It doesn’t take a lot to sit down with an accountant to explore the deductions and credits you’re entitled to as a small-business owner.  For a great overview of the top issues, visit Wells Fargo’s newly released webcast on Smart Tax Planning for Your Business, part of the bank’s series of webcasts for small-business owners.  Moderated by Rich Sloan of StartUp Nation, the panel features Carol Sanchez, CPA, Bruce Willey, JD/CPA, and moi.

The whole clan (there were nearly 20 of us!) got together at Carmine’s Restaurant and sat around a huge table.  First came the garlic bread.  Then the antipasto.  Then the Caesar salad.  Then the fried zucchini strings.  Then the penne with tomato sauce and pesto tortellini.  Then the chicken with mozzarella cheese.  The broccoli rabe with garlic.  Then dessert:  biscotti and chocolate mousse cake.  Frankly, by the time the pasta came around, I was done.  But I kept eating.  It was so scrumptious.  I was so full I could barely breathe . . . and felt just this side of sick!  I walked out of the restaurant v-e-r-r-y slowly.  I just couldn’t digest it all.

When dealing with social media, there’s so much to digest and understand–especially to use it effectively.  That’s where I’m thrilled to have my own social media Sherpa, Lena West.  She has a helpful post (yeah, OK, it’s from last year, but the advice is solid) on social media time management that bears reading.

And yet.

And yet, we can be your greatest support system.  Your protector.  The cool head prevailing when you’re ready to lose your mind.  The one who talks you down off the ledge.  And maybe (if you’re lucky enough to work with me), we’ll tell you a joke or two and make you laugh, so that you realize the world won’t come to an end if that truly awful deal doesn’t close. 

In his article in the New York Enterprise Report, Daniel Abrams identifies 10 ways you can get the most out of your attorney.  But before you reach that point, you also need to be sure you’ve chosen the right one for your business.  My program, How to Choose and Use Attorneys, available through GreatBusinessLawResources.com, can show you how to do just that.  Like dating, you want to be sure you have the right chemistry with your attorney so that you’re comfortable being vulnerable and exposing your not-so-perfect qualities/decisions.

“Advisory team.”  It’s a highfalutin’ term for what some people consider good friends who will be a sounding board for you in a pinch. Whether you pay them or you don’t, have formal arrangements with them or not, they are crucial in one major respect: You can’t build a successful business without them. 

I’ve learned from personal experience that I really flourish when I have others helping me keep my eyes above the dashboard, making sure I keep working toward my strategic goals. Without them, I’ve gotten stuck in my own mishegaas, like a dog chasing its tail. I have people I’m accountable to (other than me, my own worst taskmaster). People to keep me focused so that I don’t spread myself too thin. People to share the victories with. Two who come to mind are Dawn Fotopulos of SmallBusinessHow2.com (”simplify, focus and leverage” is her mantra for me) and Rochelle Lisner of DynamicBusinessGrowth.com (who reminds me to “speak in stories” not “information dumps”). And there are more!  I wouldn’t be where I am without them.

You can build a dream team of your own, too! For tips on how to do that, sign up for a complimentary copy of my Entrepreneur’s Business Law Primer, available at GreatBusinessLawResources.com/bizlaw. It includes an audio clip on “how to choose an advisory team” that I think you’ll find helpful.  Let me know if you do!

Our conversation then moved to “whom can you trust?” With the seemingly pervasive attitude of fear, how can business owners protect themselves in areas where they might not have enough experience (e.g., financial planning, accounting and law)? How can they feel comfortable trusting those professional specialists? For starters, we came up with a list of Top 5 questions to ask those who will become part of their trusted advisor team.

