home *** CD-ROM | disk | FTP | other *** search
- @082 CHAP ZZ
-
- ┌─────────────────────────────────────────────────┐
- │SELECTING PROFESSIONAL ADVISERS FOR YOUR BUSINESS│
- └─────────────────────────────────────────────────┘
-
- Almost no one is smart enough to go it alone in business.
- At some point you will probably be better off to swallow
- your pride, if you are the independent type who never needs
- to rely on anyone else, and seek one or more of the various
- kinds of business advisers that are commonly available and
- utilized by small businesses.
-
- Often the best place to start is with free, or nearly free,
- advice, of which a great deal is available these days for
- anyone seeking to start a new business. For starters,
- contact your local Small Business Administration office,
- and find out about the regular (and inexpensive) seminars
- they put on regularly for small businesses on a variety of
- subjects, such as how to comply with payroll tax requirements,
- if you have employees. The SBA provides help to small
- businesses in obtaining financing, including active
- involvement up to the point of guaranteeing (or even
- making, in rare cases) small business loans; but it also
- is a tremendous information resource, with helpful booklets
- on almost every conceivable business subject.
-
- Another key feature offered through SBA offices is consulting
- services, which are provided on a volunteer basis by
- experienced older individuals through SCORE, the Service
- Corps of Retired Executives. There are a large number of
- SCORE chapters throughout the country, most with a
- considerable list of participating retired executives, with
- backgrounds in many different business fields, all of them
- ready to help your new or small firm solve some of its
- problems, without your having to reinvent the wheel over
- and over.
-
- Another free or nearly free source of help and information
- throughout the country is the large number of Small Business
- Development Centers that are funded by the government and
- operate at colleges and universities. Here you can draw on
- the talents of academics and business students who, while
- often lacking the kind of experience of SCORE volunteers,
- can and will devote much more time to doing research and
- helping to develop projects or plans for small businesses.
- Check with your nearest college or university, and you
- should be able to find an SBDC, even when the college is
- located in a fairly small town, in many instances.
-
- Most state governments, and many local governments, also
- have business and economic development agencies that are
- eager and ready to provide all kinds of useful business
- information and help in locating financing for small or
- new businesses. A recent trend in many states is to also
- set up "One Stop" centers where a new business locating
- in the state can often handle ALL of its state permit,
- licensing and registration requirements, as required by
- a whole host of state agencies, at one office set up for
- the purpose of making the process somewhat easier. (In
- fact, a number of such one-stop centers are now using
- this software program....)
-
- Notwithstanding all the free or inexpensive help and
- advice described above, there will usually come a time
- for almost every business when you will need to retain
- a professional business adviser of some type, such as
- an attorney, accountant, or consultant. The following
- discussion outlines for you a few pointers and guidelines
- to use in finding and using such advisers, discussing
- each of the major types of business advisers in more or
- less the order you are likely to need them, as your
- business grows in size and complexity (and profitability).
-
- ACCOUNTANTS. Select your accountant carefully, for this is
- the one person outside your business who is most likely to
- be closely in touch with almost everything going on in your
- operation. Besides helping to set up your books and
- to establish systems for handling cash receipts and
- disbursements, a good accountant can provide a wealth
- of practical advice on a wide range of subjects that are
- important to your business, including taxes, managing your
- money, obtaining financing, and evaluating business
- opportunities.
-
- What kind of accountant should you use? CPA, Enrolled
- Agent, Public Accountant, or bookkeeping service? There is
- no simple or "right" answer to this question. Many small
- firms will do quite well with a Public Accountant (sort of
- like a Certified Public Accountant in most states, but
- usually with less educational or experience requirements)
- or a bookkeeper with no professional credentials. Many of
- these people, if experienced, can be quite good, and they
- usually charge a lot less for their services than an
- Enrolled Agent (someone who has passed a difficult Enrolled
- Agents exam, and who is authorized to practice before the
- IRS on tax matters--usually ex-IRS agents), or a CPA. A
- CPA will typically charge the most of any kind of accountant,
- and is usually the most highly-trained. Becoming a CPA
- requires passing an extremely difficult 3-day exam and
- substantial educational requirements in accounting and
- related fields (more than a simple bachelor's degree in
- more than half the states now), and, in many states, a
- year or two of qualifying experience working for a CPA
- firm.
-
- CPA's and Enrolled Agents tend to be much more proficient
- dealing with tax matters, particularly the more complex
- and sophisticated types of tax problems. But, as noted,
- you pay more to get this expertise. Bookkeeping services
- and Public Accountants, in this CPA's personal experience,
- tend to be much more familiar with tax compliance matters
- such as filing payroll tax and sales tax returns.
-
- Note that if you need financial statements for your
- business, particularly audited ones, you will need a
- CPA to do the work. Audits are quite expensive, however,
- so most small businesses usually do not have audits unless
- they are either (a) very, very profitable, or (b) some
- outside party, like a lender, requires the company to
- be audited by an independent CPA firm in order to get
- and (keep) a loan.
-
- Attorneys and bankers are often in a good position to know
- accountants whom they can recommend to a small business,
- so ask a banker or attorney if they can suggest someone.
