Recently while sitting at the gate waiting for a plane, I overhead a couple of guys talking about starting a business. The “know-it-all” in the duo explained to his buddy why they shouldn’t set up a corporation for their new venture. “You’ll have to pay double tax, and you only need it if you are going into a risky type business,” he said. It was all I could do to bite my tongue and keep my mouth shut. Talk about bad advice! The guy was ill-informed and certainly not equipped to give advice. But as they say: You get what you pay for.
I understand the last thing most people want to spend money on when they start a business is highly paid professionals. So instead of consulting with an attorney or CPA about the complexities of starting a business, they forge ahead.
Nowadays, instead of hiring professionals, new business owners often turn to the online do-it-yourself legal options. Many of these resources are satisfactory, but they shouldn’t replace professional legal advice. I recommend if you want to do the work yourself, that’s okay, but invest in having all your documents reviewed by an attorney or CPA before you finalize them.
With so much information at your fingertips, it’s easy to get a false sense of security and assume that filing all the necessary paperwork on your own is no big deal. But keep in mind that not everything is as black and white and you may think. The language used on many of these documents seems straightforward, but it’s not that simple.
Because I’m a lawyer myself, I sometimes joke that the forms were written by attorneys in such a way as to ensure job security. Of course, that’s not true. But seriously, there are nuances involved with making legal decisions about your company, and unless you have professional training, you can’t possibly grasp them. An attorney is trained to identify issues and give you informed advice.
If you wait until you’re facing a legal issue to hire an attorney, it’s generally too late. And talk about racking up expenses—just watch the billable hours churn away. The fees you’ll pay for legal services in advance of a problem are insignificant compared to what you’ll pay an attorney to get you out of trouble. Plus, when you run into legal trouble with your business it causes more than a drain on your cash. It’s a productivity drain and it affects you mentally and emotionally.
The bottom line: Qualified professional advice is your ace in the hole when you’re building a business. Get the professional advice you need to grow your venture in a smart way. Early mistakes can be costly, but even worse, may cause your business to fail.
Susan Wilson Solovic is an award-winning entrepreneur and journalist, author of three best-selling books, multi-media personality and contributor to ABC News and other outlets, public speaker and attorney. AT&T has sponsored this blog post.