I have seen it a million times. A new client looking to set up a business will come into my office and ask all the typical questions like:

  •     Should I be an LLC or a corporation? What state do I incorporate in?
  •     How am I going to be taxed? What about sales tax?
  •     Do I need a business plan? Who helps me with this?
  •     How do I open a bank account?

You get the picture. These are very basic questions that new entrepreneurs ask. They are new to the business world and want to make sure everything is structured correctly so that they can proceed and chase the American dream.

I have been asked these questions so many times it makes my head spin. But it is important to remember that you don't have to know everything before you dive into your business. Let me explain.

Do you have what it takes?

These questions are all very relevant, but I often think clients are misguided. They have this mental checklist and they feel they have to check every box before they set-up their business. They may be very smart and analytical. They have often never been self-employed before and may be coming from corporate America where things are very structured and bureaucratic.

Now I may not be the sharpest tool in the shed, so it's not my place to call anybody stupid. But sometimes folks who come from very simple backgrounds and lower education levels can be more successful in business. They are often not focused on asking the right questions because they may not know what the right questions are. They're not looking to cross every "T" and dot every "I" before they get started. So they just take the plunge. My sense is that most successful businesses have been started this way.

Look it is better to have a high IQ than a low one. But let's not let intelligence get in the way of making good business decisions. The goal is to have long-term success and sometimes you just need to dive in.

Do you need a business plan?

In more than two decades as a CPA I have never reviewed a business plan that led to a successful business. Why? