Business Professionals - A Brief Guide to CPAs, Lawyers, and Bankers
Please note that the
information in this guide is not to be used as consulting, accounting, or legal
advice. The following information is provided with the understanding that this
article is not a substitute for professional advice, and is merely for
informational purposes. BizPlanDB.com is not responsible for the use of any
information contained below or for the factual accuracy of any statements made
below.
The Accountant
When dealing with complicated
investments, your accountant quickly becomes an invaluable resource. As your
business becomes exponentially more complex, so do the tax issues involved.
Before you begin to take the next step toward becoming a business owner, you
must hire a good accountant or CPA. The
Your account can also assist
you in the capital raising process by advising on the proper entity structures,
the best methods of raising capital, and how to properly manage issues relating
to the use of cash.
Accountants do a lot more than
preparing tax returns. Your CPA is also a business advisor that has a wealth of
knowledge related to the operations of a business and has many local/regional
business contacts. Additionally, banks and investors like to see that you have
hired a qualified CPA that will help you oversee the financial management of
your business venture.
The Lawyer
Business venture and investment
agreements require complex legal documents that must be drafted and notarized by
an attorney. Your lawyer will also assist you in negotiating the proper terms
with a potential investor, filing the legal documents with the proper federal,
state, and local authorities (when applicable), registering your corporate name,
and other issues that relate to the legal liabilities of the business.
Your lawyer can also help you
draft legal disclosures, business contracts, and assist in developing methods
that will reduce your legal liabilities (if applicable).
In many ways, your lawyer is
your best friend in business. Any communications that you have with your
attorney are completed privileged, and it is important to a have third party
advice on matters that involve complex legal issues.
The Banker
Your banker will quickly become
an important resource for capital if you decide to pursue your business venture
with loan capital. Bankers are in the business of lending money, and when they
see that you are a worthy credit risk they will hound you for your business. It
is essential to realize that you are not at the mercy of a banker, and that you
can often negotiate the terms of a loan when you are trying to close a
commercial loan or large mortgage. If you plan on doing a lot of borrowing
business with a bank, it is in your best interest to have your checking accounts
and possibly your brokerage accounts with that institution. The more business
you give a bank, the more valued a client you will become. Independent bankers and brokers are
often better at arranging financing since they have the ability to price loans
with several different lenders. You may find that an independent loan originator
or broker can offer a much wider scope of lending products than can your local
bank. The independent banker will also work much harder to serve your needs as
more often than not they are paid on a commission schedule and not a bank
salary. It is important to shop around when you are getting a loan. The Internet
is an excellent place to find people to assist you in financing needs.
If you go to a branch of your
local bank, it is important to know that the nature of bank profitability is
changing. Banks have a proclivity toward people that are willing to offer them
more business than just standard banking. Fees are now a much more important
aspect of today’s banking world since more often than not a bank will typically
sell the loans that they offer to you. Our discussion about banking will be
expanded in the real estate chapters.
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This is not a complete list of the people you may come across while
building your business. If your business is involved with investing in real
estate, you will encounter several other professionals that will assist you in
the purchase, rental, and sale of income producing properties.
Today, the benefits of the increased availability of financial
information via the Internet have made the access to capital markets much more
available to the entrepreneur.