10 Reasons Entrepreneurs Should Work With A Financial Planner

Entrepreneurs are often advised to follow similar financial plans to employees. But when you build and manage your own business, your financial needs and expectations change in line with your success.

Because financial planning starts with your life, the plan you need to support your business aspirations and lifestyle goals will differ from those of an employee.

It’s a good idea to have a financial planner by your side who understands the ins and outs of running a business. Someone who can help you plan for your future, and advise you on ways you can maximise financial gains, is useful to have around as your business develops and grows.

To give you a broader understanding of the benefits of having the right financial planner in your corner, here are 10 reasons every entrepreneur should work with one.

1. Use Them As A Sounding Board

You probably spend most of your working life making big decisions about which direction you should be heading. If you’re lucky, you’ll already have talented people close to you to offer advice or simply lend an ear when bouncing ideas around.

The right financial planner can be a valuable addition to your trusted inner circle. An impartial sounding board with a clear focus on helping you attain your business and personal goals, a financial planner can help you make big decisions and ensure you execute them in line with a financially beneficial long-term strategy.

Find a fellow entrepreneur – a financial planner who owns and runs their own business – and you’ll gain someone with invaluable first-hand experience.

Working with someone who has grown their own business, and has experience of running a successful firm, will understand your needs better than an employee at a wealth manager or bank who can never fully understand the associated risks and may struggle to see things from your point of view.

An additional upside of a financial planner with business experience is that they’ll be confident to liaise with your accounting and legal teams. They’ll have the knowledge and skillset to discuss and find solutions to specific issues as and when they arise.

Not only will you benefit from their experience and financial acumen, but you’ll also have a great sounding board of someone you can trust because they’ve already faced similar decisions.

2. Create a plan for your financial future

Planning for your financial future is a vital part of the financial planner’s role. The plan will differ depending on what stage of the entrepreneurial journey you’re at.

If you’re in the early stage of your business venture, the focus will be on the business and improving cash flow. But when the business is up and running there will be time to look at your personal financial plan. This will be about establishing your life goals and future lifestyle aspirations.

Your financial planner will help you understand where you are today, and where you want to be in the future, and will develop a financial plan to help you get there.

3. Benefit from their financial coaching

Find a financial planner who knows their way around a balance sheet, understands profit and loss and how to manage business accounts. Not necessarily because it’s directly their responsibility, but the deeper knowledge of running a profitable venture is a useful sidebar for someone who you rely on to manage your long-term financial plan.

This is where financial coaching is important. With knowledge of business numbers, your financial planner can identify options for how your personal financial planning should interplay with your business – this could be identifying an opportunity or potential weak spot. Knowledge of how your accounts add up each month means your financial planner can act as a coach to help you stay on track with your plan.

If you’re in danger of veering off course or become attracted to the idea of spending money on shiny or unnecessary things that could deter you from achieving your goals, your financial planner will help steer your focus back to where you most need it to be.

Initially, they may help set up and track a budgeting system – for both your business and personal spending – so you can determine where your money is going and how you might better utilise it to pay off debt or save money.

With the basics established, the guidance can move on to investments you should consider and advanced tax planning strategies to save you money now, and into the future as your wealth grows.

4. Keep business and personal finances separate

When you’re busy running a business, it’s easy for you to forget to pay attention to your personal finances. You know you’re making a profit and that’s great, but when it comes to spending, it can be easy to blur the lines between what is your money and what belongs to the business.

A good financial planner will help you establish working systems so you can keep your personal finances entirely separate from your business.

If you’re not already paying yourself a formal salary, your planner will help you set up regular income which suits your tax requirements with the aim of creating true financial independence to fund your personal life.

Chances are, you’ll be spending more time working than thinking about how you’re spending the money your business is generating. And success means you’re unlikely to have time to watch every penny as it comes in and goes out of your business.

If your finances are muddled and your spending scattergun, understanding and gaining clarity of your financial position can be a powerful way to relieve stress.

Taking care of your finances will ultimately benefit your overall well-being and make your business more sustainable.

5. Take Advantage of Tax Planning

Your financial planner will make sure all of your tax-planning opportunities, both personal and business, are fully utilised.

Tax planning is a natural part of what a planner will do for you. They will advise where you can make tax savings and help you strategise to avoid paying too much tax.

As a business owner, you’ll have a variety of options to tackle tax reduction. From how you choose to compensate yourself, to what you can write off as a business expense and how and where you’re making investments for your retirement. It all requires planning and deep knowledge of the immediate and future tax implications.

