|Rich Best has spent 28 years in the financial services industry, as an advisor, a managing partner, directors of training and marketing, and now as a consultant to the industry. Rich has written extensively on a broad range of personal finance topics and is published on several top financial sites. Recent books include The American Family Survival Bible and Annuity Facts Revealed: What You MUST Know Before You Invest.|
Putting together the Business Owner's Financial Advisory Team
Many business owners are surrounded by a small cadre of advisors – a financial advisor, an attorney, an insurance professional, an accountant, and business planning specialists – each tasked with solving a different piece of the puzzle for the client. However, without coordination or collaboration between the various disciplines, you could be left holding different pieces of the puzzle without a clear picture of how they fit together. We all know what it’s like to try to piece together a puzzle without being able to see the box top. And, because each of the pieces is formed in separate silos, the likelihood is they won’t fit cleanly together if at all leaving you with a discombobulated plan.
Business owners can benefit from a coordinated approach to fully addressing their financial and business planning needs, but it does require a team approach by advisors representing the essential planning disciplines.
The Independent Financial Advisor
You need objective advice from an independent financial advisor. Your financial advisor should be free of conflict – in other words, he or she should work for you rather than a brokerage firm or corporate entity. Advisors with a demonstrative background in working with business owners could be a plus, but at the least, he or she should have extensive experience in working with small business owners.
For business owners, solid tax advice is precious, so nothing less than a fully certified tax professional experienced in working with business enterprises will do for you. The best source for finding a tax professional that can meet your needs are referrals from other business owners.
Attorneys who specialize in business are the only choice. Attorneys who work in a larger law firm will have access to all other forms of legal advice including estate planning.
The Risk Management Specialist
You have outgrown your property and casualty agent. You need someone who specializes in all manners of risk that relate to owning and managing a business. These are professionals who may one day save you an enormous amount of money, so choose wisely.
For a growing business, a solid relationship with a business-oriented bank can be the most important among all advisors as cash management and access to capital become more critical at key stages of business growth. A business banker who understands your industry and your business can be invaluable and will most likely be the best positioned to help you coordinate your advisory team.
The Business Planning Specialist
Most business owners see themselves as entrepreneurs following their passion, not necessarily as business managers. Most businesses fail due to mismanagement resulting from a lack of business skills. Having a business management specialist as a part of your advisory team will ensure you have the means to stay focused on the vital business issues, whether you hire a business manager or you plan to do it yourself.
This is not an all inclusive advisory team. You will also need a life and disability insurance advisor (preferably an independent broker). But, all advisors become part of the team, quarterbacked by a lead advisor with you sitting as Chairman of the Team.