I don’t believe in business loans, angel investors, or VC funding. In general, I believe in allowing a business to fund itself. You pursue sales, you grow your customer base, and then you grow your business.
So I understand the impulse to “bootstrap,” and to save every last dime by trying to wear every “hat” in the business. I understand wanting to pinch every penny, and I understand the impulse that leads you to ask yourself questions like, “How hard can it be?” while tackling the kinds of problems that other professionals get paid big bucks to devote their lives to.
However, sometimes those pinched pennies can be very costly in the long run. There are some business functions that you probably just don’t have the expertise to handle. Unless one of the following three business functions describes the actual service that you’re offering to customers right now, you should probably consider investing in them as soon as you’ve got the cash flow to do so.
Quickbooks and H&R Block are not necessarily good business solutions.
You can miss vital deductions. You can make mistakes that trigger audits. If you’re a sole-proprietor or an LLC and you don’t do things just right you could be crushed by self-employment taxes.
Tax problems can actually drive you out of business. I know one independent contractor who started looking for jobs after winding up in debt to the IRS. He said that he just couldn’t see how he wouldn’t be $20,000 in the hole in two years. I made him visit the accountant. He’d thought that the accountant would be too expensive. Turns out the accountant was far cheaper than the IRS was. He’s still in business today.
Accountants also help you grow. You can feel a lot more confident about hiring employees, for example, if you’re already working with an accountant who offers payroll services. You’ll know that the taxes are taken care of, which means you can focus on hiring and training the right people.
The Internet makes it seem like practicing the law is just a matter of downloading a few forms and filling them out. That’s a mistake. Unless you have passed the bar exam yourself you simply don’t know all that you need to know to protect your business.
Omitting or including a tiny little turn of phrase on one of those forms could make a huge difference to the future of your business. You may not even know which forms you need to download.
A form also can’t shield you from a lawsuit. A lawsuit could end your business before it starts. Thus, you need a lawyer on your side, preferably before you’re facing one. You need to be proactive. You need someone who will look at your advertising language to see if you’re running afoul of some regulation you’ve never heard of. You need someone to pay attention to your products to make sure they’re not going to create problems. You need someone who can defend you from patent trolls.
In short, you need someone in your corner, and that someone needs to know what he’s doing.
Most entrepreneurs are crappy marketers. They want to be off doing whatever they’re good at—that thing that helped them create the business in the first place.
But a business can’t grow without good marketing. It’s just a fact of life. You have to invest in it, you have to respect it, and you have to turn it over to someone who does enjoy it and is good at it if you’re no good at it.
If your marketing plan is working then by all means, continue to do it yourself. Unlike the other two disciplines, marketing does not require specialized training or an advanced degree. If your marketing plan isn’t working like it should be, however, hiring a marketing firm, consultant, or professional could be a life-or-death decision for your business.
Invest the money in real professionals. I know it’s painful now, but you’ll thank me later.