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I firmly believe they are a necessity! Financing and law have become so complicated that it is important to have another set of eyes looking out for you.
As a writer, I always try to pass things through an editor or proofer. I have found that when I try to read over things that I have written that I read them as I think they should be not as I have actually written them. I cannot trust me to catch the mistakes. The other thing is that I do not stay constant on all the rules of grammar. I am too busy writing.
I think the same is true for law and finance - you can do it yourself but it is not what you are trained to do.
I believe the reality is that a small business requires you to do some things yourself, especially in the early stages. The average founder simply can't afford to bring in qualified professionals for everything to start with. In addition, I think the more you know about the basics of the law and accounting (or any other aspect of running your business, e.g., website maintenance, advertising and marketing, human resource development, etc.) the better decisions you'll make early on -- and the better you'll understand what you're handing over to other professionals as the business grows (and the better you'll be able to assess the quality and appreciate the value of what they do).
The point at which an owner will choose to "hand things over" varies, as you said, according to (a) the owner's background and skills (if the owner hates math, he/she will want an accountant sooner than a math whiz might), (b) the nature of the business (legal and financial issues are a daily part of some industries, but rarely come up in others), (c) the size of the business and the complexity of the legal or accounting challenges it faces (for instance, accounting gets more complicated once you hire employees), and (d) the value of the owner's time (most new businesses are "ramping up," so the owner has time to DIY -- whereas once the business grows, the owner's time may be better spent on something other than legal or accounting issues).
In my opinion an Accountant is necessary. There are many do-it yourself forms, but if you read them they will mention" Please get it reviewed by your attorney" Hence you might want to look for hiring lawyers that can review your documents, offer consultation etc. Eventually, you will need various lawyers depending on the nature of area of law you need help with.
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Here's another angle to your question in regards to the need for an attorney:
In many states, at least here in Florida, if you are a corporate or LLC entity, you as owner cannot
represent your complany entity in court, the judge won't give you the time of day. The system FORCES you to hire an attorney, and I can tell you they aren't cheap, most won't let you in the door without forking over many thousands in retainer money upfront. So heaven forbid somebody should sue your company, or your company should need to sue somebody else, you are up the creek without a paddle. You'll have no choice but to settle with the bad guys because the bad guys KNOW you can't afford a lawyer and therefore are not entitled to the rights afforded by the legal system, which is about what it boils down to. Stinks, but true.
Obviously, most small businesses can't afford to keep an attorney on retainer full time. Personally, for my company I have retained a pre-paid legal service to a least have some minimal level of legal authority and expertise on my side. The fees are nominal and at the very least we get our moneys worth via contract reviews, legal advise when needed, and so on. Well worth the money in my book. If anone is interested in this concept, let me know and I'll provide a name and number.
As far as an accountant goes, I also think the sytem forces the typical small business to hire at the very least a competent bookeeper if not a CPA to keep up with all the federal, local and state quarterly and annual tax and reporting requirements. For starters, its a matter of having the expertise to perform all these functions which I feel are beyond the level of most small businesspeople. Furthermore, the time a businessperson would need to dedicate to doing these tasks him/herself would be prohibitive, much better spend managing your business than doing financial paperwork. So, in my opinion, the answer to your question is that you should hire a COMPETENT REASONABLY PRICED accountant. Shop around, fee schedules are all over the place. You can pay anywhere from $125 to $500 or more for the same regular quarterly reports if just pick the first CPA you come across.
amspcs, you are the VERY FIRST actual business owner I've encountered whose business received any value from a pre-paid legal service (not counting all the people who sell those plans). I've heard/read complaints from at least 50 (conservative estimate) clients, associates, suppliers, etc. that these plans, while possibly useful for an individual with ordinary legal issues or someone just starting a business, were worthless for the challenges that an existing business deals with.
If the legal issues aren't business-sensitive, could you briefly summarize the services you sought and received? I'm seriously interested, because this is something of a "bolt out of the blue" based on all the negative reports I've heard. Thanks!
Glad to help out, Lighthouse. Sometimes I have a simple legal question or issue I'd like to speak
to someone about locally .I also like the idea of a professional reviewing contracts and agreements before I sign off on them.They HAVE helped me see some important points I missed on my own. Granted,the attorneys at pre-paid probably don't give Perry Mason a run for the money, but for $15 per month it's worth it. And, for an extra $10 per month I get credit guard, one of those services that emails alerts when changes to your credit report takes place. Worth every penny!!!!....our college kid got his identity stolen last year which is a headache-and-a-half.
There are various plans for business owners-Home based business, Self employed, Small Business owners-1-99 employees. These plans not only cover the legal needs that covers from unlimited consultation, debt collection to trial defense services, BUT also business solutions. My clients are very happy as they get quality service and geat value. I don't beleive in pushing for sale, but higly recommed signing up for my educational series that will provide how to use, what to use for and testimonials. You can unsubscribe any time. You can sign up at www.lalithabrahma.com
Hope this helps
It depends on the business but it's a good idea to have a lawyer. I use www.avvo.com to find lawyers around my area. Make sure to call them and see how much they charge and how helpful they can be. It's always a good idea to prevent a legal nightmare. So a lawyer is definitely recommended. Accountants maybe needed when you want to sell you business if you kept records urself people may not trust as much but if you can manage no biggy, Hope this helps.