Choosing a Financial Planner:

1. What does “financial planner” mean to you? What will you be doing for me? Manage/invest my money? Write a plan? Set goals?Sell insurance? Some combination of the above?
2. What’s the breakdown (in percentages) of your own income? How much comes from money management fees? Fees for plan creation? Selling insurance?
3. How can you help me create a lifestyle for myself and my future? How can you help me take the money I accumulate and turn it into an income I can live on?
4. How will you help me protect what we put together? What will you/we do to protect against the effects of inflation, market downturns, disability, prolonged illnesses and more dependents (e.g., caring for parents or siblings)?
5. Tell me a story: How were you able to help someone in similar circumstances to mine?

Choosing an Accountant:

1. How will you act as my advisor? Are you just filing my taxes or is there more you’ll do?
2. How can you help my company meet its financial and tax goals?
3. Can you help me determine the profitability/feasibility of major financial decisions, such as buying equipment, business acquisition or business expansion?
4. What is your background and experience with companies in my industry? With my revenue levels? With the particular issues my company is facing?
5. Do you have your certified professional accountant (CPA) designation, and will that be important for the kind of work I’ll need done?

Choosing an Attorney:

1. What is your background and experience with companies in my industry? With my revenue levels? With the particular issues my company is facing?
2. How do you charge for your services? Hourly rates? Flat fees? What are those rates/fees? Do you require monthly retainer payments or do you charge on a project basis? How can you help me keep my legal fees and costs down once I’ve hired you?
3. Who will be doing the actual work on my matters? You? Or someone else in your firm? (Make sure you meet those people, too)
4. How will you keep me informed about the progress of my matters? Should I call you periodically? E-mail check-ins? How quickly can I expect to hear from you in response to my call or email?
5. Tell me a story: How were you able to help someone in similar circumstances to mine?

For more details on how to hire an attorney, when you’ll want to have one on your team and how to manage the relationship so that it works for you, I’ve created a program, How to Choose and Use Attorneys, available through my site GreatBusinessLawResources.com. It comes with a handy checklist/questionnaire to make sure you ask the attorney–and yourself–all of the pertinent questions you want the answers to when you’re pre-screening.

(Marketing experts may take issue with how I describe what I sell, but that’s not the point here).

The point is: If you don’t want to give away your product or service for free, don’t go to an expert in another field and schnuckle around for freebies. Another way of saying this is: If you value being protected against lawsuits and recognize that there is expertise “out there” that you lack and that could protect you, that expertise has a value. And we honor that value in our capitalist system by providing something of value (namely, money) in exchange for it.

(Note: This isn’t meant to start a debate on whether the Obama stimulus/bailout bill is leading us toward socialism).

Today’s rant is brought to us by the letter “O” “One thing I want to include in my agreement is______; how do I phrase it?” For example:

• “I need an exclusivity clause”
• “I need something that talks about my owning what someone else is making for me”
• “I need verbiage about my being able to kick out my business partner if he doesn’t pull his weight”

Unless you expect to give handouts to others, do the right thing. Include in your budget a bit for legal and other professional fees. The karma of professionalism will come back to bless you.

I remember the frustration a client went through when forming her business years ago. Together, we decided that forming an LLC would be in her best interests. She then spoke to her acocuntant, who pushed for an S Corp. She came back to me and explained the logic of the accountant, which didn’t seem right, based on what she had told me. Soon, this began to resemble a Wimbledon tennis match, with the client as the ball between the two advisors. Not a good situation.

So I took the bull by the horns, as it were, and got us in a room together. Turns out the client was divulging some things to me and others to the accountant. Based on the less-than-full information we each received, it was no surprise we came up with different approaches. Also, by sitting face-to-face, the accountant and I could speak in our technical language directly, without having to burden the client with being an imperfect translator. As a result, we were able to hash out the decision swiftly.

The client didn’t care which form of business she had–she just wanted to know that the decision was the right one for her, taking all factors into account. She also felt mightly relieved knowing that her trusted advisors were aligned on the best course of action for her. The investment in the advisors’ fees in the short run turned out to be a huge cost-saving device in the long run.

Why does that matter? Because culturally, in Europe, privacy rights are far stronger than they are in the U.S. So strong, in fact, that a ripple effect from this case could be that an IP address would be regarded as personal data (at least in Europe).

