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12 Best Business Finance Books to Read in 2024

You found our list of the top business finance books .

Business finance books are guides that give strategies for finding funding and making money. These works cover topics such as valuation, trading, return on investment, profit, debt management, and funding. The purpose of these books is to fund ventures, increase profits, and help organizations be economically successful long term.

These guides are a subset of business books and are similar to entrepreneurship books and books on business strategy .

This list includes:

• small business finance books
• business finance books for beginners
• books for learning business finance
• finance books for entrepreneurs

Here we go!

List of business finance books

From new releases to all-time bestsellers, here is a list of books on business finance to make operations more profitable.

1. Valuation: Measuring and Managing the Value of Companies by McKinsey & Company Inc., Tim Koller, Marc Goedhart, and David Wessels

Valuation: Measuring and Managing the Value of Companies is a masterclass in corporate valuation from consulting firm McKinsey. The textbook covers basic concepts such as creating value, predicting and assessing performance, and strategic investment and management. The book breaks down how to value companies accurately while considering factors such as taxes, inflation, operating and non-operating costs, and retirement. The final chapter also outlines special circumstances and exceptions such as emerging markets and high-growth companies. The appendices expand upon these ideas and offer case studies and formulas to round out the text. Valuation: Measuring and Managing the Value of Companies paints a full picture of how to tell what companies are worth and achieve optimal return on investment.

Notable Quote: “Companies thrive when they create real economic value for their shareholders. Companies create value by investing capital at rates of return that exceed the cost of their capital. These two truths apply across time and geography.”

Read Valuation: Measuring and Managing the Value of Companies .

2. The Alchemy of Finance by George Soros

The Alchemy of Finance is the published wisdom of famed investor George Soros. The book sheds light onto Soros’s trading and investment strategies, and provides a framework for making financial decisions. Earlier chapters view economics through a historical lens, while later chapters make predictions about emerging trends. The economic experiment at the heart of the book takes place during the 1980’s, however the takeaways and observations about markets are still relevant for current times. The writing is dense and this is not a breezy read, however readers who put in the effort can mine valuable economic insights. The Alchemy of Finance is a business finance classic and deserves a spot on any economics must-read list.

Notable Quote: “Economic theory is devoted to the study of equilibrium positions. The concept of equilibrium is very useful. It allows us to focus on the final outcome rather than the process that leads up to it. But the concept is also very deceptive.”

Read The Alchemy of Finance .

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3. The Personal MBA: Master the Art of Business by Josh Kaufman

The Personal MBA is one of the most useful business finance books for beginners. The book spans a range of topics typically covered in MBA programs and includes an extensive section on finance. Within that chapter, the authors define and explain concepts such as cash flow and income statements, purchasing power, lifetime value, pricing, and funding. This section offers a comprehensive overview of money-making best practices. Surrounding chapters deal with complimentary subjects such as valuation, sales, and improving systems. The book as a whole is a guide to making businesses profitable and efficient and acts as a crash course to holistic business operations.

Notable Quote: “Every time your customers purchase from you, they’re deciding that they value what you have to offer more than they value anything else their money could buy at that moment.”

Read The Personal MBA .

4. Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine by Mike Michalowicz

Profit First is one of the best finance books for entrepreneurs. The book preaches that to make money instead of losing money, one must use profit as a starting point when making decisions. In other words, instead of determining profit based on sales minus operating costs, leaders should first think of the desired profit and work backwards. This reverse engineering approach encourages entrepreneurs to act more intentionally and make choices that support the end goal. The book outlines how to put this theory into practice and overcome challenges that may arise. The final pages include resources such as a beginning assessment and a setup guide that make the advice even more actionable.

Notable Quote: “A financially healthy company is a result of a series of small daily financial wins, not one big moment. Profitability isn’t an event; it’s a habit.”

Read Profit First .

5. How Finance Works: The HBR Guide to Thinking Smart About the Numbers by Mihir Desai

How Finance Works is one of the most helpful books for learning business finance. The book acts as an introductory course into the world of financial systems. The guide outlines how to conduct financial analysis, explains key players and concepts within capital markets, and explores valuation. The guide also touches on capital allocation and dissects the ways good leaders make financial decisions. This guide distills complex concepts down into simple summaries and easily-digestible snippets, yet the book is not so basic that more established professionals cannot find value in it.

Notable Quote: “How safe is it to lend to a company? How financially rewarding is it to be a shareholder of a company? How much value does this company provide? Each of these questions cannot be answered by looking at any one number in isolation. Ratios provide a comparison of relevant numbers in a common way, which makes sense of otherwise meaningless numbers.”

Read How Finance Works: The HBR Guide to Thinking Smart About the Numbers .

6. The Intelligent Investor by Benjamin Graham

The Intelligent Investor is one of the best guides to trading. Written by Benjamin Graham, the legendary investor and mentor to Warren Buffet, the book preaches the gospel of value investing. This philosophy urges readers to invest for the long-term rather than chasing immediate wins. The book lays out formulas for reducing risk and achieving better returns. Graham explores ways to invest defensively in any climate and gives advice on conditions like inflation, volatility, and market fluctuations. The book outlines considerations such as portfolio policy, security analysis, dividend policy, per-share earnings, and stock selection. Graham also provides historical background, case studies, and company comparisons. The Intelligent Investor explores the inner workings of the stock market and lays out sound strategies for avoiding ruin and accumulating wealth.

Notable Quote: “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”

Read The Intelligent Investor .

7. Accounting for the Numberphobic: A Survival Guide for Small Business Owners by Dawn Fotopulos

Accounting for the Numberphobic is one of the best small business finance books. This book is specifically geared towards owners whose area of expertise is not accounting. This guide teaches entrepreneurs how to overcome the dread of crunching the numbers and how to make sense of available information. The book explores the ins and outs of net income statements, breaks down how to determine a business’s breakeven point, explains why cash flow is important and how to maintain it, and shows owners how to use balance sheets to estimate a company’s worth. The book also contains a financial dashboard that serves as a toolkit to run the numbers. Having a grasp on these concepts helps owners understand how a business is performing, and this book grants entrepreneurs the foundational knowledge and confidence to oversee the books and make financial decisions.

Notable Quote: “The goal is to build a profitable business, not maintain an expensive hobby that will leave you in the poorhouse.”

Read Accounting for the Numberphobic , and check out more small business books .

8. How to Read a Financial Report: Wringing Vital Signs Out of the Numbers  by Tage C. Tracy and John A. Tracy

How to Read a Financial Report is one of the more practical books on business finance for beginners. This work teaches readers how to make sense of economic data. The book breaks down standard parts of financial reports such as cash flow statements, net income, tax and liability. The authors show how to understand each factor individually and judge profitability and investment soundness as a whole. The final section explains ways to use financial statements. Scattered throughout the book are exhibits and examples to further readers’ understanding. How to Read a Financial Report touches on the fundamentals of economic analysis and shows beginners how to understand and pinpoint a business’s bottom line.

Notable Quote: “The cash flows summary for the year does not reveal the financial condition of the company. Managers certainly need to know which assets the business owns and the amounts of each asset, which can include cash, receivables, inventory, among others. Also, they need to know which liabilities the company owes and the amount of each.”

Read How to Read a Financial Report .

9. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by by John C. Bogle

The Little Book of Common Sense Investing is a helpful guide to index investing. The book makes the point that the most reliable investment strategy is to hold a portfolio of diversified stocks that earn gains over time rather than trying to beat the market and as a result pay high fees or see major losses. This guide explores the nuances of index funds and shows readers how to build a strong and stable portfolio that accumulates wealth. John C Bogle is a founder of Vanguard and one of the creators of the first index funds, so readers receive insights on the topic from one of the world’s foremost experts.

Notable Quote: “The true investor . . . will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.”

Read The Little Book of Common Sense Investing .

10. Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage by Mary Buffett and David Clark

Warren Buffett and the Interpretation of Financial Statements offers an in-depth analysis of Warren Buffet’s investment philosophy and strategies. The guide offers a step-by-step breakdown of how to examine investment statements and decide a company’s worth, and is one of the better books for learning business finance. The book relays Buffett’s insights into areas such as how much debt a company can hold and still be healthy, the toll research and development can have on the bottom line, and the types of companies that are better to avoid even if they do seem like a bargain. The guide shows readers how to make sense and make best use of the information on documents like balance sheets and income statements and to make informed decisions that translate into wise investments.

Notable Quote: “Before we start looking for the company that will make us rich, which is a company with a durable competitive advantage, it helps if we know where to look. Warren has figured out that these super companies come in three basic business models: They sell either a unique product or a unique service, or they are the low-cost buyer and seller of a product or service the public consistently needs.”

Read Warren Buffett and the Interpretation of Financial Statements .

11. Blockchain Revolution: How the Technology Behind Bitcoin and Other Cryptocurrencies Is Changing the World by Don Tapscott and Alex Tapscott

Cryptocurrency is a hot topic in the world of finance, and Blockchain Revolution provides a crash course in the concept. The guide gives an introduction to blockchain before projecting the impact this technology will have on various parts of the economy. The book explores cryptocurrency’s potential effects on the financial services sector, government, and culture, and imagines how wide scale adoption might shape future leadership and business models. Later chapters lay out challenges to implementing blockchain technology and brainstorm possible solutions. Blockchain Revolution explains the potential for cryptocurrency to reinvent industry and increase equity and entrepreneurial inclusion, while also providing a guide to the fundamentals of blockchain.

Notable Quote: “Data is becoming a new asset class – one that may trump previous asset classes.”

Read Blockchain Revolution .

12. The Psychology of Money: Timeless lessons on wealth, greed, and happiness by Morgan Housel

The Psychology of Money is a fascinating study of the mindsets behind financial decisions. The book makes the case that accumulating and maintaining wealth is largely about behavior and beliefs, and that business decisions are a matter of emotion as well as math. Morgan Housel sets out to pinpoint the mentalities that lead to money missteps. The pages are full of entertaining anecdotes and valuable lessons about the driving forces behind financial decisions. This book explores how humans think and feel about money, and how those factors impact the way they act. The Psychology of Money subtly shows readers how to gain control of their finances by understanding and regulating their money mindsets and emotions.

Notable Quote: “Growth is driven by compounding, which always takes time. Destruction is driven by single points of failure, which can happen in seconds, and loss of confidence, which can happen in an instant.”

Read The Psychology of Money .

Final thoughts

Common wisdom says that numbers do not lie, however, the numbers can lead to incorrect conclusions if not interpreted correctly. Books on business finance teach professionals how to navigate the often confusing world of accounting, trading, and economics, attain profitability, and make decisions that benefit a business’s bottom line both in the short and long terms. These guides are useful not only for leaders, but anyone involved in making financial decisions. Not to mention, these concepts give readers a deeper understanding of how the best businesses generate returns and can help individually understand how to make fiscally sound decisions and operate more efficiently, in both their personal and professional lives.

For more reading recommendations, check out this list of CEO books , these franchise books , and these office management books .

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FAQ: Business finance books

Here are answers to common questions about books on business finance.

What are business finance books?

Business finance books are guides to finding funding, operating within budgets, and achieving profitability. These works cover topics such as investment strategy, financial reporting, valuation, and capital structure. The purpose of these books is to help professionals understand the economics behind business operations and to make sound decisions that serve the organization’s books both in the immediate and far-off future.

What are the best business finance books for beginners?

The best business finance books for beginners include How to Read a Financial Report by Tage C. Tracy and John A. Tracy, How Finance Works: The HBR Guide to Thinking Smart About the Numbers by Mihir Desai, and The Personal MBA: Master the Art of Business by Josh Kaufman.

What are the best finance books for entrepreneurs?

The best finance books for entrepreneurs include Valuation by McKinsey & Company Inc. et al, Profit First by Mike Michalowicz, and The Alchemy of Finance by George Soros.

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The 12 Best Finance Books in 2024

Build expertise in personal finance, investing, and decision-making psychology

Michelle Lodge is a contributor to Investopedia, who is also a writer, editor, and podcaster.

There is no shortage of interest in finance books. Sales of business and economics print books reached a 10-year high in 2022, accounting for a quarter of all nonfiction unit volume and realized a 10% raise from 2021, according to market research firm The NPD Group. Business is the second-highest category in print publishing after books about religion. This large, complex print category has more than 100 categories and over 200 subcategories.

To help you sort through these offerings, we’ve put together a list of the best—everything from a biography; how-tos on managing money and investments; a lively reference book about cryptocurrency; policies that impact economics; scandals and personalities laid bare; and the thinking behind decision making in the stock market and other areas, as well as the all-time best book on negotiating. These books, written by authors of diverse backgrounds, offer the most comprehensive picture and the freshest insights to provide a broad perspective on the economy in these complicated and high-risk times and will help you make better financial choices.

Best Overall: No Filter: The Inside Story of Instagram

Sarah Frier’s  No Filter: The Inside Story of Instagram ranks as the best overall book on our list of fine finance books. The title doesn’t do the book justice, because it’s so much more than a book about two smart tech guys creating a novel app and then selling it to Facebook.

Through her well-written and -reported prose, Frier, the Bloomberg editor in charge of Big Tech coverage, tackles the significance of social media—how it can alter the outcomes of elections, impact the self-esteem and behavior of followers who don’t have the seemingly perfect lives of celebrities and influencers, and generally hurt society when it professes to do the opposite. She also takes us inside Facebook, especially profiling its co-founder Mark Zuckerberg, who Instagram co-founder Kevin Systrom called the most strategic thinker he has ever met. It’s a gripping read. 

“If Facebook was about friendships, and Twitter was about opinions, then Instagram was about experiences— anyone could be interested in anyone’s visual experiences, anywhere in the world,” Frier writes in her tale of app envy among Silicon Valley leaders. In 2010, Instagram co-founders Mike Krieger and Systrom were coming to terms with the scope of their online creation, a social media app for photos and video that led Facebook co-founder Mark Zuckerberg to acquire it for $1 billion two years later.

Systrom stayed on after the sale and tried to preserve the app’s initial intent of a way station for beautiful images, but he clashed with Zuckerberg, who wanted to grow Instagram while keeping it from overshadowing the parent . “Facebook was like the big sister that wants to dress you up for a party, but does not want you to be prettier than she is,” an unnamed former Instagram executive is quoted in the book as saying. Instagram comes out poorly, too, as its images of “perfect-looking” women caused some its followers to seek out cosmetic surgery, and opioids were sold through its site for several years.

