Small business owners often wear multiple hats. Sometimes, it’s out of necessity. Other times, it’s due to fear of relinquishing control. Trusting others to support your business can often help it flourish while minimizing risk. However, knowing which external partnerships are most important to the long-term success of your business isn’t always clear.
Consider nurturing these three relationships to help your business thrive.
1) Business Accountant
A qualified accounting professional can explain the financial and tax implications of facility expansions, major equipment purchases, and other strategic initiatives. Their input can help you make better decisions that affect your business.
Before you hire an accountant, do your homework. Don’t rely solely on referrals. Start by asking these questions:
- Do you have experience in my business type and industry? Familiarity with your line of business is critical. Accounting practices for the owner of a postsecondary school requires an accountant who understands minimum financial ratios necessary to maintain school accreditation. In contrast, a healthcare professional may need an accountant well-versed in valuing equipment and reconciling patient receivables. Different businesses demand different skill sets.
- Are you a Certified Public Accountant (CPA)? While hiring a CPA isn’t a necessity for every business, knowing the answer allows you to enter the relationship with eyes wide open. Besides holding a higher credential and agreeing to abide by an ethical code of conduct, a CPA is qualified to represent you during an IRS audit. A business accountant, without a CPA designation, would be unable to represent you during an audit defense.
- What’s included with the monthly rates or fees? Ask accountant candidates to clarify the services they provide, the actual deliverables you can expect to receive, and the cost of services before contracting with them.
Confirm whether your potential accountant has an active license and if they’ve been subject to disciplinary action. This information is available to the public. Visit the State Board of Accountancy website where they received the license and begin your search under the Verify a License tab.
2) Business Attorney
Hiring an attorney on retainer can give you peace of mind as you grow your business. Along with a CPA, they can help you identify potential risks associated with certain business decisions and provide suggestions to minimize those risks. An attorney already familiar with your business can also act expeditiously should you encounter legal troubles, saving you time and money.
As you search for an attorney, ask the following questions to help identify a good match:
- Based on my business type and industry, what would be some areas you would look at first to determine my current level of legal exposure? This question might reveal the attorney’s breadth of understanding of your specific industry and current challenges.
- What does your Retainer Agreement include, and how are fees calculated? Retainer agreements can be extremely detailed, reflecting an attorney’s personal style or intentionally vague to allow for flexibility. Regardless of your preference, confirm billable rates beforehand since they may fluctuate based on who’s completing the service, e.g., a paralegal is billed at a lower rate than a partner at the law office.
Verify whether the attorney is legally authorized to practice law in your state by visiting the American Bar Association’s Lawyer Licensing webpage.
3) Business Banker
The relationship with your banker extends beyond their ability to assist with capital expansion or cash flow needs. Along with other services, they can introduce you to a host of community contacts to support and grow your business. Before you partner with a banker, learn more about them by asking:
- What type of lending products and services do you offer to support companies like mine? These should include a mix that includes SBA Loans, Commercial Mortgages, Lines of Credit, etc.
- What sets you apart from other local banks? Local awards and recognition, like those received by Traditions Bank, are one way to confirm a bank’s footprint in the community.
- Is there someone on your banking team who has experience with small and mid-sized businesses?
Seek a long-term relationship with an experienced banking professional who understands your unique business needs.
Learn more about the financial institution by reviewing their core values statement. Turn to their two most recent annual reports for evidence of their financial stability. Some banks include an Investor Relations page on their website that contains this and other relevant information.
Running a successful business is easier when you have a team of trustworthy, qualified professionals on your side. Whether you’re speaking with a potential accountant, attorney, or banker, discuss business philosophy. If your approach to business matters is conservative while theirs is aggressive, you might be a mismatch. If you’re comfortable with each other’s style, you might develop a relationship that lasts the life of your business.