By Brett Farmiloe

To ensure your business’s financial health, choosing the right financial guidance is crucial. We gathered insights from financial planners and founders, asking them what questions and issues small business owners should consider before hiring a financial coach. From assessing personal financial readiness to verifying the planner’s track record, explore the eight pieces of advice these professionals have to offer.

What to consider before choosing a small business financial planner

1. Assess your personal financial readiness

“Will my startup survive if I don’t have my personal finances in order? It happens all too often: startups are crippled prematurely—and needlessly—because the entrepreneur’s personal finances were not in order before taking the plunge.

“On the flip side, your odds of success increase dramatically if you exercise key financial skills and habits in advance, as well as while you begin your startup journey. It is critical to have a personal cash-flow plan so you know how much money you need to live off of. It’s also important to be able to make realistic projections for early-stage business revenue and take-home pay for the entrepreneur (not the same thing!). Paying down personal debts and saving enough to cover things like an emergency fund and living expenses while the business gets going are also essential steps.

“Additionally, it is important to develop a plan for living off of irregular income, which is the case for many new business owners. Entrepreneurs who haven’t taken these steps often end up sucking every dollar out of their fledgling business just to meet their personal obligations, until eventually they are unable to grow the business or are so strapped for cash that they panic and close down the startup in favor of going back to an hourly job that they were hoping to move away from.

“A financial coach who has worked with other entrepreneurs can guide you in these areas so your entrepreneurial journey is not hindered by your personal financial situation, giving your business the best possible chance at success.”

—Jake Randall, Wild Freedom Financial Coaching

2. Clarify your financial goals

“This is an important question to consider because it helps clarify your needs and expectations. A financial planner or coach can serve many roles—they can help with investment strategies, budgeting and cash flow management, tax planning, retirement planning, risk management, and more. Knowing what you hope to achieve with their help will guide you in selecting the right professional.

“For example, if your goal is to better manage cash flow, you want someone with expertise in budgeting and forecasting. If you’re looking to grow your business and need investment advice, a financial planner with experience in business growth strategies would be a good fit.

“By identifying your specific financial goals, you can ensure that the professional you hire has the relevant skills and experience to meet your needs. It also allows you to communicate your expectations clearly, making the relationship more effective from the start.”

—Sherman Standberry, My CPA Coach

3. Ensure you can establish trust with the planner

“Before bringing on a financial planner, businesses should ask themselves a simple yet crucial question: ‘Do I trust this person?’ Trust is the foundation of any financial partnership, especially since it’s about handling your hard-earned money.

“As a financial planner myself, I emphasize the importance of trust because it sets the tone for open communication and collaboration between me and my clients. Without trust, it’s challenging to navigate the financial landscape effectively. Remember, it’s not just about numbers—it’s about feeling confident that your financial advisor has your best interests at heart.”

—Joe Chappius, TaxClimate.com

4. Choose holistic versus specialized planning

“Some businesses may prefer a holistic approach to financial planning, where all aspects of their financial situation are considered comprehensively. Others may opt for specialized services that focus on specific areas, like retirement planning or risk management.

“This question prompts a decision on the scope of financial planning services needed and guides businesses in selecting the most appropriate financial planner. From my perspective, if a business is primarily concerned with succession planning, it may seek out a financial planner with expertise in this specific area.”

—Gillian Dewar, Crediful

5. Understand the planner’s approach

“I emphasize the significance of the question, ‘What approach does the financial planner take?’ because it directly impacts the alignment of strategies with a business’s unique needs and risk tolerance. Different businesses have varied financial goals and risk appetites, and understanding the planner’s approach ensures compatibility.

“Whether it’s a conservative approach prioritizing stability, an aggressive stance seeking higher returns, or a balanced strategy mitigating risks, the chosen approach should resonate with the business’s overall objectives. A clear understanding of the planner’s methodology fosters trust and allows businesses to make informed decisions, establishing a foundation for a successful and tailored financial partnership.”

—Michael Ashley, Richiest.com

6. Evaluate cost against long-term value

“Always consider, is the cost worth it? This really depends on you. Financial coaches aren’t cheap, and the benefits they bring won’t be immediate. The real value of a financial coach is in helping you develop a long-term strategy and permanently change how you think and act about money. You might not immediately see the financial benefits of working with a coach, but over your lifetime, the impact of this coaching can be significant in terms of your wealth, lifestyle, and overall peace of mind.

“From my experience, the initial investment can seem daunting, but the long-term financial clarity and confidence gained are often worth it. It’s about weighing immediate costs against future financial stability and growth.”

—Jonathan Merry, Moneyzine

7. Determine whether your financial goals are aligned with your business strategy

“Before engaging a financial planner or coach, businesses must introspectively ask themselves, ‘What specific financial goals do we aim to achieve, and how aligned are these objectives with our overall business strategy?’

“These critical questions serve as the compass for navigating the financial landscape. It allows a nuanced understanding of whether the business requires a financial planner with a focus on strategic investments, risk management, and long-term financial planning, or a financial coach adept at fostering financial literacy and discipline within the organization. Clarity on these goals ensures a tailored approach, maximizing the synergy between financial expertise and business objectives, ultimately driving sustainable growth and financial resilience.”

—Sarah Marie Naska, SMHavice Investments

8. Verify the planner’s track record

“The burning question to ask before hiring a financial planner/coach is this: Has this professional successfully done what you’re asking them to do? And have they done this multiple times with predictable outcomes? Vetting a prospective financial coach is of utmost importance. The old adage that ‘Those who can’t do, teach’ is sage advice.”

—Ben Robinson, Bookkeepers.com

About the Author

Post by: Brett Farmiloe

Brett Farmiloe is the founder and CEO of Featured, a platform where business leaders can answer questions related to their expertise and get published in articles featuring their insights.