Company of One popped into my December reading queue. It’s a good book for other small business owners. Not all of us want to grow into billion-dollar, international companies. In fact, as Paul Jarvis points out, many times, it’s that stretch for growth that can ruin your small business. These days, there’s nothing inherently wrong with being a one-person company.
One of the themes of the book is the importance of examining why you want to start your business. If your goal is to grow into the largest widget maker in the world, more power to you. But for many others, the goal is to provide a good life for you and your family. That may not include exponential year over year growth. It may include setting a limit on your growth. Knowing what that tipping point is for your business. The one that you reach and are satisfied with.
The final chapter of Company of One focuses on some of the support systems that you should have in place. Even though you are a company of one, there are others who should be on your team to help with your business. You also need to consider other issues, such as how much salary will you be taking? Are you going to be able to amass some savings? What about health coverage? And what will your lifestyle look like?
The Professionals on Your Team
Similar to what I’ve suggested before, Company of One suggests that you pay attention to the assistance that a lawyer and an accountant can give you and your business. Especially important is the early stage of your business. When you are first starting your business, it’s important to choose the right type of corporate form. Setting up a business can remove you from personal liability for some legal issues. (Note: if you are a licensed professional, then certain acts can not be protected by setting up a company…) Working with a lawyer and an accountant, you can make sure you get the right corporate form for you.
Once your business is up and growing, a lawyer can also help you with the contracts that are needed. You’ll want to have written agreements with most (if not all) of the vendors and customers you deal with. You can try to find a blank form on the internet. But using that method can really be fraught with a lot of dangerous outcomes. Paul Jarvis gives a nice view of a lawyer for your business,
The best lawyer for a company of one is one who understands the type of business you do and is happy to work with a business of your size. And in general, I’ve found out the hard way that it’s never a smart idea to be either the biggest or the smallest client of anyone you hire for their professional services.
When it comes to accountants, he believes “that good accountants should save you more money than they charge.” That may seem like an abstract notion if you are just starting your business, but it’s true. Your accountant can be a lifesaver when taxes are due at the end of each quarter.
Looking for a good book to read? Check out Company of One. If you are thinking of starting a business or already started your business and want to make sure your legal documents are in order, give me a call and we can sit down for a Legal Strategy Session to discuss the process and what documents would be best tailored for your company – (877) AMAYERS.