After your business plan, comes your business protection.
There are two professionals every business will need early on: an accountant and a business attorney.
The reasons for hiring an accountant are pretty obvious–you need someone to help you set up your “chart of accounts,” review your numbers periodically, and prepare all of your necessary federal, state and local tax returns.
The reasons for hiring a business attorney may not, however, be so apparent. A good business attorney will provide vital assistance in almost every aspect of your business, from basic zoning compliance and copyright and trademark advice to formal business incorporation and lawsuits and liability.
Some general rules about dealing with business attorneys:
If you are being sued, it’s too late. Most small businesses put off hiring a lawyer until the sheriff is standing at the door serving them with a summons. Bad mistake. The time to hook up with a good business attorney is before you are sued. Once you have been served with a summons and complaint, it’s too late–the problem has already occurred, and it’s just a question of how much you will have to pay (in court costs, attorneys’ fees, settlements and other expenses) to get the problem resolved.
America’s judicial system is a lot like a Roach Motel–it’s easy to get into court, but very difficult to get out once you’ve been “trapped”. While nobody likes to pay attorneys’ fees for anything, the fee a business attorney will charge to keep you out of trouble is only a small fraction of the attorney’s fee charged to get you out of trouble once it’s happened.
Like doctors, lawyers are becoming increasingly specialized. Someone who does mostly wills, house closings and other “non-business” matters is probably not a good fit for your business. At the very least, you will need the following sets of skills. The more skills reside in the same human being, the better!
- Contracts. You will need a business attorney who can understand your business quickly; prepare the standard form contracts you will need with customers, clients and suppliers; and help you respond to contracts that other people will want you to sign.
- Business organizations. You will need a business attorney who can help you decide whether a corporation or limited liability company (LLC) is the better way to organize your business, and prepare the necessary paperwork.
- Real estate. Leases of commercial space–such as offices and retail stores–are highly complex and are always drafted to benefit the landlord. Because they tend to be “printed form” documents, you may be tempted to think they are not negotiable. Not so. Your business attorney should have a standard “tenant’s addendum,” containing provisions that benefit you, that can be added to the printed form lease document.
- Taxes and licenses. Although your accountant will prepare and file your business tax returns each year, your lawyer should know how to register your business for federal and state tax identification numbers, and understand the tax consequences of the more basic business transactions in which your business will engage.
- Intellectual property. If you are in a media, design or other creative-type business, it is certainly a “plus” if your lawyer can help you register your products and services for federal trademark and copyright protection. Generally, though, these tasks are performed by specialists who do nothing but “intellectual property” legal work. If your lawyer says he or she “specializes in small businesses,” then he or she should have a close working relationship with one or more intellectual property specialist.
“Where to Start Looking” section by Karen E. Spaeder, and “Cost-Saving Strategies” section excerpted from Start Your Own Business.