In the small business section of my practice I find that many of my small business clients have started a business by accident. What I typically see is the owner has a hobby that they enjoy and along the way someone mentions to them that they may be able to make some money by selling the result of that hobby. They start small by letting friends and family know they are selling something, then maybe they start going to vendor shows or start an online store. Before they know it, they have a business. At this point it isn’t always making more money than it is spending, but they have a product they know people want and they are ready to make sure the business is successful.
These people generally aren’t business people, they are creative people who haven’t been trained in running a business. They now need to learn how to run a business on the fly. To help with this transition from creator to business owner the owner should seek resources that will help them run their business. So that brings up the question, who should I have in my corner as a business owner. I answer this question below:
- Accountant – As an accountant who has many small business clients I know the importance of know the financial health of your business. If you can’t answer what I call the “Shark Tank Questions” you need to find a qualified accountant to help you. The “Shark Tank Questions” are: What is my profit margin on each unit or service I sell? What do my sales need to be to break-even? How much does it cost to acquire a new customer? What is my cash cycle? What is my projected net profit for the next three years? What cash will I need to invest in the business to reach that projection?
- Lawyer – One of the first people you should consult when starting a business is a lawyer. They can advise you on a wide range of items for starting your business from what type of entity you should create (an accountant can help you with this as well) to the wording of your contracts and many other items.
- Business Coach – A business coach is someone who has years of experience in either starting businesses or supporting those who have. The purpose of a business coach is to be a third-party sounding board who can help you take the emotions out of your decision making as well as use their experience to help lead you down the best business path.
- Insurance Broker – A lawyer will be able to advise you what insurance you should have in your business and an independent insurance broker will be able to help you find the right insurance at the right price.
- Banker – Establishing a relationship with a banker is important because a banker can help you with more than a bank account. This is the first person you will go to when you have any financial need related to your business. Where you have your bank account is also the financer who is most likely to provide you a loan at a good rate because they have an existing valuable relationship with you. It is important to work with a banker who wants to have a relationship with you, not just someone who wants to sell you financial instruments.
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