What women, minorities, veterans (and any) potential entrepreneur needs to know…
The original idea for this article series first appeared on one of OUR favorite sites – Small Biz Trends – the actual original check list is THEIRS, not ours – however we’ve re-posted it with some of our thoughts because at the time of the posting, the original was not available on their site- and we thought it was most valuable information. In over seven years of doing business, advising start up entrepreneurs and growth oriented business owners, we know – first hand – that even if you’re in an incubator, or accelerator – there’s a lot of information that you aren’t always aware of. Game changing information that can make the difference between your start-up going the extra mile and “making it” or it just being another great idea that “never quite happened, or got it together.”
In an effort to bring value we decided added our additional thoughts and impressions of things that are often “not said” in the hopes it helps women entrepreneurs, business owners, potential investors and decision makers make better decisions. This is part of a four part series – and today we target the next 7 items on the check list to get you moving in the right direction (we thought increments of “lucky” 7 was a good way to go.) To view the original 7 on the Ultimate check list – click here. To view part II (second in the series) click here.
15. Open a business bank account
It’s all too easy to use your personal bank account to pay for business expenses, but it becomes a gnarl to untangle later. OH! Could we wax poetic about this one…Here’s the thing, banks don’t really WANT to lend you money, until you don’t need it. It’s kind of like business physics and an unfortunate reality of doing business. Especially for women, minorities and veterans, it can be exponentially harder to get financing…(don’t even get us started about access to capital – that’s a whole other post in and of itself!)
However, here’s why you need to open a “business bank account” in a few points.
A) A business banker “gets it” and will respect you for taking your business seriously enough to cultivate a business relationship versus relying on your personal checking account. It’s never too early to build your “Dream Team” as we like to call our team of trusted advisors (banker, lawyers, insurance agents and accountants…more on them later!) Anyway, a good business banker will help you identify how much banking and services you need, will usually point you in the direction of the best value in terms of accounts (free checking is not always the best deal BTW…read the fine print.) An amazing business banker will take an interest in your company, guide and advise you through the ups and downs of business. How do you find an amazing business banker? YOU SHOP AROUND.
You wouldn’t marry the first person you go on a date with, same goes for choosing a bank to get your business financials squared away. We recommend in the Maryland region – Howard Bank, beyond that we like BB&T and Wells Fargo…however keep in mind – the bigger the bank, often the less personal the relationship. Ask around, get references, interview a few candidates. They should earn your business, not make you feel it’s a privilege to serve you. A bad attitude with a banker, is never a good thing and in this competitive climate, believe us – you can shop around – even if you’re a small business! To find out about SBA Lending – listen to this informative podcast with one of our regional sponsors – Howard Bank and one of their star bankers – Rosa Scharf.
You can find more informative posts in our “Learning Center“. To check that out, click here.
16. Set up your accounting system
Once you have your bank account set up, choose an accounting program. Start as you intend to go. Few things will doom your business faster than books that are a mess. Here’s another one we could write a book on. Head’s up – Accountants are important. No matter how small, you do yourself a disservice by trying to figure it out, or do it yourself (unless you’re an accountant!) It can be intimidating to hire an accountant, and yes – they are expensive. But a good accountant is another key member of your “dream team” and when the time comes to do taxes, seek funding or financing, or check in with how your business is REALLY doing – you’ll be glad you weren’t penny wise and pound foolish.
This being said, an accountant is important to interview and be chosen in terms of aligned attitude, values, approach and view on business. A bad accountant can turn into a nightmare. Just like every professions there’s good ones and terrible ones, there’s also quite a few who like to phone in the performance. You get what you pay for to a degree with accountants so you want to be sure you don’t skimp on this. This being said going to a large firm is not the best choice if you don’t anticipate having sophisticated accounting needs, or complicated transactions, multiple revenue streams, etc.
Start with a small, well viewed, highly recommended independent firm and as you get bigger, adjust accordingly if needed.
The tree key characteristics of a good accountant (as we see it) are:
#1. Honest and upfront. You don’t want surprise bills, or worse lack of ethics.
#2. A desire to educate and help you as a client. An accountant who takes time to explain things, and doesn’t always bill for every second you’ve got a question, or ask to pull a financial is a true asset. Beware of accountants who say they are helpful but then aren’t very responsive. Also keep in mind accountants are busy during January-April and so asking for things that can wait, is usually a good idea during that time period.
#3. Provides added value and charges fairly. We are big fans of accountants with transparent fee structures, who bill fairly and make you aware when you’re getting close to maxing out your accounting “budget”. We also LOVE accountants that are truly committed to their client’s success and provide what we call “value add” (or around the office…fries with that?) An accountant that offers ways to upskill on other business concepts, has trainings, a great newsletter and more importantly helps you grow your business by making connections is really a great asset for your business. Just like a banker, you don’t need to RUSH the relationship. Pick one you feel comfortable with, that gets what you do, and is interested in your business. You’ll be glad you did.
17. Assign responsibilities to co-founders
If you have one or more founders, it’s imperative that you decide who will do what up front. Put it in writing. Co-founder disagreements can destroy your business. This should be identified and reflected also in your Operating Agreement, a key legal document that will help you in case the venture comes to a point you need to part ways, or mediate through a challenging time in the business. It’s all fun and games in the beginning but the only constant is change, having a solid operating agreement that delineates who does what, and who has absolute authority over what, and how you resolve it if there’s a difference of opinion helps to keep the relationships well defined, and albeit an up front cost…one that can save you potentially thousands later, not to mention a lot of aggravation and headache should roles become muddled and co-founders become confused who does what in the company…Something that happens a lot when quick growth takes effect.