Businesses are rarely run by a single person. Instead they are run by a team of persons, each bringing certain expertise which in combination with the other gathered talents create a unique mix that is designed to make the business succeed. In the same fashion, the owner or owners of a small business often need the strength found in this teamwork approach to deal with the wide variety of business challenges each business owner faces.
There are some basic functions that each business must accomplish and some added functions unique to each business. The most common functions include: capital formation and management, risk management, marketing, legal issues, accounting and tax issues, and general advice. Let’s take these one at a time.
Each business will either raise capital from within its owner-investors or its creditors or both. The stakeholders then become the owners and the lenders. If the lender is an institutional bank, it often provides other services, as well, such as depository and lending services, financing inventory and receivables, factoring, and the like. For that reason, it is often helpful to look for a banker as an adviser on the Business Advisory Team. This person will provide a great perspective from the standpoint of a lender.
It is impossible to avoid all risks. On the other hand, it is possible to manage the risks to which a business subjects itself so that it may succeed in the long run. Commercial insurance agents who have dealt with clients facing all kinds of risks become well tuned to see which risks are manageable and which risks put the business in jeopardy. Bringing such a person to the team will strengthen the team by helping the group assess how much coverage to carry, whether to enter into certain risks, and how to deal with claims when they arise.
The global economy has changed how business now must sell their goods or services. It is important not only to have a plan, but to have someone able to help direct that plan in a new arena of websites, blogs and twitters. Many things have now become commodities, and the only differentiating thing about the products are the way they are marketed. Get a good marketer on your team.
Anyone can sue anyone. To have a good defense, you need a good offense. To do that, you need a good legal mind on your team. Don’t worry about whether that lawyer "does it all." Just be sure they have enough experience to direct your group the right direction in the event of a legal problem.
Accounting and Tax are two very specialized areas. Look for a CPA who is personable and willing to spend the time not only crunching the numbers, but meeting to explain what they mean and what result will most likely occur if certain changes are made.
Finally, consider who you would go for advice under certain very difficult situations, such as a discovery that a key employee was stealing from you. That adviser may be someone as close to you as a spouse or a trusted clergy person or other intimate adviser.
In summary, your Business Advisory Team would probably include at least your:
- Insurance Agent
- Marketing Person
- Spouse or Trusted Friend
Such a team, coupled with advisers dealing with your business’s special characteristics will lend a lot to insuring the success of your business.