By Graham Knight, Partner
The Importance of Association
There is nothing more important in your business future than careful choice of those you associate with. Successful ventures generally are made up of different people with different talents, and the most important qualities these people can possess are honesty, respect, a willingness to work hard, and a general disinterest in taking the credit for things that go well. The joke around our firm for years has always been that we “stab each other in the front”. If the character of the people you choose to work with is substandard, you will pay for that choice. The question is only when.
Knowing your Business and the Business Side of your Business
Over my 30+ years of practicing business law, I have often seen business trouble or failure arising from the principals not studying the business of their business. Stated another way, you may be the best computer technician in Ontario, but if you do not spend serious time looking at the mechanics of your business, including receivables, payables, plans for the future and the like, you may find yourself in trouble. It is not necessary that everyone in your business be an expert on the accounting/financial/planning end, however, it is prudent that everyone in your business has a good working knowledge of same and makes a point of keeping in touch.
Another sad story that one sees far too often starts with a division of responsibilities in a business where, one person is out doing the job with the public, and the other manages the office or looks after the financial side. If the person out in the field does not keep in touch with the business side, abuse can and does arise. Whether or not you find the business side of your business exciting or boring, you will find that the return from your business will improve markedly if it is run properly.
The Importance of Good Advisors
It is vital to seek out competent professional assistance, particularly in the area of accounting/tax, banking, insurance, and law. When you are starting a business, ask your associates or even competitors who they consider to be good and take the time to visit these advisors and get to know them. A good advisor will return your calls promptly, offer you professional service that meets your needs, (not more or less than your needs), and is proactive to the extent that instead of simply answering the questions that you raise or doing jobs that you request, they will look a few moves down the board, anticipate where you are going, and make suggestions now to help your business in the future.
Your advisors should stick to their area of expertise. We see accountants doing legal work, lawyers doing accountant’s work and insurance agents also getting involved in areas that are not their primary expertise. Form a team and let that team know that you expect them to work together for your benefit. Always remember that you are the boss of the team.
I regularly provide client’s accountants with a “heads up” letter of what I am intending to do so the accountant not only knows what is going on with his/her client, but is in a position to add value if, for example, from a tax point of view, the accountant thinks some aspect of the proposed course should be more closely scrutinized.
A good advisor will give you advice in language you understand. Be careful if you are receiving communications full of big words and bafflegab. I am of the view that someone that really knows their trade can get the relevant points across to you in simply language.
Most businesses are short of funds when starting out and are consequently reluctant to seek professional input. In my view, it is worth investing an hour with an accountant, a lawyer, and an insurance agent so that you establish a professional relationship, and can take suggestions from them as to how to appropriately launch your business. It is easier to do something right the first time than it is to come back later and try to patch things up. Also, when you need to call them with a serious issue, they will be taking a call from a client, not a cold call.