Financial Business Coach vs. Financial Advisor vs. Bookkeeper: Which One Do You Need?
Financial advisors, financial business coaches, accountants and bookkeepers, oh my! The number of financial professionals out there who can help you are in no short supply.
If you’re a business owner experiencing headaches when it comes to your finances, you may already know that you could benefit from bringing in a professional.
But what kind of professional can help you the most?
The answer, my friend, depends on your situation. (I know, I know, that’s not the response you were hoping for.)
Essentially, there are three different professionals who can make your life easier when it comes to your business finances (there are more, but these three are the most common):
A financial business coach
A financial advisor who serves business owners
A bookkeeper or accountant
To choose the right professional for you and your business, you need to know what each professional specializes in, the services they offer, and how they can specifically help support your business financials.
What Is a Financial Business Coach?
A financial business coach helps you understand the basics about your business finances and your personal finances. Financial business coaches also train you in the arts of creating healthy financial habits that will help you reach your short- and long-term goals.
A financial business coach can help you solve a number of problems, including but not limited to:
Determining how much to pay yourself consistently
Creating a budget for your business so you’re never strapped for cash
Developing a plan to maximize your profits
Strategizing the best ways to reinvest profits in your business
Systematizing your cash flow and processes for sustainable growth
Building confidence in your ability to master your finances
A financial business coach will teach you the skills you need and coach you to take the necessary actions that will help you achieve success.
They will not, however, take any of those actions on your behalf. When you choose to work with a financial business coach, you’re ultimately still in control.
What Is a Financial Advisor?
A financial advisor specializing in serving small business owners is a little different from a financial business coach. A financial advisor is typically more suited to helping clients manage assets, build investment portfolios, and grow the wealth they’ve already accumulated.
Additionally, financial advisors typically take a comprehensive approach to someone’s entire financial life, including their taxes, insurance, estate planning, long-term care planning, and other considerations for future retirement. These things go beyond the basic skills needed to manage cash flow and organize your day-to-day personal finances.
Most financial advisors who work with business owners are best suited to help with high-level needs, such as pension planning, business debt analysis, risk management, cost segregation, and even business exit planning.
While a financial business coach focuses on your money mindset and the behavioral aspects of your finances, a financial advisor focuses on the broader performance of material components that make up your personal and business financial situations.
What Is a Bookkeeper?
A bookkeeper is a professional who does all the financial tracking within your business for you. A bookkeeper systematizes your invoicing, expense tracking, and cash flow. A bookkeeper also organizes your financial documents so everything is easily accessible.
Bookkeepers can produce report after report after report to help you clearly understand your business’s financial situation. These reports may include things like profit and loss statements, current year vs. previous year reports, projected vs. actual reports, and more.
These reports can be incredibly useful, especially during tax time to help alleviate your stress and minimize your tax obligations.
However, most bookkeepers (not all!) do not provide advice or guidance if the numbers in the books aren’t going well. Bookkeepers will crunch the numbers for you, but they most likely won’t have any advice if the numbers are crunching you.
Which Type of Business Financial Professional Do I Need?
Now that you know more about what each type of financial professional can help you with, you may have more clarity on which professional can best serve your current needs. But if you’re still not sure, ask yourself the following three questions.
1. What Do I Need the Most Help With When It Comes to My Business Finances?
If you need or want help fully understanding your business finances and what you can do to improve, a financial business coach may be the best fit. Financial business coaches are teachers and trainers. They show you what to do and keep you accountable for doing those things.
On the other hand, if you have a decent grasp on how finances work and just need someone to free up some more of your time, a bookkeeper might be right for you at this stage. A bookkeeper can take over most of your administrative financial tasks.
And if you have high-level financial needs, such as cost segregation, retirement sponsor planning, or risk moderation analysis, a financial advisor for business owners could be the professional you need.
2. What Do I Want to Get Better At?
If you want to better understand your financial situation and processes yourself, you guessed it: a financial business coach may be best suited to assist you. A financial business coach can help you integrate your personal finances with your business finances so your two most important financial spheres are seamlessly aligned.
A financial advisor can also help integrate your business and personal finances, but may not have the time or resources to learn about and educate you on your money mindset and habitual financial decisions. An advisor is often best suited to manage aspects of your finances on your behalf rather than help you get better at managing your finances yourself.
If you simply want someone else to develop and manage your business’ financial systems without providing any coaching or advice, a bookkeeper might be for you. A bookkeeper can save you time on the finance side so you can focus on getting better at other aspects of your business.
3. How Much Time Am I Willing to Spend on My Business Finances?
The professional you choose to work with may also depend on the amount of time you’re willing and able to spend on improving your business finances. To be fair, I believe that no matter what, every business owner should have at least a basic understanding of how finances work to ensure their business can grow and thrive sustainably.
So if you’re hopeless when it comes to finances, a financial business coach may be your saving grace. In fact, it’s probably a good idea to work with a coach before handing off financial responsibilities to other professionals. When you work with a coach, you might even find that the knowledge you gain saves you enough time and stress to comfortably manage your finances on your own.
Your Needs May Change Over Time
The truth is, your needs may change as time goes on.
While a financial business coach may be a great fit for the first few years (or even decades) of your business success, you may find that once you’ve become more comfortable with your own understanding of your finances, a bookkeeper can save you time as your business grows.
Similarly, you may benefit from working with a financial advisor for business owners only after you’ve accumulated significant assets that could benefit from a professional who offers expert management services.
But of course, plenty of small business owners benefit from working with a coach throughout the lifetime of their business. It all depends on how complex your financial situation becomes, how adept you are at managing complex financial needs on your own, and the time you’re willing to spend doing your own tracking and accounting.
If a Financial Business Coach Is Right For You, You’ve Come to the Right Place
At Financial Fitness Coaching, I specialize in helping small business owners take control of their finances and ultimately take back their time so they can focus on what they love most: actually running their business. I take the time to understand your financial situation and struggles so I can coach you on the processes that will help you find the most success.
To see if I can help you and your business, email me at kristen@financialfitnesscoaching.com or simply schedule a free 20-minute Discovery Call on my calendar below.