If you run a small business, there’s already a lot on your plate. You’re in charge of managing employees, overseeing marketing campaigns and delivering services to your customers.

But who keeps an eye on your company’s finances? You might have a CPA or accountant to call on during tax time, but hiring a holistic financial advisor with experience in small businesses planning can help take your enterprise to the next level.

In this article, we’ll explore what business financial advisors do and how hiring this type of professional can be a worthwhile investment for your company’s future.

What is a business financial advisor and what do they do?

A business financial advisor is a hired professional who specializes in matters such as retirement planning for the self-employed, small business taxes and identifying cash flow issues.

As a small business owner, you’re probably used to doing a lot of things yourself and might wonder if you really need a financial advisor or if you can manage everything on your own. If you can financially afford it, and you’re comfortable with handing over some responsibility to a professional, hiring a financial advisor could help you streamline your company’s finances.

In essence, a small business financial advisor acts as a strategic partner. If you’re just starting out, speaking with a financial advisor before launching your business can help you identify any funding issues or spot discrepancies in your projections.

Here are some other things a small business financial planner can help you with:

  • Financial planning
  • Tax strategies
  • Budgeting and forecasting
  • Investment and retirement planning
  • Estate planning
  • Risk management
  • Loan and financing guidance
  • Business valuation

Need expert guidance when it comes to managing your investments or planning for retirement?

Bankrate’s AdvisorMatch can connect you to a CFP® professional to help you achieve your financial goals.

Benefits of small business financial advisors

If you want to take your startup to the next level, a financial advisor for small business owners can help. From creating a business plan to drafting a succession plan, a financial advisor can help you chart a roadmap of financial success from start to finish.

Creating a business plan

A robust business plan can be your gateway to a small business loan, a grant or some other important funding opportunity. Working with a financial advisor to strengthen your business plan (and check your math) can give your company a strong start.

Advisors bring expertise in financial projections, budgeting and risk assessment, ensuring your forecasts are realistic and sustainable. They can also provide information about different legal structures for your business, such as S Corp, LLC or incorporation. How you structure your business has long-term tax implications, so getting a second opinion from a financial advisor while you’re still drafting your business plan is a good idea.

Managing investments and retirement plans

A skilled small business financial advisor can create a personalized retirement strategy for you, considering factors such as business succession and tax implications. They’ll help you strike a balance between reinvesting in your business and securing your future.

Once your retirement account is set up, a business financial advisor can help you select appropriate investments that align with your risk tolerance and long-term goals.

Assessing market trends

It’s important for small business owners to monitor market trends to stay competitive and adaptable. Economic factors outside your control — like inflation, interest rates and regulatory changes — can have a major impact on your company’s bottom line.

Business financial advisors can help you navigate changes in the broader market and explain any potential impacts on your company. Having another person keep an eye on industry shifts and consumer behavior might help you get ahead of the competition, or at least better prepare for possible roadblocks.

“Some advisors can even do business consulting, or act as a thought partner to bounce business ideas off of,” says Jeremy Eppley, a certified financial planner at Silverstone Financial in Owings Mills, Maryland. “Is this capital investment a good idea or should I be putting my money to work elsewhere?”

Improving efficiency

Saving time and money is always a top priority for small business owners. But if you’re managing everything yourself, financial matters might slip through the cracks.

You might not be aware of all the potential tax write-offs you’re eligible for, such as a home office deduction, depreciation against assets and mileage. Or you might struggle to find places to cut costs in your budget for next quarter.

Creating a succession plan

Succession planning secures your business’s future and safeguards your hard-earned legacy. Yet some small business owners fail to properly plan for an emergency or their eventual departure from the company.

A small business financial planner can create a comprehensive succession plan to  safeguard the financial health of the business.

“This could be as simple as a life insurance policy to more complex things like a contingency agreement with another business to buy the owner’s family out in the event of death,” said Erik Baskin, a certified financial planner and founder of Baskin Financial Planning.

An advisor can also assist in valuing the business accurately, ensuring a fair transaction when it comes time to sell.

“Many ignore succession planning and the business is most likely the owner’s most valuable asset, so it needs a plan to support it,” says Baskin.

Avoiding common mistakes with a financial advisor

Still not sure if hiring a business financial advisor is the right decision? Here are some common mistakes small business owners make — and how business financial advisors can help you avoid these pitfalls.