Silicon Valley’s workings are thoroughly reported, thanks to Frier’s extensive interviews with venture capitalists and tech executives and Instagram influencers and celebrities. Accolades poured in for No Filter : It was named the best business book in 2020 by the Financial Times and McKinsey Business Book, and it received equally effusive attention from Fortune, The Economist , Inc. , and NPR. 

Best on Personal Finance: Rich Dad Poor Dad

As any investor knows, it’s not how much money you make, but how much you keep—a main premise of Rich Dad Poor Dad , now published in a 20th anniversary edition. This conversational book—which considers being financially literate crucial to acquiring wealth—cites the lessons from a “rich dad,” a friend’s father who rises from humble beginnings to create a lucrative business and a capitalist, and a “poor dad,” author Robert T. Kiyosaki’s own father, who was a highly educated government employee his entire working life and a socialist.

Kiyosaki obviously took the “rich dad” lessons to heart in co-writing what’s still considered, after 25 years, a top personal finance book. Chapter 2 questions the “American dream” of homeownership by spelling out Kiyosaki’s controversial argument that owning a house is a financial liability, not an asset, because paying for and maintaining it is a drain on finances, while Chapter 4 delves into the history of taxes and the power of corporations. He says that having financial literacy means a broad understanding of accounting and investing and knowing the markets and the law.

Each chapter ends with a “Study Session,” which reviews the material and poses questions.

Rich Dad spent nearly seven years on the New York Times bestseller list, one of the first self-published books to land there. “It [offers] useful information for a generation on the brink of making important financial decisions,” says Eric Estevez, a member of Investopedia’s Financial Review Board and an independent insurance broker. “Robert has a track record of breaking down complex financial concepts into simple explanations.”

Best Cryptocurrency Reference: The Basics of Bitcoins and Blockchains

You can judge this book by its cover because it delivers on its title, resulting in a comprehensive, lively must-have reference book on cryptocurrencies. Antony Lewis, a former technologist at Credit Suisse in Singapore and London, left banking to join the startup iBit, where clients buy and sell Bitcoins, and has never looked back.

His nine-chapter book starts with defining money—followed by definitions of digital money, cryptography, cryptocurrencies, digital tokens, and blockchains—and illustrates points with pictures, graphs, tables, pie charts, and infographics. He suggests, for example, that Bitcoin be called an “electronic asset” because “the word currency often sidetracks people when they are trying to understand Bitcoin. They get caught up trying to understand aspects of conventional currencies which do not apply to Bitcoin, what backs it (nothing) and who sets the interest rates (there is none).”

Investopedia’s Vinamrata Chaturvedi, senior editor overseeing blockchain and cryptocurrency, says this about the book: “There are many questions we have when thinking about blockchain. This book answers all of them. It explains how blockchain technology works and why cryptocurrencies are the future of money.”

Lewis freely admits that he “loves the industry” of crypto assets, Bitcoins, and blockchains, yet he also cautions about the very real dangers to investors. In a section called “Scams,” he lays out the swindles of Ponzi schemes, exit and fake scams, pump-and-dumps, scam initial coin offerings (ICOs), spoof ICOs, scam mining schemes, and fake (digital) wallets. “People have made and lost fortunes trading cryptocurrencies and investing in ICOs, but there are many risks,” he writes. “If you do decide to get involved, be careful and do a lot of research before committing your money.”

Best for Investing: A Random Walk Down Wall Street

Burton G. Malkiel is an economics professor, a former director at Vanguard, and a former dean of the Yale School of Management, yet his most recognizable contribution to finance is his Random Walk book, originally published in 1973 and, as of 2019, in its 12th edition. If you wait for Jan. 3, 2023, you can get the 50th anniversary edition in a green, not yellow, cover—the one pictured above.

“A random walk is one in which future steps or directions cannot be predicted on the basis of past history,” writes Malkiel. “When the term is applied to the stock market, it means that short-run changes in stock prices are unpredictable.” Sound familiar?

Amy Drury, a member of Investopedia’s Financial Review Board, and CEO and founder of the financial training company OnPoint Learning, who recommended the book, had this to say: “I reread this recently and found that it was a pretty comprehensive overview about finance and investing. It is very dense, so maybe not one to take to the beach, but it is great as a reference book to dip into on specific topics.”

Best Personal Finance Disaster Management: What to Do with Your Money When Crisis Hits: A Survival Guide

There are two ways to read Michelle Singletary’s personal finance book, and both are right: You can tackle it from start to finish or dive into the topics that are the most pressing first and then read the rest. In her Survival Guide —an outgrowth of her nationally syndicated personal finance column, “The Color of Money,” for The Washington Post —Singletary covers how to manage money and deal with crises, using a question-and-answer format, which delivers authoritative, straightforward, and actionable answers.

When money is tight, Singletary advises triaging: assessing what must be paid for, such as having food on the table, and dealing with remaining creditors directly by working out payment plans. What’s especially impressive about her book is that it serves a wide range of readers—those who enjoy hefty incomes and live beyond their means, rank newcomers to financial self-care, and everyone in between.

Its “Resources” chapter lists organizations, companies, and government agencies that offer information and, as needed, possible relief for the consumer. “Very timely, relevant, practical, and helpful” is how Marguerita M. Cheng, CEO of Blue Ocean Global Wealth and an Investopedia Financial Review Board member , describes the book.

Best Global Perspective: The Silk Roads: A New History of the World

To the uninitiated, the words “silk roads” may conjure up the deep beauty of shimmering silk fabric in exotic locales. The reality is quite different. In his 2015 book, Oxford University global history professor Peter Frankopan weaves a complex tale across centuries about fearless merchants, middlemen, soldiers, and leaders—many of whom traveled on life-challenging passages across treacherous terrain throughout the Middle East, China, the Balkans, and South Asia with the added provocations of unpredictable weather and peoples, crime and life-threatening disease, and even the proselytizing by clergy of religions old and brand-new, which led to deadly power grabs and wars.

So valued was silk that it became an international currency when others, such as grain, failed. Through the centuries, new cities sprouted and others faltered. The simple purpose, of course, was commerce.

“ The Silk Roads refocuses our attention on a region that has always and will always play a critical (and defining) role in the global economy,” says David M. Roth, CEO of Wakaya Group, a former director of FIJI Water in Fiji, and an entrepreneur-in-residence at INSEAD. “Frankopan also helps us contextualize and make sense of current events within the long arc of human history. To paraphrase [Democratic political operative] James Carville, it is and always has been about the economy.”

A follow-up from Frankopan is The New Silk Roads: The New Asia and the Remaking of the World Order (Vintage, 2018). 

Best on the Dangers of the Gender Data Gap: Invisible Women: Data Bias in a World Designed for Men

In this absorbing book—named 2019’s Financial Times and McKinsey Business Book of the Year and a London Times bestseller, British journalist and activist Caroline Criado Perez spells out how the data gender gap accounts for disadvantages for women worldwide, costing companies and governments plenty in missed opportunities and productivity. It shows how this bias can yield an unhappy workforce and populace and result in unnecessary illnesses—and even deaths—among women.

“The stories we tell ourselves about our past, present, and future. They are all marked—disfigured—by a female-shaped ‘absent presence,’” writes Criado Perez, who draws on numerous research studies. “This is the gender data gap.” Practically speaking, this means that medical studies—which often include miners and construction workers, mostly male, and leave out cleaning staff and nail-salon workers, mostly female—still largely focus on men as the default, leaving doctors to estimate drug dosages and treatments for women. In addition, car safety systems are designed for the larger male body, causing additional injuries for female drivers in the event of an accident. The same is true of personal protective equipment (PPE), which leaves female police officers, for example, unprotected on duty as bulletproof vests often don’t fit them.

Even transportation systems are geared toward the male breadwinner driving a car. Meanwhile, women, who are often responsible for primarily caring for children and aging adults and grocery shopping, are left to rely on usually time-consuming and inefficient public transportation and walking. One success story was a change in the order of snow-clearing practices in the Swedish town of Karlskoga. The governing body decided to clear snow from sidewalks before roadways. That’s because pedestrians, two-thirds of whom were women, sustained injuries, mostly through falls, three times more often in the winter. The estimated cost of all these falls in a single winter season was some $4 million.

Criado Perez maintains that using the male default isn’t intentional, but ingrained. However, the next time you see a female colleague wrapped in a blanket in the office, while male workers simply wear their regular clothes, know that the data gender gap is partly to blame.

Best Biography: The Snowball: Warren Buffett and the Business of Life

Berkshire Hathaway Chairman and CEO Warren Buffett, the so-called “Oracle of Omaha,” has had volumes in many languages written about him. Yet his personal life from the earliest days and beyond remained a mystery until Alice Schroeder penned this eloquent biography at Buffett’s invitation. “Whenever my version is different from somebody else’s, Alice, use the less flattering version,” Buffett advised Schroeder.

This New York Times bestseller traces Buffett’s French Huguenot and German heritage, whose family motto was likely “spend less than you make,” with the addendum of “don’t go into debt.” She goes from his birth 10 months after the 1929 stock market crash to his unconventional marriage and fatherhood, to his many deals and the circus-like atmosphere surrounding Berkshire Hathaway’s popular shareholders meetings.

Buffett credits his success to “intelligent parents” and having “luck.” Yet the numbers-loving Buffett had, by age 10, figured out that having money meant coveted independence, the basics of buying and selling stocks, and how equity’s volatility can impact an investor. His metaphor for compounding is a snowball in wet snow that gathers strength and heft as it rolls down the hill. Still working 82 years later, Buffett is one of the world’s richest men, with an estimated net worth of $99.7 billion as of this writing.

Best Origin Story: Trillions

“Over the past decade, 80 cents of every dollar that has gone into the U.S. investment industry has ended up at Vanguard, State Street, and BlackRock,” writes Robin Wigglesworth, editor of the Financial Times ’ Alphaville, a news and commentary service for financial professionals. Wigglesworth’s compelling book tracks the beginning of index funds to the current day and ponders what their dominance means.

Wigglesworth begins by introducing a cast of 32 characters—among them, only two women: Jeanne Sinquefield, who designed derivatives, and former Barclays Global Investors CEO Pattie Dunn. Other key players:

• “Early-twentieth-century French mathematician Louis Bachelier, whose work on the ‘random walk’ of stocks would make him the intellectual godfather of passive investing”
• Berkshire Hathaway Chairman and CEO Warren Buffett, who won a 10-year-old bet with Ted Seides of Protege Partners in 2017 that the returns of index funds would outstrip those of a basket of hedge funds
• Jack Bogle, the founder of Vanguard, often called “Saint Jack” because his company offered index funds to the public en masse. At the end of his life, Bogle questioned the value of index funds but also defended them. “It’s hard to know how big we can get, and the consequences...,” he said. “But to solve this, we should not destroy the greatest invention in the history of finance.”

Best for Decision-Making Skills: Thinking, Fast and Slow

Daniel Kahneman is a psychologist by training. However, his work on prospect theory earned him a Nobel Prize in Economics in 2002, an award he acknowledges he would have shared with collaborator Amos Tversky, had Tversky lived, and with whom he also explored heuristics in judgment and decision making. Prospect theory means that investors value gains and losses differently, placing more weight on perceived gains than perceived losses.

His research also led him to conclude that women make better investors than men because they hold on to their investments, whereas men panic and sell when the market dips, thereby missing out on upswings. Kahneman estimates that the average person makes 35,000 decisions a day—the fast kind, such as when to get up, what to eat for breakfast, what to wear, and the slow kind that involve deliberative thinking, such as whether and whom to marry, which career to pursue, or where to live.

This data-heavy book, thoughtful and cerebral, is also full of anecdotes about Kahneman’s life of research and experiences. In 2016, Michael Lewis published The Undoing Project: A Friendship That Changed Our Minds , on the close partnership of Kahneman and Tversky.  

Best Read on Scoundrels and Saviors: The Predators’ Ball

Today’s younger readers may only know Michael Milken as an advocate for prostate cancer research and the founder of the Milken Institute, a think tank that promotes market-based principles and everything from financial innovations to social issues. When New Yorker writer Connie Bruck’s gripping book was published, life was very different for Milken. He was fighting off federal charges of securities and tax violations. He had been the junk bond king who underwrote some of the biggest corporate raiders, such as Ronald Perelman and Carl Icahn, during the height of junk bonds’ popularity and the leveraged buyout boom.

So concerned was Milken about Bruck’s reporting that he offered to pay her for all the book’s copies sold in exchange for not publishing it. He was right to be scared.

The book chronicles how Milken built the junk bond market and supported the corporate raider culture, while working 18-hour days from his Southern California office, as well as his precipitous fall leading to a plea deal in 1990. In addition to Milken, the characters include Apollo Management’s Leon Black, KKR & Co.’s Henry Kravis, Loews Corp.’s Laurence Tisch, stock trader Ivan Boesky, and Rudy Giuliani, then the crusading U.S. Attorney for the Southern District of New York. Then-President Donald Trump granted Milken a full pardon in 2020.

The Predators’ Ball is a meticulous retelling of the era that spawned the sentiment “greed is good.”

Best for Dealmakers: Getting to Yes

This classic book uses the words of poet Wallace Stevens to lay out its premise: “After the final no there comes a yes and on the yes the future of the world depends.” Getting to Yes , which debuted in 1981 and has been revised since, is the finest book on how to advocate for what you want with skill, integrity, and success.

It offers tips on developing a cordial relationship with the other side—that is, being a person, not the entity you represent—while avoiding the trap of being “nice” and getting walked all over, and deflecting and moving beyond the aggressive tactics of unscrupulous negotiators. Most helpful are examples of simple dealings in which the parameters of what’s at stake are expanded—the pie gets bigger, so to speak, so that both parties end up with more than they first asked for.

Underneath these outcomes are four steps: separating people from the problem; focusing on interests, not positions; inventing multiple options representing multiple gains for both sides; and insisting that the results be based on an objective standard.

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15 Best Finance Books for Financial Professionals

These finance books are must-read picks for financial advisors and other financial professionals.

