Nearly 20% of small businesses will fail within the first year. Many that don't will ultimately succumb to poor financial habits, processes, and decision-making. If you fear that your business may be heading for this fate, then now is the time to take action.

Working with a financial coach for your small business may be just what you need to get your company's finances back on track. Keep reading to discover the top signs that your business needs a financial coach and to learn more about how they can help.

What is a Financial Business Coach?

A financial coach is a financial expert helping businesses organize and manage their finances.

Working with a financial coach will help your company create a comprehensive plan for its finances and track its progress against that plan over time.

Whether you need help managing your cash flow or increasing your profitability, a business financial coach can help you do it all. They'll meet your company where it's at now and help you create and execute a plan that gets it where you want it to go.

You Struggle with Cash Management

Managing your company's cash flow is essential to running a business. You need to have enough cash on hand to pay out your obligations on a timely basis. Failure to do so could increase your debt, incur late fees, and result in other challenges for your business.

Do you feel like you never have enough cash on hand to pay vendors and employees? If so, that may be a sign that it's time to start working with a financial coach who can evaluate your current cash management practices and help you improve them in a methodical, step-by-step manner.

You Don't Know How to Create a Good Budget

Some surveys have found that over 60% of small businesses don't create an annual budget. Many small businesses fail to do so because they don't see the importance of creating a budget, while others may not know how to get started.

Every business needs a budget. If yours don't have one, it will be impossible to track your performance over time, which makes it extremely difficult to improve.

A financial business coach can help you fix this problem as well. They can teach you how to create and use a budget so that you're able to use this resource to its maximum potential.

You Aren't Using Financial Reports to Guide Your Decision-Making

There are a wide variety of financial reporting strategies that companies use to optimize their performance and improve their decision-making.

If you never compile or look at financial reports when making critical decisions for your company, there's a good chance that the strategies you're implementing aren't optimal. That means your company may be underperforming when there's no reason to do so.

A financial coach will teach you how to create and use various financial reports. That way, every decision you make is more informed and accurate so that you can give your company the best chance to succeed moving forward.

You Feel Stuck and Don't Know What to Do

Are you facing a debt crisis? Liquidity issues? Or maybe you know that your company's finances aren't where they should be, but you don't know what steps to take to fix the problem.

If you feel stuck and aren't sure what to do, that's a significant sign that now is the right time to begin working with a business financial coach.

A financial coach will help you develop a step-by-step strategy from where you are now to where you'd like to be. They can also teach you the tools you need to build these strategies on your own in the future if you ever need to do so again.

You Feel Like Your Business Isn't Making Progress

When you run a business, you never want to stagnate. If you feel like your company isn't working towards any goals and you're not sure how to achieve the next stage in its growth (or even what that looks like), it could be another sign that now is an excellent opportunity to work with a business financial coach.

Your coach can help you figure out what comes next for your business and how to get there. They'll work closely with you to ensure that your business reaches the financial goals you're trying to achieve.

Everything You Try Doesn't Seem to Work

Running a business isn't always easy. You may feel like everything you do is wrong and lose confidence in your vision. But there's always a reason behind a failure.

A financial coach will help you pinpoint the specific reasons why your strategies haven't been working. Whether you have excess expenses or ineffective pricing strategies, a coach will help you find and resolve the factors holding you back.

You Struggle to Control Spending

Some business owners struggle to keep their spending in check. If you feel like you can't turn a profit no matter what you do because costs are too high, then that could be another sign that now is the time to start looking for a financial coach.

A coach will help you determine the specific expenses limiting your profitability. Then they'll work together with you to identify your best options moving forward so that you can start turning a more significant profit on every product you sell.

What to Look for in a Financial Coach

How many of these signs resonate with you? Whether the answer is one or many, you may be ready to start looking for a financial coach who can help.

However, not all financial coaches are worth the investment. If you're going to pay to work with a financial expert, you want to ensure that you will derive a significant amount of value from doing so.

With that in mind, here are three factors you can use to find the right financial coach for your needs.

Success Stories From Previous Clients

One of the first things you should consider is what a financial coach has achieved for their previous clients. More specifically, have they succeeded in helping businesses move past the same struggles that yours is experiencing?

If a financial coach can't give specific examples of how they've helped other businesses improve, that's a red flag. It could signify a lack of experience or ineffectiveness, and you're better off looking at alternatives in either scenario.

Experience in Your Niche

Another question you want to ask yourself is whether the financial coach has previous industry experience. If they don't, then that's not necessarily a deal-breaker. But you may want to keep your search open to see if you can find a coach with industry-specific experience.

Industry knowledge is valuable because if a financial coach knows your industry, they'll already be familiar with your company's struggles. That can help them provide much more practical assistance to you.

Personality Match

Finally, personality and communication style are worth considering when interviewing financial coaches. If you struggle to engage with your coach due to differing personalities, that could impact how much value you get from their services.

Ideally, you'll find a financial coach with a proven track record of helping companies in your industry and someone you get along with. But you may have to weigh these factors against one another if you can't find a professional offering all these benefits.