As your small business grows and changes, consulting the right professionals when starting new endeavors is key to its success. One of these trained pros on your team should be a certified public accountant (CPA). What changes and new enterprises should you consult about before embarking? Here are a few of the most important.
1. Hiring Employees
Becoming an employer results in benefits as you get the help you need to grow. But it also puts you in a new category of oversight, subject to new rules and with new responsibilities and expenses — even if you only hire one employee. Talk with a CPA first to find out what you're getting yourself into, any alternatives you might want to consider, and how to budget accurately for payroll.
2. Changing Business Entities
Many businesses start out as less formal business entities — often a sole proprietorship or LLC for instance — but need to adapt when the company changes. Are you considering a ntity change to add partners, reduce personal liability, issue shares, or merge with another business? If so, a CPA can help analyze the available choices and consequences — both financial and legal.
3. Starting New Products
Want to venture into a new product line? This is vital for growth, but it should involve a lot of planning. The business will need to be in good financial shape to weather potential setbacks and extra expenses involved in getting a product on the market and growing. You may need to budget for the new project. An ongoing cost analysis will help you understand your actual profit from it. An accountant can help with all this.
4. Seeking New Funding
Before you go to the bank for a loan or make your case before new investors, go over your books with an accountant. As an outside observer and someone who has worked with many small businesses, your CPA will assess your chances of success based on things like the business plan and financial statements. They can offer suggestions to strengthen your position as well as how to present yourself.
5. Buying a Large Asset
Before you make a big expenditure that accounts for a significant part of your financial or physical operation, talk it over with an accountant. This could include buying or leasing commercial real estate, merging with a business, investing in new equipment, or purchasing intellectual property. This way, the CPA can advise you on everything from contract language to budgeting or even creating a special-use business entity.
As you find yourself contemplating any of these valuable moves, consulting with an accounting pro will help ensure that it goes smoothly and profitably. Learn more about how a certified public accountant can help you by making an appointment today.