Finding the Right Person to Ask
Sep 26, 2024Starting and running a business is like navigating a maze of unknowns. For many budding entrepreneurs, the most daunting task is not just figuring out what they don’t know but also determining the right person to ask. In a recent episode of "Keep What You Earn," Shannon tackled this topic to help business owners identify who to turn to for various types of advice.
One of the biggest frustrations new business owners face is the overwhelming sense of uncertainty. “It’s bad enough that we’re afraid to ask questions out of shame or fear,” Shannon shared. The situation worsens when the professional you turn to dismisses your concerns. Entrepreneurs often don’t know whether their questions should be directed to a CPA, a lawyer, or another kind of expert, making it crucial to understand who handles what.
A useful rule of thumb Shannon offers is her saying, “Lawyers do letters, accountants do numbers.” This means that if your question involves legal documents, contracts, or anything related to the alphabet like names and terms, it’s best to consult a lawyer. On the other hand, questions regarding numbers, such as financial statements, tax forms, and financial strategies, should be directed towards an accountant. For instance, forming an LLC involves legal liability and is a question best answered by a lawyer. From a tax perspective, it often doesn’t matter whether you’re an LLC or a sole proprietor. However, the legal structure has implications that a lawyer can better address.
There are scenarios where expertise overlaps, requiring both legal and financial lenses. Shannon emphasizes the importance of a collaborative approach. “The best approach is to have both a lawyer and a tax advisor in the room, basically doing the puzzle together,” she explains. This is especially true for more complex organizational structures, where legal and tax implications need to be balanced. An optimal result often lies in the Venn Diagram's sweet spot where legal and tax advice overlaps.
Once the money moves beyond your business bank account and into personal wealth management, another set of experts come into play. Shannon warns against asking your business accountant questions that pertain to personal finances. For example, you might be tempted to ask your business CFO about investing in a stock portfolio or paying off personal debts. While it’s okay to have casual conversations as friends over coffee, Shannon advises seeking a dedicated financial planner or wealth advisor for in-depth guidance.
A critical point Shannon drives home is understanding the scope of engagement. “You hired me to be a chef at your Mexican restaurant, and now you’re asking me to cook an Italian dinner,” she analogizes. Though accountants and financial professionals may have the skills to offer broad advice, it’s essential to recognize their specific role and expertise. Engaging the right expert for the right task ensures you receive specialized and accurate advice.
If you’re wondering how to find the right professionals, consider Shannon’s approach in her CFO on Demand program. She’s integrating a network of specialists to answer specific questions beyond her scope. By doing this, Shannon ensures her clients get comprehensive support from an array of experts.
The takeaway from Shannon’s podcast episode is that knowing who to ask is half the battle in business. Lawyers handle legal aspects, accountants manage the numbers, and financial planners guide your personal wealth. By understanding these distinctions, entrepreneurs can navigate their questions more effectively and get the precise help they need. And remember, the best professionals are those who ask you multiple questions to truly understand your situation before offering advice.
For more insights and a network of trusted professionals, consider joining Shannon’s CFO on Demand program. This is where you can get access to specialized advice tailored to your business needs, ensuring you make informed decisions every step of the way.
For regular updates and tips, don’t forget to subscribe to "Keep What You Earn" and follow Shannon on Instagram @shannonkweinstein. Your business deserves the best advice, and finding the right expert to ask is the first step toward your success.
What you'll hear in this episode:
05:20 Seek advice from those who ask questions.
08:56 Understand your accountant's role in financial advice.
10:33 Choose relevant financial advisor or a money coach.
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Watch this episode and more here: https://www.youtube.com/channel/UCMlIuZsrllp1Uc_MlhriLvQ
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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.
