In the digital age, accessibility and autonomy are becoming a defining part of startup culture. With a growing freelance economy and so much public information aimed to help small business get off the ground, a growing number of entrepreneurs and small business owners are questioning the needs for services often associated with traditional business practices, such as consulting services. With so many conflicting views on whether or not startups really need financial consultants, it really all boils down to the individual needs of each business.
Here are some of the main arguments, both for and against, taking on a financial consultant that will help you decide whether or not your startup could benefit from these services.
A second set of eyes
You would be hard pressed to come across a business that doesn’t understand the value of a second opinion. When it comes to financial modeling, there are various benefits that come from an expert opinion, but it can also be a risky move if you don’t pick the right person.
An experienced financial consultant can help you create a customized budget that will help you control your finances and highlight where you can make improvement.
Financial consultants tend to have a wealth of experience and can introduce new concepts and ideas that will help improve your financial performance.
Financial consultants can help you develop a financial model that makes room for lucrative opportunities.
Hiring a financial advisor is an investment, thus it’s important that you have goals in place for your new hire to ensure you aren’t wasting time and resources.
A financial advisor that doesn’t specialize in your industry or understand your company culture could potentially point you in the wrong direction.
Taking on a consultant's means opening yourself to someone else's opinions, which can backfire if you aren't ready to introduce new ideas.
Before making a final decision, it’s essential that you establish any issues that you might be facing. In addition, map out your expectations in order to understand the various pros and cons of taking on a new team member and whether or not that will work for you.
Financial health isn’t only about dollar signs
Growing businesses often start out with a small core team that handle pretty much everything from marketing to human resources and financial matters. Bootstrapping your business naturally instills a sense of pride and unity within teams, but as you start to grow you run the risk of burning out your team members. While most companies take on financial consultants to help organize money matters, there are also numerous advantages for the human side of your business, as long as you know how to reach them, of course.
Financial advisors can evaluate your team structure and make suggestions on potential new hires or training needed to streamline team efficiency and productivity.
Finance experts can help you execute a strategy that caters to your specific needs, whether that means cutting down on certain resources without compromising growth.
Taking on a financial consultant can help relieve burden from less experienced team members who may be taking care of financial tasks to save on costs.
Hiring a consultant to help you improve productivity is only possible if you have a good sense of team dynamics, as an outside hire cannot help you improve without your internal knowledge.
Taking on a financial expert that doesn’t have experience in your industry is risky as they may provide advice that doesn’t pertain to your company.
Startups should most likely avoid financial consultants that primarily work with corporate entities as they may not understand the needs of startups.
If your startup has recently received funding or is experiencing an uptick in growth, taking on a financial consultant can help you transition smoothly as you grow.
Evaluating the pros and cons of taking on a financial consultant is a reliable first step that will help you assess whether or not your startup could benefit from an outside opinion and the services provided by a consultant. Luckily, as the startup ecosystem continues to grow, an increasing amount of finance experts are now expanding their skill sets to include early stage businesses in the digital age.