It is nearly impossible for a single business owner to know everything there is to know about running a business. To help stay current, successful business owners need a group of trusted business advisors they can call on from time to time to help keep their business running efficiently and generating the most profits possible.
Most business owners consider their core business advisors to be their corporate attorney, accountant, insurance agent, and business finance advisor. Depending on the type of business and number of employees, they may also have an intellectual property attorney, a human resources and regulatory issues management company, and advisors who provide other specific assistance.
Human resources and employee regulatory compliance, for example, has more than 100 rules, regulations, and laws an employer must comply with concerning treatment of employees. These rules and regulations are constantly changing, so having advisors to handle these responsibilities allows the business owner to manage the businesses while maximizing profits and minimizing risk.
Here are a few considerations when picking your trusted advisors and deciding how to use them best:
- Corporate attorney: If your business is set up as anything other than a sole proprietorship, certain records and books must be maintained. If your company has more than a couple of shareholders, maintaining good corporate governance becomes even more important. You can keep many state-required corporate records, but having your corporate attorney review them annually is a good idea. He or she can also prepare buy/sell agreements and assist you with general contracts and minor litigation. The most important consideration is that your counsel gives you strong practical legal advice so you can make good decisions.
- Accountant: Today with QuickBooks and other computerized accounting programs, many successful businesses do not rely on their accountant for daily bookkeeping. Accountants now bring the highest value to a company when they help establish the company chart of accounts and do an annual year-end compilation of the books. From the annual compilation they produce a tax return and necessary shareholder forms that become a part of the owner’s tax return. Often businesses ask their accountants to prepare IRS 1099s and W-2 forms to be sent to contractors and employees. Many small business owners also ask their accountant to prepare their quarterly IRS 940 reports and compute the appropriate taxes. During the year business owners may call on their accountants for advice as necessary to minimize taxes and maintain their good standing with the IRS.
- Insurance agent: Many business owners don’t realize how much money a good property and casualty insurance agent can save them. This is particularly true if a company’s workers’ compensation premiums are high. The type of insurance a business must maintain varies by business but can include workers’ compensation, general liability, completed products liability, fire, and commercial auto. It doesn’t take long for the cost of various types of insurance to add up, so finding a qualified insurance agent who writes many types of business policies is valuable.
- Business finance advisor: With the availability of business credit becoming harder to obtain and the number of financing options increasing, it is often worthwhile to have a coach who can help you find the best financing options and loan structuring for your business. Occasionally your accountant can fill this role, but with finance options and costs frequently changing in the market, it is worthwhile to have a relationship with someone who can help you keep good external financing options available and affordable.
Successful business owners develop their own style for how to use their trusted advisors and over time develop a strong synergy allowing them to do what they do best, which is manage their business while maximizing profits and minimizing risk.
Sam Thacker is a partner in Austin, Texas-based Business Finance Solutions.