Did you know that nearly 20% of small businesses fail in the first year? According to the same source, nearly 50% fail by year-five.
There are a lot of things that can lead to a business’s downfall. Failing to market products and services effectively is a major factor. Jumping into an over-saturated market can be another issue.
However, many businesses go under because their owners don’t know how to manage their finances. They don’t know how to save, invest, or prioritize their costs. This is where financial coaching comes in.
A financial coach can help your business in a number of ways. Keep reading for everything you need to know
What is a Financial Coach?
First, let’s talk about what a financial coach is and does. Many people confuse financial coaches with financial advisors. However, the two practices are fundamentally different.
A financial advisor’s main priority is helping people manage the wealth they (typically) already possess. They specialize in long-term financial planning, estate management, etc.
A financial coach, on the other hand, works with people on a personal level to help them build wealth. They start at the foundation of wealth-building by educating their clients and helping them implement good habits.
The Benefits of Getting Financial Coaching
There are countless benefits of investing in financial coaching for your business. They will work hand-in-hand with you to help you understand the basic rules of saving, planning, making investments, and financial management. They’ll help you set goals and encourage you to stay on the right path.
Let’s break it down.
A Financial Coach Can Save You Money
It’s hard to wrap your head around paying for services to save money. However, financial coaches bring a lot of experience, knowledge, and skills to the table. Furthermore, look at hiring a financial coach as an investment in your future.
You don’t need to hire a financial coach indefinitely. Instead, consider working with one for six months or so to establish good habits and increase your personal knowledge.
It’s quite similar to hiring a personal trainer to teach you how to exercise safely and effectively for maximum results. Sure, you may desperately need them in the beginning, but eventually, you can branch out on your own.
A quality coach (fitness, financial, or otherwise) teaches you the tools and knowledge to help you find success on your own.
A Financial Coach Can Set You Up for Long-Term Success
One of the most important benefits of financial coaching, as noted above, is the investment into your future wealth and financial security. A financial coach specializes in setting financial goals and teaching their clients how to do so for themselves.
They will walk you through the goal-setting process, helping you make SMART goals. SMART goals are:
Just as importantly, a financial coach will encourage you to stay motivated and focused on these goals. The best goals carry no value if you can’t stay dedicated to them.
Financial Coaching Keep You Accountable
Setting financial goals is important. However, you must be consistent in your pursuit of these goals. A financial coach can help hold you accountable for your financial goals and strategies.
Again, look at it as health and fitness goals. If you only diet or workout a few times a week, you can’t expect to make significant progress. In the same way that a personal trainer helps you stay on-task, a financial coach will keep you committed to your goals.
Financial Coaching Teaches You How to Prioritize Your Expenses
We mentioned earlier that the mismanagement of funds is a major downfall of small business owners. Financial coaching can teach you how to make sound financial decisions for your company. They will help you prioritize your needs and minimize your costs.
Furthermore, they will help you establish good financial habits, such as:
- Being prepared for business taxes
- Cutting back on unnecessary expenses
- Tracking your cash flow through bookkeeping programs
- And more
Every business needs to plan for necessary costs, such as marketing, insurance, payroll, materials, etc. A financial coach will help you organized these expenses and learn how to save as much money as possible.
A Financial Coach Can Help You Solve Complex Problems
Many entrepreneurs set out with a dream and seemingly unlimited motivation and optimism. However, you must be prepared for business financial challenges.
The statistic noted at the beginning of this articles shows that financial problems aren’t uncommon in the business world. The difference between making it through and being forced to shut down can all come down to how you handle these problems.
Financial coaching will teach you how to make tough, but educated decisions that can help you keep your business afloat during hard times. Ideally, a financial coach will help you prevent such a situation from occurring in the first place.
If Needed, a Financial Coach Can Manage All of Your Finances for You
Hiring financial coaches can be good for business owners with a wide variety of needs. For example, new business owners may need a few months of financial education to help them learn the ropes. After some time working with a financial coach, they may have all the information they need to succeed.
On the other hand, financial coaches can also provide more hands-on services. If needed, you can hire them to take over your finances entirely. They can track your cash flow, help you with your taxes, work with you to make financial decisions, and more.
How Much Does a Financial Coach Cost?
You’re probably wondering about costs. As a business owner, you must always make sure you’re consulting your budget and keeping your business in the black, even when hiring necessary services.
If you’re looking for a one-time, hour consultation, we charge $250. However, you can save money by buying a pack for several hours. If you’re looking for complete business financial management, we charge $1,500 per month.
Do You Need Help Managing Your Business’s Finances?
If you’re struggling to keep up with your finances or your business continuously dips into the red (or comes dangerously close to it), we can help. Be sure to check out some of our other articles on financial coaching and management.