15 Best Books for Finance Pros

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These money-focused reads include informative books by both investors and financial advisors.

Financial advisors and money professionals can choose from a range of books to supercharge their professional development, advice-giving strategies and money-management skills.

Many workers in finance know how deep the rabbit hole of information goes. There seems to be an endless depth to the well of knowledge available to financial professionals. Sometimes, you know what you're after when you dip your bucket into its pools. At other times, it's nice to have a recommendation to guide you.

This list highlights 15 great finance books. It includes behavioral finance books and tomes on understanding how money really works. It lists books by investors and by financial advisors.

This list of the best books for financial advisors won't let you go thirsty for knowledge.

"The Creature from Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin

While the title may sound better suited to a Halloween reading list than a list of the best finance books , make no mistake, this "creature" is one financial professionals should know about. Anyone who deals in finance had better understand money and the Federal Reserve. And no one explains it better – or more engagingly – than Griffin does.

It's written like a detective story, and Griffin pulls back the curtain to reveal "the magician's secrets" that "create the grand illusion called money."

"An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk" by Allison Schrager

It's hard to resist a book with a title like the start of a bad joke, which is good because Schrager's book should not be resisted. It should be devoured. At only 240 pages, it won't take long to do. In fact, you might wish it took a little longer.

An economist and award-winning journalist who has devoted her career to studying how people manage risk in all areas of their lives, Schrager is uniquely suited to help readers do the same.

As financial advisors know, risk cannot be avoided. Instead, the question is how to measure risk to maximize your chance of getting what you're after. In her book, Schrager teaches the five principles of dealing with risk. They may just change how you look at investment risk going forward.

"Nudge: Improving Decisions About Health, Wealth, and Happiness" by Richard H. Thaler

Written by the recipient of a Nobel Prize in economics, "Nudge" is a must-read for financial professionals, says Pete Clemson, senior vice president of digital solutions at Advisor Group.

"While not specifically about finance, it talks about how to change behaviors to be financially successful," he says. "It's even kind of humorous."

"Nudge" looks at how we make choices, which we often do poorly, in life and finance. And it explores how to make better decisions. What's more, if you know how people think, you can help "nudge" them to make better choices, a superpower many financial professionals would be glad to have.

"The Quants" by Scott Patterson

In his New York Times' bestseller, financial journalist Scott Patterson takes readers into the world of the quants, who are "technocrats who make billions not with gut calls or fundamental analysis but with formulas and high-speed computers." Patterson takes readers inside the heads of these math whizzes without forgetting that his readers may not live and breathe formulas.

"This rollicking romp through the history of quantitative finance traces the decadeslong development of quant models along with the colorful characters who developed them," says Steve Sanduski, a certified financial planner and co-founder of ROL Advisor. "(It's) a great primer on how quants dominate the market, written in a highly engaging narrative that is hard to put down."

"The Score Takes Care of Itself" by Bill Walsh

Not all financial books have to be boring – or directly related to personal money management. Take "The Score Takes Care of Itself" by Bill Walsh, for instance. While it's technically a football book, there's plenty in it for financial advisors to learn, Sanduski says.

In the book, Hall of Fame football coach Walsh shares his philosophy of leadership and the 17 values and beliefs that guided how he turned the San Francisco 49ers from one of the all-time worst professional sports teams into three-time Super Bowl champions during his 10 years as head coach, Sanduski says.

"(Walsh's) attention to detail, systems and process is exactly what top advisors need to do when scaling a world-class organization," he says.

"Advice That Sticks: How to Give Financial Advice That People Will Follow" by Moira Somers

Giving advice is easy, but getting your clients to follow your advice is less simple.

Financial psychologist and executive coach Somers knows how frustrating financial nonadherence can be. She also knows, from her clinical and consulting experience and research into positive psychology, behavioral economics and neuroscience, how to increase the chances that it won't happen to you and your clients.

Her book looks at the five main factors that contribute to whether a client will follow through with your advice. It's a thought-provoking, practical and sometimes humorous resource for any advice-giver.

"Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts" by Annie Duke

Whether it's working for you or against you, luck plays a role in every situation, according to former World Series of Poker champion Annie Duke. The trick is to let go of your need for certainty and instead focus on assessing what you know and what you don't, so you can embrace uncertainty to become a better decision-maker.

"The Alchemy of Finance" by George Soros

Soros is often hailed as one of the most profitable money managers in the world. In his book, he shares the strategies that earned him the title.

A philosopher at heart, Soros has treated the financial markets as his laboratory to astounding success. If you turn the last page of this great finance book holding the same perspective on financial markets you had upon opening the front cover, you probably read it wrong.

"No Longer Awkward: Communicating With Clients Through the Toughest Times of Life" by Amy Florian

At its heart, financial planning isn't about money; it's about people. "No matter how skilled you are at managing money, you might have to help a client when they are dealing with grief," says Misty Lynch, a certified financial planner and director of financial planning at Beck Bode in Boston. "Avoiding feelings is a mistake a lot of advisors make because it makes them feel uncomfortable." But advisors can be a huge help to clients during emotional transitions.

Florian's book will teach you how. "(It) gives practical tips on how to quit saying, 'I'm sorry' or go-to phrases and have a real, meaningful conversation about what your client is going through," Lynch says. "And if you can ever hear (Florian) speak, do yourself a favor and sign up. She is brilliant."

"Creating Money: Attracting Abundance" by Sanaya Roman

Roman's book may lean more toward the spiritual side of money mindsets, but its potential impact can't be overlooked. While unconventional compared to most finance books, it was incredibly helpful when Lynch started to examine her own thoughts about money, she says.

It's broken into four parts, starting with a section that helps you think about how your thoughts and energy attract what you want. "This may sound a little woo for an investment advisor," Lynch says, "but our thoughts drive our actions and our results."

The second part discusses the limiting beliefs you may harbor and how you can move past them. "So much of what we think about money was handed down to us and never questioned," Lynch says. "Even professionals have thoughts about money that can hold us back."

Next, the book takes readers through a section where you define what you love to do and how you can align it with the ways you make money. "There are plenty of people in jobs they don't even like for many reasons, and this chapter is a guide to get everyone thinking bigger," Lynch says.

The final chapter focuses on having money, which may sound easy, but if your "normal" state is being broke, your brain may guide you in a self-fulfilling broke prophecy.

"Overall, this book is fantastic for anyone who is willing to do some mindset work and feel better about money," Lynch says.

"The Most Important Thing: Uncommon Sense for the Thoughtful Investor" by Howard Marks

In the words of Marks, "You can't predict. You can prepare." After decades as a professional investor, Marks compiled excerpts from memos he sent to his clients to create "The Most Important Thing."

In it, Marks "explains his rules-based process, investment philosophy and thoughts on risk in a truly remarkable and effective manner," says B. Brandon Mackie, a certified financial planner and managing associate at Felton & Peel Wealth Management in Georgia and New York. The result is not an investing manual or how-to book. It's one man's philosophy and words of wisdom from a lifetime of experience.

"It reads more like a novel than a finance book, and you're learning from a professional – an expert that manages over $100 billion in assets and has been a professional investor for 50 years," Mackie says. "Passing on the chance to absorb that wisdom is a mistake in any market."

"The Behavioral Investor" by Daniel Crosby

Psychologist and behavioral finance expert Crosby is the man you want guiding you through investors' heads. Trained as a clinical psychologist, Crosby has applied his behavioral insights to his work as an asset manager and bestselling author.

In "The Behavioral Investor," Crosby "delivers what is arguably the most comprehensive guide to the psychology of asset management to date," says Joy Lere, a psychologist and consultant specializing in behavioral finance. "Crosby educates readers about the ways in which an investor's social milieu, psychology and neurobiology combine forces to impact behavior and decision-making."

Advisors who want to create and maintain a competitive edge by integrating behavioral finance in their practices shouldn't be without this book, she says. You'll get that inside edge you need through Crosby's practical, actionable strategies for successful wealth management.

"The modern-day investor's portfolio is incomplete without a copy of this book," Lere says.

"The Psychology of Money" by Morgan Housel

Housel's book takes a narrative approach to revealing human relationships with money. Through 19 short stories, Housel brings to life the complex psychology of money.

The book covers the same personal finance concepts you've probably learned before, but Housel reframes them in a way that makes you rethink your unique relationship with money, says Travis Briggs, CEO of Robo Global U.S.

"The lessons in this book are life-altering," and the "narrative captures the reality that it takes more than numbers to compute the complex calculus that is financial psychology," Lere says. It reveals the "timeless truths about the human experience of money."

"Women of The Street: Why Female Money Managers Generate Higher Returns (and How You Can Too)" by Meredith Jones

"If you want to have a fighting chance of winning the Wall Street World Series, then it will behoove you to throw like a girl," Lere says. "While the finance industry remains a field dominated by male players, Jones hits it out of the park with this valuable playbook."

Drawing from behavioral and biological investment research and interviews from top female money managers , her book shows why women make better investors.

"She helps readers understand the ways in which females in finance have a tendency to show up on the field in unique ways cognitively and behaviorally that ultimately yield a powerful edge and create outsized investment returns."

"Security Analysis" by Benjamin Graham and David Dodd

Most financial advisors know about "The Intelligent Investor," but how many have unearthed the great finance book that is "Security Analysis"?

First published in 1934, it laid the foundation of value investing before value investing was a thing. The latest edition includes 200 pages of commentary by leading Wall Street money managers, so you get to hear not only from "the Father of Value Investing" himself, but from modern practitioners of his philosophies as well.

Tags: money , books , financial advisors , personal finance , financial literacy

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• Business Financial Planning: How to Create Business Financial Plan
• Post author: fincart
• Post published: January 8, 2024
• Post category: Financial Planning

Table of Contents

In this fast and competitive world, the success of a business depends on how prepared they are. Prepared to adapt, to keep up with rivals, to handle the unexpected, and to seize opportunities as they arise. Through Business Financial Planning, businesses can fortify their foundation for success. They can gain insights by making use of their past performance data, their current situation, and trends to make predictions about future performances. They can make efficient use of their resources to maximise profit and wealth to keep all stakeholders happy. Since financial planning is so important for businesses, they hire a business financial consultant to help create a solid financial plan for sustained, long-term growth.

In this blog, let us understand the meaning of business financial planning, how it benefits businesses, how you can create a financial plan for your business, and see how different business financial plans are from individual ones.

What is Business Financial Planning?

With business financial planning, you create the blueprint for your business’s financial future. It details the financial management of your overall business plan. Through it, you decide the allocation of resources, monitor cash flows, decide the budget, manage liabilities, make projections and forecasts, manage risk, and much more, ultimately improving efficiency and achieving your short and long-term business goals. Basically, doing financial planning for business gives you insights to make smart and sustainable decisions. It is a comprehensive approach that ensures that your business not only survives but thrives in the ever-changing market dynamics. It needs to be strong and built on a solid foundation because when you try to grow your business and seek investors or loans, your financial plan will become the bedrock of credibility and confidence. 

The importance of financial planning in business

For any business, the Importance of Financial Planning cannot be overstated. It is essential to the success of any business. Here’s why – 

• Through financial planning, entrepreneurs gain insights that keep them informed and improve their decision-making.
• A financial plan outlines the business strategies that an entrepreneur will use over the course of the next month, quarter, or financial year. 
• Entrepreneurs can use financial plans to assess their past and current situation, the progress of their goals, and their resources. It helps them keep track of their financial performance, identify areas of improvement, and make informed decisions to ensure the optimal allocation of resources for sustained growth and success.
• When the resources are optimally allocated, business owners can increase their profitability and sustainability.
• Financial plans can also help identify risk areas in advance which enables business owners to develop strategies to mitigate them. 
• If you are a new business owner or are looking to start a business, it’s important to seek guidance from experts. A business financial planner can make sure you cover every essential component in your plan and ensure it aligns with your business goals. 
• Consider the local aspects of your business and ask yourself, “Can a business financial advisor near me help me get started with my financial planning?” With help from a local business financial consultant, you will receive personalised insights tailored to the specific needs and challenges of your new venture while keeping in mind the competition and market trends in your area. 
• Explore different business finance consulting services, and leverage the expertise of professionals who can help your business grow and succeed.

Benefits of financial planning for business

A well-crafted business financial plan lays the foundation for stable growth. Let’s list down some ways in which making a financial plan can benefit your business – 

1. Cash Flow Management 

As the name suggests, cash flow refers to the money coming in and out of your business. Usually, when a business is new, it will spend more money than it will earn, so your expectations about cash flow should be realistic. Through a financial plan, you will be able to forecast and manage cash flows effectively and avoid underflows or overflows. 

2. Risk Management 

A business faces many different types of financial risks , such as credit risk, liquidity risk, legal risk, operational risk, systematic risk, and market risk. A financial plan helps a business stay prepared for such dangers through forecasts and scenario planning. It will also compel you to create contingencies to tackle unexpected circumstances. 

3. Creates Transparency 

A financial plan creates transparency among investors, executives, and employees. If you want to hire good employees, they would want to know how stable your business is, and how likely it is to succeed in the future. A good and transparent financial plan attracts investors and high-quality employees. 

4. Cost Reduction 

A part of your financial plan is your budget. When you assess your expenses, you will likely find areas where you can make cuts to save more money. Cost cutting will help your bottom line and make sure you utilise your resources more efficiently.

Also Read: What is Cost Reduction Strategy? A complete Guide

5. Funding Opportunities 

A solid financial plan enhances your credibility and attracts potential investors. Investors will see how their money will be used and study your past performances. Similarly, if your business needs loans, banks will scrutinise your liabilities and how you’ve managed them. A good financial plan can ensure your business gets all the funding it needs.

6. Crisis Management 

Through projections, forecasts, and scenario planning, you will see any financial crisis coming from far away. But there are cases when extremely unexpected events happen, such as the 2008 global economic crisis, or the COVID pandemic. A well-prepared financial plan not only enables you to identify potential crises in advance but also equips you with contingency measures to deal with such events. This includes having a comprehensive risk mitigation strategy, maintaining a sufficient cash reserve, and establishing clear communication to keep stakeholders informed. 