Inadequate cash flow management

Unlike workers with a fixed salary, small business owners often experience variable cash flow, which can affect both your business operations and personal finances. Working with a business financial planner to create a cash flow analysis can help you better plan for these ebbs and flows while bolstering your business reserves.

Lack of risk management

Running a business is risky enough, but there are some easily avoidable blind spots a small business financial planner can help you avoid, such as not carrying enough insurance.

“Business owners typically think about growing their companies and their profits, but not always about protecting their assets,” says Brad Wright, a certified financial planner and chief investment officer at Launch Financial Planning, LLC in Andover, Massachusetts.

A good business financial advisor can help you shop for and find the right insurance providers, as well as explore optional coverage, such as key man insurance. They can also help you create an emergency fund for both your personal and business needs.

Ineffective debt management

Small business owners often grapple with debt management due to limited resources and unforeseen market challenges. This can lead to mounting interest and ballooning debt, which hampers growth and profitability. A small business financial advisor can provide a tailored debt alleviation roadmap to help position your company for sustainable success.

Neglecting retirement planning

If you’re young and running your own business, contributing to a retirement account might be the last thing on your mind. But as an entrepreneur, you have several retirement plans for the self-employer to choose from, including a SEP IRA and a Solo 401(k), each with its own unique tax benefits and limitations.

A financial advisor for business owners can help you pick a plan that’s suited for your company’s size and structure.

“We’re also able to illustrate the benefits of the retirement plan to both the owner and employees,” Wright says. “We can shop the potential plan to multiple record keepers and team up with a third-party administrator.”

How to choose a business financial advisor

There are many financial advisors out there, so it’s important to find one who specializes in small business planning.

Engaging with small business organizations is one way to find financial advisors in your area who can meet your needs. Here are a few places to start your search.

CFP Board

The CFP Board’s Let’s Make a Plan website offers a search tool to help you find certified financial planners in your area. You can filter results to get matched with a financial advisor who specializes in small businesses. There are also filters for business succession planning, tax planning, and employee and employer plan benefits.


SCORE is a nonprofit organization providing free mentoring and educational resources for small business owners. Its network of volunteers offers guidance on all aspects of business, including planning and financing.

Small Business Development Centers (SBDCs) 

Small Business Development Centers are funded by the Small Business Administration and provide free consulting services, training programs and resources. You can find guidance on business planning, marketing strategies and financial management.

Once you’ve narrowed down your search, here are some important tips for choosing a financial advisor:

  • Identify your needs: Before the initial consultation, have a clear understanding of your financial situation and what you hope to achieve.
  • Check their credentials, reviews and ask for references: You can research an advisor’s background by using FINRA’s BrokerCheck.
  • Make the most of the initial consultation: Use the first meeting to gauge the advisor’s expertise to see if they align with your business goals. Make sure to ask a financial advisor these important questions, too.
  • Understand their fee structure: Understand how the advisor is compensated. Whether it’s a flat fee, hourly rate or based on assets managed, make sure it fits with your budget.

Alternatives to hiring a financial advisor

A business financial advisor can’t do it all, so you should really think of this person as one member of a larger financial and legal team.

“Most business financial planners aren’t lawyers and therefore can’t give legal advice,” says Eppley. “Some are not valuation experts. Some don’t do day-to-day bookkeeping.”

However, a good business financial advisor should be able to give you vetted referrals to other business professionals you’ll likely need on retainer, such as a:

  • Certified public accountant: Financial advisors can guide you on accounting practices, but they aren’t a substitute for a certified accountant, especially when it comes to audits of your business books.
  • Business lawyer: Financial advisors are not lawyers. For legal structures, contracts or disputes, consult a lawyer.
  • Bookkeeper: While they can provide financial insight, financial advisors are not involved in the daily running of the business.
  • Business broker or real estate agent: If you’re trying to find a physical storefront or refinance your store’s mortgage, you’ll need to consult a real estate agent or business broker.

Bottom line

As a small business owner, you face many unique financial challenges, including managing your personal finances alongside your business finances. Speaking with a small business financial advisor is an investment in your company’s future. This professional can help you navigate retirement planning and long-term financial planning, acting as a strategic partner as your company grows.