A lot has been written about what a trusted business advisor can do for small and midsize enterprises. This ranges from sophisticated forecasting, risk mitigation, cash flow analysis, and so much more. Thanks to advancements in technology, accountants and bookkeepers are now able to provide the same high-level services to SMEs as a CFO would in a large multinational corporation, all at a fraction of the cost.
In most cases, it makes sense to have a business advisor with expertise in many areas that can provide input into multiple aspects. Even though it might appear as though you only need advice on a single issue or area of the business, oftentimes there are underlying or contributing factors that manifest themselves in the glaring problem. This is why being able to communicate and give your advisor the necessary information is very important. Hence, that is why this person must be someone whom you trust and are comfortable with knowing vital information about your business. For a lot of small business owners, their accountant already fits this description because of their access to the financials and working relationship already in place.
One of the first things a prospective or new business advisor will want to do is give you the opportunity to talk about yourself and the business to get an idea of where you currently stand and potential plans for the future. By doing this, your advisor can see where he or she might be able to make a meaningful and immediate impact. This is often one of the tougher things for business owners to do. If you are not able to clearly lay out and define your short and long-term objectives it will be hard for the advisor to formulate a plan on how to best reach those goals. After getting to know a little more about you and the business as a whole, the next step is typically a review and analysis of the financials. For this, you should provide a historical look, up-to-date statements, and any forecasts or scenarios being considered. Some of the specific items they will be looking for include key performance indicators, an understanding of your breakeven point, aging receivables and accounts payable, and cash flow.
Having trust in your business advisor is key to being comfortable enough in sharing vital information that is essential to a long and prosperous working relationship. The more information you can put in the hands of your business advisor, the better. This enables your advisor to be more proactive in providing actionable input and insights about your business. By making an investment into a highly skilled business advisor and combining that with the necessary information you gave them, it is only a matter of time before you see increased prosperity and financial stability.