Question: What Makes a Good Business Advisor?
There is no such thing as a "best" CPA, attorney, or any other advisor. During your initial contact with potential advisors, look for these key factors, and keep looking as you start into a business relationship with each advisor.
Answer:
There is no such thing as a "best" CPA, attorney, or any other advisor. During your initial contact with potential advisors, look for these key factors, and keep looking as you start into a business relationship with each advisor.
Answer:
- Availability. You certainly want an advisor who is available when needed, within reason. A new business owner attempted to contact a CPA to talk about hiring him; the CPA never returned several phone calls. That is a clear sign that this person is probably not going to be available when needed.
- Competence. While you must trust an advisor to do what needs to be done, you also must know enough to be aware when the person is doing something wrong, or forgetting to do what needs to be done. In one Tax Court case, a doctor had to pay fines and penalties when his CPA failed to file payroll taxes. The business owner must know what needs to be done in order to monitor business advisor competence. One of my purposes in this GuideSite is to help you know what needs to be done, so you can check on your advisors and employees. Of course, you probably won't be able to figure out competence during an initial interview with a business advisor, but sometimes they drop hints, so stay alert.
- Compatible Style. One new business owner said he talked with two CPAs. One was very conservative, taking only deductions that were obvious and easy to justify. The other CPA was more aggressive, taking deductions that others might not consider but which were perfectly legal. If you want conservative or aggressive, either one is fine; just be sure you know which you want.
- Ethics. There is still a line to be drawn between aggressive and unethical. While you may not know where the line is for a specific situation, you can trust your feelings about whether it makes sense or causes you to lose sleep. For example, a CPA who says, "Don't worry about that. The IRS never catches this stuff," might raise a red flag with you.
- Personality. Finally, there is always that intangible personal factor. You may find an excellent professional, but you may not like this person or find him/her hard to talk to. Keep looking. Liking the person you are working with means you are going to be more likely to call and talk, and work together easily. Think about this: If you had to go to Tax Court with your CPA, wouldn't you rather have it be someone you like, other things being equal?