You’re seriously thinking about starting a business, and that is an incredible step toward taking control of your future. Whether you want to escape the payroll grind or find fulfillment in building something from scratch, this journey is about you and your values. It’s natural to feel a mix of excitement and pressure, but you don't have to navigate the path alone.
Why you need professional support for your small business
Whether your dream is to support yourself and your family or build the next tech giant, you will need a team of professionals to help you get started. Using your resources wisely is key to avoiding the pitfalls many entrepreneurs often face.
Hiring the right team reduces stress, minimizes expensive mistakes, and helps you avoid major headaches down the line. They help you set a strong foundation and offer a perspective you may not know you’re missing. While you may not need all these specialists immediately, it's critical to understand what skills they bring to the table and where they fit into your roadmap.
The 5 professionals to hire immediately
From legal advice to financial strategy, here are the five types of professionals whose expertise can help new small business owners hit the ground running.
Attorney
An attorney will advise you on choosing a corporate structure and handling state and federal registration paperwork. They also handle ongoing legal needs, such as drawing up or reviewing contracts.
Accountant
Just like your personal taxes, your small business needs to file taxes too. An accountant can assist you with choosing a corporate structure, understanding tax obligations, and tax preparation. Some accountants also offer bookkeeping and other day-to-day financial services.
Insurance Agent or Broker
An insurance professional ensures you’re protected against personal liability if something unexpected happens. Additionally, they can assist with filing claims if necessary. Rather than sorting through different policies on your own, a business insurance specialist could save you time and money.
Banker
A relationship with a banker is essential if you need business loans, lines of credit, or other banking services beyond basic checking and savings accounts.
Financial Planner
A CFP® professional can recommend and manage your company-related retirement plans. They also help you keep an emphasis on your personal financial obligations while you build your business.
Other helpful services to consider
Business coach, consultant, or mentor
Business coaches are professional mentors who motivate, educate, and support small business owners. They offer guidance on a company's growth, vision, and goals. The best coaches prioritize strategies that help you flourish while offering motivation.
Benefits consultant
These specialists help select and manage healthcare and other benefits. Many will also educate and support your employees.
The three main priorities for a new business
To get started, you need to identify your business’s priorities. All the professionals you work with are ultimately there to help you achieve three specific goals.
First, you want to avoid potential liabilities. Second, you need to manage your taxes so you don't pay more than you have to. Third, you must remain in compliance with all government and industry regulations.
While these sound simple, fulfilling each one can be complex.
The risk of DIY
Avoiding potential liabilities involves how your business is legally organized, what your contracts say, and the type of insurance you carry. That alone could mean consulting an accountant, an attorney, and an insurance broker.
If money is tight, it may be tempting to go the do-it-yourself route. In some cases, that may be fine. In others, doing it yourself could cost you much more time, effort, and money in the long run.
For example, if you choose a corporate structure and complete the paperwork yourself, you could encounter unintended tax consequences later. An attorney or accountant could show you how a specific structure offers benefits for retirement plans or makes it possible to add partners in the future.
Similarly, an insurance expert could save you from learning the hard way that your homeowner’s insurance won’t cover certain liabilities if you have a home office.
Step 1: Decide on a structure
The first decision is how you plan to structure your business. Will you form a corporation? If so, what type best suits your new business? Will you start as a freelancer or treat this as a side hustle until you grow it? Do you plan to hire people now or in the future?
Benefits of forming a corporation
For most entrepreneurs, avoiding potential liabilities is the biggest reason to form a corporation. Without one, you and your company are legally the same entity. If someone files a lawsuit against your company, you are liable. That means things you own, such as your bank accounts, investments, and even your home, could be lost if someone successfully sues your company.
Forming a corporation lessens your potential financial and legal liabilities. It also provides opportunities for tax savings and opens up options for company retirement plans.
Each type—C Corporation, S Corporation, Limited Liability Corporation (LLC), or Sole Proprietor—has different rules and tax treatments. It is helpful to consult an accountant or attorney to decide which is best for you.
Filing articles of incorporation
Once you’ve decided on a structure, the next step is to file articles of incorporation (for corporations) or articles of organization (for partnerships/LLCs) with your state through the Secretary of State’s office.
Your state should have the forms you need online. Generally, the paperwork isn’t too complicated, but many entrepreneurs still choose to pay a professional for assistance. You’ll also have to make sure your business name is available and not already registered. Finally, if you plan to launch a website, check that the domain name is available through your domain registrar.
Getting your tax ID
After this, it is time to obtain your federal tax ID number or Employer Identification Number (EIN). You can do this through the IRS online portal. Be wary of other websites saying they can do this for you. While a second set of eyes is useful, third parties will likely charge unnecessary fees.
If you decide to structure your company as an S Corporation, you must file Form 2553 with the IRS. Depending on your industry and location, you may also need to obtain specific permits and licensing.
Step 2: Set up your finances
The next step depends on whether you need a loan or a line of credit. If you do, you'll want to develop a business relationship with a bank.
As an alternative, the Small Business Association (SBA) has several loan programs for small businesses at terms that may be better than what a bank can offer.
The personal guarantee
One thing to remember is that banks and the SBA may require you to sign a personal guarantee to obtain a loan. A personal guarantee means that if you fail to repay the loan, the lender can take certain assets, such as personal bank accounts or even your home, to cover the unpaid loan.
If you choose this option, make sure you have a realistic strategy to pay back the money so your personal assets aren’t at risk.
Business checking accounts
A business checking account is necessary regardless of how you finance your business. It's important to keep personal and business accounts separate. The IRS doesn’t look kindly on business owners who don't keep these accounts separate.
Step 3: Protect yourself and your business
Forming a corporation can shield you from some types of liability, but you still need to consult an insurance agent or broker. Different types of businesses need different types of insurance, so make sure you talk to an agent who understands both small businesses and your industry. You may also need to consider health insurance options for yourself and your family.
Step 4: Build ongoing relationships
Some relationships, such as tax or legal professionals, will continue to be essential once your business is up and running. It is a good idea to maintain these connections so they can provide ongoing assistance.
For example, an accountant may be needed to handle your taxes and bookkeeping. An attorney can assist with preparing employment contracts or liability issues as you grow. An ongoing relationship with a banker can benefit you in ways beyond loans, such as verifying a check that a new client just sent for a deposit.
Step 5: Investigate potential pros
The final step is due diligence. You want professionals who are well-versed in your business structure and have experience working with startups. It's a bonus if they understand your industry.
Networking with other entrepreneurs is a great way to gain referrals. You can also check LinkedIn, local events, or Facebook groups to find connections specific to your industry.
Interviewing your team
Interview each professional as a potential connection. Ask in-depth questions like:
- How many new or startup businesses have you worked with?
- What did you do for them, and what were the results?
- How many businesses like mine have you worked with?
- What do you know about my industry?
Ask for references and do a thorough review. Make sure you understand their fees and what’s included. If you decide to work with them, ensure you have a written agreement outlining the fees. An attorney can help you review any contracts before you sign.
Be upfront about what type of assistance you need. These professionals work for you to make your business successful, so ensuring they’re a good fit is important.
The Facet difference
At Facet, we believe your business is just one part of your overall life journey. Traditional advice often treats your business finances and personal finances as completely separate islands, but we know they impact each other daily. Our membership model gives you access to a team of CFP® professionals who look at the whole picture. We don't charge commissions, so our advice is objective and focused on helping you achieve self-fulfillment and financial wellness.