Depending on your circumstances, there are various ways a financial planner may add value when it comes to mitigating tax. For example, you may be able to take less income out of the business, allowing taxation to be deferred, or to utilise tax-efficient investments such as Venture Capital Trusts (VCTs) or Enterprise Investment Schemes (EIS), which both carry healthy tax incentives.

Pension contributions are also tax-deductible and there are multiple ways you can save towards your retirement. Your financial planner will advise the ways that are available and most suitable for your particular circumstances and long-term goals, always with a close eye on the tax implications of the decisions being taken.

6. Make Sure Your Money Is In The Right Place

Sounds simple enough. While you may already have banking set up and hold investments, a great financial planner will review your existing providers to make sure your money is in the best place.

They will review any investments or pensions you have to make sure that your portfolio adopts evidence-based portfolio management (avoiding expense underperforming active fund managers), minimises costs (so more of your money is retained by you) and the asset spread aligns with your long-term goals and risk profile and is best placed for maximising potential growth.

A part of this organisation will include establishing easy-to-access digital systems. You’ll know where everything is, and it will all be digitised in one safe place.

7. Plan for the worst-case scenario

It’s never easy to contemplate, but planning for unexpected events is a vital part of what a great financial planner will do for you.

Common protection a financial planner will consider includes:

  • Lifestyle and debt maintenance, should you be unable to work for an extended period of time
  • Provision for your family in case you die unexpectedly or develop a serious illness
  • Arrangements for business continuity and protection for your business partners (shareholder protection), in the event of death or serious ill-health.

Your planner will also cover the protection needs of your business. A good example of the kind of thing any business owner should consider is key person insurance. This is designed to help business continuity if you or a vital member of staff should suddenly be unable to work through ill health.

A great financial planner will ask hard questions and make sure that your business and personal life can go on as best as possible, even in the face of adversity.

8. Invest wisely

Many of the best financial planners take an evidence-based investment approach. They will actively avoid all the noise of subjectivity and expensive fund management and focus on what has worked consistently over a long period.

Many people chase the “magic” of the latest investment tip or play the odds by attempting to time or predict the market, which can be costly.

No one can expect to pick consistently the next winning stock and the performance of so-called “star” fund managers is often down to good luck; with a large enough pool of managers, someone will always be right in the short term, but over the longer-term their performance almost always fails (see our evidence-based guide for the data, link above). Attempting to predict or chase the winners can be costly and encourages bad investment habits that can damage your long-term wealth.

While all investments come with an element of risk, evidence-based investing is designed to capture the value of the whole market. It reduces costs and, crucially, removes emotional decision-making with well thought-through structured discipline.

9. Form a great working partnership

A great financial planner will form a strong working partnership with you. Taking on everything we’ve covered here and more besides. They will give you all the necessary information to help you make the best decisions but also be able to offer you support, advice and useful opinions, which will help you be more successful in business, and more profitable in life.

A great planner will provide financial peace of mind and extreme clarity for the future.

10. Make Your Money Work Harder

This goes without saying, but some highlights you should expect your planner to cover would include:

  • Implementation of tax-efficient investments, for example through Venture Capital Trusts (VCTs) or Enterprise Investment Schemes (EIS)
  • Tax-efficient strategies for withdrawing dividends from the company, to allow you to de-risk your position by building assets in your personal name
  • Assessing pension contributions and retirement planning with a view to maximising your tax savings now and your income on retirement.

These are just three of the seriously useful things a great financial planner will do for you. You can find more details in our blog.

Find The Right Financial Planner

With a financial planner on your team, you’ll gain a valuable resource.

You need someone who understands your business and is able to articulate and discuss the challenges you face. Someone with a high level of financial knowledge who can understand and execute a long-term strategy to your financial plan to support your business and personal goals.

Flexibility is key. When you’re an entrepreneur, you need someone who can adapt to the needs of your business with the ability to wear many different hats and communicate effectively with your trusted partners.

You need someone responsive to your needs. Delivering advice and service, but also taking time to immerse themselves within your business and get a thorough understanding of your needs and what makes your business work.

They won’t be a “yes person”. You want someone you can trust to ask the right questions and be a financial sounding board you can rely on.

If you need a financial planner in your business, and your life, get in touch. Find out what we can do for you by emailing us at hello@firstwealth.co.uk or calling 020 7467 2700.


This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Let's Talk

Book a FREE 30-minute Teams call and we’ll answer your questions. No strings attached.

Check Availability 

You are now leaving First Wealth's website

First Wealth (London) Limited does not endorse the linked website or any of its contents, and is not responsible for the accuracy of the information contained within it.