Relationship Series: Overview
Crucial to the success of each small business is a relationship with many outside service providers. These relationships don’t just happen overnight but are built over time. They take work, hard work, but reap rewards when you put the effort in to them. Communication is key and you need to be willing to share honest and real-time information with service providers you plan to work with.
Do you know why it’s important to build a relationship with your banker? This relationship is probably one of the most crucial relationships for any small business. Bankers play a big role in helping businesses obtain capital and should be an advocate for you.
A bank can also be your lifeline when things get tough for your business. Building a relationship formed on trust before you get to the tough times is very important. Establishing trust is based on open communications during both good and bad times – bankers don’t like surprises. You should help your banker understand your business and goals. Your banker is more apt to support you on borderline decisions when they have been kept informed on your business activities. Bankers have a vested interest in helping your business succeed. Having open lines of communication allows your banker to provide you with the right services at the right time.
Communication is key and your tax accountant is not just the person that files your taxes after the year is over, they should be a trusted advisor for your business. Part of being that trusted advisor means they need to know what is happening in your business throughout the year. They are there to help you think strategically about your business goals. Tax saving strategies should be a topic of conversation that you have regularly as updates to the business are discussed…it’s hard or impossible to implement tax savings opportunities at the end of the year or after it is over. The bottom line is – you need to be in touch with your tax professional more than once a year.
There is a theme to this series – communication is so important to your relationships. The relationship with your insurance agent is no different. Your insurance agent can educate you on types of coverage you need and what the coverage entails. They should understand your needs, financial situation, and goals to help you determine what type of coverage is best for your business. As your business changes, your insurance needs do as well, and your insurance agent can help make sure that you have the best policies for your needs.
Many businesses are hesitant to call an attorney to help them with situations or questions they have as they are fearful of the cost. While attorney costs aren’t necessarily “cheap” you also need to consider the cost that you may incur because you failed to make the proper decision or fell out of compliance with an item because of the desire to minimize costs. Like your other professional advisors, you need communicate with your attorney on a regular basis to ensure that you are in compliance with everything related to your business. If you don’t have a go-to attorney already you should put that on our to-do list so that you have someone that is there whenever legal challenges arise.
Did you know that poor financial management is one of the primary reasons for small business failure? For small businesses that do not have accounting staff, the relationship with your external accountant is crucial. Your accountant should understand your business well and know what your goals are. As with any other relationship, open communication it imperative.
You should meet with your accountant regularly to understand the financial performance of the business. Information should be shared regarding the financial performance and position of the business that helps you make decisions in an informed manner.
Contact ESG if you are in need of an accountant to provide financial information to help you make informed decisions and understand your financial position.