7. Professional Guidance 

These benefits highlight why businesses invest heavily in business finance consulting services. Seeking guidance from a business financial consultant comes with its own advantages, the first being benefiting from the specialised knowledge and experience of financial professionals. A business financial planner can also tailor your financial plan according to the unique needs and goals of your business, and help you by regularly reviewing and adapting your financial plan to changes in the market.

Steps to Develop a Business Financial Plan

Creating effective financial plans for businesses demands a thoughtful approach, honest assessment, and careful implementation. Understand that this plan is going to be your guide for the future, and how closely and effectively you follow it will determine whether or not you achieve your business goals. Here are three simple steps you can take to start creating a successful business financial plan – 

A. Setting Financial Goals:

Start by setting attainable short-term and long-term financial goals that are aligned with your business vision. These objectives should be clear, measurable, and defined with a time horizon. Ask yourself some questions –  Where do I want my business to be in the next year or five? Do I plan to expand my business? If so, in how many years? Do I want to hit a specific revenue target to attract investors? Be specific with your questions, as the answers will help you set realistic goals. Establishing such goals will provide a strategic framework and help you focus your financial efforts and resources toward specific milestones, which will ultimately steer your business in the direction you wanted and planned for. 

B. Budgeting Techniques

A budget can help you dictate the flow of cash. It is a framework that includes your total income, total expenses, and investments and reserves. Assess your situation and note down all your income and its sources, such as sales income, investments, donors, investors, or other revenue streams. Now take a thorough look at your expenses such as daily operational costs, marketing, advertising, employee salaries, research and development of products, equipment, and technology. Of course, if you want to profit, your revenue should exceed all your expenses. A budget helps with exactly this, and more. It will allow you to allocate resources to different departments efficiently. It is essentially a constraint, and everyone must work within it. When you break down your budget, you’ll find it easy to track and manage it.

Also Read: Understanding Budgeting in Financial Management

C. Forecasting and Projections:

Now you have to create financial projections for different components such as income statements or balance sheets. These take into account the past performance, market trends,  expenses you are expecting, and your sales forecast for the next month, quarter, or year. If you own a business that works with a very tight cash flow, you can also consider making a weekly projection. 

Financial projections are important as they are shared with stakeholders, and help you navigate uncertainties and make sure that you remain on track toward your business goals. Take a look at your goals and work out how much it will cost you to reach them. Do this for a variety of scenarios – best case, worst case, or likely scenarios. This comprehensive scenario planning will help you stay prepared for any challenges and improve your decision-making. 

Other than these steps you should make sure to plan for contingencies. Even though forecasts and projections give you a good idea of where you’re likely headed, they can’t predict the future. The world of finance especially is full of uncertainties, and a business should be prepared for them. 

Make sure you have a decently sized cash reserve during slow periods or market downturns. Other things include making sure you have access to quick credit lines and liquid assets. Remember that financial planning doesn’t just stop after you craft the document. It is a continuous process, which means you should monitor and review your plan regularly and accordingly make adjustments. 

Individual vs. Business Financial Plans

Here is how a business financial plan differs from that of an individual:

Conclusion:

Every business financial plan should clearly state three things – How the business will make its money, what it needs to do to achieve its goals, and its operational budget. We’ve seen the many benefits of a business financial plan, and how assessment, financial goals, budgeting, and projections can help you craft one. We’ve also seen that financial planning for business is a lot more complex and bigger in scope than individual financial planning. As a business owner, you will be answerable to your investors, employees, banks, and other stakeholders, so your financial plan needs to be transparent and have a solid base.

It would be wise for any business owner to consult with a business financial advisor. This professional guidance can provide valuable insights and expertise while crafting a comprehensive financial plan that is suited to your specific industry, goals, and competition. Their expertise will also help you with other aspects, such as risk management, investment decisions, and your optimising capital structure. By having them by your side, you can make informed decisions, and ensure the financial stability and growth of your business.

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• Creating a Small Business Financial Plan

Written by True Tamplin, BSc, CEPF®

Reviewed by subject matter experts.

Updated on September 02, 2023

Get Any Financial Question Answered

Table of contents, financial plan overview.

A financial plan is a comprehensive document that charts a business's monetary objectives and the strategies to achieve them. It encapsulates everything from budgeting and forecasting to investments and resource allocation.

For small businesses, a solid financial plan provides direction, helping them navigate economic challenges, capitalize on opportunities, and ensure sustainable growth.

The strength of a financial plan lies in its ability to offer a clear roadmap for businesses.

Especially for small businesses that may not have a vast reserve of resources, prioritizing financial goals and understanding where every dollar goes can be the difference between growth and stagnation.

It lends clarity, ensures informed decision-making, and sets the stage for profitability and success.

Understanding the Basics of Financial Planning for Small Businesses

Role of financial planning in business success.

Financial planning is the backbone of any successful business endeavor. It serves as a compass, guiding businesses toward profitability, stability, and growth.

With proper financial planning, businesses can anticipate potential cash shortfalls, make informed investment decisions, and ensure they have the capital needed to seize new opportunities.

For small businesses, in particular, tight financial planning can mean the difference between thriving and shuttering. Given the limited resources, it's vital to maximize every dollar and anticipate financial challenges.

Through diligent planning, small businesses can position themselves competitively, adapt to market changes, and drive consistent growth.

Core Components of a Financial Plan for Small Businesses

Every financial plan comprises several core components that, together, provide a holistic view of a business's financial health and direction. These include setting clear objectives, estimating costs , preparing financial statements , and considering sources of financing.

Each component plays a pivotal role in ensuring a thorough and actionable financial strategy .

For small businesses, these components often need a more granular approach. Given the scale of operations, even minor financial missteps can have significant repercussions.

As such, it's essential to tailor each component, ensuring they address specific challenges and opportunities that small businesses face, from initial startup costs to revenue forecasting and budgetary constraints.

Setting Clear Small Business Financial Objectives

Identifying business's short-term and long-term financial goals.

Every business venture starts with a vision. Translating this vision into actionable financial goals is the essence of effective planning.

Short-term goals could range from securing initial funding and achieving a set monthly revenue to covering startup costs. These targets, usually spanning a year or less, set the immediate direction for the business.

On the other hand, long-term financial goals delve into the broader horizon. They might encompass aspirations like expanding to new locations, diversifying product lines, or achieving a specific market share within a decade.

By segmenting goals into short-term and long-term, businesses can craft a step-by-step strategy, making the larger vision more attainable and manageable.

Understanding the Difference Between Profitability and Cash Flow

Profitability and cash flow, while closely linked, are distinct concepts in the financial realm. Profitability pertains to the ability of a business to generate a surplus after deducting all expenses.

It's a metric of success and indicates the viability of a business model . Simply put, it answers whether a business is making more than it spends.

In contrast, cash flow represents the inflow and outflow of cash within a business. A company might be profitable on paper yet struggle with cash flow if, for instance, clients delay payments or unexpected expenses arise.

For small businesses, maintaining positive cash flow is paramount. It ensures that they can cover operational costs, pay employees, and reinvest in growth, even if they're awaiting payments or navigating financial hiccups.

Estimating Small Business Startup Costs (for New Businesses)

Fixed vs variable costs.

When embarking on a new business venture, understanding costs is paramount. Fixed costs remain consistent regardless of production levels. They include expenses like rent, salaries, and insurance . These are predictable outlays that don't fluctuate with business performance.

Variable costs , conversely, change in direct proportion to production or business activity. Think of costs associated with materials for manufacturing or commission for sales .

For a startup, delineating between fixed and variable costs aids in crafting a more dynamic budget, allowing for adaptability as the business scales and evolves.

One-Time Expenditures vs Ongoing Expenses

Startups often grapple with numerous upfront costs. From purchasing equipment and setting up a workspace to initial marketing campaigns, these one-time expenditures lay the foundation for business operations.

They differ from ongoing expenses like utility bills, raw materials, or employee wages that recur monthly or annually.

For a small business owner, distinguishing between these costs is critical. One-time expenditures often demand a larger chunk of initial capital, while ongoing expenses shape the monthly and annual budget.

By categorizing them separately, businesses can strategize funding needs more effectively, ensuring they're equipped to meet both immediate and recurrent financial obligations.

Funding Sources for Small Businesses

Personal savings.

This is often the most straightforward way to fund a startup. Entrepreneurs tap into their personal savings accounts to jumpstart their business.

While this method has the benefit of not incurring debt or diluting company ownership, it intertwines the individual's personal financial security with the business's fate.

The entrepreneur must be prepared for potential losses, and there's the evident psychological strain of putting one's hard-earned money on the line.

Loans can be sourced from various institutions, from traditional banks to credit unions . They offer a substantial sum of money that can be paid back over time, usually with interest .

The main advantage of taking a loan is that the entrepreneur retains full ownership and control of the business.

However, there's the obligation of monthly repayments, which can strain a business's cash flow, especially in its early days. Additionally, securing a loan often requires collateral and a sound credit history.

Investors, including angel investors and venture capitalists , offer capital in exchange for equity or a stake in the company.

Angel investors are typically high-net-worth individuals who provide funding in the initial stages, while venture capitalists come in when there's proven business potential, often injecting larger sums. The advantage is substantial funding without the immediate pressure of repayments.

However, in exchange for their investment, they often seek a say in business decisions, which might mean compromising on some aspects of the original business vision.

Grants are essentially 'free money' often provided by government programs, non-profit organizations, or corporations to promote innovation and support businesses in specific sectors.

The primary advantage of grants is that they don't need to be repaid, nor do they dilute company ownership. However, they can be highly competitive and might come with stipulations on how the funds should be used.

Moreover, the application process can be lengthy and requires showcasing the business's potential or alignment with the specific goals or missions of the granting institution.

Preparing Key Financial Statements for Small Businesses

Income statement (profit & loss).

An Income Statement , often termed as the Profit & Loss statement , showcases a business's financial performance over a specific time frame. It details revenues , expenses, and ultimately, profits or losses.

By analyzing this statement, business owners can pinpoint revenue drivers, identify exorbitant costs, and understand the net result of their operations.

For small businesses, this document is instrumental in making informed decisions. For instance, if a certain product line is consistently unprofitable, it might be prudent to discontinue it. Conversely, if another segment is thriving, it might warrant further investment.

The Income Statement, thus, serves as a financial mirror, reflecting the outcomes of business strategies and decisions.

Balance Sheet

The Balance Sheet offers a snapshot of a company's assets , liabilities , and equity at a specific point in time.

Assets include everything the business owns, from physical items like equipment to intangible assets like patents .

Liabilities, on the other hand, encompass what the company owes, be it bank loans or unpaid bills.

Equity represents the owner's stake in the business, calculated as assets minus liabilities.

This statement is crucial for small businesses as it offers insights into their financial health. A robust asset base, minimal liabilities, and growing equity signify a thriving enterprise.

In contrast, mounting liabilities or dwindling assets could be red flags, signaling the need for intervention and strategy recalibration.

Cash Flow Statement

While the Income Statement reveals profitability, the Cash Flow Statement tracks the actual movement of money.

It categorizes cash flows into operating (day-to-day business), investing (buying/selling assets), and financing (loans or equity transactions) activities. This statement unveils the liquidity of a business, indicating whether it has sufficient cash to meet immediate obligations.

For small businesses, maintaining positive cash flow is often more vital than showcasing profitability.

After all, a business might be profitable on paper yet struggle if clients delay payments or unforeseen expenses emerge.

By regularly reviewing the Cash Flow Statement, small business owners can anticipate cash crunches and strategize accordingly, ensuring seamless operations irrespective of revenue cycles.

Small Business Budgeting and Expense Management

Importance of budgeting for a small business.

Budgeting is the financial blueprint for any business, detailing anticipated revenues and expenses for a forthcoming period. It's a proactive approach, enabling businesses to allocate resources efficiently, plan for investments, and prepare for potential financial challenges.

For small businesses, a meticulous budget is often the linchpin of stability, ensuring they operate within their means and avoid financial pitfalls.

Having a well-defined budget also fosters discipline. It curtails frivolous spending, emphasizes cost-efficiency, and sets clear financial boundaries.

For small businesses, where every dollar counts, a stringent budget is the gateway to financial prudence, ensuring that funds are utilized judiciously, fostering growth, and minimizing wastage.

Strategies for Reducing Costs and Optimizing Expenses

Bulk purchasing.

When businesses buy supplies in large quantities, they often benefit from discounts due to economies of scale . This can significantly reduce per-unit costs.

However, while bulk purchasing leads to immediate savings, businesses must ensure they have adequate storage and that the products won't expire or become obsolete before they're used.

Renegotiating Vendor Contracts

Regularly reviewing and renegotiating contracts with suppliers or service providers can lead to better terms and lower costs. This might involve exploring volume discounts, longer payment terms, or even bartering services.

Building strong relationships with vendors often paves the way for such negotiations.

Adopting Energy-Saving Measures

Simple changes, like switching to LED lighting or investing in energy-efficient appliances, can lead to long-term savings in utility bills. Moreover, energy conservation not only reduces costs but also minimizes the environmental footprint, which can enhance the business's reputation.

Embracing Technology

Modern software and technology can streamline business processes. Automation tools can handle repetitive tasks, reducing labor costs.

Meanwhile, data analytics tools can provide insights into customer preferences and behavior, ensuring that marketing budgets are used effectively and target the right audience.

Streamlining Operations

Regularly reviewing and refining business processes can eliminate redundancies and improve efficiency. This might mean merging roles, cutting down on unnecessary meetings, or simplifying supply chains. A leaner operation often translates to reduced expenses.

Outsourcing Non-core Tasks

Instead of maintaining an in-house team for every function, businesses can outsource tasks that aren't central to their operations.

For instance, functions like accounting , IT support, or digital marketing can be outsourced to specialized agencies, often leading to cost savings and access to expert skills.

Cultivating a Culture of Frugality

Encouraging employees to adopt a cost-conscious mindset can lead to collective savings. This can be fostered through incentives, regular training, or even simple practices like recycling and reusing office supplies.

When everyone in the organization is attuned to the importance of cost savings, the cumulative effect can be substantial.

Forecasting Small Business Revenue and Cash Flow

Techniques for predicting future sales in a small business, past sales data analysis.

Historical sales data is a foundational element in any forecasting effort. By reviewing previous sales figures, businesses can identify patterns, understand seasonal fluctuations, and recognize the effects of past initiatives.

