Tag Archives: business relationships

Making Choices & Getting Business Advice

New to owning a business?

You may find the following information valuable, and certainly of interest, even if you’ve already been in business for a number of years.

Every business owner needs advice on occasion.  The key is knowing when to ask for it.

It is said you are never alone if you have a deck of cards.  Start playing solitaire and someone is bound to tell you what to play where.

It is said you are never alone if you have a deck of cards. Start playing solitaire and someone is bound to tell you what to play where.

If you believe you can make your own decisions without counsel, go right ahead.  Even if you do receive a professional’s expert opinion, you can always choose to ignore it and make your own choices.  You own the business, so every decision you have to make is ultimately your responsibility.  You reap the rewards or bear the blame.

One of our clients was looking to raise more capital.  The company was solvent and generating close to $1 million in annual sales.  More funds were needed to complete some upgrades, so the owner was curious about options.  We discussed the ins and outs of venture capital, issuing stock, private equity investors, and traditional financing options for the investment the company was seeking.  We had experience as licensed investment representatives, so we had a grasp of the basics.  We continued the discussions as time moved forward and, eventually, the client was able to get some of his better clients to invest in the company and accomplish their shared objectives.

Was it our professional counsel that turned the tide?  All the client needed was information to make an intelligent decision, and the right choice for the company’s survival.  The client got advice from other sources as well, and used the accumulation of information to choose wisely.

In many cases, the advice is free because of the relationships business owners have with the resources available to them, whether vendors, friends, or business associates.  In other cases, the counsel is part of the overall service the business owner is contracted to receive.  Is one better than the other?  Only the person receiving it and using it to make their business decision can determine that.  There are occasions where the more expensive advice is better than that offered without cost, and the reverse can be true, too.

Back to the issue of knowing when to ask for advice.  Your accountant should be consulted before you ask your banker to extend you a line of credit, so you know what your cash flow looks like for repaying the loan and other reasons.  Your legal counsel should be asked to review legal documents before you sign them, just to protect your assets, if nothing else.  There are other professionals and business associates out there that you can ask for opinions about a variety of topics, from buying company vehicles to advertising campaign strategies and from charitable contributions to lobbying legislators.

If you take the time to get the information you need, you are far more likely to make a better, wiser, and more profitable decision for your business.  The secret:  Knowing where to get the information and being able to interpret that knowledge to gain wisdom.

Team Resource – Your Insurance Agent

What in the world does an insurance agent have to do with managing your business and being part of your non-staff management team?  Your agent is worth far more than you may want to believe.

Let’s start off by covering your most vital employee – besides yourself.  Think for a minute who that person might be.  Let’s assume it’s your sales manager and that she has been driving your bottom line for five years already.  Do you have “Key Man” insurance to cover your company if something should happen to her?  Your insurance agent can help you put together coverage to protect you and to encourage her to stay on board for the benefit that policy can offer.Insurance Umbrella

In another scenario, let’s talk about you and your relationship to your business and your employees when you are the office manager, sales person, production manager, human resource director, marketing vice president, and president of the company.  Oh, and you travel a lot to trade shows or client meetings.  Are you covered adequately if you’re involved in an accident and are unable to work for a month or two?  There are important considerations, such as who will run the operation while you’re incapacitated, but more essential is where are the funds going to come from to keep the operation afloat while you’re out of commission?

Talk to your insurance agent about these concerns.  At least once a year you should meet with your agent and do an insurance review.  Ask if you have enough liability coverage for customers or employees getting hurt in your place of business.  Talk to her about the changes in national health care laws and what your position should be on providing coverage for your employees.  Do you have enough, and the right type of, life insurance on your life to take care of your family and the business?

Like your team’s legal counsel, your insurance agent is there to help you minimize the risks that can put you out of business.  Yes, there are costs incurred with insurance policies, but consider the cost should a catastrophe occur and wipe out your place of business with inadequate insurance coverage to get you right back in operation.

Talk to your insurance agent about any concern you may have.  Do you need product liability coverage?  Does your facility lie within a flood plain?  Are you planning a remodeling project, and do you need coverage for the contractor’s faults?  Is your worker’s compensation coverage adequate?  What about potential damage to your intellectual property rights?  Some of these may be a stretch, but the point is that your insurance agent is a valuable member of your team and can give you answers to these and other insurance-related questions.

You should get to know your agent so you can call him whenever you have a question.  You know you have the right agent when you do call, he asks more questions than you thought needed to be asked, and then either tells you you’re covered or you probably don’t need that kind of coverage.  That tells you there’s a trustworthy relationship between the two of you, and that’s good.