This is a healthy reminder of a couple of important things. First, that U.S. laws and perspectives on business, commerce and privacy are not necessarily shared worldwide. The U.S. may have taken the lead in many aspects of internet use and protocol, but attitudes are still somewhat territorial. The global availability of information does not equate to a globally unified perspective on how it should be used. Second, within the U.S. itself, there are differences in how issues of state laws on privacy (among other things) are handled. That’s why it’s so important to be sure that you consult an attorney who understands the laws of the state in which you are doing business. Also, your terms and conditions should name your state as the place where (and the law) where disputes will be handled. Otherwise, you risk having to consult attorneys in every state in which you have a customer to make sure you have not run afoul of their laws.

There are a lot of laws that business owners need to follow. There are laws concerning how to form the entity that is your company, how to handle decision-making in your business partnership and what rate of interest you can charge on your contracts. There are many, many laws about how to deal with your employees. And there are volumes of laws about the taxes a business is required to pay. Relatively few taxes were imposed 100 years ago. And while I’m not a proponent of going back to “days of yore,” I do admit that running a business is made more complicated as a result. That’s why it’s so crucial for business owners to have a good advisory team. The basics include an accountant, an attorney, a banker and an insurance broker. For no one person can know everything there is to know about building and running a successful enterprise, especially when there are so many taxes floating around (which, if not paid timely or properly, could cost you penalities and interest). Do you know which ones in this list you are responsible for?

• Accounts receivable tax
• Building permit tax
• CDL license tax
• Cigarette tax
• Corporate income tax
• Excise taxes
• Federal Income tax
• Federal unemployment tax (FUTA)
• Food license tax
• Fuel permit tax
• Gross receipts tax
• Inventory tax
• IRS interest charges/IRS penalties (tax on top of tax)
• Liquor tax
• Luxury taxes
• Medicare tax
• Property tax
• Real estate tax
• Service charge tax
• Social Security tax
• Road usage tax
• Sales tax
• State income tax
• State unemployment tax (SUTA)
• Telephone federal excise tax
• Telephone federal universal service fee tax
• Telephone federal, state and local surcharge taxes
• Telephone minimum usage surcharge tax
• Telephone recurring and nonrecurring charges tax

• Telephone
• State and local tax
• Telephone usage charge tax
• Utility taxes
• Vehicle license registration tax
• Vehicle sales tax
• Well permit tax
• Workers compensation tax

Online sites don’t necessarily empower the lawyer in all of us.  What they do is delude many people into thinking that they have an “inner lawyer�.  Not everyone does, and that’s okay.  I don’t have an “inner doctor� –- if I have a medical need (even a regular check-up), I get help.  I don’t have an “inner accountant� – I make sure that I have one on call who can provide guidance as to how I should handle my financial statements and taxes.  I am who I am:  anal, cautious, and detail-oriented (among other things).  That makes me perfectly suited to being a lawyer.  I am not cut out for many other professions, and that suits me just fine.  I’ll leave those areas of specialty to the experts.

What’s dangerous about these sites is the false sense of security that entrepreneurs get from taking legal agreements from the Internet, without having the background or training to fairly evaluate whether what’s in the agreement is in their best interests, or whether there are other things that should be in the agreement that aren’t.  There’s no one affiliated with the sites who will give you the legal advice about your specific situation –- they’re just selling you a product (the agreement).  Take it or leave it.  They don’t take your own needs into account when creating the agreement –- it’s an off-the-shelf product. 

It would be like walking into Bloomingdales and buying a suit without looking at the size.  You know you need a one, but if it doesn’t fit properly, you could end up spending more for alterations than you paid for the suit.  Getting the right legal protections in place for your company isn’t just a matter of one-size-fits-all merchandise. 

Lawyers provide a hybrid:  product and service.  And it’s the service you receive that ensures that the product truly meets your needs.  For more guidance, see my article “What You Should Know Before Copying Contracts from the Internet.