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Writer's pictureTroné Fossum

Small Business Financial Advisors and How They Help

Updated: Nov 13

What to look for when hiring a small business advisor


If you're a small business owner, you probably have your plate full—maybe even overflowing.


When running your own business, you likely don't have time to learn the ins and outs of the market and become a professional at creating retirement plans. You’re probably too busy to dedicate long hours to creating a comprehensive retirement plan. 


Depending on the size of your business and your personal financial goals, it may be time to seek the guidance of a small business financial advisor.


Not all financial advisory firms have the skills or resources to help business owners. So, as you begin your quest to find the right team, make sure you have clear goals and find a firm that can help you move towards those goals. This post will cover how a small business financial advisor can help and when to consider seeking the guidance of a financial advisor. 


At 360 Financial, we pride ourselves on our extensive experience working with business owners. If you're running a growing business, we recommend that you schedule a call with one of our fiduciary advisors. 


fiduciary financial advisor

Table of Contents




What Is a Small Business Financial Advisor?


A small business financial advisor is not just a guide but a key partner who helps business owners navigate toward achieving their goals.


The term "small business financial advisor" refers to financial professionals who specialize in offering advice and services tailored to the unique needs of small business owners. These financial advisors focus on identifying appropriate retirement plan options, cash flow management, tax strategies, risk management, and investment guidance.


However, while the term “small business financial advisor” is widely used, not all advisors have the same titles or designations. If you're looking for a financial advisor to help you with your business finances, make sure the advisor has experience with business owners.


Depending on the size of your business, you may wish to seek out a holistic wealth management team that can provide strategic guidance across all aspects of your business and personal finances.


In addition, make sure you find a wealth management team that operates within a fiduciary environment.



What Is a Small Business Financial Advisor?


The Importance of Working with Fiduciaries


A fiduciary financial advisor has a legal obligation to act solely in your best interest, striving to ensure that the advice provided is not only suitable but is the best possible recommendation for your financial goals.


Not all advisors have this legal obligation. Look for advisors who are CFPs, AIFs, or CPWAs. Below, we've listed the designations that indicate that your advisor is a fiduciary.

If your advisor is not a fiduciary or does not work within a fiduciary environment, they are likely only required to provide "suitable" advice. They are not required to provide the best possible advice at all times. 


Here are some key designations that typically require fiduciary duty:


  • Certified Financial Planner (CFP®)

  • Certified Private Wealth Advisor (CPWA®)

  • Chartered Financial Analyst (CFA)

  • Accredited Investment Fiduciary (AIF®)

  • Chartered Financial Consultant (ChFC®)


Advisors with these designations are committed to working in your best interest. Always verify a financial advisor's fiduciary status before signing the dotted line.




The Importance of Working with Fiduciaries


Do You Need a Financial Advisor as a Small Business Owner?


A financial advisor can be invaluable if you’re facing complex financial decisions.


But how do you know if you need a financial advisor?


There's no set time when a business owner must get a financial advisor. But if you're unsure how to manage the next stages of business growth, seeking professional advice is a step in the right direction.


Likewise, if you’re nearing retirement or planning on exiting the business, getting a business financial advisor is critical.


In general, getting a financial advisor may be smart if your business generates $500,000 or more in annual gross revenue or has investable assets of $1 M or more.


If you're planning on exiting your business but are unsure how much you need or what your income will be in retirement, it's time to meet with an advisor.



Do You Need a Financial Advisor as a Small Business Owner?


Get Your Questions Answered


See if any of the questions below apply to you.


If they do, then it may be time to seek the advice of a financial advisor who can help you with complex financial planning and answer your technical questions.


  • How can I get better control over my cash flow and boost profits?

  • What can I do to lower my tax bill?

  • What are my best options for getting the capital I need to grow?

  • How can I safeguard my business from financial risks or downturns?

  • What’s the best retirement plan for both me and my employees?

