YOUR BUSINESS’ INFRASTRUCTURE
By JIM KENDALL
This material originally appeared as one of Jim’s Daily Herald columns
The infrastructure that supports most small businesses typically doesn’t involve roads and bridges. Think instead about such internal structures as management teams, advisory boards, training and development, and such outside professionals as attorneys and accountants.
Infrastructure is important for even the smallest businesses – just you and your cat – and is increasingly important as the business grows. The key is building a foundation of people you trust:
* Your attorney – or (gasp) attorneys. An experienced small business attorney – probably not the one who handled your home purchase or estate plan – is especially important as you start out. The business’ legal structure matters. So do contracts that give you recourse if, for example, a customer decides not to pay.
Also on the better-have-the-attorney-take-a-look list: A buy-sell agreement that sets parameters when an owner leaves the business (often part of the original paperwork); the contract a vendor asks you to sign; and a look at your new lease.
You may want to be on friendly terms with an employment attorney, too. Such issues as the newly revised, duties-based overtime rules from the U.S. Department of Labor that take effect next month; the potential in any business for harassment claims; the ever-increasing complexity of benefits issues, especially when health benefits are involved, often require specialized employment law knowledge.
* Your accountant. Strategic tax advice is the most important issue, but within that context your accountant should be able to advise on financial trends and what your data say. A sit-down review twice a year, maybe quarterly, should be part of the infrastructure process.
* An advisory board. Simplified, the traditional board of directors exists to provide direction, guidance and oversight of a business entity. Advisory boards, on the other hand, exist to provide well-considered advice to senior management – which can accept the advice or not.
The advisory board’s value depends on its makeup. A few grey heads representing tons of experience; younger members who understand today’s technology and markets; and – yes, it’s necessary to say – women, who often bring a different view to strategic discussions can be a good mixture.
Don’t load your advisory board with family members. It’s too easy for personal issues to dominate discussions – and decisions.
I sit on an advisory board that provides client views to management, and I’ve watched other boards in session. With an open mind from top management, an advisory board can be an extremely beneficial part of a business’ infrastructure.
There are other infrastructure elements as well:
* A management team that serves as a sounding board for the owner-CEO and chips in its own ideas can be invaluable. The management team isn’t an advisory board; it comes with hands-on, workplace perspective.
* Training and education. Industry seminars, trade shows that you and appropriate employees attend, chamber events and similar business outings that create name recognition also are part of the infrastructure support that almost every successful business needs.
© 2016 Kendall Communications Inc. Follow Jim Kendall on LinkedIn and Twitter. Write him at Jim@kendallcom.com. Listen to Jim’s Business Owners’ Pod Talk at www.kendallcom.com/podcast.