Not every entrepreneur is naturally business savvy. People, generally, start their own business because they are an expert and love what they do, whether that be an auto mechanic, a clothing designer or information technology consultant. To ensure your success, you should concentrate your time and efforts on what you do best, then consult or hire professionals to handle the rest. The saying “You have to spend money to make money” is applicable when starting a business.
Taxes are an extremely complicated field that I do not recommend you address alone, especially if you are a small business owner. As you begin your venture, your business and personal taxes should be addressed together, as many small business entities have income and losses passed through to the owner. All too often, new business owners seek tax advice after they are in business. A tax professional should be able to provide advice on the tax effect of different business entities prior to you going into business. In addition to preparing your tax returns, a tax consultant should be proactive in working with you on tax planning. Your tax consultant may also be able to advise you on the best bookkeeping method for your business.
Just as your business entity structure affects your taxes, it also affects your personal liability. Prior to beginning a business, you should consult an attorney concerning the legal aspects of the different business entities available to you. Your attorney should advise you of the best available ways to protect your personal assets and business interests. An attorney can set up your business entity properly and advise you of any contracts you might be required to sign in the course of conducting your business. If your business requires your clients sign a contract with you, your attorney should prepare the contract for you.
Don’t forget the insurance. You should retain an insurance agent to advise you about the proper insurance coverage you need to protect your business and ultimately, yourself. With all the changes that can happen to a growing business, start-ups should have quarterly or semiannual reviews with their insurance agents. It is important to determine that the policies coincide with the changes. For example, you opened your doors thinking you’d offer a particular service; however, the market provided you the opportunity to offer a different service to your customers. You should determine that your business insurance policies cover your new activities.
You may also consider seeking advice from experts in your field when developing your business plan. A business consultant should be able to advise you on critical issues, such as, the proper pricing for your products or services, and how to seek financing for your business.
Just as an accountant would go to a dentist if his tooth hurt, a dentist should consult an accountant when looking to establish his own practice.
William G. Lako Jr., CFP, is an executive in residence at Kennesaw State University’s Coles College of Business and a principal at Henssler Financial. Lako is a certified financial planner.The Marietta Daily Journal will periodically publish columns from KSU business faculty.