Every start-up needs outside advisors. It doesn’t matter if you’re a first-time entrepreneur creating a sole proprietorship in a spare bedroom or a serial innovator with a venture-capital-backed deal in your pocket. Nobody goes it alone.
Outside advisors provide experience and wisdom that complement the founder’s skill set. Typically they are experts in important functional areas such as banking, law, accounting, and taxes. But the best advisors are the ones who can combine practical knowledge with strategic thinking that’s relevant to an emerging business in your specific industry.
You don’t need a high-profile advisory board to help you get your start-up on the right track. But finding a mentor who understands your business and its challenges is a key step. In most cases, emerging businesses need to keep their staffing lean, so you’ll also want to seek out professionals who can help you with a consultative approach to the law, banking, accounting, and insurance.
The core function for business lawyers is risk management. But they also can add value through access to their professional network and by helping augment the owner’s strategic vision. The key is to avoid lawyers who are overly risk averse. Running an emerging business is a risky enterprise, and you are likely to benefit from a lawyer who takes a balanced approach and is in sync with your particular risk profile.
For emerging businesses, bank loans and lines of credit are the most frequently used source of financing. So, most owners should be looking for a great local banker, rather than a VC or an angel investor. As with all of your professional advisors, try to find a banker who’s positive about your vision and can support you with strategic advice – as well as supplying financing that meets your needs.
The key value of accounting is the knowledge of how much things should cost. That’s why it’s important to find a CPA who is familiar with your industry. When trying to identify tax deductions, or track cash flows and inventory, it’s the details that matter. Someone who knows from experience what the numbers should look like will be an invaluable asset as you build your business.
For the purposes of this article, we’ll be discussing the value of including a business insurance expert on your start-up team. Soon you’ll need to think about health insurance and group benefits for your company, these topics are covered in separate articles. Because insurance companies offer products that insure a wide variety of business risks, it’s important to find a professional who will tell you objectively what you need. Thinking in terms of “managing risk” rather than “buying insurance” will put your focus where it belongs – on your actual business needs. A good professional will work to build a long-term relationship with you that continually adds value as your business grows and matures.