It’s common to have a trusted accountant or solicitor, why not a financial adviser?
If you have a problem, where do you turn to for help? It’s usually to someone that you trust, who you are confident will give you sound advice from a position of knowledge. The first port of call for a personal problem might well be a family member or close friend. But for something that requires specific knowledge, you look for an expert.
For anyone who runs their own business, starting out can be difficult. You have a fantastic product or service that you are convinced other people will want to buy, but this is just the starting point. To get the business off the ground you need help with everything that goes with it, like getting the finances in place or recruiting staff. Much of this is new and confusing. Knowing what should be in the fine print of a contract or how to file a tax return requires technical knowledge that most people don’t know, have the confidence to find out or the time to learn. This is when they seek expert help.
Most businesses will have an accountant and/or a solicitor that they will regularly turn to for advice and support, but a far smaller number will have a financial adviser. Why is that? Isn’t a fundamental part of business to know what your goals are and how you intend to reach them? Without having an end destination in mind, how can you put effective plans in place in order to get there? How can you galvanise your team to come with you on your journey, if they don’t know where they are going? Prudent financial management is a vital component in making that end destination a reality, putting plans in place that secure future wealth and mitigate against risk.
Thinking about the future
In my experience, many small businesses are so consumed with the here and now, they forget to stop and think about where they are going. This is especially true now, when so many are working hard just to survive during the current social restriction. The thought of looking to the future and making plans can seem too difficult and stressful as it feels so uncertain. As with anything new, it can be hard to know where to begin, so you end up doing nothing. It can feel like being lost in the middle of a vast ocean with no clue in which direction to turn.
This is where a financial adviser can help. They can provide the coordinates to help you plot your course to the safety of shore. By establishing what you want to achieve and when you’d like to achieve it by, a financial adviser can suggest the right vessels that will transport you there safely. They can help you face your risks and what you want to protect, allowing you to be proactive, putting up suitable defences in case any storm should hit.
The “ostrich” factor
“In this world, nothing is certain except death and taxes” is the famous quote from Benjamin Franklin on the establishment of the US Constitution. While this is very true, most people find it much easier to face up to their taxes than their own mortality. We all know the end will come at some point, but very few of us think it will be anytime soon. Most people have the same view of long-term illness. We know it happens and can happen to anyone, but there is always the feeling that it won’t be us and it will happen to someone else.
Death and illness are scary subjects because we can’t control them. No one, however healthy or careful, can eliminate the risk of contracting a serious illness or dying in an accident. The natural response for many is to pretend they don’t exist, pushing them to the back of their minds and trusting to luck.
The last year has illustrated just how vulnerable our health can be. While nothing can bring back loved ones, products like life insurance and income protection can considerably soften the blow, at least ensuring financial security for those left behind or dealing with the effects of a long-term illness. For those that run their own businesses and rely on themselves for their income, these kinds of protections are indispensable. Not having them is like driving without a seat belt or riding a motorbike without a helmet.
Not enough time
Ask any small business owner what they would like more of and high on the list will be time. Running your own enterprise is not a nine to five job. There is so much to think about and do, it can feel like there is no time to do anything that is not “essential”. With a to-do list that probably runs to at least several pages, where do you find the time to think about financial management?
There is a perception that a financial adviser will demand hours of your valuable time, taking you through endless, tedious, confusing documents. This is far from the truth. I see most of my clients between two and four times a year, when it suits them and for around an hour each time. The meeting is driven by their needs and concerns. I am there to make sense of their issues, offer advice and take away the burden of worrying about their future financial security. I am always available for questions, there whenever support is required. For the equivalent of around half a day a year, anyone can put their financial affairs in order and save themselves countless sleepless nights.
A bit of “me time”
Small business owners work incredibly hard. Building a successful company takes time, dedication, and energy. What is the point of putting all that effort in, if you don’t ensure there will be rewards to enjoy further down the line? We all need to look after ourselves and take a step back on occasions, have a break from the day-to-day stresses. It might seem strange to see time planning your finances as a form of relaxation, but knowing that are taking care of your future, maximising your assets, and protecting the things you love can feel like being freed from an enormous weight. Trust your financial adviser to do the heavy lifting and help relieve those worries.