Chapter 6: Professional Advice
Taking sound advice from an accountant and lawyer is the start of building the firm base to your business. Too often the excuse for not consulting an accountant and a lawyer is “I cannot afford it.” That excuse does not wash. You have to use some of your money to get your business correctly set up. An accountant will advise you on the best structure for your business and the type of company you should form in accordance with your potential tax liabilities. A lawyer will draw up proper terms and conditions of trading and most importantly include your payment terms. At least if payment is part of the deal with customers they know when money is due and you have legal grounds to demand payments.
If you start your business properly it saves you trying to change terms at a later date which you will find very difficult once you have established trading terms with customers.
One of the worst things to happen is to be in a taxi, caught in heavy traffic, going nowhere but the meter is still ticking away.
This is the same as going to a Lawyer or Accountant and not knowing what it is going to cost at the end of the journey. In every business deal I suggest you get a fixed price for the work. What you do not want is to get a nasty surprise at the end when a bill is given to you far in excess of what you expected or what you can afford.
It is the same if you are buying products or services especially if you are the man in the middle. If you were buying a product and the selling it on you would want to know the cost so that you can make sure that you sell on at a profit.
I have known many people not to get a firm fixed price and have got into financial difficulties. If you are buying an item for $5 then make sure that it includes everything, shipping, taxes, license that may apply etc. This is especially the case when importing goods as some countries products have import license requirements and import taxes. Also you want the cost to include custom clearance, and delivery to your business.
Make sure you know what commitment you are entering into and fix the price before you start.
When you are having an agreement drawn up by a lawyer or accountant, or other advisor, you must understand what you are being told. You cannot assume that the advisor is always correct, because they are not. Everyone makes mistakes and you, the client, will be responsible especially if he asks you to approve the contract or tax return. If you do not look at it carefully and rely on the advisor then he will not be responsible if he asked you to approve the papers and you just looked at them and signed them.
It is hard to understand many contracts and tax returns but you must take the time to check them out and what you do not understand then ask questions. It is your ultimate responsibility to look at everything before you sign it. Everyone has to learn and it takes time. A lawyer and accountant spent many years learning what they know and you cannot be the same as them in weeks or months. But you still have to learn what affects you. Ask questions again and again until you understand and are happy that the papers you sign are OK.
When you have a meeting with your lawyer or accountant it is vital that you clearly understand what they tell you. It is a lot to digest but you must make the effort and I will explain why.
Every time you meet with a professional or speak to them on the phone you must keep careful notes of what was discussed. The reason for this is that you may want to refer to what you have been told and want to make sure that you got the correct information and that you clearly understood the advice.
When you meet with an advisor ask him to write to you confirming what was discussed and ask him to provide answers to your questions. The same when you have a telephone conversation. Write to him saying this is your understanding of what was discussed and these were his recommendations. Ask him to confirm that you letter and that the information is right because you want to file it and refer to it when you need to.
Read selected chapters from the book on the links below:
- 1. Starting a Business
- 2. Identifying Your Audience: Marketing & Selling
- 3. Maximising Your Audience
- 4. Financial Management
- 5. Raising Money: Buying & Selling a Business
- 6. Professional Advice
- 7. Why Businesses Fail
- 8. Motivate Yourself to Success
- 9. What is an Entrepreneur
- 10. Summary of Points to Remember