THE ROLE OF FINANCIAL CONSULTING IN SUPPORTING SME GROWTH IN THE UNITED STATES

REGISTRO DOI: 10.69849/revistaft/fa10202505181643

Felipe Oscar Testoni

ABSTRACT

Small and medium-sized enterprises (SMEs) are vital to the U.S. economy, yet they face persistent challenges related to financial management, access to capital, and regulatory compliance. Financial consulting offers crucial support by providing strategic guidance and tools that enable SMEs to optimize their operations and ensure sustainable growth. This paper examines the role of financial consultants in addressing SME-specific needs, leveraging empirical evidence, including case studies from the United States and Mexico. It also highlights the growing importance of inclusive consulting for minority-owned businesses and the integration of digital and sustainable financial practices. By showcasing real-world outcomes, the study underscores how financial consulting contributes to SME resilience, innovation, and long-term success.

Keywords: Financial consulting; SMEs; business growth; sustainability; digital transformation

Small and medium-sized enterprises (SMEs) are the backbone of the U.S. economy, representing 99.9% of all firms and employing nearly half of the private workforce (Investopedia, 2024). Despite their significance, SMEs often face challenges in accessing capital, managing finances, and navigating complex regulatory environments. Financial consulting has emerged as a critical support mechanism, offering strategic guidance to help these businesses overcome obstacles and achieve sustainable growth.

Financial consulting encompasses a range of services, including strategic financial planning, risk management, capital structure optimization, and regulatory compliance. For SMEs, these services are vital in addressing common challenges such as limited access to financing, inadequate financial planning, and insufficient risk mitigation strategies. A study by Nahavandi and Chesteen (1988) found that small business owners who received consulting services reported high satisfaction levels and perceived a positive impact on their businesses. However, the study also noted that some recommendations were not implemented due to perceived inappropriateness or lack of consultant expertise, highlighting the need for tailored and context-specific advice.

The figure 1 illustrates how financial consulting supports SME growth through a structured pathway of services, impacts, and outcomes. The consulting process begins with core services such as strategic financial planning, capital access facilitation, digital adoption, and ESG (Environmental, Social, and Governance) guidance. These services directly enhance SMEs’ decision-making capabilities, operational efficiency, and risk management practices. As a result, businesses experience measurable improvements, including increased revenue, job creation, and long-term resilience. The figure emphasizes that financial consulting is not merely administrative support, but a strategic function that enables SMEs to navigate challenges and achieve sustainable growth.

Figure 1. The role of financial consulting in SME growth. The diagram illustrates how key consulting services influence SME performance and lead to improved business outcomes.

Source: Adapted by the author based on conceptual frameworks discussed in Nahavandi & Chesteen (1988), Bruhn, Karlan & Schoar (2018), and recent SBDC performance data.

Empirical evidence underscores the positive impact of financial consulting on SME performance. A randomized control trial conducted in Mexico demonstrated that SMEs receiving one year of management consulting services experienced significant improvements in total factor productivity and return on assets (Bruhn, Karlan & Schoar, 2018). Five years post-intervention, these firms showed a 50% increase in employment and total wage bills, indicating long-term benefits.

In the U.S., Small Business Development Centers (SBDCs) play a pivotal role in providing financial consulting services. In 2023, SBDCs facilitated $6.9 billion in financing, helped create over 80,000 jobs, and generated $6.6 billion in client sales (Investopedia, 2024). These outcomes highlight the effectiveness of structured consulting programs in fostering SME growth. Minority-owned SMEs often face disproportionate challenges, including higher failure rates and limited access to capital. During the COVID-19 pandemic, Black-owned businesses experienced a 41% drop in active operations, compared to a 22% overall decline (The American College of Financial Services, 2020). Financial consulting can bridge these gaps by offering personalized financial planning, enhancing creditworthiness, and facilitating access to funding opportunities.

Tailored consulting services that consider the unique cultural and socioeconomic contexts of minority entrepreneurs are essential. By addressing specific barriers and leveraging community resources, financial consultants can empower these businesses to achieve resilience and growth. Sustainable financial advice is gaining prominence as SMEs seek to align with environmental, social, and governance (ESG) goals. Financial consultants can guide SMEs in adopting integrated thinking approaches, balancing financial objectives with social and ecological considerations (De Jong & Wagensveld, 2024).

By advising on multiple value creation strategies, consultants help SMEs build long-term resilience and contribute to broader sustainability targets. This holistic approach not only enhances business performance but also positions SMEs as responsible corporate citizens. The digitalization of financial services has transformed the consulting landscape. Technologies such as cloud computing, artificial intelligence, and blockchain enable consultants to provide real-time insights, automate processes, and enhance decision-making (Cohesion Companies,2024).

For SMEs, digital tools facilitate efficient financial management, improve access to capital, and streamline compliance. Financial consultants play a crucial role in guiding SMEs through digital adoption, ensuring they leverage technology to drive growth and competitiveness. Financial consulting has proven to be a fundamental driver of SME development and competitiveness in the United States. Through tailored financial strategies, consultants help business owners navigate challenges such as limited access to credit, operational inefficiencies, and evolving market conditions. The evidence suggests that consulting not only improves financial performance but also boosts employment and fosters innovation, especially when services are inclusive and address the specific needs of mi nority and underserved businesses. As digital transformation and sustainability become central to business success, financial consultants are increasingly essential in guiding SMEs through technological adoption and ESG integration. For policymakers and stakeholders, continued support for accessible, high-quality financial advisory services is critical to ensuring that SMEs can continue to thrive and fuel economic growth nationwide.

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