Legal Alerts
Assembling A Business Advisory Team
Assembling a business advisory team is one of the most important parts of starting and ultimately growing a business. Advisors will ask you questions that you haven't even thought of and help you look at your business with a fresh perspective and provide critical insight. But how do you get started choosing an advisory team?
First you want to look at yourself. If you're a small business owner take a hard look at your personal strengths and weaknesses. Most people are good in one or two key business areas but no one is good at everything. Are you a marketer? A salesman? A strategist? Even if you have a legal or accounting background it's best to hire outside help.
Next take a look at your in-house team. What are their strengths and weaknesses? What do they need to learn and how do they need to grow? Then look for an advisory team to round out the skills your business needs.
At a minimum each new business needs a business lawyer, an accountant, a banker and an insurance agent. A trusted accountant will assist you with acquiring all of the necessary identification numbers and reporting formats for your business. What's more your accountant will ensure that you have your bank accounts properly established, a record keeping system appropriate for your business type and size and a system for filing all necessary reports.
Your accountant will also help you with tax planning and the proper filing of federal state and local income taxes. Perhaps even more important, the accountant can be an excellent source of advice and a solid sounding board for you about your business goals.
A business attorney will ensure that you select and properly form and organize the best business entity for your organization. Your lawyer may also assist with the many legal issues which confront a business owner every day. These may include contracts, leases, raising capital by borrowing money or selling equity, stockholders agreements and operating agreements, decisions on hiring employees or independent contractors, post employment restrictions like covenants not to compete and non-solicitation clauses, patents, copyrights, trademarks, trade secrets, zoning issues, labor agreements, warranties, lawsuits and much more. Many attorneys concentrate their practices - some deal primarily in real estate, others in family matters or litigation. You want to find an attorney who works primarily in commercial business matters.
A banker is not usually at the top of a new business owner's advisory list - but should be. Unfortunately some small business owners wait too long to establish a good working relationship with a banker. If financial issues arise, you want to have an already established working relationship with the bank and your banker. What's more your banker is usually very well connected in the community and can be an excellent source of business referrals for you.
You also need an insurance agent. Typically, you may need a general liability policy or a personal umbrella liability policy for protection. You may also need some sort of product liability insurance or casualty, loss of business or credit insurance. Disability insurance and life insurance may fit into your business needs as well. You may also need advice on pension plans or other benefit plans for employees. Your insurance agent can tell you exactly what you need to protect yourself and your business.
Rather than having these people serve on a formal "board of directors," you may prefer to have them on an informal board of advisors. This option will give you greater independence while retaining their help. It clarifies their involvement, gives you greater freedom of action and fewer controls, places them more in the planning than review mode and it may be a cost effective option for your business.
You want to make sure your team of professionals know each other and are free to communicate amongst themselves about your issues. This is a great way to leverage their collective knowledge for your benefit.
Business owners and entrepreneurs are visionaries and dreamers. A solid team can help assure that the vision you have for your business becomes a profitable reality.
Wishing you all the best with your business,
Mark T. Jensen
Senior Partner
Bowie & Jensen, LLC
jensen@bowie-jensen.com