questions. Do they talk with you in terms you can understand?
If you have students who are attorneys or accountants, you may want to engage their services for your business. Be sure to pay them or offer like-valued services in exchange for their help. If students feel that you are taking advantage of them, you could lose them, both as students and as advisors. Moreover, be sure these students can get away from their business when they’re studying with you. One main reason working adults sign up with a martial arts school is to spend some time each week forgetting their job. Make sure your students who work for you do so during their work time, not during their recreation time.
Accountant
At a minimum, have your accountant do your business income taxes. The IRS tax code makes it difficult and very time-consuming for untrained individuals to do their own business taxes. Having your accountant do your taxes can not only save you time and aggravation but also save you money.
A good accountant can be a valuable consultant not only at tax time but whenever you need insight into financial matters. For example, ask your accountant for a list of the licenses and tax forms you will need to open and run your business. Accountants deal with such things as a part of their job. They should be able to make sure you haven’t forgotten something crucial.
By the way, if you can’t read a financial statement, don’t hesitate to ask your accountant for help. Reading a financial statement is a matter of understanding ratios. Your accountant can teach you which ones are necessary for you to get a good idea of how healthy your business is. (See chapter 12 for more information on financial statements and ratios.)
How do you find a good accountant? Ask business associates, your banker, your attorney. Look for someone who is a member of a state or national professional accounting association. Most of these associations require their members to subscribe to a code of ethics. They also require continuing education, which is crucial for an accountant who wishes to keep up with new accounting methods and the ever-changing tax code.
Accountants typically have a price list for various services. It’s a good idea to get that list before you begin a relationship. In fact, get the list before you begin making financial estimates for your prospective business. Budget enough money to hire a good accountant right from the beginning.
Attorney
Do you need an attorney? Yes. It’s an attorney’s job to know where the legal land mines are. Especially if you’ve never owned a small business before, attorney’s fees will probably be a small price for peace of mind. An attorney’s function is not just to get you out of legal trouble. A good attorney can help you avoid legal problems before they happen.
For most of your needs, you want a basic business attorney, in other words, a corporate attorney who knows small businesses. Describe your business needs to the attorney. If your needs lie outside her specialization, ask for a referral to the correct specialist. Many attorneys work in large practices with experts in several different specialties under one roof. These large firms give you the advantage of multiple resources when you need them. Always have one main attorney representing your interests, though.
When you go in for the initial interview with an attorney, in fact any time you go in for a consultation, have a list of questions. Time with an attorney is not cheap. Do some advance planning. Use your attorney’s time wisely. Doing so is using your own money wisely.
Banker
Of course you will want a checking account with a bank. But more than that, you should have a good business relationship with a bank. A good bank can handle your accounts, provide you with a line of credit, handle your credit card transactions, and even give you valuable business information.
Make an appointment with the manager or account representative of several banks in your area. Tell them you’re opening a martial arts school in the neighborhood and are interviewing banks. Compare overall service, fees, and whether they offer the specific services you need. In your interview with a banker, you are doing three things: First, you are getting enough information about fees and services to make an informed decision about where you want to bank. Second, you are feeling out where you might be able to get a loan and what would be required in doing so. And finally, you are getting a feel for the “personality” of each bank and the people who run it. Based on these three kinds of information, you make your choice of bank.
If you develop a good, long-term relationship with your banker, you can get important business advice from her. Ask your banker to give you her definition of a healthy business. Ask her to describe the telltale signs of a business that’s getting into financial trouble. Remember that bankers make a career of determining which businesses are good credit risks and which aren’t. Ask them what ratios they like to see on small business balance sheets. Forge a relationship with not only a bank but also the people who run the bank: the branch manager, a loan officer, the person in charge of credit card services. Greet them by name when you come in to make a deposit. Make them your allies.
Other Consultants
The SBA supports several organizations whose purpose is to foster small business growth. Throughout the United States, this federal government agency has local offices whose sole purpose is helping small business owners.
For example, the SBA’s Small Business Development Centers offer free counseling, training, and technical assistance to small business owners. These centers are staffed by a mix of government and private sector consultants, mentors, and teachers. Their purpose is to direct you to experienced professionals who can teach you how to put together a business plan, find financing, or set up a profitable business. SBA consultants are available to small business owners who can’t afford to pay a private consultant to help them begin or expand their first small business. The SBA has at least one Small Business Development Center in each state. SBA offices are in the telephone directory under “U.S. Government,” you can check their Web site at www.sba.gov, or you can call the Small Business Answer Desk at 1-800-8-ASK-SBA.
Another service of the Small Business Administration is the network of Business Information Centers. These centers are high-tech laboratories that have computer workstations, videos, and other technical resources for start-up small businesses. Counselors can help you use these resources to set up your business or to improve your existing business. The Business Information Centers are less widespread than the Small Business Development Centers, but more than thirty are scattered throughout the country. Check your telephone directory under “U.S. Government” to see if there is one in your city.
For a novice business owner, one of the most valuable SBA resources is SCORE, the Service Corps of Retired Executives (www.score.org). These experienced volunteers work with the SBA to provide free counseling on most facets of starting and managing a small business. The SCORE program can help you find and supplement the areas where you are weak. For example, if you have experience in bookkeeping and accounting but have never done any management, SCORE can recommend a mentor with management experience. Be aware, however, that SCORE is a mentoring program. It’s not their job to run your business or to do your work for you. They can give you experienced advice, but only you can chart the course of your business.
Set Up the Legal Form of Your Business
Once you’ve assembled your team of professionals, it is time to enlist their help and make some important decisions. Before you put together your business plan, before you start applying for loans, you need to choose the legal form of your business.
The
