As business owners and especially as solopreneurs you are in business for yourself and more often than not that means by yourself too.
Not only is the road to entrepreneurship a lonely one sometimes it is littered with landmines that can topple even the best businesses! That’s why every business needs to recruit the right advisors for their “A” Team. The advisory team that every business needs at a minimum is in the areas of finance, legal and risk management.
Your Finance Advisors
On the financial side you need a CPA, Certified Public Accountant, to help navigate the tricky rules and deadlines of the compliance side of the tax code. Missing deadlines and not filing the proper forms can be costly in penalties and interest.
Perhaps the greatest help that a CPA can offer is designing a system in your business to measure the key numbers to track profitability and the health of your company. Some CPAs will help with system design, setting up a bookkeeping system, choosing the right software to manage the numbers and of course helping plan for the least taxes possible!
Some CPA’s will even handle the bookkeeping for you but if they don’t another piece of the financial “A” team is a bookkeeper. The temptation for most solopreneurs is to try to take care of the books themselves when that function can quickly consume a lot of the time that should be focused on revenue generating activities like sales.
Round out your financial “A” team with a banker and financial planner. You want your banker to know you before you need them to know you. Going to a bank to seek working capital to grow your business is a lot easier when you have built a relationship with your banker before you start asking for help.
You should also have a financial advisor that works closely with you and your CPA to make sure that you are investing the profits in your company into the right vehicles and strategies to build wealth while you are building your business. After all, what you keep from your business is really more important than what you make.
Your Legal Advisors
The second team member is a lawyer or access to a legal team. Like the tax and accounting side of your business, legal aspects can present challenges that you must navigate.
From the outset of your business there are contracts that need to be reviewed both between you and customers for the services or products you provide and between you and your vendors. When your agreements between you and your customers are not in writing there is often a chance that the parties don’t really have the same understanding of what the obligations are for everyone involved. These misunderstanding can be costly.
Another area that a legal team comes into play is when customers owe you money. We all assume our customers and clients are going to value our product or service and gladly pay the agreed upon amount, but sometimes this does not happen. When a customer doesn't pay and you have tried to receive payment without success, often a letter or contact from a lawyer to your client is the magic bullet that gets the invoice paid!
A lawyer also comes in handy when you are ready to grow your business and are considering changing your entity type or taking on a partner.
Having a legal advisor in your court is also helpful when navigating your risk management issues.
Every business has to manage risk- insurance is a great way to provide a safety net for your business. Having a savvy insurance advisor on your team that can help you navigate what the risks are in your business and suggest insurance where appropriate to cover those risks is vital to protecting your company and your income.
Unexpected things come up in life and business--while unavoidable the pain from them can be less if there is a backup plan. What will happen in your business if you become sick or disabled? How will you meet obligations to your customers or pay for your living expenses while you cannot work? What happens if your office (or your home if that is where you work) becomes unusable do to a flood or fire or some other emergency. Having the right insurance in place can certainly make dealing with these issues easier.
Many issues in your business you can handle yourself- but just because you can do everything in your business does not mean you should. Surround yourself with the right “A” team to hasten your way to a stronger, safer and more profitable business.