It can be challenging to understand the advantages of hiring a team of finance specialists versus employing just one. Small business owners know it’s wise to entrust certain complicated tasks to those qualified to navigate their nuances and pitfalls. But who should you trust? To answer this important question, here are five finance pros to consider for your small business and the benefits of outsourcing to them.
A Financial Advisor
Every small business, no matter the type, should have a financial advisor on call. These money-savvy professionals can set you up for success with financial counseling, budget creation, and investment tips. Later on, they can help you prepare for retirement and the transfer of your business to another. A financial advisor will be with you every step of the way.
An Investment Broker
Brokers are licensed finance professionals that bring together buyers and sellers of investments and help investors reach their financial goals. A good broker will work in tandem with you and your financial advisor to seek out the best investors to raise capital for your small business. They’re your trusted agents in commercial negotiations or transactions.
A Bookkeeper
A certified bookkeeper balances books and keeps daily records of your small business’s financial affairs up to date. Bookkeepers fit right in with businesses that collect income from a number of sources. For instance, they track the flow of capital, handle payroll, write checks, and fill out tax forms for your employees so you can focus on growing your business.
A Certified Public Accountant
Certified public accountants (CPAs) work with the information collected by bookkeepers to prepare and examine financial records and make sure those records are accurate. These professionals also keep track of company bills, making sure they are paid properly and on time. They perform financial statement analysis and audits to make sure you act within the limits of the law. Ideally, a bookkeeper and accountant work closely together, simplifying the finances for you, the business owner.
A Tax Lawyer
Tax lawyers step in to help in the event of IRS trouble, such as an audit; provide advice on federal, state, and local taxes; and speak in court on your behalf should the need arise. A tax lawyer is an indispensable part of your financial professional team. If you struggle to manage your taxes properly, professional help is a sensible investment. Every business stands to benefit from having one in its employ.
For the safety and longevity of your small business, it’s a good idea to seek counsel and delegate arduous accounting tasks to the professionals. It’s never too early to contact these key financial pros. In fact, many small business owners wish they had looked into professional counsel sooner. Even if you’re just starting out and only need occasional consultations, be sure to check references, ask questions, and start your small business on the right foot. Now, you’ll be ready to create the team best-suited for the needs of your small business.
Determine Your Type of Business
One of the first decisions that you must make as a business owner is how to build your company’s infrastructure. This decision will have long range implications, so we recommend to you, dear reader, to consult with an accountant and a corporate lawyer. They will help you pick the type of business most beneficial for you.
Sole Ownership
The great majority of small businesses are started with only one owner. These companies are in the hands of one person who normally is responsible for day-to-day operations.
Pros: Sole ownership is the simplest and cheapest way to possess and organize a business venture. You will have total control; possess all the profits generated by your business. The profits will directly flow towards the declarations of personal taxes. If you desire, it will be easy to dissolve your business.
Cons: You will be responsible to cover all your costs. You will have the legal obligation to pay all debts incurred. You will put at risk all personal and business valuables. You can be at a disadvantage in gathering funds. More times than not you will be limited to using your personal savings or making individual loans.
Partnerships
In a partnership, two or more people share the ownership of only one business. The law does not distinguish between the business entity and it’s owners.
Pros: The business venture will be easier to establish. However, it is necessary to invest time in the establishment of a contract between the owners of the business. It is also easier to gather funding. The profits flow directly to the tax declarations of each of the partners.
Cons: All partners are individually and collectively responsible for the actions of the other partners within the entity. All profits should be shared by other partners. All decisions are made by the collective partnership; there will be the probability of disagreement with the day to day operation of the business. In fact, count on it.
There are different types of partnerships to be considered. They are: General Partnerships, Limited Partnership, Limited Liability Partnership (LLP) and Joint Ventures.
