Why Every Startup Should Consider a Financial Advisor

Farwah Jafri | December 12 2021

Looking for greater financial stability for your business to survive in the long run and navigate the economic ups and downs?

You can meet the financial needs of your startup by hiring the professional services of a financial advisor. Whether you are thinking short-term needs or long-term objectives, a financial advisor or a CFO will share your burden of designing financial roadmaps and providing professional guidance on important financial matters, thus, leaving you plenty of time to focus on your core business.


Here are some of the benefits of hiring a financial advisor for your business:

1. Assessment of financial risks and rewards

When planning for their business model and the resources required for its operation, business owners may fail to make decisions from a financial perspective, leading to miscalculated quotations, over or underpricing of the product or service, and sometimes even under or over-hiring of staff and the acquisition of resources which are not in line with the value of the output.

The adverse effects of this oversight can be minimized with the professional advice and guidance of a financial startup advisor. They can assess the financial risks and rewards of your business strategy and analyze its impact on your business model so that you can realign your strategies for identified financial risks and rewards.

For example, a financial advisor will be able to indicate to you any tax incentives or special support programs by the government which you might not even be aware of. By reassessing associated risks and rewards in the given circumstance and revising your cost pricing strategies and business model, the startup advisor can help you save more money or make more money over time.


2. The input of profit maximization and cost-saving strategies

It is said that how you reach your business goals is as important as reaching the goal itself. Achieving business targets economically and maximizing profits are the foremost concerns of all startup owners. A financial startup advisor will also help you in re-assessing your business strategies using different profit maximization and cost-saving models, thus, offering insights that will make the venture more financially viable and stable.


3. Seeking funding and raising venture capital

Fundraising is one of the hardest and often very frustrating aspects of launching or scaling a startup business. With limited resources and knowledge of funding options, you will need the expertise of a professional financial advisor to help raise seed capital from angel investors and later, venture capitalists. Without the support of a financial startup advisor, you will find yourself treading the choppy waters of almost opaque VC funding processes.

A financial advisor will take a lot of stress off the early-stage capital funding. Whether it is attracting venture capital or approaching potential investors to fund your business, a financial advisor plays a vital role in obtaining the funds you need.


4. Efficient utilization of funds

Another key role performed by the financial startup advisors is carefully planning for better utilization of funds. These professionals will help you in examining the need for disbursements for your business and plan them diligently which will save you millions in expenses. Any excess cash or savings can then be reinvested in a profitable side project which might add a stable income stream to your business.

Moreover, a financial startup advisor can greatly help you in the efficient utilization of funds by identifying the areas for further business growth, hence, enabling you to capitalize effectively on the potential for generating income in the coming years.


5. Preparation of budgets and forecasts

Budgets and forecasts can enormously benefit you as they accurately portray the expected results of all your planned business activities. The preparation of budgets allows startup owners to assess the expected future inflows and outflows, providing them the opportunity to reset their plans, strategies, and financial targets if and when necessary.


6. Proactive approach

Where the future of your business is concerned, it is always best to adopt a proactive approach and prepare in advance for any new developments and unforeseen circumstances. Hiring the services of a financial advisor will afford you the clarity needed to make sound decisions and take the business in the right direction even in uncertain times.

Not many startup owners take future changes in technologies, demand and supply situations, evolving customer needs, and other important factors into account when planning for their business. Not only are the methods of production or service provision rapidly changing in today’s marketplace but these changes are also reshaping the needs of the customers and the nature of market competition, all of which can make the business environment highly unpredictable and volatile for doing business.

Your financial readiness is extremely important to implement a proactive approach and that’s where your financial advisor will help you in making the right, timely decisions.


7. Integration of financial management systems

Most startup owners might not realize it, but financial mismanagement is often the prime reason for new business failure.

A financial startup advisor is not only your financial planning partner but he or she can play an instrumental role in helping companies and individuals reach their financial goals. Each business model carries different financial challenges, risks, and threats, and a financial startup advisor can help mitigate them with sound strategies and sophisticated financial planning.

A well-integrated financial system can serve as the cornerstone of your business’s survival and growth. By utilizing advanced financial tools and financial software, financial advisors can optimize financial plans, project future business growth, propose tax savings, and determine potential returns from the business’s investment portfolio. In essence, a good financial management system will help your startup venture in making effective use of business resources, gain a competitive advantage in the marketplace, and achieve long-term financial success.


Take your financial planning to the next level

Financial professionals facilitate startup owners in many different aspects of the financial health of their business, including ongoing planning, resource mobilization, cost savings, tax savings as well as long-term stability.


Here is how financial startup advisors can immensely facilitate you in the selection and application of financial management systems:

a – They will study the whole business plan and list down the features required in a financial management system for your business to record the routine operations of your business.

b – Financial startup advisors can also help in identifying the prominent characteristics of the business plan and then assessing its financial impact on the business. This will eventually help in highlighting the areas for improvement or recovery.

c –  They help you select appropriate financial management software at a price worth their value.


The way forward

Managing your finances and making financially sound business decisions are by no means easy jobs. While the right decisions can lead your startup to long-term financial stability and eventual business success, any wrong decisions can cause irreparable damage. Having a startup advisor or a CFO on board means you can better ensure and accelerate your business success in real-time.

See Also: 5 Decisions That Will Increase Your Chances Of Building a Successful Startup

A good financial advisor stands to take a lot of stress off your plate. A qualified and experienced financial startup advisor is not an added expense to your business, but an investment that is sure to reap sizeable returns for your startup.

At Monily, we offer a dedicated team of startup advisors who are specialists in dealing with all kinds of personal and business finances. We work with you in all areas of financial planning, accountancy services, tax planning, and financial analytics to help you stay on top of your finances. Get in touch with our financial advisors today and let us create a plan tailored to your unique business needs.


Author Bio

Farwah is the Product Owner of Monily. She has an MBA from Alliance Manchester Business School, UK. She is passionate about helping businesses overcome challenges that hamper their growth, which is why she is working at Monily to facilitate entrepreneurs to efficiently manage business finances and stay focused on growth.