This information offers a baseline upon which to build future projections, accounting for known recurring variables in the business cycle .

Market Research

Understanding the larger market dynamics is crucial for accurate forecasting. This involves tracking industry trends, monitoring shifts in consumer behavior, and being aware of potential market disruptions.

For instance, a sudden technological advancement can change consumer preferences or regulatory changes might impact an industry.

Local Trend Analysis

For small businesses, localized insights can be especially impactful. Observing local competitors, understanding regional consumer preferences, or noting shifts in the local economy can offer precise data points.

These granular details, when integrated into a larger forecasting model, can enhance prediction accuracy.

Customer Feedback

Direct feedback from customers is an invaluable source of insights. Surveys, focus groups, or even informal chats can reveal customer sentiments, preferences, and potential future purchasing behavior.

For instance, if a majority of loyal customers express interest in a new product or service, it can be indicative of future sales potential.

Moving Averages

This technique involves analyzing a series of data points (like monthly sales) by creating averages from different subsets of the full data set.

For yearly forecasting, a 12-month moving average can be used to smooth out short-term fluctuations and highlight longer-term trends or cycles.

Regression Analysis

Regression analysis is a statistical tool used to identify relationships between variables. In sales forecasting, it can help understand how different factors (like marketing spend, seasonal variations, or competitor actions) relate to sales figures.

Once these relationships are understood, businesses can predict future sales based on planned actions or expected external events.

Understanding the Cash Cycle of Business

The cash cycle encompasses the time it takes for a business to convert resource investments, often in the form of inventory, back into cash.

This involves the processes of purchasing inventory, selling it, and subsequently collecting payment. A shorter cycle implies quicker cash turnarounds, which are vital for liquidity.

For small businesses, a firm grasp of the cash cycle can aid in managing cash flow more effectively.

By identifying bottlenecks or delays, businesses can strategize to expedite processes. This might involve renegotiating payment terms with suppliers, offering discounts for prompt customer payments, or optimizing inventory levels to prevent overstocking.

Ultimately, understanding and optimizing the cash cycle ensures that a business remains liquid and agile.

Preparing for Seasonality and Unexpected Changes

Seasonality affects many businesses, from the ice cream vendor witnessing summer surges to the retailer bracing for holiday shopping frenzies.

By analyzing historical data and market trends, businesses can prepare for these cyclical shifts, ensuring they stock up, staff appropriately, and market effectively.

Small businesses, often operating on tighter margins , need to be especially vigilant. Beyond seasonality, they must also brace for unexpected changes – a local construction project obstructing store access, a sudden competitor emergence, or unforeseen regulatory changes.

Building a financial buffer, diversifying product or service lines, and maintaining flexible operational strategies can equip small businesses to weather these unforeseen challenges with resilience.

Securing Small Business Financing and Capital

Role of debt and equity financing.

When businesses seek external funding, they often grapple with the debt vs. equity conundrum. Debt financing involves borrowing money, typically via loans. While it doesn't dilute ownership, it necessitates regular interest payments, potentially impacting cash flow.

Equity financing, on the other hand, entails selling a stake in the business to investors. It might not demand regular repayments, but it dilutes ownership and might influence business decisions.

Small businesses must weigh these options carefully. While loans offer a structured repayment plan and retained control, they might strain finances if the business hits a rough patch.

Equity financing, although relinquishing some control, might bring aboard strategic partners, offering expertise and networks in addition to funds.

The optimal choice hinges on the business's financial health, growth aspirations, and the founder's comfort with sharing control.

Choosing Between Different Types of Loans

A staple in the lending arena, term loans offer businesses a fixed amount of capital that is paid back over a specified period with interest. They're often used for significant one-time expenses, such as purchasing machinery, real estate , or even business expansion.

With predictable monthly payments, businesses can plan their budgets accordingly. However, they might require collateral and a robust credit history for approval.

Lines of Credit

Unlike term loans that provide funds in a lump sum, a line of credit grants businesses access to a pool of funds up to a certain limit.

Businesses can draw from this line as needed, only paying interest on the amount they use. This makes it a versatile tool, especially for managing cash flow fluctuations or unexpected expenses. It serves as a financial safety net, ready for use whenever required.

As the name suggests, microloans are smaller loans designed to cater to businesses that might not need substantial amounts of capital. They're particularly beneficial for startups, businesses with limited credit histories, or those in need of a quick, small financial boost.

Since they are of a smaller denomination, the approval process might be more lenient than traditional loans.

Peer-To-Peer Lending

A contemporary twist to the traditional lending model, peer-to-peer (P2P) platforms connect borrowers directly with individual lenders or investor groups.

This direct model often translates to quicker approvals and competitive interest rates as the overheads of traditional banking structures are removed. With technology at its core, P2P lending can offer a more user-friendly, streamlined process.

However, creditworthiness still plays a pivotal role in determining interest rates and loan amounts.

Crowdfunding and Alternative Financing Options

In an increasingly digital age, crowdfunding platforms like Kickstarter or Indiegogo have emerged as viable financing avenues.

These platforms enable businesses to raise small amounts from a large number of people, often in exchange for product discounts, early access, or other perks. This not only secures funds but also validates the business idea and fosters a community of supporters.

Other alternatives include invoice financing, where businesses get an advance on pending invoices, or merchant cash advances tailored for businesses with significant credit card sales.

Each financing mode offers unique advantages and constraints. Small businesses must meticulously evaluate their financial landscape, growth trajectories, and risk appetite to harness the most suitable option.

Small Business Tax Planning and Management

Basic tax obligations for small businesses.

Navigating the maze of taxation can be daunting, especially for small businesses. Yet, understanding and fulfilling tax obligations is crucial.

Depending on the business structure—whether sole proprietorship , partnership , LLC , or corporation—different tax rules apply. For instance, while corporations are taxed on their earnings, sole proprietors report business income and expenses on their personal tax returns.

In addition to income taxes, small businesses may also be responsible for employment taxes if they have employees. This covers Social Security , Medicare , federal unemployment, and sometimes state-specific taxes.

There might also be sales taxes, property taxes, or special state-specific levies to consider.

Consistently maintaining accurate financial records, being aware of filing deadlines, and setting aside funds for tax obligations are essential practices to avoid penalties and ensure compliance.

Advantages of Tax Planning and Potential Deductions

Tax planning is the strategic approach to minimizing tax liability through the best use of available allowances, deductions, exclusions, and breaks.

For small businesses, effective tax planning can lead to significant savings.

This might involve strategies like deferring income to a later tax year, choosing the optimal time to purchase equipment, or taking advantage of specific credits available to businesses in certain sectors or regions.

Several potential deductions can reduce taxable income for small businesses. These include expenses like rent, utilities, business travel, employee wages, and even certain meals.

By keeping abreast of tax law changes and actively seeking out eligible deductions, small businesses can optimize their financial landscape, ensuring they're not paying more in taxes than necessary.

Importance of Hiring a Tax Professional or Accountant

While it's feasible for small business owners to manage their taxes, the intricate nuances of tax laws make it beneficial to consult professionals.

An experienced accountant or tax consultant can not only ensure compliance but can proactively recommend strategies to reduce tax liability.

They can guide businesses on issues like whether to classify someone as an employee or a contractor, how to structure the business for optimal taxation, or when to make certain capital investments.

Beyond just annual tax filing, these professionals offer year-round counsel, helping businesses maintain clean financial records, stay updated on tax law changes, and plan for future financial moves.

The investment in professional advice often pays dividends , saving businesses from costly mistakes, penalties, or missed financial opportunities.

Regularly Reviewing and Adjusting the Small Business Financial Plan

Setting checkpoints and milestones.

Like any strategic blueprint, a financial plan isn't static. It serves as a guiding framework but should be flexible enough to adapt to evolving business realities.

Setting regular checkpoints— quarterly , half-yearly, or annually—can help businesses assess whether they're on track to meet their financial objectives.

Milestones, such as reaching a specific sales target, launching a new product, or expanding into a new market, offer tangible markers of progress. Celebrating these victories can bolster morale, while any shortfalls can serve as lessons, prompting strategy tweaks. F

or small businesses, where agility is an asset, regularly revisiting the financial plan ensures that the business remains aligned with its overarching financial goals while being responsive to the dynamic marketplace.

Using Financial Ratios to Monitor Business Health

Financial ratios offer a distilled snapshot of a business's health. Ratios like the current ratio ( current assets divided by current liabilities ) can shed light on liquidity, indicating whether a business can meet short-term obligations.

The debt-to-equity ratio , contrasting borrowed funds with owner's equity, offers insights into the business's leverage and potential financial risk.

Profit margin , depicting profitability relative to sales, can highlight operational efficiency. By consistently monitoring these and other pertinent ratios, small businesses can glean actionable insights, understanding their financial strengths and areas needing attention.

In a realm where early intervention can stave off major financial setbacks, these ratios serve as vital diagnostic tools, guiding informed decision-making.

Pivoting Strategies Based on Financial Performance

In the ever-evolving world of business, flexibility is paramount. If financial reviews indicate that certain strategies aren't yielding anticipated results, it might be time to pivot.

This could involve tweaking product offerings, revising pricing strategies, targeting a different customer segment, or even overhauling the business model.

For small businesses, the ability to pivot can be a lifeline. It allows them to respond swiftly to market changes, customer feedback, or internal challenges.

A robust financial plan, while offering direction, should also be pliable, accommodating shifts in strategy based on real-world performance. After all, in the business arena, adaptability often spells the difference between stagnation and growth.

Bottom Line

Financial foresight is integral for the stability and growth of small businesses. Effective revenue and cash flow forecasting, anchored by historical sales data and enhanced by market research, local trends, and customer feedback, ensures businesses are prepared for future demands.

With the unpredictability of the business environment, understanding the cash cycle and preparing for unforeseen challenges is essential.

As businesses contemplate external financing, the decision between debt and equity and the myriad of loan types, should be made judiciously, keeping in mind the business's health, growth aspirations, and risk appetite.

Furthermore, diligent tax planning, with professional guidance, can lead to significant financial benefits. Regular reviews using financial ratios allow businesses to gauge their performance, adapt strategies, and pivot when necessary.

Ultimately, the agility to adapt, guided by a well-structured financial plan, is pivotal for businesses to thrive in a dynamic marketplace.

Creating a Small Business Financial Plan FAQs

What is the importance of a financial plan for small businesses.

A financial plan offers a structured roadmap, guiding businesses in making informed decisions, ensuring growth, and navigating financial challenges.

How do forecasting revenue and understanding cash cycles aid in financial planning?

Forecasting provides insights into expected income, aiding in budget allocation, while understanding cash cycles ensures effective liquidity management.

What are the core components of a financial plan for small businesses?

Core components include setting objectives, estimating startup costs, preparing financial statements, budgeting, forecasting, securing financing, and tax management.

Why is tax planning vital for small businesses?

Tax planning ensures compliance, optimizes tax liabilities through available deductions, and helps businesses save money and avoid penalties.

How often should a small business review its financial plan?

Regular reviews, ideally quarterly or half-yearly, ensure alignment with business goals and allow for strategy adjustments based on real-world performance.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide , a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University , where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon , Nasdaq and Forbes .

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Home > Blog > Top Recommended Financial Planning and Analysis Books

Top Recommended Financial Planning and Analysis Books

by Zvi Korn

The field of FP&A is an ever-changing, dynamic landscape. To help finance professionals stay ahead of the curve, it’s important to have a solid understanding of financial analysis methods and processes. 

Whether you are a brand new finance professional or someone who is looking to brush up on your skills, there are countless FP&A books out there that you can read. The question becomes which ones are worth reading? 

Therefore, we’ve put together a list of recommended FP&A books in 2021 . Read on to find out which books can help you unlock the raw, untapped power and potential of financial reporting.

1. Financial Planning & Analysis and Performance Management by Jack Alexander

Jack Alexander is a celebrated author and an experienced CFO and business consultant. In this five-part book , Jack offers a practical guide that helps professionals bridge the gap between performance and planning. 

The author calls upon his extensive expertise as a CFO and business consultant to create a phenomenal reference manual for FP&A analysts and Investor Relations teams.

As far as Financial Planning and Analysis books go, this is among the best FP&A books out there with its wide assortment of topics, ranging from the basic best FP&A practices and critical tools to more advanced topics such as dealing with uncertainty and risk.

This book also has the unique feature of having a companion website, wiley.com/go/fpapm , which emphasizes the importance of selecting appropriate financial dashboards and measures. It does this by using illustrative performance dashboards and excel models to be used as working examples and starting points for the reader’s use. 

The excel examples used in the books have accompanying spreadsheets on the website that enable the readers to fully comprehend the context, objectives, and logic of the worksheet analysis.

2. Financial Planning and Analysis with SAP: SAP solutions for Enterprise Performance Management (EPM) by Malcolm J. Faulkner and William D. Newman

Financial Planning and Analysis with SAP is the ultimate FP&A guide for professionals who desire to develop and execute a fully optimized EPM process and strategy. This book’s content, which covers topics ranging from strategic planning through integration to SAP requirements for its successful application in EPM, has made the business path a little bit easier to navigate. 

It takes the concept of EPM and explores it extensively, trying to make the reader understand how SAP EPM can be leveraged with other solutions, while also expanding the flexibility and effectiveness of SAP EPM further.

As expert consultants and SAP insiders, Faulkner and Newman provide an insider’s view into the technical configuration of FP&A and EPM processes with the strategic utilization of SAP focusing on EPM solutions. The book helps you discover how EPM can help manage your organization’s FP&A processes. 

It also introduces readers to SAP Business Planning and Consolidation , the most influential SAP applications for budgeting and planning in EPM. Professional financial analysts can use the book as a guide for navigating the company’s strategic journey. It provides a process of laying out the plans and execution elements that companies should take to help them attain financial stability.

3. Financial Analysis, Planning, and Forecasting: Theory and Application (Third Edition) by Cheng F. Lee and John Lee

Financial Analysis, Planning and Forecasting: Theory and Application , a five-part book, is an excellent introduction to FP&A and Forecasting for beginners . Drawing on Prof Cheng-Few Lee’s extensive business experience, teaching, and research, this guide helps its reader understand and integrate both practical and theoretical aspects of financial planning and forecasting. 

