The one resource that we all have in equal quantities is time. No matter where you come from or how much money you have, you still only get 24 hours each day. It is very easy for business owners to get caught up in the day to day details of running a business and then not have time to step back and look at the big picture. Many business owners know the importance of having engaged employees that understand the values and goals of their business as well as a solid management team to oversee various divisions within their business.
Another effective way for a business owner to leverage his or her time is to build a team of outside trusted advisors that help focus on big picture planning. This “outside team” would typically include an accountant, attorney, banker and insurance agent. While these are all typically necessary components of running a successful business, it is the depth and breadth of these relationships that can make a difference. It is not enough just to have your tax returns prepared, legal documents filed, or an insurance policy drafted; an on-going dialogue with these key resources can be critical to the success of your business in the long run.
It is a good practice for a business owner to plan for some of the unpleasant scenarios he or she could be faced with before they happen. For example:
- What would you do if you received a letter from the IRS saying your business is being audited?
- What if it was a letter from an attorney saying you are being sued?
- What if you suddenly needed to finance a piece of equipment that unexpectedly needed to be replaced?
- What if you had to make an insurance claim?
These are not the times to be introducing yourself for the first time or getting to know your outside team. Of course, it’s also a good practice to plan for the positive scenarios you could be faced with too.
- What if you have a banner year and need to do some tax planning?
- What if you have an opportunity to buy some property at a bargain price and need an attorney to handle the legal work, a bank to finance it and a new insurance policy to protect it?
Instead of waiting for an event to trigger a phone call to one of your outside team members, why not schedule regular meetings to keep in touch? Easy ways to do this are:
- Sending monthly or quarterly information to your CPA and scheduling a regular tax planning session toward year end
- Establishing an on-going dialogue with your commercial banker
- Scheduling a periodic review of your insurance coverages with your agent.
Regular communication will give these partners a better understanding of you and your business and put them in a better position to act quickly when you need assistance. Some of the most successful businesses not only have established these kinds of relationships, they have taken it one step further. In these situations, the accountants, attorneys, bankers and insurance agents have all had some form of interaction with each other – and the business is at the center of the relationship.
Running the daily activities of a business can make it challenging to find the time to establish deep and integrated relationships with your outside team. However, having the discipline to make time can ultimately save your business time and money and be better prepared for the unexpected.
As a commercial banker, the most enjoyable part of my job is establishing meaningful relationships with my business clients. Whether it be visiting their place of business for the first time, seeing a new project, having a cup of coffee or lunch, getting to know my clients and their businesses is by far the most interesting and rewarding part of my job. I can often offer some industry financial statistics or helpful advice if solicited. Best of all, building these relationships costs the business owner nothing except their time. I often find that the longer a relationship has been established and the deeper it is, the faster I can respond and the more I can help when the unexpected happens. In any case, an on-going dialogue with your outside team is usually still time well spent and who knows – you’ll probably get a free cup of coffee or lunch!
Rob Reisner – Commercial Lender