  • How do I increase the value of my business if I want to sell someday?

  • Are my current financial systems ready to scale as we grow?

  • What’s the best way to diversify my business and personal investments?

  • How can I set up employee benefits that are attractive but cost-effective?

  • Should I offer equity or profit-sharing to keep my key employees?

  • What kinds of insurance should I have to protect my employees and the business?

  • How much will I need if I want to sell my business and retire?

  • Am I saving enough each month?

  • Do I need a trust to preserve my assets?



When to Get a Small Business Financial Advisor


A small business owner should consider working with a financial advisor as soon as the business grows beyond basic operations.


Managing finances becomes more complex when your business begins growing rapidly, taking on debt, or making investments. When you’re growing rapidly, a financial advisor can offer valuable guidance.


Additionally, if you're trying to reduce taxes or reinvest in the business, an advisor can help you create a strategy that aims to support these goals. 


A good rule of thumb is to consider getting a financial advisor when your business's financial needs become complex, often at around $500,000 in annual gross revenue. However, this can vary depending on the business's financial complexity. 


As your revenue grows, the financial stakes increase, and working with an advisor can help you avoid costly mistakes. 


If your business is already well established, it’s essential that you work with an advisor who can help you with your business and personal financial planning and investment management. A good financial advisor could help you minimize tax and work with you to prepare for a work-optional future.  



When to Get a Small Business Financial Advisor


Benefits of Small Business Financial Advisors


Financial advisors offer more than just number-crunching—they provide strategic insight.


A small business financial advisor helps you understand how to invest in your business and manage resources effectively. If you’re heading toward retirement, a financial advisor can create a financial plan that considers the need for future personal income streams as well as the needs of your business.


Financial advisors can help you with tax planning, investment management, and succession planning. And they can also seek to ensure your business is financially prepared for growth and future challenges.


By crafting a comprehensive financial strategy, a financial advisor aims to help you avoid pitfalls, improve profitability, and create a roadmap for long-term success.



Benefits of Small Business Financial Advisors


Do You Need a Financial Planner or a Financial Advisor?


Choosing between a financial planner or a financial advisor depends on your business's specific needs.


A financial planner focuses on creating a long-term roadmap. They can help you with retirement planning, tax strategies, and setting financial goals. If you're looking for a comprehensive, big-picture approach to your personal and business finances, a financial planner might be right for you.


A financial advisor, on the other hand, tends to focus more on managing investments and providing advice on how to grow your wealth. A financial advisor could be a better fit if your primary concern is maximizing profits or handling investments.


A wealth management firm specializing in helping business owners will offer financial planning, investment management, risk management, tax planning, and estate planning.

It's important to assess your needs and choose the right team accordingly.



Choosing between a financial planner or a financial advisor depends on your business's specific needs.
Choosing between a financial planner or a financial advisor depends on your business's specific needs.


How to Find a Financial Advisor as a Small Business Owner


Finding the right financial advisor starts with leveraging your network and doing thorough research.


If you wish to speak with a fiduciary financial advisor immediately, schedule a call with a 360 Financial advisor.


However, if you're still in the research phase, ask fellow business owners or industry peers for recommendations. Professional networks, such as local chambers of commerce or small business associations, can also be valuable resources.

Do a Google search in your area and look at several websites. Read the advisors’ bios and find out if they are fiduciaries.


We recommend you check a financial advisor's credentials, areas of expertise, and client reviews.


Next, meet with potential financial advisors to discuss your specific business needs and share an understanding of the challenges small businesses face. This way, you’ll find someone who aligns with your values.




We recommend you check a financial advisor's credentials, areas of expertise, and client reviews.
We recommend you check a financial advisor's credentials, areas of expertise, and client reviews.

How a Small Business Financial Advisor Can Help


A small business financial advisor may be a game-changer for your business’s financial health.


