Why every entrepreneur needs a skilled financial adviser

As an entrepreneur or business owner, you wouldn't risk entrusting a crucial task like fixing your plumbing or undertaking a major construction project to someone unqualified, would you? No, that would be financially imprudent.

When it comes to financial advice for your business, the same common sense should apply because the stakes are just as high, if not higher. According to Tarryn Richter, Financial Adviser at Momentum, the wrong advice can derail your journey, sending you down a costly rabbit hole.

“Just as you wouldn't consult a plumber about an ear infection, you shouldn't rely on just anyone for financial guidance. It's essential to find a credible financial adviser who understands your entrepreneurial needs and can steer you towards success.”

Richter says choosing an unqualified financial adviser can have serious repercussions. These advisers might lack the necessary knowledge about entrepreneurship and the specific financial challenges that come with it.

“Their advice might be generic, misguided, or even harmful, leading to poor financial decisions, missed opportunities, and potential losses. The reality is that misguided financial advice can undermine your business's foundation and growth prospects.”

She says entrepreneurs face unique financial challenges that require specialised expertise. A financial adviser well versed in entrepreneurship can offer tailored advice that aligns with your business goals.

“They understand the intricacies of cash flow management, funding strategies, tax planning, and risk management specific to businesses like yours. This specialised knowledge is crucial for making informed decisions that support your long-term success,” says Richter.

So, what steps should one take to find the right financial adviser?

Finding the right financial adviser involves a deliberate and strategic approach. Richter provides some key steps to ensure you choose a professional who can genuinely contribute to your entrepreneurial journey:

Identify your needs: Determine the specific areas where you need advice. Whether it's financial planning, investment strategies, tax optimisation, or business growth, understanding your needs will help you find an adviser with the right expertise.

Search for experts: Look for advisers who specialise in your area of need. Networking events, online platforms like LinkedIn, and referrals from trusted sources can help identify potential candidates with a clear history of success.

Check qualifications and experience: Verify the qualifications and experience of potential advisers. Look at their track record and ask for references. Ensure they have a proven history of working with entrepreneurs and a deep understanding of the business landscape.

Evaluate compatibility: Since you will be sharing intimate details of your business, it is important that you get along well with your adviser. This should be felt through mutual respect and an ability to trust each other and work together.

Know the fee structure: Before making a final decision, discuss the adviser's fee structure and make sure it aligns with your budget and provides the right value to you and your business.

“With the right adviser, you can navigate almost any financial challenge, optimise your strategy and quickly identify growth opportunities. Their advice is the wrench that fixes the leaky balance sheet, and it literally pays to know they know what they are doing.”

Ultimately, the current economic climate reminds us that the journey of entrepreneurship is fraught with risks. But Richter believes the right adviser can transform those risks into rewards. By choosing a financial adviser who understands your entrepreneurial vision, she says you can steer your business in the right direction, ensuring sustainable growth and long-term success.

“The right adviser will provide invaluable guidance, helping you navigate the complexities of financial management and paving the way for your business's success. Remember, professional financial advice can lead to big rewards, especially when you're backed by the right expertise,” Richter concludes.