The five parts covered in the book are:

• Information and Methodology of Financial Analysis
• Alternate Finance Theories and Cost of Capital
• Capital Budgeting and Leasing Decisions
• Corporate Policies and their inter-relationships
• Financial Planning and Forecasting

These five parts analyze the inter-relationships between the distinct theories in FP&A carefully by using real-world examples to discuss the ideas in depth, using relevant methodology and data.

Among the topics discussed in this publication are the fundamental concepts of financial analysis and planning, using financial management as a background for discussing financial analysis and planning. 

With new chapters added and other chapters combined in the third edition, the subject matter has been extensively expanded and updated to accommodate and keep up with the digital migration of the business world, thus providing a holistic view of the subject. 

However, the integrity of the authors’ wisdom remains, despite the book featuring brand-new updates and extra modern takes on the concept. This has made it earn its place in the prestigious literary canon for financial titles.

4. Corporate Financial Analysis: Simple Methods and Strategies to Financial Analysis Mastering by Blaine Robertson

This is a book that will enable its readers to understand the intricate and surprisingly simple concept of Corporate Financial Analysis, so that they can correctly judge whether or not their company is financially sound.

With a number of finance and investment-related books under his belt, Robertson has proven to be an expert in the financial department, imparting his wealth of knowledge to both professionals and beginners.

Corporate Finance Analysis: simple methods and strategies to Financial Analysis Mastering , this book comes at a time when the need for financial analysis has grown exponentially in the current digital world. 

Businesses, especially small businesses, need to weigh the effects of certain financial decisions, such as borrowing on their businesses. This book covers Financial Analysis, which gives a business owner the tools they need to evaluate their company’s financial information. 

It also equips potential investors with the necessary information so that they can form opinions about the company’s investment value and the expectations for future performance.

5. Corporate Financial Analysis: 3-in-1 Comprehensive Beginner’s Guide Simple Methods and Strategies + Advanced Methods and Techniques for Analysis of Financial Statements, Reports and Markets by Blaine Robertson

This is the beginner’s guide book that provides its readers with a wide array of information regarding the different strategies and methodologies employed in corporate financial analysis to create a financially sound organization. 

From the mind that brought you Corporate Financial Analysis: Simple Methods and Strategies to Financial Analysis Mastering, Robertson combines his works in this masterpiece. 

This book covers the concept of Corporate Financial Analysis in its entirety, extensively breaking down the processes step-by-step to simplify them, so that beginners can easily understand them.

Some of the questions that business owners usually ask themselves are answered in this book. The book provides true learning by equipping its readers with enough knowledge to enable them to practice what they have learned and apply it to real-life situations, and teach the readers the basic concepts of Corporate financial Analysis. 

This book is versatile, and professional financial analysts can also use the content in the book to guide their practice. The book is available in both paperback and ebook versions that people can read on any device.

6. Using Excel for Business Analysis: A Guide to Financial Modelling Fundamentals + Website by Danielle Stein Fairhurst

Ms. Fairhurst channels her expertise and experience as a Financial Analyst to bring to life this comprehensive guide to financial modeling , suitable for beginners’ intermediaries and professional analysts. 

Readers of the book will gain from the author’s talent for financial modeling and help them create meaningful financial models in the forms of pricing models, business cases, and management reports that they can use to draft and craft proposals and financial reports . 

The book is packed with financial modelling concepts and practicalities that are essential in performing complex analyses in Excel.

The modern business world relies heavily on technology and real-time data and information for financial forecasting to be a step ahead of the competition. The book profoundly exploits the Excel functionality to enable financial practitioners to craft a compelling financial model to provide accurate information for sound financial decision-making. 

The author opens the book with a general guide to financial modelling, building skill upon skill on each subsequent chapter, leading to an actual working model. The book thoroughly covers the features, functions, and financial tools from a practical perspective, highlighting their application in a real-world situation using relevant examples. 

Financial modelling using Excel and its different aspects is also covered, including the step-by-step instructions of the process. The companion website provides the readers with live model worksheets that give them hands-on practice and experience.

The importance of financial planning and analysis cannot be stressed enough in the modern business world. And while there are numerous financial analysis books out there that help professional analysts build upon their FP&A knowledge, there are many more that can simplify the subject and are highly recommended for beginners.

You can apply the theoretical aspects of FP&A found in these books to real-world situations, enabling you to leverage insights or metrics to make significant improvements in your company. And in return, allowing your company to thrive and prosper.

If you are looking to further your knowledge in financial analysis, then the books mentioned above should top your list. 

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Business Financial Planning with Microsoft Excel 1st Edition, Kindle Edition

Business Finance Planning with Microsoft® Excel ® shows how to visualize, plan, and put into motion an idea for creating a start-up company. Microsoft Excel is a tool that makes it easier to build a business financial planning process for a new business venture.

With an easy-to follow structure, the book flows as a six-step process:

• Presenting a case study of a business start-up
• Creating goals and objectives
• Determining expenses from those goals and objectives,
• Estimating potential sales revenue based on what competitors charge their customers
• Predicting marketing costs
• Finalizing the financial analysis with a of financial statements.

Written around an IT startup case study, the book presents a host of Excel worksheets describing the case study along with accompanying blank forms. Readers can use these forms in their own businesses, so they can build parts of their own business plans as they go. This is intended to be a practical guide that teaches and demonstrates by example, in the end presenting a usable financial model to build and tweak a financial plan with a set of customizable Excel worksheets. The book uses practical techniques to help with the planning processing. These include applying a SWOT (strengths, weaknesses, opportunities, and threats) matrix to evaluate a business idea and SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) objectives to link together goals. As the book concludes, readers will be able to develop their own income statement, balance sheet, and the cash-flow statement for a full analysis of their new business ideas.

Worksheets are available to download from: https://oracletroubleshooter.com/business-finance-planning/app/

• ISBN-13 978-1032534411
• Edition 1st
• Sticky notes On Kindle Scribe
• Publisher Chapman and Hall/CRC
• Publication date June 9, 2023
• Language English
• File size 11563 KB
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Editorial Reviews

About the author.

Gavin Powell is a professional database subject matter expert with 30 years’ experience as an IT professional, working in fields such as database architecture, operational administration, performance tuning, troubleshooting teaching, data warehousing, leadership, and development. Gavin has also built and run a small software business creating accounting software.Gavin has authored the following books:

• Working with Oracle GoldenGate 12c
• Database Modeling Step by Step
• Oracle SQL Jumpstart with Examples (with Carol McCullough-Dieter)
• Oracle Performance Tuning for 109Rz
• Oracle Data Warehouse Tuning for 10gR2

Product details

• ASIN ‏ : ‎ B0BX9K3XKM
• Publisher ‏ : ‎ Chapman and Hall/CRC; 1st edition (June 9, 2023)
• Publication date ‏ : ‎ June 9, 2023
• Language ‏ : ‎ English
• File size ‏ : ‎ 11563 KB
• Simultaneous device usage ‏ : ‎ Up to 4 simultaneous devices, per publisher limits
• Text-to-Speech ‏ : ‎ Enabled
• Enhanced typesetting ‏ : ‎ Enabled
• X-Ray ‏ : ‎ Not Enabled
• Word Wise ‏ : ‎ Enabled
• Sticky notes ‏ : ‎ On Kindle Scribe
• #984 in Spreadsheets (Kindle Store)
• #1,742 in Microsoft Excel Guides
• #2,552 in Spreadsheet Books

About the author

Gavin powell.

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The best books for financial advisors in 2023

It's no surprise to find financial advisors and planners who are also voracious readers. After all, Warren Buffett has likened the knowledge gleaned from reading to gains made in the market: "It builds up, like compound interest." 

To close out 2023, we asked financial professionals about books they read this year that made the biggest impact on them, whether in their work practice or in their personal lives. Answers came in from across the country and ranged far and wide, from business books to self-help tomes to memoirs. Scroll down to see the titles you might want to add to your own reading list in 2024. 

And to see previous book lists, check out: 

‘Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever’ by Robin Wigglesworth

‘Grit: The Power of Passion and Perseverance’ by Angela Duckworth

‘Quit: The Power of Knowing When to Walk Away’ by Annie Duke

‘Get Good With Money’ by Tiffany Aliche

‘The Gap and The Gain’ by Dan Sullivan with Dr. Benjamin Hardy

‘The Storyteller: Tales of Life and Music’ by Dave Grohl

‘Stocks for the Long Run’ by Jeremy J. Siegel with Jeremy Schwartz

‘Don’t Get Killed on Taxes’ by P.J. DiNuzzo and Steven Jarvis

‘The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness’ by Morgan Housel

‘Same as Ever: A Guide to What Never Changes’ by Morgan Housel

‘The Smartest Investment Book You'll Ever Read’ by Daniel R. Solin

‘Range: Why Generalists Triumph in a Specialized World’ by David Epstein

'Going Infinite: The Rise and Fall of a New Tycoon' by Michael Lewis

‘Atomic Habits: Tiny Changes, Remarkable Results ’ by James Clear

'The Innovator's Dilemma' by Clayton M. Christensen

The first three months of 2024 were hard on Wells Fargo — particularly for its wealth management division.

The banking giant nonetheless saw strong growth in net new assets in the first quarter and a 14% jump in returns from asset management fees.

Citigroup reported lower first quarter earnings within its wealth unit compared to a year ago. But earnings overall have improved from the fourth quarter, when it took significant losses as it finishes a major organizational restructuring.

Only about a third of millennials have planned for what happens if they die or are incapacitated. Here's how financial advisors can help.

Carson Group has snagged two powerhouse leaders in tech and wealth management on the heels of former CEO Ron Carson's departure and the naming of Burt White to the top role.

An expungement lawyer contends firms have an incentive to tar the reputation of departing brokers in an attempt to retain assets under management.

7 best small business financial books for beginners

Table of Contents

The best financial books for beginners: Our top picks

Bookkeeping and accounting all-in-one for dummies.

• Financial Intelligence 

Valuation: Measuring and Managing the Value of Companies

Profit first, the economist guide to cash management, found money, the psychology of money, reading up on smart business finances , simplify your small business finances with a clever app.

Are you new to small business and financial management? If so, you might want to read a few books to get you started.

The best financial books for beginners make the information digestible and offer practical solutions for your business. They’ll also offer unique approaches and a comprehensive understanding of financial management. 

But with so many options on the shelves, it can hard to find the best picks. Luckily, we can help. 

This guide lists the seven best financial books for beginners, including:

• Bookkeeping and Accounting All In One For Dummies by Jane Kelly
• Financial Intelligence by Karen Berman
• Valuation: Measuring and Managing the Value of Companies by Tim Koller and Marc Goedhart
• Profit First by Mike Michalowicz
• The Economist Guide to Cash Management by John Tennent
• Found Money by Steve Wilkinghoff
• The Psychology of Money by Morgan Housel

Accounting and bookkeeping is a legal requirement for small businesses. But it’s also a critical way of tracking your financial progress and performance. Jane Kelly can show you how to do just that in Bookkeeping and Accounting All In One For Dummies . 

This book offers the information of six books in one , acting as the ultimate reference guide to financial accounting, particularly for small businesses. 

It offers essential definitions and shows you how to create an effective bookkeeping system that seamlessly tracks your finances. Plus, it’s the UK edition, so you can learn about relevant accounting and tax regulations . 

Financial Intelligence  

Financial literacy, or the ability to comprehend and analyse financial data, is valuable for small business finances. To grow these skills, consider reading Financial Intelligence by Karen Berman. 

This book teaches the essentials of understanding numbers to stay on top of your financial information. Beyond understanding what the numbers mean, you’ll also learn why they’re essential. 

Ultimately, this book is an excellent resource for the analytical side of financial management . 

With Valuation: Measuring and Managing the Value of Companies by Tim Koller and Marc Goedhart, you can go beyond the basics of financial management. 

Koller and Goedhart offer a guide to assessing the financial value of your business. Though the book leans towards corporations or larger companies, it provides essential decision-making skills. 

Overall, the book will help you build your financial strategy skills and look at the bigger picture. It’s also a great pick if you expect to merge or sell your business in the long run.  

See also : How do you put value on a small business?

With Profit First by Mike Michalowicz, you can focus on retaining your business earnings and reducing wasteful spending. The book focuses on how to improve your profitability and take control of your finances. 

Profit First is a great guide for increasing profits, but its valuable advice can also help promote your confidence as a small business owner.   

See also : How to cut costs in small business .

It’s important to juggle the cash coming in and out of your business. If you fail to maintain a positive cash flow , you could struggle to meet regular expenses. 

Thankfully, The Economist Guide to Cash Management by John Tennent can show you how to organise and manage your cash flow . This book covers more than just daily cash management. It also discusses:

• Cash flow forecasting
• Planning for funding and investment 
• Tracking profitability
• Future planning with excess cash  

As successful as your business is, you can’t maintain operations without cash and plan for what to do with it. This book can help with that. 

Found Money by Steve Wilkinghoff focuses on financial management for small businesses already up and running. 

Wilkinghoff explains what to do with your money beyond setting up your financial organisation . He can help you determine if you’re on target with your goals. If not, he offers tips to alter your methods for success.  This book ultimately teaches you to maximise your profit, improve and analyse your cash flow, and reach your business’s total capacity . 

For many people, the topic of money is stressful and awkward. But, if you conquer the thoughts behind money, you can manage it better for your business. 

That’s why The Psychology of Money by Morgan Housel is another of the best financial books for beginners. It leans away from the mathematical side of finances to look at the behaviours that motivate financial decisions . 

In this book, Housel helps you build a solid psychological foundation around money for better decision making . As a result, you’ll be better prepared to handle your business’s finances. 

As you dive into these reads, they’ll strengthen your toolkit for organised business finances and more informed financial decisions . 

The books can help you with everything from accounting and cash flow management to decision making and strategy. Plus, they’re great to have on hand whenever you have a financial question. 

If you’d like to find more useful books, consider checking out our article on the six best bookkeeping books for small businesses next. 

Books aren’t the only things that can support your small business finances. Countingup can too. 

Countingup is the business current account and accounting software in one app . It automates time-consuming bookkeeping admin for thousands of self-employed people across the UK. 

Save yourself hours of accounting admin so you can focus on growing your business. 

Start your three-month free trial today. 