Here's a basic list of all the things an advisor may be able to help you with:


  • Financial Planning

  • Growth Strategy

  • Investment Advice

  • Tax Planning

  • Risk Management

  • Insurance Planning

  • Employee Benefits - 401(k) plans

  • Retirement Planning

  • Integrating Personal and Business Finances

  • Succession/Exit Planning



How a Small Business Financial Advisor Can Help


Common Business Owner Services


Insurance Planning for Small Businesses


Insurance is a key part of preserving your business.


From general liability to property and even employee health coverage, choosing the right insurance is crucial to preparing your business from unforeseen risks. A financial advisor assesses your business's unique risks and helps select policies that take those into consideration.


They can also guide you on the tax benefits of certain insurance plans, making sure you’re fully covered without overspending.


Integrating Personal and Business Financial Planning


Balancing your personal and business finances can be tricky.


Small business owners often blur the line between their personal and business finances, which can lead to complications down the road. A financial advisor helps you keep these areas separate while seeking to ensure both are aligned toward your goals.


For example, they can help you plan for retirement while aiming to ensure your business finances support that goal. They can also offer advice on paying yourself effectively and safeguarding your personal assets from business risks. Integrating both sides creates a more holistic financial plan that benefits all aspects of your life.


Tax Planning Strategies


A financial advisor can help you avoid overpaying taxes.


They work with you and your accountant to reduce your tax liabilities by identifying deductions and credits that are available for your industry. Whether it’s managing business expenses, structuring your company to optimize tax benefits, or planning for quarterly tax payments, an advisor will help with proactive tax planning.


They can also guide you through more complex tax issues like depreciation, capital gains, or employee tax obligations. By staying proactive with your tax planning, you should be able to keep more profits in your business and avoid any unpleasant surprises at tax time.


Creating a Financial Plan Focused on Your Retirement


For high-net-worth business owners, retirement planning presents unique challenges, particularly when much of their wealth is tied to the business. 


A knowledgeable financial advisor can help you build a comprehensive retirement strategy that seeks to balance your business’s financial needs with your personal long-term goals.


An advisor may recommend tax-advantaged retirement plans, such as a 401(k) with Profit Sharing, Cash Balance Plan, or Defined Benefit Plan, which allow for significant contributions and potential tax savings. These plans are designed to help high-income earners maximize retirement savings while reducing taxable income. Additionally, options like SEP IRAs and Solo 401(k)s can be used in certain cases to enhance flexibility and tax benefits further.


By focusing on your business and personal retirement objectives, a financial advisor aims to create a strategy that preserves your financial future without hindering your business’s growth. This approach is designed to help you move toward financial independence and a smoother transition into a work-optional lifestyle.


Setting Up Employee 401(k) Plans


A 401(k) plan allows employees to save for retirement while benefiting from tax advantages.


And as a business owner, you can benefit from tax deductions, too. A financial advisor can help you choose the right plan for your business, whether it’s a traditional 401(k), a Roth 401(k), or a Safe Harbor 401(k), depending on your business size and budget. 


They can also guide you through compliance with government regulations, which can be complex.


Creating a Succession Plan


Are you planning on exiting the business in the next few years?


Whether you plan to retire, sell your business, or pass it on to a family member, a financial advisor helps you craft a clear succession plan.


An advisor will evaluate your business’s current value and create strategies to transition ownership smoothly and avoid legal and financial disruptions. 



Common Business Owner Services
A financial advisor can help you avoid overpaying taxes.


Top Financial Mistakes Small Business Owners Make


These mistakes are common, but they don't have to be.


With the right financial advisor, you can have confidence knowing that your business and personal finances are covered.


Mistake 1: Neglecting Retirement Planning


As a business owner, it's critical that you plan for a work-optional future.


It's hard to predict the future. Perhaps you'll want to work well into your 80s. Or maybe you'll be done with work in your mid-50s. It's up to you. The important thing is to have your financial freedom pathway mapped out.


