ideally review and be updated at least once a quarter.
Firms like Pro-Financial have deep experience, insights and expertise in all aspects of financial planning, especially in the Dubai (UAE) market. We give businesses and institutions the leading-edge tools, expert insights and holistic financial planning services that they need to optimise their performance and risk – now and for the long-term future. Contact us today for more details and enquiries. We will ensure that you get a consultant that you are comfortable working with.
Asfar is an Independent Financial Advisor and Associate Partner with Continental Group based in Dubai, UAE with over 12 years of experience in the region. His clientele includes high networth individuals, corporations, C suite executives, business owners, and entrepreneurs in the region.
Although with proper planning and consistent effort, you can save, invest and distribute your own finances. It is always good to get some professional advice. If you need help in planning your finances in the short, medium, or long term, I can help you do so. You can write to me with your questions and comments to firstname.lastname@example.org