There are some professionals that you will have to deal with on a regular basis when you start your own business. You would do well to think of them as a type of extended business family, because you will not only have to interact with these people regularly, they also often play a vital role in a business’ success or failure. Among these professionals are lawyers, accountants, and in some cases, a marketing consultant to give advice on marketing or a business consultant that can advise on general business matters. These “fee-for-service providers” help to provide a sounding board for ideas, help to bring the entrepreneur back to reality with realistic facts and figures, and give aid with general business operating procedures and concepts.
Accountants have a variety of uses. They can set up your bookkeeping so that you can have a methodology to follow to make your books cleaner and easier to refer to for year end planning and the annual tax bill. They can also set up a cash-handling system for receivables. When the time comes, the accountant or accounting firm will prepare your taxes and give you advice on how to reduce your tax bill for future years.
Lawyers are even more useful to the entrepreneur. From the very first steps, the lawyer can help you choose the form of business you need and will help prepare and file the necessary paperwork. You can get advice on compliance with local business laws and lawyers will draft contracts and leases for you. Lawyers will provide legal advice for any and all of your business decisions, and you can utilize them in the traditional manner when involve in litigation.
Many entrepreneurs shy away from leaning too heavily on the professional involved in their business world and seek their services only when absolutely necessary. This only shoots the entrepreneur in the proverbial foot by reducing options to resolve critical situations. If you shy away from lawyers and accountants you may also be increasing overall costs by not resolving situations early enough and by allowing critical situations to turn into lingering issues. Let’s consider a situation where you already know how to prepare your own financial statements and tax forms; doing this yourself may seem cost efficient to you but in actuality this accounting work takes up your valuable time, time that could be better spent dealing with other issues. To find out how much a lawyer or an accountant will cost you, send the word out in your network of associates and friends and ask for recommendations and advice. Alternatively, you can call lawyers and accountants up yourself and ask them directly. In most cases you will not be charged for the initial visit and you can do some easy comparison shopping.
It is important to sit down and think about whether potential lost business is greater than the cost of hiring an accountant. Do not think about the entrepreneurial relationship with the extended business family as a “dependency,” rather, frame the relationship as a collaboration where both parties bring something to the table of equal value. Also, remember that good professionals cost money. Do not shy away from a lawyer who asks for a retainer – this is actually a great method to use for budgeting legal costs since you pay a bulk sum up front and you know exactly how much you will be spending. A retainer fee is a lump sum that you pay up front, and subsequently you draw from that sum every time the lawyer advises you. This is an increasingly more common practice because it is not good business sense for the lawyers to give out advice on credit to a business that may fail before the bills are paid. Make sure to comparison shop to see retainers fees for lawyers in your area.
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