Working with a financial advisor means having a retirement plan in place.


As your life circumstances and goals change, your advisor will update your financial plan to remain relevant. 


A financial advisor can help structure a retirement plan focused on personal financial independence, regardless of business performance. Many business owners assume their business will fund their retirement, but without a solid retirement plan, they risk not having enough saved, especially if business conditions change



Working with a financial advisor means having a retirement plan in place.
Working with a financial advisor can help you to have a retirement plan in place.


Mistake 2: Lack of Risk Management


Neglecting risk management leaves your business vulnerable to financial shocks that could derail operations.


Risk management is about identifying potential threats and implementing measures to mitigate them. Many small businesses underestimate their exposure to risks, which can lead to significant financial losses. Lawsuits, property damage, or market downturns are all potential risks. 


A financial advisor can help design risk mitigation strategies through appropriate insurance and diversification, which is even more critical as the business grows.


If your business is making seven figures, risks increase—whether from legal liabilities, economic shifts, or operational issues. A larger business has more to lose, making risk management essential.



A financial advisor can help design risk mitigation strategies through appropriate insurance and diversification, which is even more critical as the business grows.
A financial advisor can help design risk mitigation strategies through appropriate insurance and diversification, which is even more critical as the business grows.


Common Questions When Hiring a Small Business Financial Advisor


How can I determine if someone is a good business financial advisor?


Look for credentials like CFP® (Certified Financial Planner) or CFA® (Chartered Financial Analyst), along with experience working with small businesses. Check if they have any case studies or reviews, ask about their fee structure, and make sure they understand your business goals and financial needs.


Are business financial advisors worth it?


Yes, business financial advisors can save you money, help accumulate and preserve your business, and provide valuable insights into managing cash flow, investments, and risk. Their expertise helps you make informed financial decisions. 


What is the difference between a personal financial advisor and a business financial advisor?


A personal financial advisor focuses on your individual financial needs, such as retirement and investments.


A business financial advisor helps manage your business’s finances, including cash flow, taxes, and growth strategies.


Some advisors offer both services, helping you integrate personal and business financial plans. If you are a high-income earner, working with a holistic wealth management firm that can help you with your business and personal finances and estate planning will likely be best. 



A personal financial advisor focuses on your individual financial needs, such as retirement and investments.
A personal financial advisor focuses on your individual financial needs, such as retirement and investments.


Should I hire a certified financial planner?


Hiring a Certified Financial Planner (CFP®) means working with someone with extensive experience in comprehensive financial planning.


CFPs are held to strict ethical standards and can help with both personal and business finances, making them a good fit for small business owners.


What is a certified private wealth advisor? Are they the right fit for a small business owner?


A Certified Private Wealth Advisor (CPWA®)  is a professional with deep expertise and knowledge for closely-held business owners and high-net worth individuals.


They may be a good fit if your business has significant investment needs. A CFP or other business financial advisor may be sufficient for many small businesses. For larger, more complex businesses, a CPWA may be helpful.  


What is the difference between a business consultant and a financial advisor?


A business consultant advises on operational and strategic aspects like marketing, HR, and business growth.


A financial advisor focuses on managing your financial health, including investments, cash flow, tax planning, and risk management. Both roles can complement each other in your business strategy.



Speak with a fiduciary advisor


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About 360 Financial


360 Financial is an independent wealth management firm with a team of specialized financial advisors and financial planners. As fiduciaries, 360 Financial’s advisors provide services to business owners, entrepreneurs, and professionals. We help investors with sudden wealth, retirement planning, tax planning, estate planning, and business financial planning. 


Headquartered in Minnesota, we serve investors across the US with online and in-person wealth management and financial planning services.







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360 Financial is an independent wealth management firm with a team of specialized financial advisors and financial planners.

 

Founded by Mike Rogers, AIF®, 360 helps investors with sudden wealth, retirement planning, tax planning, estate planning, and business financial planning. 

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