Hiring Professionals

Among the professionals you may need to work with are a lawyer, an accountant, and, in some cases, a marketing or business consultant. You might as well think of them as being part of your business family because they'll play an extremely important role in your business's success or failure.

The general rule for determining whether you should hire them is if (1) they have expertise you need but personally lack or (2) you have the expertise, but they can do what they do cheaper than you can do it.

 
Example

Suppose you know how to prepare your own financial statements and tax forms. If, however, you lose business because you're too busy doing your own accounting work, you'll have to determine whether the lost business is greater than the cost of hiring an accountant. If it is, you should hire the accountant.

The two professionals you'll almost certainly need to work with are an accountant and a lawyer. Let's take a quick look at the tasks they'll perform for you:

Accountant can set up your bookkeeping; can set up your system for handling the cash you receive; can do your taxes and advise you on how to operate your business to reduce your taxes; can provide financial planning advice.

Lawyer can help you choose the form of business you need and can help you prepare the necessary paperwork; can help you make sure you've complied with all local laws; can help you draft contracts and leases; can provide legal advice for many of your business decisions; can defend you if you get sued and can advise you if you are considering legal action against someone else.

To find out how much a lawyer and an accountant will cost you, ask your friends and business associates or call some lawyers and accountants and ask them. In most cases, a lawyer or an accountant will not charge you for an initial visit, so you can do some free comparison shopping (but make sure you call and confirm that the initial visit is free before you go).

Once you've chosen a lawyer, he or she may ask you to pay a retainer fee, which is a lump sum that you pay up front and then draw against every time the lawyer advises you. This practice is becoming increasingly common because lawyers are growing wary of providing advice on credit to businesses that may fail before the bills are paid. Some lawyers may ask you for a retainer of as much as $2,000 or $3,000. Ask around to find out what others are paying.

 
Warning

Don't be scared off by a lawyer who wants a retainer. In some ways, it's a good method for budgeting your legal costs since you know up front how much you'll be spending.

For a more complete discussion of how you determine which professionals are right for you and your new business and where you might find them, see hiring a professional.