Many entrepreneurs like to keep their business and personal finances separate, and can sometimes become quite defensive about discussing their company accounts – especially if business is not so great at the time.
While each client has the right to privacy when dealing with a financial planner, keeping financial secrets to yourself is not always the best strategy. If your financial planner isn’t aware of all your assets, commitments and liabilities, they won’t be able to offer you the best advice – simply because you haven’t given them the full financial picture.
Opening your books to a financial planner
There are several benefits to showing your company’s finances to your financial planner. In general, many entrepreneurs don’t always manage to separate their personal finances completely from their businesses, meaning that some personal expenses are paid by the business and vice versa. This point aside, the performance of your business has a direct influence on your income – the better your business does, the better your chances of making other investments or increasing your retirement contributions.
How a financial planner can help your business
If your business is experiencing difficulties, as many businesses are at the moment, you may not think that your financial planner can do very to help. However, you might be surprised when you show your company’s finances to a financial planner – these professionals are not only skilled in helping you manage personal finances, but can provide crucial advice to business owners too.
By looking at the running costs and cost of sales in your business, a good financial planner can identify expenses that are draining your company of money each month. In lean times, the need to tighten up spending is even greater, and you’ll be surprised just how much money your business could save if your costs are managed more efficiently – those savings will all translate into profits.
Being open with your financial planner
Many clients come to brokers and financial planners wanting to make a good impression. Quite often these clients want to appear successful, with plenty of money to spare, and might not like to be reminded that they have certain financial challenges to overcome.
It’s important to play open cards with your financial planner, because by doing so you will empower them to help you succeed. Making a good impression on your financial planner is less important than being honest about financial challenges, because once you have solved your problems with the help of a financial planner you won’t need to make an impression – you will simply be a financial success.