January 19, 2021

How to Build a Financial Network of Advisors

Woman on mobile device

Author: Dahna Chandler 


No matter what your business does, it’s essential you build relationships with a dedicated network of financial advisors. They help you operate, develop, and grow your business so you can focus on serving your customers, while avoiding financial missteps. But which do you need and when do you need them?


The following is some guidance from two women business owners who have started, funded, scaled, and in one case, sold businesses. Dr. Michele Pfannenstiel is an US Army veteran, veterinarian, and consultant who helps food businesses grow and scale. Her business, Dirigo Food Safety, teaches small food firms how to build wealth by running their companies the right way.


Rosemary Brensen, Founder and CEO of Department of Community, has launched, scaled, and sold a business. She now coaches clients on how to face their financials without fear or shame and construct the life and profitable business they envision.


Who You’ll Work with Most Often


Both Brensen and Pfannensteil agreed accounting professionals were your most important financial partners and they talked most about them. “Early growth stage companies need to contract with a bookkeeper and someone to help them budget, which may not be the same person,” explains Pfannenstiel, who goes by “Dr. P”. Bookkeepers can assist you in setting up accounting software, maintaining financial records, conducting accounts payable and receivable activities, and doing payroll. They also keep your financial records in order, so they’re easier to use by accountants, especially at tax time.


“Your numbers are the backbone of your business,” says Brensen. “With solid financial statements, you can check on the health of the business consistently,” she continues. “That is crucial for decision making, pivoting, and knowing what is working and what is not.”


Brensen also says business owners must feel knowledgeable and empowered in handling their finances, so engaging someone who helps with that is vital. “Your number one goal should be to know your numbers backwards and forwards,” she asserts. It’s the key to growing the business you want, she stresses. She agrees with Pfannenstiel business owners should engage a bookkeeper and CPA as soon as they’re ready for help.


“Business owners need to add an accountant to their financial network as soon as it looks like quarterly taxes are on the horizon,” explains Pfannenstiel. “A great bookkeeper and accountant will work together to make sure the business is on track for meeting tax obligations and paying bills,” she adds.


How to Choose the Right Accounting Professionals


The accountant or bookkeeper you need depends on your business type, since they specialize like doctors. For example, if you have an online retail business where you collect sales taxes in multiple US states, you’ll need an accountant who specializes in this area. Otherwise, you may battle state and federal tax authorities for mistakes you didn’t have to make.


A manufacturing business accountant should help you assess your direct costs to pinpoint areas for increased efficiency, so you’re producing the most lucrative products. An accountant for a service business identifies opportunities to maximize billable hours for the most profitability.


Make sure you choose accounting professionals who can also assist you in determining key performance indicators or KPIs in your business or understanding cash flow projections. The right one for you is knowledgeable about your industry, so they help you compare industry benchmarks to businesses in the same sector as yours. They’re fundamental to developing financial business strategy and leveraging the other financial professionals in your network effectively.


Brensen and Pfannenstiel say the best way to find accounting professionals for your business by asking other business owners for referrals. Often, you can do this on social media groups for business owners. You also can use the American Institute of CPAs state database or the National Society of Accountants to identify or research particular accountants. Investigate them carefully before choosing one.


Other Important Financial Network Members


You’ll also need additional support from these members of your financial network to reach the economic vision you have for your business.


Business Banking or Credit Union Professional


Either can help you choose depository accounts or identify the right business credit card or loan products for you. However, Pfannenstiel says, “I strongly recommend looking to professionals at your local credit union to help you set up your business banking and savings.” That’s because as with personal credit union accounts, your business will own shares in the credit union, making it a fractional owner. That usually leads to better service for your business.


Whether you choose a bank or a credit union, find one that offers you support beyond depository account opening and maintenance. Ideally, get support establishing business credit, meeting business growth objectives, managing cash flow, tax leveraging strategies, and identifying services like payroll and credit card processing. Your banking or credit union professional should act as a trusted advisor to your business who facilitates business relationships for you with other enterprises in your community.


You learn about these professionals and their financial institutions through referrals from other entrepreneurs or doing online research. Pay particular attention to their customer service ratings. They can give you reassurance about your choice or save you the headache of choosing the wrong institutions for your business. Develop a relationship with your professional and ask what services are available to you to meet the needs you have for your business.


Business Insurance Broker


You’ll need business insurance, whether it’s coverage for the office equipment in your home-based office or general liability for your manufacturing enterprise. You can learn more about business insurance through sites like the Insurance Information Institute, which you should do before contacting a broker.


This professional should help you determine what kind of insurance coverage you need and help you maximize premium savings by bundling policies. They should specialize in your industry, too.


A solopreneur consultant or blogger advising individuals or other businesses needs different coverage from a retail store or restaurant with employees. No business insurance policy—or business insurance broker—is one-size fits all. So, scrutinize these professionals carefully.


Equity Funding Consultant


If you decide to sell partial control of or equity in your business to raise funds, you’ll need specialized help to find venture capital. Before you hire this consultant, do research on the Small Business Administration site, and elsewhere about getting this (or other) funding. The SBA shows you the basics of preparing for venture capital. You also should talk to other entrepreneurs who have taken this route to determine if you should, too.


If you hire the right consultant, they can help you present your business to venture capitalists in a winning way. The best way to find these consultants is by referral from trusted sources.


Don’t Scrimp on These Financial Professional's Services


Brensen keeps her advice in this area simple: “You get what you pay for,” she says. Pfannenstiel agrees, adding, “This is not a place to cut corners.” She says you don’t have to pay someone like a bookkeeper $3k/month at the outset. “But unless you will spend the time doing the work they would do for you, you need to spend the money,” she asserts.


“Ask yourself—what is your job at your business?,” she continues. “It’s meeting people, telling them who you are, and making offers of your products and services to help them,” she answers. If you do that well, she says, you’ll be able to to afford the help you need.


Photo: Getty Images

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