Business Consultant vs. Financial Advisor: What’s the Difference and Which is Right for You?

As you navigate through the conception and implementation of your blossoming business, you’ll quickly discover that the financial planning and monitoring element to business operations will end up consuming quite a bit of your time. There’s a lot that goes into mastering the finances of any business, large or small. That’s why many business owners choose to work alongside a business strategy consultant or a financial advisor: They can focus on other essentials that keep their business afloat while periodically or regularly gaining invaluable insight into running the business smoothly.

However, many who consider bringing on a business plan consultant or financial advisor are quick to discover that there are key differences between the two. Though they are more similar than different, knowing the difference between a business consultant vs financial advisor will help you select the right person for your business’ needs.

In this article, we’re going to uncover the differences between business consultant services and financial advisors. By the end, you should be able to answer the following questions from the perspective of your business: Are financial advisors worth it and would a business consultant vs financial advisor be better for my situation?

Business Consultant vs Financial Advisor: The Main Differences

As mentioned above, business strategy consulting and financial advising are similar to one another. However, there are key differences between the two that make it obvious to small- and large-business owners which would be ideal for their situations. Here’s a brief overview of the key differences between the two financial strategy entities:

1. Business consultant services allow businesses to retain more independence, while financial advisors typically grow to play an integral role in the operation of a business.
2. Business consultants maintain a more infrequent role in a business and the nature of the relationship is more about identifying problems and suggesting targeted solutions than that of a financial advisor.
3. Financial advisors are brought on to work together alongside a business owner to keep a business performing optimally. In contrast, business consultants take a more hands-off approach, identifying problems and areas of improvement as they arise.
4. Business consultants typically introduce tools and software for business owners to use, while financial advisors will more often use those tools and software to improve the financial posture of that organization over a predetermined period of time.

Let’s cover these differences in more detail below:

Wanting to Maintain Independence

Business owners who bring on business consultant services over financial advisor services tend to retain more independence over their financial strategy. That’s because business strategy consulting tends to focus on problem areas rather than taking a step back to assess overarching financial goals. Business consultants identify areas for improvement, both for current and projected financial success.

On the other hand, financial advisors manage the overarching strategy for a business in the long term. So are financial advisors worth it? If you’re wanting to work alongside an advisor who will manage the financial elements of your business, then yes. But if you are looking for an entity that’ll steer you in the right direction without becoming intrinsically involved, then business consultant services may be the ideal choice for you.

The Nature of the Relationship

Mentioned briefly above, the nature of the relationship with a business consultant vs financial advisor tends to be a bit different depending on which businesses go with. Financial advisors essentially function like a member of a business. They provide financial advice and coaching, developing a long-term relationship with an organization.

On the other hand, business strategy consulting aims to set businesses up for success without being too involved. By suggesting strategies, building financial frameworks, setting targets, and identifying weaknesses, a business plan consultant coaches businesses on success without involving themselves directly in operations. The nature of the relationship with business strategy consulting tends to be more hands-off in terms of operations, while financial advisors develop long-term, integrated relationships with the organizations they partner with.

Identifying Problems Within Your Organization

Perhaps one of the biggest differences between a business consultant vs financial planner lies with the financial problem-solving process. Business strategy consulting targets existing problems within businesses. Business consultants propose solutions to these problems, attempting to quickly remedy any important financial difficulties businesses are currently facing.

In contrast, financial advisors work alongside businesses over longer periods of time. Their role isn’t necessarily about addressing a need to solve an issue; financial advisors guide organizations along their long-term strategies toward financial success. They aren’t typically there to solve problems, they’re there to move organizations along their journey toward what they together envision as their goals.

So, are financial advisors worth it? For solving short-term problems and addressing areas of concern, they may not be. But if you want someone to further your organization through long-term partnership and strategy development, they may be the way to go.

Introduction of Tools

The final big difference between a business consultant vs financial advisor is the introduction of tools and software for you to use in your business. Remember that business consultant services are made to enable you to better understand and implement the financial successes within your business. A business plan consultant is brought on to identify problems and give you the solutions you need to solve those problems. That often comes along with the introduction of tools meant to make the financial element of running your business go smoother.

Looking at the other side of the coin, financial planners handle a lot of the financial strategizing and implementing when brought onto a business. So in most cases, any tools or software they use will be maintained by them, not introduced to business owners.

Are financial advisors worth it for business who want to gain a comprehensive understanding of how to run the financial elements of their organization? They can be, with the right fit and good communication. But as a general rule, you’ll have more luck learning how to run the financial components of your business by working with a business consultant who provides essential information along the way.

So Which is Right For You? Business Consultant vs Financial Planner

As with most things in life, it truly depends on what you’re looking for. Don’t forget that the above differences laid out between business consultant services and financial planning services don’t always apply. Some financial planners may provide their clients with tools they can use, and some business consultants prefer to work long-term on financial strategy.

Use the knowledge laid out above as a basis for your initial conversations with a business plan consultant or financial consultant. Now that you know more about what you’re looking for, make sure you ask questions pertaining to your wants from a business consultant or financial advisor.

4Corner Business Consulting Services in Denver, CO

4Corner Business Services is Denver’s answer to business consulting services. 4Corner’s team of experienced accounting and bookkeeping experts provide you with the business financial consultants you need to make critical decisions. In addition to providing bookkeeping services for small businesses & large businesses, 4Corner offers payroll help, support in choosing & using accounting software, professional tax services, and business financial consulting.

We can provide your Denver, CO small business with all the bookkeeping and accounting services you need so you can better understand your business’s finances and maximize your profit potential. At 4Corner Business Services, we are the experts who help you understand what financial services you need. We address all your accounting needs from general ledger accounting to other small business accounting services so you can focus on the other important aspects that come with running a small business. We can also help you budget and track annual business revenue, giving you invaluable insight into how your business is currently performing and how it is projected to perform.

If you have any additional questions, feel free to contact us at 4Corner Business Services. You can set up a meeting with Phil Zavala, founder of 4Corner, to get you on the right track.