-
- One bit of philosophical advice: Avoid accountants who
- appear too smooth, too glib, and who look too tanned and
- well-rested. They are usually better at selling their
- services than delivering them. The really competent
- accountant is often a bit frazzled looking, and somewhat
- lacking in social graces; i.e., slightly nerd-like. That
- is usually because they are so concerned about doing the
- job right for their clients that they work about 70 or
- 80 hours a week, and don't have time to work on fine-tuning
- their tennis backhand or do much of anything else except
- ride a computer all day and study the Good Book (for CPA's,
- that's the Internal Revenue Code) religiously. THAT'S the
- kind of accountant I would want if I had to hire one for
- my business. (This isn't an absolute Law of the Universe,
- but, having spent most of his professional life as a CPA
- in a number of large and small firms, this writer can
- testify that it's a pretty good rule of thumb to go by
- in selecting accountants, in most cases.)
-
- ATTORNEYS. Unless you start out your business as a sole
- proprietor, you will usually need an attorney to prepare
- a partnership agreement or to set up a corporation (or to
- set up a "limited liability company," in states where such
- entities are permitted). You will probably do well to
- consult an attorney anyway to make sure you are obtaining
- necessary licenses and permits or to help you obtain them
- in some cases. In most parts of the country, local bar
- associations have lawyer referral services that can put you
- in touch with attorneys in your area who practice in various
- fields of law. However, in most cases, you will be better
- off asking an accountant or banker to recommend a good
- BUSINESS lawyer. If you need highly-specialized legal
- advice or representation, such as on patents or trademarks,
- ask an attorney you know to recommend such a specialist.
-
- BANKERS. Establishing a good relationship with officers
- of the bank branch where you open an account for your
- business is strongly recommended. Even though you may find
- it difficult to borrow from your friendly banker when you
- first go into business, he or she will be interested in
- keeping an eye on your business to see how it develops. It
- pays to cultivate the relationship and to create a good
- impression long BEFORE you are ready to apply for a business
- loan from the bank. Ask around before opening an account,
- to find out if there is a bank in your area that is well
- known for lending to small businesses. Many of the large
- banks tend to be more interested in larger accounts,
- although different branch managers of the same large bank
- may have very different ideas about working with small
- businesses.
-
- Your banker is usually very well "plugged-in" to your
- community and can be a useful source of free advice at
- times when you need practical financial advice or to make
- connections with other businesses or people in your vicinity.
- In short, don't just think of your banker as someone to
- borrow money from, but as a "money doctor," and one who
- doesn't usually charge you by the minute for advice. In
- fact, some savvy small business people will go to a local
- banker they want to cultivate and ask to buy them lunch in
- order to ask their advice about something, even if they
- don't really need the advice, just as a way of making a
- connection and impressing the banker, if they have a good
- "story" to tell about their business, and can't find any
- other good excuse to let the banker know what a great
- operation they are running.
-
- @IF121xx]BENEFIT CONSULTANTS. If you want to get the most "bang for
- @IF121xx]the buck" for a corporate pension or profit sharing plan (or
- @IF121xx]to establish a Keogh plan, should you cease to operate in
- @IF121xx]corporate form), you may want to seek out an employee benefit
- @IF121xx]consulting firm and obtain their proposals as to how such
- @IF121xx]retirement plans should be structured and operated to best
- @IF121xx]suit the specific needs of @NAME.
- @IF120xx]BENEFIT CONSULTANTS. If you intend to eventually incorporate
- @IF120xx]and establish a corporate pension or profit sharing plan
- @IF120xx](or even Keogh plans for your existing @ENTITY),
- @IF120xx]you may want to seek out a benefit consulting firm and obtain
- @IF120xx]their proposals as to the type of benefit plan or plans
- @IF120xx]you need and how such plans should be structured to fit the
- @IF120xx]specific needs of @NAME.
-
- Since many such firms are primarily engaged in selling
- insurance products (life insurance, annuities and "guaranteed
- investment contracts") designed for retirement plans, the
- plan those firms design for you will almost invariably
- involve building in their products. Since insurance in your
- pension or profit sharing plan may or may not necessarily
- make sense in your particular situation, you should ask
- your attorney or accountant to recommend a benefit consulting
- firm that does not have a product (like insurance, or other
- investment products) to sell, other than their consulting
- and plan administration services. On the other hand,
- insurance-based benefit consulting firms often charge little
- or nothing for their plan administration and consulting
- services, in the way of direct fees, instead being paid
- commissions by the insurance companies who products they
- sell to you. This can be very attractive, as compared to
- the thousands of dollars a year an independent benefit
- consulting plan will typically charge. But just remember
- that those healthy commissions they get paid have to come
- from somewhere, ultimately -- not from the Tooth Fairy.
-
- MANAGEMENT OR BUSINESS CONSULTANTS. Last, but not least,
- are other business consultants, whose skills and areas
- of practice may range from things like insurance risk
- management to inventory management to export trade, to
- name only a few, as well as more general management
- consulting and executive recruitment. We've listed this
- catch-all category of business advisers last, and you may
- never need one of them, but such a consultant may in some
- cases be the FIRST outside adviser you retain, perhaps
- even before your business is started, to help you create a
- business plan, or to do a feasibility analysis to help you
- make the ultimate decision of whether or not you should
- even start the business you are planning go into.
-
- You'll find a lot of people listed under "Management
- Consultants" in your local Yellow Pages, but to find someone
- who has expertise in the particular area or areas that you
- need help with will not always be easy, or even possible.
- In most cases, rather than picking a name out of the phone
- book, you will be most likely to find someone who can really
- do the job you need done only by talking to a lot of people
- in your industry, and trying to find out if any of them
- have used consultants, and if so, whether they felt the
- consultants they used were knowledgeable and worth their
- fees. Finding the right consultant can frequently be a bit
- like finding a needle in a haystack -- but if you find the
- right one, who really knows the area you need help in, a
- good consultant can be an invaluable resource to your
- business.
-