Owning a small business comes with its fair share of challenges. From the daily hustle of operations to planning for future growth, it can feel like a lot to handle. This is where having the right financial professionals becomes crucial. The right advisers can guide you in making smart decisions and help you steer clear of common business blunders, while setting yourself up for future success.
In this blog post, we delve into the roles of accountants and financial advisers, highlighting how each plays a vital part in the success of your small business. By understanding these roles, you’ll be better equipped to select the right assistance to meet your specific needs.
Defining the roles
What is a business adviser?
A business adviser acts as a strategic partner for your business, offering guidance on both financial and operational aspects. Our professionals are qualified Certified Practising Accountants or Chartered Accountants, as well as well-versed in areas like operations, sales, HR, and software for efficiency. Their primary goal is to help your business grow and thrive.
General responsibilities and focus areas:
- Strategy development: Assisting in creating long-term plans and setting achievable goals.
- Operational efficiency: Streamlining processes to boost productivity and reduce costs.
- Market analysis: Providing insights into market trends and helping you stay competitive.
How they support business growth and strategy:
Business advisers take a holistic approach, examining every facet of your business. They offer tailored advice to help you capitalise on opportunities and mitigate risks. By working closely with you, they ensure that your business is on the right path to success.
What is a financial adviser?
A financial adviser, on the other hand, is your go-to for all things money-related. They offer financial planning services, providing tailored guidance and support to individuals and businesses in managing their financial futures. They focus on managing your finances, investments, and risks. Their expertise lies in helping you make sound financial decisions that align with your business goals.
Key responsibilities and financial focus:
- Financial planning: Developing strategies for managing personal finances, superannuation, and investments.
- Risk management: Identifying potential financial risks and creating plans to mitigate them.
- Wealth management: Advising on asset allocation, retirement planning, and investments.
Their role in managing business finances:
Financial advisers provide the financial acumen needed to keep you financially healthy and ensure you are on the right path to retire when you want, reach other goals, or help you out with very specific financial circumstances. They can help you understand your financial assets, plan for future expenses, and ensure you have the resources needed for growth.
The importance of business advisory services
How business advisers contribute to strategic planning
Strategic planning is crucial for any business looking to grow. Business advisers bring a wealth of knowledge and experience to the table, helping you formulate plans that are both realistic and ambitious. They ensure that your business is prepared for future challenges and can seize opportunities as they arise.
The value of business advisory in navigating market trends
Understanding market trends is vital for staying competitive. Business advisers analyse market data and provide insights that help you adapt to changing conditions. By staying ahead of the curve, you can make informed decisions that keep your business relevant and profitable.
The importance of financial adviser services in retirement planning
How financial advisers contribute to strategic planning and investment strategies
Financial advisers play a key role in strategic planning by providing financial insights that shape your business’s direction. They help you allocate resources effectively, plan for future investments, and ensure you have a solid financial foundation.
It is crucial to work with licensed professionals who adhere to regulatory standards, such as those set by the Financial Industry Regulatory Authority, to ensure reliable financial advice.
Many people assume that financial planners only offer investment advice, but the role of a qualified professional financial planner is much broader. It involves examining all aspects of your lifestyle, goals, and requirements to develop a suitable financial strategy. This strategy aims to help you reach your financial goals effectively and efficiently, encompassing areas such as superannuation, wealth creation, investments, risk insurance, and wealth preservation.
Choosing the right adviser for your business needs
Factors to consider when selecting an adviser
Choosing the right adviser depends on your specific needs. Consider factors such as their expertise, experience, and the services they offer. It's also important to assess their compatibility with your business's culture and values.
Examples of when to consult a business versus a financial adviser
Sometimes, you may need the expertise of a business adviser, while other situations call for a financial adviser. It is important to note that accountants can only offer financial advice if they hold an Australian Financial Services (AFS) license. Without this license, they are limited to providing general information and assisting with basic tasks related to investments. For instance:
- Business adviser: When you’re looking to expand your business, enter new markets, or improve operations.
