You don’t know what you don’t know.
Maren Morris got it (mostly) right in her song The Bones: “When the bones are good, the rest don’t matter. The house don’t fall when the bones are good.” Foundational issues in a business can be extraordinarily difficult to fix once your business is established. It’s much easier to start off with a solid framework, built with the help of a partner who understands how it will stand the test of time. Knowing the right corporate entity structure to choose, what categories should be in your chart of accounts, if you should have an employee handbook (you should), or if you can handle your own payroll are all things you want to have dialed in well in advance of opening your doors.
Your expertise is likely not in accounting and human resources.
As an entrepreneur, you have an idea that you can do something better, improve a process and make money doing it. Or maybe you have a new product that the world needs to see. Your enthusiasm and energy is best spent in that arena, but if you aren’t partnered with a small business specialist, chances are you’ll end up spending a significant amount of time on tasks that don’t add value to your small business. What takes you hours and hours of your valuable time and is frustrating, your partner can do in a fraction of the time, and probably with much better results. The law of attraction says, what you focus on expands.
Changes in employment laws happen that affect your business.
The US Congress and state legislatures pass and change laws continually, and it can be hard to keep up. Some changes are well publicized, like minimum wages requirements, but others like Colorado’s Proposition 118, which lead to the Paid Family and Medical Leave Insurance program, are less well known, but equally important to both employers and employees. The IRS continually updates its regulations, things like the mileage reimbursement rate which can and often change mid-year. Having a small business partner who keeps abreast of these changes for you, saves you time and money.
Compliance violations can bring down your business in a hurry.
It’s possible to skirt by without knowing you’re violating employment laws, but it doesn’t absolve you of your responsibility as an employer. And when the regulatory agencies come knocking, the penalties can be hefty. For example, one of the most frequently asked questions we hear is “can I pay this person as an independent contractor?” The answer to that question has serious implications to a small business.
You may not know how to interpret your financial statements to maximize growth.
A small business partner can teach you how to understand what your financial statements mean to your specific business. When you know what your numbers mean, you can drive the changes you want to see. Creating a realistic budget is essential for any startup to be successful. Knowing what your anticipated cash flow looks like over the course of a year is key to sustainability. Having a knowledgeable partner by your side to help guide you will allow you to focus on creating what you started your business for in the first place.