Is it time to connect with a financial advisor?
If you don't have a financial adviser, you might think seriously about finding one -- preferably an individual who understands both the household financial issues virtually everyone has plus the companion business issues entrepreneurs face.
Getting professional financial planning help can be especially important as you develop startup plans -- and as your business, once started up, experiences the almost inevitable financial ups and downs that come with business ownership.
Step One is to sharpen your awareness of the financial issues you're likely to see. Starting up, you'll need to generate enough income after business expenses to cover your own household expenditures: The mortgage or rent. Groceries. The car. Tuition payments, either right away or in the future. Clothes. Vacation. Your retirement, probably a future cost but one that will require significant dollar set-asides now.
Remember health care costs. When you own the business, you may also be the HR department -- i.e., the place employees (and your family) expects to turn to for help with medical expenses.
In fact, unless your background includes solid benefit management, health care is one reason your financial adviser should have some business-related experience. There are other sources who can help, but health care will matter -- to you and to any employees you bring aboard.
Once you have a comfort with the basic expenses your business must cover (remember company rent and equipment), you'll need to find a financial planner who can help you manage business dollars as they come in and go out.
Finding a compatible planner is Step Two.
Ask both your banker and accountant for a recommendation or two. Ask noncompeting business friends for recommendations.
Go to the local chamber and ask the director for her thoughts. The head of the trade association that serves the industry you want to enter is another good source.
FINRA, a nongovernmental Financial Industry Regulatory Authority, has good "Choosing an Investment Professional" content at www.finra.org under the Products & Professionals tab -- and a way to search for any background issues individuals or their firms may have. Also take a look at www.plannersearch.org.
Ultimately, you'll likely want a face-to-face get acquainted meeting with a potential financial adviser or two:
• Are you and the adviser compatible? You're looking for financial input for you and your business, but that means you'll have to open up about retirement plans, education for any children and business growth goals. In turn, the adviser should be willing to answer questions and explain options.
• You'll want to know whether the adviser serves clients with similar needs -- entrepreneurs looking to grow a fledgling business, for example.
• Check out fees and other charges.
• Seek a sense of the type of plan you'll get. If the planner seems to focus on a particular type of financial instrument, you may want someone with more flexibility.
Don't rush the process. A good financial adviser can be an important part of your team.