Dollars And Sense
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Are you overwhelmed by all the details of your start-up? "New businesses are often underfinanced and don't realize it until it's too late," cautions Hugh Kellogg, a financial advisor in Evanston, Illinois. "A qualified financial advisor can help design a business plan and a realistic budget to avoid surprises." Once your business is underway, a financial advisor can also help you improve cash flow, increase profits--and maybe even enjoy early retirement.
Kellogg, a former Arthur Andersen CPA, says, "It's important to choose someone with a broad range of experience. A CPA might know about taxes and financial statements, but generally isn't familiar with investment securities, business plans, debt management, insurance and retirement planning."
To find a good advisor, get referrals from friends, business associates and professionals (such as your attorney or accountant), or call the International Association for Financial Planning (888-806-PLAN). Fees generally range from $100 to $300 an hour; there usually is no charge for the initial meeting. Before making an appointment, interview several advisors by phone. Ask these questions:
- Do you specialize in small businesses? (Get references.)
- Do you have working relationships with other professionals? (Get names and numbers.)
- How long have you been practicing? Do you have a degree in financial planning?
- What designations do you hold?
Someone designated as a certified financial planner (CFP) or chartered financial consultant (ChFC) usually has expansive knowledge on financial planning. Chartered life underwriters (CLUs) are insurance experts, and most certified public accountants (CPAs) have extensive experience in tax issues.
To verify an advisor's designation:
As a CFP, call the Board of Standards (303-830-7543)
As a ChFC or CLU, call American College (800-368-4684)
As a CPA, call the American Institute of CPAs (212-596-6200).
To determine SEC registry, call (800) 732-0330.
Before signing contracts with new clients or vendors, it helps to have some insight on their credit-worthiness. Do they pay on time or deliver as scheduled? Visit Dun & Bradstreet (D&B) online for answers.
Connect directly (http://www.dnb.com) or through the AOL WorkPlace (D&B@AOL) to access your choice of reports on a given company. D&B's cornerstone product, the Business Information Report ($85), usually includes a company summary, it's D&B rating, history and operation performance, special events, payment patterns, company changes, recent financial history and an overview of the company's history.
The Business Background Report ($21) provides information on a company's history, the business background of its management, special events, recent news items and a business operation overview. It does not include credit information.
The reports, which are updated daily or as needed, may also be ordered by phone; call D&B at (800) 765-3867.
The Rating Game
Do you ever wonder if your neighborhood bank is friendly to small business? You can find out in Small Business Lending in the United States, 1997 Edition. This SBA report ranks the lending performance of more than 9,300 banks by state and identifies the ones that are microbusiness-friendly.
According to the report, commercial banks are among the largest sources of credit to small businesses, with $117 billion in small commercial and industrial loans outstanding as of June 1997. The number of small-business loans was up 25 percent last year.
An easy-to-use tool for locating loan sources in your community, the complete report may be accessed via the Internet (http://www.sba.gov). Or visit http://www.entrepreneurmag.com/money/bestbanks/ for a listing of banks. To purchase a hard copy of the complete study ($60), call the National Technical Information Service at (800) 553-6847 and ask for PB98133101.
Paul DeCeglie (MrWritePDC@ aol.com) is a former staff reporter for Journal of Commerce and American Banker.
Arkansas Financial Group Inc., (501) 376-9051, firstname.lastname@example.org