14 Aug Who Should Be on Your Management Team
Often when I’m advising small business owners I tell them that they need to assemble a Management Team. After telling me they can’t afford a management team, many of my clients ask: What does a management team look like? Who would be involved in that team? What is their role?
To answer the first question, small business owners who are first starting out probably don’t have a paid staff or managers. A management team is a set of informal advisors or professionals who are on the outside looking in. The management team exists to assist in both building and managing the business.
Now, who should be on this management team?
As self-serving as it may sound, I think that everyone should have an attorney available – one that they know and trust. The attorney should understand the business. They should be able to offer advice not only about the legal side of things, but also maybe a little business experience (not required, just helpful).
Next up, an accountant. I don’t just mean an accountant who starts and ends with handling your taxes. A good accountant is someone that you are consulting regularly so that you can manage your tax burden, cash flow, and finances in a proactive manner. I can’t tell you the number of times I have met clients who are looking at a tax liability because they didn’t consult with their accountant on a regular basis, so they got smacked around with a $15,000 tax bill at the end of the year. Frankly, I am speaking from experience on this score.
I encourage small business owners to have an insurance broker. I don’t mean an insurance agent, but a broker. Insurance brokers rarely work for one specific insurance carrier. A broker is there to look at multiple carriers and multiple types of insurances and assist the business owner with assessing risks to the business. Then the broker finds insurance products that protect the business’ risks as well as regularly running risk assessment as the business grows.
I encourage regular communications with a banker, who can help you at least keep your personal financial situation in order, so that if the time comes to borrow money from a bank, you are able to do so. I often recommend local banks, but that is not a hard and fast rule. Local bankers are part of the community that the business operates in and thus has a grasp of community trends. Local banks often rely on intangibles that big national banks don’t consider when lending money. That is not say a large national bank is always a bad idea, but form a relationship with a branch manager or service agent.
I also recommend a marketing person or two. Marketing people typically have an insight to customers – how they operate, what they think – and how to appeal to those customers. Finding marketing professionals who have experience in your particular niche is often very helpful. Marketers don’t have to be local, particularly if they are familiar with your niche. But having said that, if you’re a local business, you may want to find a marketing agency that specializes in your locality.
The last two team members are a little different.
First, a mentor or mentors. You may have mentors who operate in different areas, for example in business or personal growth. There are lots of mastermind groups out there who can help you manage the mental aspect of a business, as well as the day-to-day operations.
Finally, you should be looking at your significant other, be it your spouse, boyfriend/girlfriend, business partner, or what have you. Running a small business is intensely personal and it is a very stressful process. Having someone at home that you can speak to and vent to can help you through the mental downturns of any business.
When first assembling your management team, you need to look at folks who are there to help you grow your business. Having these people around and regular interactions with them is going to go a long way.