Apply now .

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• I Will Teach You To Be Rich
• Finance for the People
• The Automatic Millionaire
• The Simple Path to Wealth
• Get Good With Money
• Cashing Out
• Retire Before Mom and Dad
• When She Makes More
• You Are a Badass at Making Money
• The Millionaire Next Door
• Spend Well, Live Rich
• Your Money or Your Life
• Broke Millennial Takes On Investing
• Get A Financial Life
• The Financial Diet
• The Money Manual
• Clever Girl Finance
• How I Invest My Money

The 19 best personal finance books

Affiliate links for the products on this page are from partners that compensate us and terms apply to offers listed (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate products and services to help you make smart decisions with your money.

These are the best personal finance books for 2023:

• " I Will Teach You To Be Rich ," by Ramit Sethi
• " Finance for the People ," by Paco de Leon
• " The Automatic Millionaire ," by David Bach
• " The Simple Path to Wealth ," by JL Collins
• " Get Good With Money ," by Tiffany "The Budgetnista" Aliche
• " Cashing Out: Win the Wealth Game by Walking Away ," by Julien and Kiersten Saunders
• " Retire Before Mom and Dad ," by Rob Berger
• " When She Makes More ," by Farnoosh Torabi
• " Financial Feminist: Overcoming the Patriarchy's Bullsh*t to Master Your Money and Build a Life You Love, " by Tori Dunlap
• " You Are a Badass at Making Money ," by Jen Sincero
• " The Millionaire Next Door ," by Thomas J. Stanley
• " Spend Well, Live Rich ," by Michelle Singletary
• " Your Money or Your Life ," by Vicki Robin
• " Broke Millennial Takes On Investing, " by Erin Lowry
• " Get a Financial Life ," by Beth Kobliner
• " The Financial Diet ," by Chelsea Fagan and Lauren Ver Hage
• "The Money Manual," by Tonya B. Rapley
• "Clever Girl Finance," by Bola Sokunbi
• "How I Invest My Money," by Joshua Brown and Brian Portnoy

We've put together a list of 18 books for every stage of life and for every money goal, whether you want to retire early , invest in the stock market , start conversations about money with your family , or just see money from a different point of view. 

These titles were handpicked by the Personal Finance Insider team: some of our personal favorites, some we're always talking about, and some with truly impressive Amazon reviews and ratings.

From timeless advice to detailed budgeting breakdowns for millennials, here are Insider's top 18 personal finance books for 2023.

Read more: The best investing apps for beginners

'I Will Teach You To Be Rich,' by Ramit Sethi

Personal finance author Ramit Sethi outlines a six-week plan for living out your "rich life" as you define it. ""I Will Teach You to be Rich" by Ramit Sethi" walks readers through how to use credit cards and maximize rewards , opening a high-yield savings account to earn interest, and even automating accounts to save with no effort every month. This easy-to-read and highly actionable book goes from reading to returns quickly. 

• Making a plan
• Strategizing with your money
• Setting up systems to build wealth

'Finance for the People,' by Paco de Leon

In "Finance for the People," former financial planner Paco de Leon explains how to take personal responsibility for our personal finances despite inequities out of our control, while providing the necessary tools to help you build a strong financial foundation.

• Visual learners
• Socially conscious millennials and Gen Zers
• Holistic financial wellness advice

'The Automatic Millionaire,' by David Bach

This book by financial writer David Bach teaches one simple principal: automating your finances. From saving to paying off debt, this book posits that setting up your finances to manage themselves could help grow wealth over many years. This book lays out a plan that can be put into action in an afternoon and make a lasting impact.

'The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life,' by JL Collins

The principles of "The Simple Path to Wealth" were first laid out in a series of letters by the author to his daughter, and there's no shortage of accessible and actionable advice on  investing  throughout the book. It takes on a light and casual tone in some chapters, but doesn't shy away from explanations of more complicated topics, either. It's the highest-rated personal finance book on the list, with over 3,800 Amazon reviews and an average rating of 4.8 stars. 

• People who want to retire early

'Get Good With Money: Ten Simple Steps To Becoming Financially Whole,' by Tiffany 'The Budgetnista' Aliche

Tiffany Aliche, aka The Budgetnista , shares her own triumph over debt and financial hardships. "Get Good With Money" also includes worksheets to help you assess your financial wellness without shame or judgment.

• People who want to pay off debt
• People who like worksheets
• Young professionals

'Cashing Out: Win the Wealth Game by Walking Away,' by Julien and Kiersten Saunders

Early retirees Julien and Kiersten Saunders, founders of the award-winning blog rich®ULAR , outline the exact 15-year plan they used to retire in their 40s. "Cashing Out" walks readers through the process of building a lasting wealth-building plan without sacrificing too many small pleasures that keep you going.

• Anyone experiencing burnout in a high-stress job
• First-time investors

'Retire Before Mom and Dad,' by Rob Berger

For anyone considering early retirement through the  FIRE (Financially Independent, Retire Early) movement , this book is a quintessential primer on the principles of getting started on this path. But, it also looks at principles that make financial independence and retirement attainable, even if retiring early isn't on your list.

• People who want to build wealth

'When She Makes More,' by Farnoosh Torabi

"When She Makes More" author and personal finance expert Farnoosh Torabi explores a reality she lives with every day:  being a breadwinner and a woman  in a different-sex relationship. She looks at the realities and the rules she's made with her partner, and discusses ways to maximize earnings and minimize conflict.

• Starting a conversation about money

'Financial Feminist: Overcoming the Patriarchy's Bullsh*t to Master Your Money and Build a Life You Love,' by Tori Dunlap

In "Financial Feminist," entrepreneur and author Tori Dunlap teaches women how to advocate for their worth and channel their emotions to make smart money decisions. Dunlap offers a financial game plan that helps you build a career you love.

• Socially conscious millennial women

'You Are a Badass at Making Money: Master the Mindset of Wealth,' by Jen Sincero

Jen Sincero comes at money from a lighthearted angle in this book, and looks at the mindset it takes to earn and keep money. What it lacks in actionable financial advice it makes up for in inspiration. It's an ideal book for anyone wanting a new perspective on earning and a motivation boost. 

• Inspiration

'The Millionaire Next Door,' by Thomas J. Stanley

Thomas J. Stanley's profile of America's wealthy citizens finds that they're more similar than they are different, and they're not all the people you'd expect. Stanley looks at millionaires and finds seven habits that they have in common, including living below their means and rejecting traditional consumerism. Stanley's insights have earned this book over 5,300 five-star reviews.

'Spend Well, Live Rich: How to Get What You Want with the Money You Have,' by Michelle Singletary

Author Michelle Singletary reflects on her life with her grandmother, who raised five children (including the author) on a modest salary. Singletary looks into the principles that her grandmother used with her own finances to make the most of what she had. It's best for anyone wanting inspiration on making the most of the money they already have. 

• Personal finance beginners

'Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence,' by Vicki Robin

Financial independence is at the core of "Your Money or Your Life," and it lays out a plan to get to that goal. While the book is fairly long (368 pages long, to be exact) it does give advice for every aspect of becoming financially independent, from the mindset it requires to the investment moves  you should be making. It offers specific advice that can be applied whether or not you're aiming to retire early. 

'Broke Millennial Takes On Investing: A Beginner's Guide To Leveling Up Your Money,' by Erin Lowry

" Broke Millennial " took the world by storm with great budgeting tips  written specifically for avocado-toast-brunching millennials.  Erin Lowry is back at it again with a practical, easy-to-read guide to investing. Packed with tips for beginners, " Broke Millennial Takes On Investing " will teach you how to navigate the market in alignment with your beliefs and values.

• Socially conscious investors

'Get A Financial Life: Personal Finance in Your Twenties and Thirties,' by Beth Kobliner

Another book aimed at millennials and young adults, "Get a Financial Life" focuses on the basics. From  doing taxes  to  debt repayment  strategies, Beth Kobliner gives a thorough foundation for anyone wanting to establish a financial life for themselves. 

'The Financial Diet: A Total Beginner's Guide to Getting Good with Money,' by Chelsea Fagan and Lauren Ver Hage

Another great book for beginners, "The Financial Diet" lays a groundwork for anyone wanting to learn more about money and life. Best for young adults, Fagan dives into starting to invest and saving for retirement, as well as budgeting and debt repayment plans. The advice here is no-frills and easy to put into practice. 

'The Money Manual' by Tonya B. Rapley

"The Money Manual" is a guidebook to the basics of managing money, from saving to building credit. Written by the blogger behind  Myfabfinance.com , this book is both engaging and approachable, with money lessons that are applicable no matter how much you're earning. 

This book is more interactive than most, with sections of questions and space for writing. The book starts with a simple money check-in, and from the beginning gives actionable advice that can help you understand where you are and where you want to go. 

Best for: 

• Young adults and millennials
• Re-learning the basics of budgeting and saving
• Hands-on learners

'Clever Girl Finance,' by Bola Sokunbi

This easy-to-read guide to money doesn't make assumptions — it starts with the very basics of building wealth and builds on them. This book roots its lessons in reality with real-life anecdotes, including from the author herself. 

It doesn't require any prior knowledge, either. It covers the basics of organizing money and budgeting , then explains the credit system, debt, investing, and even asking for a raise.

It's an excellent choice for anyone who is just getting started with personal finance, or simply wants a refresher on the basics. 

• Anyone searching for a crash course on managing money and building wealth

'How I Invest My Money,' by Joshua Brown and Brian Portnoy

If you've ever wondered how your financial advisor, a venture capitalist, or that money expert on the internet invests their money, Brian Portnoy and Joshua Brown have answers.

With pithy stories from 25 financial experts, this book advances on basic personal finance topics, giving readers ideas to implement as they take the next steps on their financial journeys.

It's not the best choice for anyone who's new to managing money, as it lacks enough explanation of the basics to be a stand-alone guide. But for readers who are ready to make new financial moves, this book will prove helpful.

• Strategies for building wealth, saving, and retirement topics
• People who are looking for inspiration to take the next step with their money

Want to read more? Try these:

Not every book we wanted to mention made the top 18. Here are a few more good choices to continue your reading:

• " The Intelligent Investor, " by Benjamin Graham
• " Girl, Get Your Credit Straight! ," by Glinda Bridgforth
• " Financially Fearless: The LearnVest Program for Taking Control of Your Money ," by Alexa Von Tobel
• " Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School ," by Andrew Hallam

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

**Enrollment required.

• Main content

An Overview to Buying and Selling a Financial Advisor Book of Business

Mergers and acquisition activity in the wealth management space is hot. What’s driving this wave of deals?

M&A gives advisors the chance to create even better practices by combining with others. Larger firms tend to generate more value through economies of scale and through teamwork versus smaller or solo practices.

In addition, roughly 37% of advisors plan to retire over the next 10 years, according to data from  Cerulli Associates , and completing a deal can be part of financial advisor succession planning.

Large institutional investors such as private equity firms are also highly interested in transactions involving wealth management firms because it is a stable, growing sector.

Thanks to this influx of investment cash, our partners and contacts tell us they are receiving offers for far more than they thought possible. Instead of a valuation of two to three times revenue, some businesses are selling for far more.

Given what’s at stake, this is a decision to handle very carefully, not just for your finances but also for your clients and your legacy.

In this guide to M&A for financial advisors, we will outline how to find a financial advisor book of business for sale, the value in buying a book of business, as well as when you should consider selling your book of business and how to find a buyer.

Table of Contents

• Why you should buy a book of business
• How to find a financial advisor book of business for sale
• Why you should sell your book of business
• How to find a buyer for your business
• Preparing for a successful M&A deal

Why Buy a Book of Business?

Buying a book of business can be a way to take your practice to new levels quickly and effectively. Some of the key reasons to buy a financial advisor book of business include growing your AUM, adding services to your firm’s offering, succession planning and more. Let’s break it down.

Accelerated AUM growth (inorganic growth)

Think how long it would take to add another $100 million of AUM to your firm organically – likely years, even if you already have an established sales process and team. Through a successful merger or acquisition, you can potentially bring on a book of business within a few months and enjoy the extra revenues from that point forward.

Larger firms in particular could benefit from this strategy due to their greater efficiencies and economies of scale. If you run a large firm with a valuation based at seven times EBIDTA and you acquire a smaller one valued at five times EBIDTA, you immediately create more enterprise value through the acquisition alone.

Added specialties

Through a merger or acquisition, you can expand your practice to offer additional specialty services. For example, if you’re a CFP® Professional who works in retirement income planning, you could look to bring on a tax specialist, a firm offering 401(k) small business services and/or an estate plan attorney.

Again, buying or merging with an existing practice is often a lot faster than the hiring process and trying to build up a new business from scratch. Not only will bringing on a partner or advisor with a specialty inject new clients to your firm from the get-go, it will add value that helps you better serve your existing client base. Clients like having all their financial needs handled by the same team. If you’re working solo, there’s always the risk that even satisfied clients leave for the convenience of a one-stop shop.

Expanding services can also generate referrals from happy clients and attract new clients over time.

Talent acquisition

When buying a business, the assets are important but not always the primary reason to complete a deal. The extra advisors you’re bringing on board could do even more to drive future value, especially if they have skills that complement your own. For example, perhaps you find a young advisor to serve existing clients, while you focus on new asset accumulation. This frees up your time to do what you love.

Succession planning for financial advisors

Buying a business can also help with  succession planning for financial advisors and your eventual exit  from your firm.

Succession planning for financial advisors is crucial for everyone involved in your business. It protects:

• your clients  by making sure they continue to have access to financial advice
• your other advisors and staff  by maintaining their careers after you leave
• your future family income  by generating the payout you deserve for your hard work
• your legacy  as you see that your firm can stand on its own merit, with proper planning.

Let’s say you plan on retiring in 10 years. You could set up a smoother transition by identifying and training your eventual replacement now, making client introductions and working out the details of your future buyout.

If you haven’t  identified a successor in your practice who is prepared to take over, you could acquire or partner with an advisor who has the right skill set and shares your values. Taking over another firm with an established book of business could provide the resources to fund your eventual exit. Buying a financial advisor book of business could further grow the value of your practice so you could sell for more on the open market later.