- Financial adviser: When you need help with financial planning, investment strategies, or managing financial risks.
- Tax adviser: When you require guidance on tax planning, compliance, or optimising tax liabilities.
The role of an accountant and tax adviser
A tax adviser is essential when you need guidance on tax planning, compliance, or optimising tax liabilities. Accountants are not merely number crunchers; they manage and analyze financial transactions, providing valuable business advice. With their in-depth knowledge of your financials, accountants are well-suited to offer actionable insights that drive business growth.
How an accountant can provide specific tax advice in a way financial advisers cannot
One area where accountants excel is tax planning. They understand the intricacies of tax laws and can help you minimise your tax liability. This expertise is something that financial advisers may not offer.
The dual benefit of combining accounting with business strategy
Combining accounting with business strategy provides a holistic approach to business management. Accountants who offer advisory services can help you align your financial strategies with your business goals, ensuring long-term success.
In addition to analyzing financial transactions, accountants also engage in financial forecasting, which differentiates their role from that of financial planners who focus more on wealth management and retirement planning.
Case studies/examples
Success stories of small businesses using advisory services
Case study: Tas Moulis at QPaint
Tas Moulis, the founder of QPaint, embraced our business advisory services early on. Collaborating closely with Tony Madden, a seasoned business adviser and CPA, Tas navigated the complexities of business expansion with strategic guidance and support.
“Like most businesses starting out, I had to wear many hats from quoting, sales, HR, hiring, ads, invoicing… It was very difficult in the early days. It was great to actually meet Tony at Trekk Advisory, and take the business to the next level.” - Tas Moulis
Tony’s approach began by identifying the key revenue drivers within QPaint, paving the way for a tailored growth equation that propelled profits. Together, they crafted a business model aligned with Tas’s aspirations, fostering a culture of change within the organisation.
“There’s another part of the business where you need to be looking ahead, and aiming for something… Being able to forecast ahead, work on the tactics and strategies at this point in time to get you to that end goal, or your ideal end of financial year result. This has changed not just the way we do business, but the overall predictability of how we hit our outcomes each year.” - Tas Moulis
Reflecting on his work with Trekk Advisory, Tas highlighted how working smarter, not harder, with Tony’s guidance made a big difference. The strategic guidance helped QPaint predict well, use specific strategies, and get real results, transforming how they run their business.
“Working with Trekk Advisory and Tony has helped me see that being a better business person was critical to driving and building a business. Being able to take all that hard work, but work smarter, to execute clear tasks and plans so we began seeing the results quickly.” - Tas Moulis
Tas’s reflections of working with Tony underscore the invaluable role of structured support and expert guidance in driving business success. For businesses seeking a transformative journey towards growth and efficiency, an adviser proves to be an indispensable asset.
“Based on my experience, I strongly advise any business seeking structure, support, routine, and guidance to consider engaging an adviser.” - Tas Moulis
Avoiding ineffective advisory practices
Not all advisory relationships are successful, often due to poor communication, misaligned goals, or insufficient expertise. To prevent these pitfalls, it's crucial to thoroughly research potential advisors. Discuss your options with family or fellow business owners and perform due diligence. These steps can guide you in making informed decisions when selecting advisers.
For more insights and resources, check out our business advisory services and what is a "business adviser" and how to find the right one.
Conclusion
Understanding the differences between business advisers and financial advisers is crucial for small business owners. These professionals offer unique expertise that can drive your business towards success. By selecting the right adviser, you can ensure that your business is well-equipped to face challenges and seize opportunities.
If you're ready to take your business to the next level, assess your advisory needs and reach out to local business or financial advisers for consultation. Their tailored advice can provide the support you need to achieve your goals.
Disclaimer:
Remember, the information in this article is general—it's not one-size-fits-all advice. Understanding your numbers, especially when making business decisions, can be a complex process and you may been professional support and advice along the way. Always consult your advisor before making decisions based on this piece. The info here is accurate to our knowledge at the time of publishing. For tailor-made advice, don't hesitate to get in touch with us at Trekk Advisory. We're here to help you grow.
