Why Good Financial Advice Can Help Set the Direction of Your Business
Let this be your compass when charting your company’s path to success
PHOTO CREDIT: Getty Images
So you’ve finally made the decision to take the leap into the exciting world of entrepreneurship. But before you get caught up in the flurry of all the tasks that will occupy your time, take a moment to think about harnessing one of the pillars of a solid business: good financial advice.
One cannot underestimate the power and potential of a financially healthy business. You will be in a better position to plan for, say, expansion to new markets or the development of a new product. It can give you leverage when it comes to selecting suppliers or executing marketing plans.
To be sure, no company will be immune from challenges, such as canceled orders, delayed payments from clients, overspending, or investors suddenly pulling out. But knowing who or where to turn to on what your next steps should be is a privilege not all entrepreneurs have.
This is the reason why, ultimately, sound financial advice can help set the direction of your business. You can learn from the successes of others. When running a company, you will be pulled in different directions all at once, but investing time and effort in seeking financial advice will help you respond better when things get rough.
Ask yourself: Are you knowledgeable when it comes to expanding or investing your funds? How well or poorly do you manage your money? More importantly, do you enjoy reading about investments and money matters in general?
These are questions you need to ask yourself early on in your entrepreneurial journey, and depending on your answers, you will be able to objectively justify whether or not you need a little help in thinking about your company’s financial future.
“Most people need a financial planner,” said Loren Dunton, one of the founders of the financial planning movement, in her book Financial Planning Can Make You Rich (1987). “The ones who don't need one are usually smart enough to use one.”
Turn to someone you can trust
A financial advisor, for instance, is more akin to a business partner who can take care of your financial health. It goes without saying that a financial advisor needs to have a CV that speaks for itself. After all, you are banking on their expertise to steer you and your business in the right direction. He or she must know the ins and outs of the industry and is knowledgeable about the trends currently controlling the market.
“Remember, no two financial advisors are alike. They not only need to have experience in managing money but have to understand your business,” says Junie Veloso, Head of Business Banking at the Bank of the Philippine Islands (BPI).
“You have to remember that you and your financial advisor are a team. You both need to complement each other’s strengths and weaknesses for the whole arrangement to work,” Veloso adds.
Well-established financial institutions like BPI and its relationship managers can also help entrepreneurs by providing them with the information and tools they need to make the right financial decisions. Listening to experts who have been in the business for a long time will help you plan for the future and navigate challenges along the way.
In the same way, people outside the financial industry can provide sage advice on money matters. They can be former professors, bosses whom you admire, or fellow entrepreneurs who found success in the industry that you want to enter. The best sources of advice are those who have already been where you want to be, and can impart lessons they learned along the way.
“Their experience and wisdom will prove invaluable to entrepreneurs who are just starting out on their journey,” Veloso says. “They can share practical lessons and can also help entrepreneurs avoid the same mistakes they did.”
He adds, “Aside from guidance on how to pilot your venture, they can also be great sources of financial advice. Being smart about money is important in any business, but for new businesses with limited resources, it can spell the difference between going under and staying afloat.”
Whoever you choose to turn to, he or she must be someone you can trust. You need to be able to have confidence in his or her judgment, and believe that this person has your business’ best interest at heart. Never take for granted what your instincts are telling you.
Don’t be afraid of seeming weak when asking for help. You will become a better entrepreneur once you recognize that there’s a lot you don’t know and that there is always room for growth. Your business will thank you for it.
BY Amanda Pressner Kreuser