How to Find a Book of Business for Sale

Finding a financial advisor book of business for sale can be challenging. To narrow your search, you need to have a very specific idea of what you’re looking to take on: the type of advisor, the size of the book, the type of practice and so on.

Your existing network is often the best place to get started. Consider what local contacts you have from industry organizations, your charitable work and other interests, and personal friendships. Given that you already have an established relationship and trust, you have a sense of what working together would be like. You also save the time and money that would have been spent on marketing.

Besides your existing network, you could also find deal partners with advisors you don’t already know. Even if you have some warm leads in mind, you may want to make some additional outreach to see what other offers you could get as a backup.

In a seller’s market, upward of 40 buyers might exist for every firm looking to sell, although in reality, most interested buyers don’t have the resources or experience to complete a deal. Even so, there are still typically around five qualified buyers per quality seller. That’s why it’s crucial to have a plan to attract these limited opportunities. Some marketing strategies include:

• Attending industry conferences and networking events to expand your network of warm advisor leads.
• Hosting your own events for advisors on topics they’d be interested in, like sales strategies or regulatory changes. These events are a chance to build buzz around your firm and future deal.
• Identifying local firms and reaching out through  an ongoing marketing campaign  using postcards, emails, letters, calls and social media.

Other lead sources

Another way to find potential deal partners is through external listing websites like FP Transitions ¹  and AdvisorBid ² .  They’re like Match.com for financial practices. Through these websites, advisors can connect with potential buyers and sellers.

If you are part of a large broker-dealer firm or network, your company may have its own internal listings for these same transactions to keep assets in-house. In this scenario, you generally have less control of the details and process.

Carson partner offices work with  a dedicated and experienced mergers and acquisitions team  who help you weigh your options and determine what’s best for your business. Our team helps our current partners identify potential external partners, as well as evaluate, structure, value and negotiate strategic transactions, with marketing support and deal framework assistance from our legal team.

Coaching and support

Given that this process can be time-consuming, you might want to  bring on a coach for support . Carson has emails and other marketing materials ready to go for financial advisor M&A outreach, so you don’t have to spend time creating them all from scratch.

Your business coach can also make sure you understand the process of how to buy a financial advisor’s book of business and that you’re prepared for the transaction. It’s crucial that your firm is ready to complete the deal, both on the financing side and in terms of operational efficiency. If you buy a book of business while understaffed and lacking adequate resources, this could offset any advantages of the acquisition and even damage your practice, leading to lost clients and employee turnover.

Your coach can also help you understand what would make your practice most attractive to potential sellers, so you stand out in a tight market. Depending on where you are, this extra prep work could take several years but could add considerable value to your future deal.

Why Sell a Financial Advisor Book of Business?

Given the level of deal activity, other advisors and firms could be highly interested in buying your practice. While you typically need a book of over $30 million in assets to find a deal partner, we have seen local acquisitions for books in the $7 million to $12 million range. When it comes to selling a financial advisor book of business, here are the top reasons, and benefits, for doing so.

You’re getting ready to retire or leave the industry

M&A plays an important role for your succession planning. Both buying and selling practices are different routes for  protecting your clients, staff, retirement and future legacy . This applies even if you’re leaving the industry, but not quite ready to retire. Selling could generate money for your next venture while transferring your clients to another trusted professional.

You want to add more resources to your firm

Selling could also make sense if you want to add more resources to your practice. By partnering with a larger firm, you could significantly expand what’s available to you and your clients.

Whether it’s better compliance, marketing, technology or financial planning support, a larger organization may simply be able to offer more than a solo practice or small firm.

For example, Carson’s Advanced Solutions team acts as an extension of our partners’ offices; this team is experienced in working exclusively with ultra high net worth clients who have complex planning needs.

You want to grow as a team versus on your own

Operating as a solo practitioner or with only a small staff limits what you can deliver. Not to mention, it can get a little lonely and stressful. By selling to another firm through M&A,  you can combine resources and leverage each other’s strengths to drive future value .

You want to protect your clients with a continuity plan

You might not plan on leaving the industry for many years and even decades. But, as you likely advise clients, your should plan for unexpected illness, disability and death. By selling your practice to add additional team members, you create a continuity plan to take care of your clients and your firm should anything happen to you.

You’d like to improve your quality of life

Another reason to consider selling is if you’d like to improve your quality of life. Perhaps you built up your successful practice through years of working nights and weekends. By selling to another practice with more support, you may be able to maintain your current production levels – or even expand them – while creating a better work-life balance.

You want to maximize growth

One other attractive reason to sell is that you could maximize growth by playing to your strengths. For example, perhaps you’ve hit a ceiling at $300 million in AUM and dream of developing a billion-dollar practice one day. You might not have the capacity to grow due to too much time spent on marketing, operations and investment management. You could sell to a larger company that can handle this day-to-day work so you can focus on going out and meeting clients full-time, which could help you reach this next level of growth.

How Do I Find a Buyer for My Business?

Before heading into the selling process, your first step should be to get a good idea of your firm’s valuation. That will set the tone for future negotiations. Go beyond simple rules of thumb like 1.5 to three times revenue and spend time thinking about the factors behind a firm’s value such as:

• Average client age
• Number of clients connected to the firm versus connected to you specifically
• AUM per advisor, including AUM with advisors who will stay on after you leave
• Growth trends
• Technology and systems your firm uses

For an external calculation, FP Transitions method is an industry standard, with good reason ³ . Some firms might choose to work with an investment bank for the sale, and they would help set the valuation. Of course, you can come up with whatever figure you want but, ultimately, the price you get will depend on the market.

Valuations are surprisingly high for wealth management firms as there is a high level of interest in the sector. For more information on calculating your company’s valuation,  read our guide  or speak with one of the valuation experts at Carson.

Finding buyers

When it comes to finding a buyer, the process is similar to that of looking for a seller. Start your search with existing connections from industry associations, local groups and charities and personal friendships. You save time by not having to market to strangers, plus you already have a sense of whether there is a culture or relationship fit. If you don’t have a local contact in mind or would like to further expand your search, other ways to find buyers include:

• Attending industry conferences and networking events
• Using matching websites like FP Transitions ¹  and AdvisorBid ²  that connect buyers and sellers of firms
• Contacting your broker-dealer or RIA to see if they could connect you to other internal advisors looking to buy
• Partnering with Carson, which specializes in wealth management M&A, including making introductions to qualified buyers

Evaluating buyers

Due diligence goes both ways with M&A transactions. Both the buyer and seller should closely examine each other’s firms, and you should also closely consider your deal partner in ways beyond dollars and cents.

Of course, you want to focus on whether the terms of the deal make sense from a financial perspective, based on your valuation estimate. This includes making sure the buying firm has the resources to complete the deal and to properly manage your book.

Understand how the potential buyer would manage your practice after they take over. How do they operate and do they have enough staff to handle the needs of your clients? This is important for your legacy and retirement income, assuming part of the buyout is based on the firm’s future performance and client retention. If you will stay on with the firm, what will their expectations be for you?

Assess whether there is a cultural fit. Can you see yourself working together smoothly during the negotiations and beyond, or is there a personality mismatch with someone in the group? This is especially important if you and/or your staff will stay on after the deal.

These conversations can be easier when you have existing relationships with the buyer, but consider the culture fit with other advisors in the practice, too, even if it feels a bit awkward. Above all, both parties should walk away feeling comfortable and confident in the agreed deal.

M&A considerations and support

Once you complete a deal, it can be hard to reverse, which is why it’s crucial to handle the process properly. Ideally, both parties will have some sort of consultant or advisor with experience in M&A, whether it’s a business broker, an investment bank or a wealth management support specialist.

Your consultant can help you set the proper valuation, discuss the different ways to structure your deal and point out common pitfalls to avoid. These could include making sure the buyer doesn’t have any liability issues from a regulatory standpoint and that they offer all the products your clients currently use as investments.

With their experience, your advisor can also suggest questions you might not think to ask before completing a deal, like making sure both you and the buyer agree how long you will stay at the firm post-deal. One question to ask a potential buyer is whether they have gone through a merger or acquisition before. Many firms, especially smaller practices, only have the capacity to handle one or two deals properly. If they are trying to make multiple acquisitions, especially over a short period, they might be overextending their resources.

All of Carson’s partners have access to an experienced in-house M&A team. This is an advantage of finding a buyer through the Carson network: You’ll know that both sides of the transaction will be going in with the necessary support.

Preparing for a Successful M&A Deal

Whether you’re looking to buy or sell your practice, a few common tips can help make sure any future deal is a success:

• Have a goal for buying and selling, so you can narrow your search to the best candidates
• Understand your current valuation and how it will benefit from a deal
• Use several forms of outreach to both existing contacts and advisors you don’t know yet
• Make sure to have some sort of M&A support, whether it’s a broker, an investment bank or an industry specialist

Getting ready for a merger, acquisition or sale takes time. The sooner you start preparing, the sooner you’ll be ready to hit the market. Working with a qualified advisor can get you deal-ready and maximize your value.

Carson’s M&A team has a proven track record of success with more than 40 completed transactions. We can be your partner as you figure out this exciting next stage for your firm. For more information, schedule a call with our M&A team .

1) AdvisorBid, https://www.advisorbid.com . Accessed 28 June, 2022.

2) FP Transitions, https://www.fptransitions.com/ . Accessed 28 June, 2022.

3) Kitces, Michael. “FP Transitions And The Kelley Blue Book Valuation Of An Advisory Firm.” Kitces.com, https://www.kitces.com/blog/fp-transitions-review-of-david-grau-comprehensive-valuation-report/ . Accessed 28 June, 2022.

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If you’re looking for a practical book for your summer reading, Bankrate’s list of the best personal finance books for 2022 offer insightful and trustworthy expertise on what to do with your money.

‘The Millionaire Next Door: The Surprising Secrets of America’s Wealthy,’ by Thomas J. Stanley and William D. Danko

Whom this book is best for :

Anyone who wants to learn from the financial behavior of millionaires.

Why the book made Bankrate’s list :

Being rich doesn’t mean being flashy. In fact, it’s the opposite. “The Millionaire Next Door” reveals that many affluent individuals shy away from buying the most expensive cars and taking the most over-the-top vacations, opting instead for a disciplined approach to their money. It turns out that being a millionaire relies more on being thrifty.

‘How to Make Your Money Last: The Indispensable Retirement Guide,’ by Jane Bryant Quinn

Retirees looking to build wealth through solid investment advice.

Why the book made Bankate’s list :

If you have questions about how to sustain your investments through your retirement, “How to Make Your Money Last” has the answers. With thoughtful details on ways to supplement income from Social Security, investments and more, Quinn shows how to create a recurring paycheck that will have you living comfortably through retirement .

‘A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing,’ by Burton G. Malkiel

Anyone (specifically business students) who wants to understand how the stock market works.

If you’re new to investing , “A Random Walk Down Wall Street” lays out a solid blueprint for success. Malkiel goes into detail on a variety of investing strategies including smart beta investing (which combines the benefits of passive investing and the advantages of active investing strategies) and finding opportunities in emerging markets. In the process, the reader gains an understanding of the complex world of investing.

‘The Intelligent Investor: The Definitive Book on Value Investing,’ by Benjamin Graham

Readers who want a deeper understanding of the risks and rewards of investing.

”The Intelligent Investor” is the gold standard of investing, teaching the importance of value investing , which enables investors to develop long-term strategies. And with updated insight from financial reporter Jason Zweig, readers will gain an understanding of long-term values and how they can incorporate them into the current financial landscape.

‘Bunny Money (Max and Ruby),’ by Rosemary Wells

Children looking to learn the basics of personal finance.

The story in this children’s book is about bunnies Max and Ruby who are trying to buy their grandma a gift for her birthday. As they set out, they encounter a series of adventures that deplete their money supply. In the process, children discover how their decisions impact the money they have.

‘Spend Well, Live Rich: How to Get What You Want with the Money You Have,’ by Michelle Singletary

Readers who want practical advice on how to manage their money.

Singletary chronicles the “7 Money Mantras for a Richer Life” she learned from her grandmother. These mantras may be simple in nature, but they provide a firm foundation for anyone hoping to strengthen financial behavior. The book differentiates between wants and needs and why you should sweat the small stuff.

‘Broke Millennial: Stop Scraping By and Get Your Financial Life Together,’ by Erin Lowry

Millennials who want to understand the basics of money management and how to avoid common financial errors.

Lowry creates a blueprint millennials (ages 26-41) can use to go from living from paycheck to paycheck to achieving financial goals. She delves into the thought process behind making financial decisions, such as, “Do you treat your money like a Tinder date or a marriage?” By providing applicable insight and relatable stories, Lowry gives those in their 20s, 30s and early 40s the basics they need to make better money decisions.

‘Get a Financial Life: Personal Finance in Your Twenties and Thirties,’ by Beth Kobliner

Those in their 20s and 30s seeking guidance on managing their finances.

Why this book made Bankrate’s list :

“Get a Financial Life” covers all aspects of personal finance from how to file taxes and investing, to strategies for improving your credit scores . Kobliner creates a guide that encompasses every aspect of your financial life, with practical suggestions for achieving financial goals.

‘When She Makes More: 10 Rules for Breadwinning Women,’ by Farnoosh Torabi

Female breadwinners looking to balance the health of their relationships and finances.

Torabi tackles a relevant topic to today’s social and financial climate: An increasing number of wives are making more money than their husbands. In 2020, women made more than their male partners in 29.9 percent of marriages, according to the Census Bureau. Twenty years earlier, the percentage was more than 6 percentage points lower (23.3 percent). In “When She Makes More,” Torabi highlights that there are significant financial but also psychological effects the changing role of the breadwinner has on those in committed relationships. Her advice is directed at women to make the most of their financial circumstances and keep their relationships healthy, but it can help men to understand relationship dynamics as well when their partner is the breadwinner.

‘Simple Wealth: The Practical Guide to Transform Your Relationship with Money and Live in Abundance,’ by Holly Morphew

Consumers looking to have more confidence in their financial decisions.

Making a change in your financial life means making a change in your personal life, too. “Simple Wealth” shows how personal life decisions and financial decisions go hand in hand, providing practical advice in terms that are easy to grasp. Morphew, a financial counselor, breaks down not only how to escape the “shame cycle of money,” but also how to make affirmative moves toward financial independence and success.

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