The Law of Numbers
Nuts and Bolts: Lawyers and the Books
Lawyers and number crunching — alone, each are scary but put the two together and some will go running for the door! Here are the important take-away messages from our fine presenters this week.
Bookkeeping 101 with Matt Cronin from Boardwalk Business Group
Bookkeeping is important! Organizing and keeping records of your finances helps to more efficiently manage and analyze the health and growth of your business. Having a clear and organized system for bookkeeping also allows third parties like banks to better understand your business’ potential and keeps the auditing police happy. An ongoing system to keep your finances organized creates order and peace of mind — Yes, please…It is nice to have some order and peace of mind while managing the creative chaos of entrepreneurship! Create a financial system that works for you and works for the vision of your business down the road.
There are many tools to analyze the health of your business including Balance Sheets, Income Statements and Cash Flow Statements. These financial statements provide a snapshot into the workings of your company for a period of time (daily, weekly, quarterly or annually). Other useful financial reports include Budget vs. Actual Income statements, Historical Year vs. Year Income statements, Weekly Cash Flow Projections and Cost Center Income Statements. All these tools will help you better understand what money is coming in, what is going out, seasonal cash flow and if the amount of work hours you are putting into the business is sustainable. These tools will also help inform your goal setting for the business. Make sure to create long-term and short-term goals. Record these goals and check in frequently to see how you are progressing toward these goals.
Explore and leverage the varied technologies out there for managing the diverse financial aspects of your business. Some general ledger software tools include Quickbooks, Freshbooks, Xero. Other helpful business applications and software include: payroll services like Gusto, payment services like Square, paypal or Stripe; Evernote for communication, Dropbox for storage and Expensify for expense tracking. Every January, PC Magazine features an analysis of the latest accounting software. This is a good place to start if you want to understand and compare what financial software products are offering. Don’t procrastinate on getting a solid financial system in place! Focus on your core strengths and keep it simple — You got this!
Hiring a Lawyer with Nick Obolensky from Duarte, Obolensky & Balkcom
Be choosy when finding a lawyer to work with for your business. Ask around and see if there are any lawyers that friends, family or business colleagues recommend. Then do your homework. Ask to speak with them. Don’t be surprised and always ask up front if initial consult is free — Many offer a free initial conversation, some do not. Do they seem honest, have integrity, are their morals in the right places for your preferences? Do they seem enthusiastic about your business? Will they willingly admit to things they do not know? Do you get a good vibe from them? Remember this could be a business relationship that last years, so you want to feel comfortable and confident in communicating and working alongside this person. Ask for and check references. Talk about cost of services. Talk to more than one lawyer before making your decision.
Time is money! Be prepared when you do settle on a lawyer. Have all documents and paperwork in order. Have questions written down and ready to discuss. Lawyers charge big bucks per hour so don’t waste your money shuffling papers around to find what you need during your appointments.
Invest in covering your legal “bases” up front to avoid potential problems down the road. Although many entrepreneurs are working with lean budgets to start up, spending money on legal services to determine business structure and operating agreement details in the early days can save you money and headaches in the future. Should there be a shake up in management, ownership and/or stake in the business at any point, having procedures and protocols in place will make life a lot easier for everybody involved.
