How to make sure the financial consultant is a good fit for your home building business

If you’re thinking about hiring a financial consultant for your home building business, there are many things you need to consider. Of course, you first need to understand why you need a financial consultant. In a recent blog on the subject, we related that “82% of businesses that fail do so because of cash flow problems … Nearly 80% of businesses said they struggled because they underestimated how much money they needed to start.”

You might be an expert in construction, but that doesn’t mean you understand all the ins and outs of finances. That’s where a financial consultant comes in.

How to hire a financial consultant for your business

Once you’ve decided to hire a financial consultant, you need to select one. You want a consultant with experience in your industry. Someone who understands the specific regulations and concerns related to your type of business. Plus, there are personality differences and a general way of doing things that might not mesh with your style. The process of selecting a financial consultant should be a back-and-forth exercise where both sides ask questions.

We’ve put together a list of four questions you should ask potential financial consultants, and four they should ask you.

Four questions you should ask a business financial consultant:

1.  What certifications and licenses do you have?

The first thing you want to do is make sure the consultant has the proper licenses and credentials. Certifications should at least include Certified Public Accountant (CPA), but there are other certifications, as well as insurance licenses.

2.  What is your experience?

When you ask about experience, go beyond the number of years in business. What you want is a consultant who has experience in your field. In other words, do they have experience in the construction and home building industry? Make sure they understand the regulations and laws specific to the industry.

Along with knowledge of the industry, be sure the firm can handle a company of your size and scope. If you have a large operation, make sure the firm has the resources to provide the services you need.

3.  What kind of services do you offer?

Of course, you want a CPA who can set up or organize your accounting system. However, a financial consultant should go beyond the basics to offer additional services, including:

  • Strategy Consulting
  • Mergers & Acquisition Consulting
  • Valuation
  • Financial Analysis
  • Tax Planning
  • Tax Prep
  • Bookkeeping

4.  Will I be assigned a specific person for my account?

You want to find out if the same person will be working with you all the time or if there will be different people working on your account. Ideally, you want to work with the same person over the long term. That way, the consultant will come to know and understand how you do business. They will become accustomed to your needs and your style. Consistency is key if you want to manage your finances and expand your business successfully. If you’re constantly working with a different person, it’s like starting over again each time.

Four questions potential financial advisors should ask you:

1.  What are your financial goals over the next five years?

What is it you want to accomplish with your home building business? Do you want to become a leading expert in a specific niche? Do you want to expand operations? What kind of profits do you want to see?

A good business financial consultant should want to know your vision and dreams. They should be willing to listen first and then give advice based on your specific goals.

2. What are your biggest financial concerns?

As a business owner, you probably have constant worries about financial matters. Are you worried about how much debt you’re carrying? Are you concerned about obtaining financing or how to manage current loans? Are your books so messy that you have no idea about profit margins, expenses, and labor costs? This is the time to be upfront about your needs.

3.  What do you want us to accomplish for you?

The consultant should seek to find out your purpose in hiring a financial consultant. Do you need someone to organize or overhaul your accounting system? Should they develop tax-minimization initiatives? Do you want them to analyze your business practices and give advice? How about creating a strategic business plan to help reach your goals? Do you want to obtain financing or restructure current financing? You need to explain how much input you are looking to get.

4.  Why do you think you need help?

Are there current issues you haven’t been able to solve? Are you an expert in construction, but financial matters give you a headache? Maybe you want as little to do with accounting and financial matters as possible. The financial advisor needs to understand your capabilities when it comes to business practices to come up with a plan that will work for you.

Finding a financial consultant for your construction business is a key decision that will impact the success and growth of your company. Use these questions as a guide to determine which consultant is best equipped to help you reach your goals. No Boundaries Advisors has been helping construction businesses grow and thrive for over 25 years. Contact us today to find out how our expert staff can help you meet your financial goals.

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