BusinessTN

Whether you’re a small business that’s just starting out or a seasoned one that’s aiming to take things to the next level, you’re going to need a little help. It’s easy to talk up your small business when things are going well, but what about when they’re not? You’re not only going to need someone to talk to about it, but you’re going to need someone to help you out as well. And it’d be nice to have someone to help you avoid making such mistakes in the first place. That’s where financial advisers come in.

As a small business in Tennessee, there’s a 30% chance that the thing that takes your business under will be related to finance, be it poor financial structure or mismanagement of cash flow. Financial advisers can help businesses, especially small business owners, avoid these pitfalls.

Most small business owners are technicians who had a dream and an entrepreneurial seed,” says Tim Cummings, a Nashville-based business adviser and CEO of Cummings Enterprises. “They’re not particularly financially savvy in the way a financial adviser would be.”

Financial advisers come in all shapes and sizes. There are mentors and coaches that offer advice from the perimeter and then there are advisers who actually get in there and help you implement strategies step-by-step. Different businesses have different needs, but the common goal is always the same: to help the business succeed and prosper.

Sometimes business owners just don’t know what to do next and need help establishing financial goals. “You might think you’re a profitable business because you take out petty cash to buy groceries and pay rent,” Cummings says. “But that doesn’t mean you’re running a proper business.”

In cases such as these, a financial adviser would come in and help the owner lay down a framework. What financial goals should you have? How do you want to grow the company? Where do you want the company to be in one, three and five years? They can then help the business owner structure his or her business plan around these goals and establish measurement techniques to help monitor the progress.

Financial advisers are also useful when it comes time to secure capital. They can help business owners identify the most appropriate avenues for their business to pursue, be it applying for a small business loan or approaching investors. They also provide guidance when it comes to preparing documents, such as business plans, or pitching presentations to ensure that the business is putting its best foot forward. That unclaimed inventory that hasn’t been paid for or shipped? A good adviser might suggest that you leave that out of the asset statement completely, so as to avoid making a bad first impression that will result in further revisions down the line.

Often, the best place to go for financial advice is the bank. Many banks provide small business services to help in such matters. Your CPA can also refer you to someone, though be wary of actually using your CPA as your financial adviser. Even though some CPAs offer financial advising services, someone who works closely with your company may not be the most objective.

From there, all that’s left for a business owner to do is find an adviser whose business philosophies mesh with his or her own.

“It needs to be someone that you can respect,” Cummings says. “Someone who respects you and whose opinion matters to you. Someone who will go toe-to-toe with you and tell you what you need to hear, not what you want to hear.”

Adviser fees are either hourly (normally a few hundred dollars) or based on a retainer over a longer period of time. But ideally, a financial adviser is helping a small business make more money or take the steps to do so, so it should be worth it.

Not all advising has to be costly though. The Small Business Development Centers throughout the state offer free consulting services, including financial guidance, to small business owners who need it. Groups such as the Service Corporation of Retired Executives (SCORE), a group of retired business owners who volunteer their expertise, are also helpful.

“There are just some things that someone with an MBA and 35 years of experience can do with their eyes closed,” Cummings says. “So it’s silly to not take advantage of that.”

He also recommends that small business owners seek advice from financial professionals with backgrounds in an array of industries. After all, business is business, he says. Getting someone with broader exposure who can bring in new ideas and resources that aren’t being exploited in the business owner’s particular industry may be the very thing that propels a business ahead of the competition.

And really, isn’t that what every small business wants?