Financial records should reflect performance management and overall solidity of your operation at all stages of its development. In addition, having a good set of books allows you to make better decisions in order to maximize your profitability, direct cash flow and provide a competitive benchmark for growth.

Regardless of whether you plan to build an empire or run a small home-based venture, employing the services of a competent bookkeeper from day one will result in a win-win situation. In addition to helping you to understand the various financial aspects of running a business, a good bookkeeper frees up time so you can be more devoted to growth of your business.

How much does it cost to have a bookkeeper do your books?

It varies depending on the size and complexity of your business. But just to give you an idea, I pay about $600 a year for my excellent bookkeeper to keep the books for my relatively simple consulting practice.

All I do is through my paperwork into one of three boxes: money in, money out, and paid by cash. Once a quarter I drop the boxes off at her office and she does the electronic data entry using Simply Accounting Basic. At the end of the fiscal year she does up a summary for my accountant. I must tell you that's the best $600 I spend all year.

However, if paying someone else to maintain financial records is totally unfeasible at the initial start-up phase of your small business, you should still ensure that record keeping is performed regularly. The more record keeping you can do yourself, the less you will have to shell out to an accountant at year end. At the very least, use my "money in, money out" box system, and do keep all receipts.

Legal representation for small business

Another aspect of business that sometimes gets overlooked during launch is legal representation. As a small business owner, you assume responsibility for all contingencies arising from your operation. Consulting with a lawyer prior to conducting trade may initially seem like a waste of money, however, sage legal advice at the start may save you a lot of money in the long run.

We live in an increasingly litigious society, so protecting your personal and business assets is a must. Most small businesses begin as sole proprietorships, so the owner is personally responsible for any and all debt incurred by the business. This includes any expenses arising from personal injury claims to errors and omissions resulting in loss to others.

But what if you're already being sued?

The reality is the fees you pay to keep your business on the right side of the courtroom door will be miniscule compared to those you will need after the fact to get yourself out of trouble.

Once a summons has been registered against your business you are already in the damage control stage of operations. Unfortunately, now the only definitive answers you will get from a lawyer is approximately how much money you will be expected to shell out to get yourself out of the mess.

When starting a small business, a consultation with legal representation in order to ‘cover your assets’ does not have to break the bank. Shop around and don’t be afraid to ask other business owners for referrals. Defining the legal parameters of your business prior to developing problems will save you big bucks in the long run.

How to hire a good lawyer or accountant

Whether hiring a lawyer or an accountant, ask potential professional service providers questions about their qualifications. Get references (including contact information) prior to obtaining their services and do phone the references.

If possible, try to select industry-specific professionals for your business. A lot of financial and legal services are becoming increasingly specialized, so make sure the person you hire is knowledgable of your particular business needs.

Conversely, exercise caution when dealing with an outside agency that represents one or more of your competitors. Even though most professional codes of ethics are designed to protect clientele from breaches in security, you want to be sure that sensitive information about your business is not going to become common knowledge.

And finally, ask around to make sure professional fees are fair and competitive. As with any other business venture, good research and careful evaluation of your needs can go a long way in providing future dividends.

This article is for information purposes only and should not be construed as legal or financial advice.