How To Find a Financial Partner For Your Service Business
When it comes to financial management in any capacity, it can be very difficult to trust the people involved in the process.
You likely have an accountant who handles your taxes every year, but beyond that, we're used to either figuring it out on our own, winging it, or just pretending it doesn't exist. While these methods can work (though we don't encourage them) for your personal finances, when you add in the extra-legal requirements to run a business, it can end poorly.
This loose financial management can lead to the following:
Missed deadlines.
Extra fines or unexpected fees.
Other costly mistakes.
A lack of stability in the long term.
The good news is that you don't have to figure it out yourself. Nor do you have to work with the first person who pops up on your Google search!
This post will guide you through the evaluation process for a potential financial partner so you can ensure that whoever you end up working with will be the perfect fit!
1. Why Small Businesses Struggle to Find the Right Financial Partner
While the idea of handing off the financial side of your business might feel like a relief, many who have tried have either had a bad experience or expect their experience to go badly.
Many business and/or agency owners make the same mistake when handing their finances off. Let's review a few of the most common reasons you'll likely have a bad experience with a financial partner.
You don't know what to look for. Finance professionals often speak in finance jargon. It can be tricky to identify which advisors are knowledgeable vs just jargon-heavy. More on this below! ⬇️
You believe that every finance partner is the same. Within finance, there are many niches, such as bookkeeping, accounting, advisors, etc. While there is a lot of shared common knowledge, align your growth goals with your partner to ensure maximum success.
You didn't ask enough questions upfront. Don't fret—ask about ALL THE THINGS. Having an in-depth understanding of what the partnership will look like prior to getting started can ensure that all your expectations are met.
2. What You Actually Need as a Small Service-Based Business
As a small service-based business or agency owner, your financial needs will differ from those of a larger corporation or a product-based business.
It's important to realize that what works for larger companies or different types of companies might not be the support you need.
We suggest looking for a partner who:
Understands your business niche. This way, they can give tailored advice to help you make smart financial decisions.
Uses clear, concise, and proactive communication. Look for someone who values your time and theirs by responding promptly.
Makes their pricing transparent. You should know what a financial partner's services will cost and what you'll get in exchange for their work prior to engaging with them.
A strategic mindset. With a higher profit margin, having a partner who can guide you toward optimizing for growth and long-term financial stability is helpful.
Industry knowledge. You must find a partner who eats, sleeps, and breathes what you do! We suggest looking for a finance company or partner who works exclusively with service-based businesses or agencies.
3. Key Questions to Ask Before You Hire a Financial Partner
Below are a few key questions that will help you gauge whether you'll get along well with a financial partner. While all of these are great, if this seems like a lot, pick one or maybe two from each category to ensure you're covering your bases!
Experience & Specialization
Have you worked with service-based businesses like mine?
How do you help clients beyond just bookkeeping or tax prep?
Can you walk me through an example of how you've helped a business my size grow or become more profitable?
Communication & Support
How often do we check in, and what's included in our service package?
How do you explain financial reports to non-finance people?
What happens if I need urgent support or have questions outside business hours?
Pricing & Transparency
Can you break down exactly what's included in your fees?
Are there any hidden costs I should be aware of?
Do you offer flat-rate pricing, or do you bill hourly?
Technology & Security
What accounting tools do you use and provide training if I need it?
How do you ensure my financial data stays secure?
The interview is crucial to building a strong working relationship with a potential partner.
Remember: They should be happy to help build trust by investing in your relationship early on. If they seem annoyed or unhappy answering your questions, they might not be a good fit for you.
4. How to Vet a Financial Partner (and Avoid Another Bad Experience)
If you've previously had a negative experience with financial partners in the past, you might be hesitant to invest in services similar to that again.
Here are a few tips to help you properly vet a finance partner so that your next experience can be positive.
Are they active online? Do they have reviews and testimonials? What about social media? Are they on LinkedIn? Do people seem to know the brand and its owners?
Ask the business if they can connect you to people in your niche that they work with. Don't be afraid to explore their network and ensure they work with customers like you!
Book a demo or an intro call. Use this time to see how you mesh. Are they talking too much? Are they dismissing your questions? Do you leave the conversation feeling at peace or anxious?
Trust your instincts! If it's not a h*ll yes, it's a h*ll no (and that's ok!). If you don't love how you connect or how they interact with you, how long it takes to get a reply, etc., it's ok to walk away!
Finding the right support can take time, but it's important to the overall success of your partnership to find someone you trust vs the first person you meet!
5. Red Flags to Watch Out For
As you interview finance partners, here are a few things to help you identify those who might not be a great fit for your business.
They are only focused on compliance, not strategy. They are missing the big picture if they aren't talking about how to help you increase profitability or margins.
They don't take time to explain things. The right partner should make you feel less intimidated by your finances, not more anxious!
They aren't responsive when you need them, like tax season or month-end.
They aren't open about their pricing. It's unclear or keeps changing, so you never know what monthly it will cost you.
They don't ask about your business goals, so they won't help you reach them.
6. How to Make the Right Decision
Ok, we gave you a lot of information, but the TLDR version is:
Compare multiple potential partners to get a feel for what you like/dislike before you commit.
Choose someone who cares about your business—not just QuickBooks.
Choose someone who makes you feel at ease, not overwhelmed or confused.
If possible, leverage a trial engagement or talk to their other real customers to see what it's like working with them.
Conclusion
While it can be scary to think about investing your hard-earned money into financial support, it is possible to do it in a way that makes the whole experience positive!
Taking time to properly vet a potential partner will help you find someone who can support your growth and take stress off your plate.
Ready to see what we can do for you? Learn more about our services here, or book an intro call with our team today.
