When I first got going more than two decades ago, I remember hearing at National Pavement Expo someone saying how important it was to develop relationships with your banker, CPA, insurance agent, and lawyer. Ummm, yeah, right! Who could afford those guys or their services?
Well, as we grew and over the years, I learned the value and importance of each. One big benefit: free lunch! Who doesn’t love a free lunch? Okay, so kidding aside, these people do have their importance to even a very small business (in addition to that monthly lunch). Those of you who don’t have these relationships, I would highly encourage you develop them.
Initially there isn’t much you need from them after setting up your business accounts, but the value that I realized came as we started to deposit larger checks. By knowing the banker and the banker knowing us, we were less likely to have holds placed on large deposits. This can be a big deal where cash flow is concerned. In addition, as we needed lines of credit or other products such as credit cards, the banker knew us and our business, and could assist in approvals.
By the way, talk new loans or new credit cards, and that’s your key to lunch with a banker. It’s also not a one-way street either; many banks will allow their customers to have a display table in the lobby. That’s right, now you can market your services to others via the trust of the bank. The display tables are usually part of a spotlight on local businesses, and it’s a marketing effort that most of us just don't think about. But it’s a great way to get your name out there. Note: The smaller the bank, the more likely they will do this.
Well, mine actually tries to get me to buy lunch, but that’s a short-lived effort if I talk of switching to another CPA! In all seriousness, your CPA is one of the biggest assets you can have – and my CPA and I are great friends! No matter what size company you are, work with them to develop clean organized books. This will not only help you flourish as a company but ensure your growth for years to come. Anyone that knows me knows I am a numbers guy, and I firmly believe knowing your numbers is key to success in any industry -- but ever so important in the pavement one.
A good CPA will prepare financial statements and give you tax advice to best set yourself up for years of success. These financial reports can also be used for bonds, licenses, and lines of credit. Not to mention a well-prepared financial statement is the best view of the health of your company. After all, you are either making money or you’re not.
CPA’s can be used even if you are your company’s only employee; you don't need a big company to have one. Many guys start by organizing their financials online, but I promise: getting a good CPA will benefit you in more ways than you will realize.
The Insurance Agent
This is the sure bet when it comes to lunch. These guys can get pushy, though, so don't say I didn't warn you. Finding a good one and developing a relationship is key, even beyond the free lunch. Having insurance is a must, of course, no matter what your size. A good agent will not only shop for the best markets but will make sure you have the proper coverage. Can you imagine making a claim, only to find out that you don’t have the proper rider or coverage so your claim is denied? That would end many small businesses. Same thing with coverage limits. You might be surprised at how little it might cost you to jump an extra $100,000 in coverage. A good agent will be there for you and help with this process.
They’re not as likely to buy lunch but hey, give it a try…Just make sure he isn’t billing during that pizza break! Lawyers are even more important for new businesses than they are for established ones. Some of the things you might use a lawyer for initially would be for incorporating your business and ensuring you are set up legally. Down the road (and for a fee) they will also write collection letters. That is one of the most common uses and hey, a collection letter from a lawyer usually gets the check received fast. They can also be there should you ever find yourself in a tricky situation in a contract or on a job. Fortunately, we rarely need our lawyer, but having access to him gives us peace of mind.
As you can see, even a one-man-band size business should develop these relationships. I promise that utilizing each one of these professionals will help you succeed in the long run. I understand that owners of a new or very small business might not think that spending money on these services is worth it. However, if you don't, you will be tripping over dollars to pick up dimes over and over. I wished I had this advice when I first started.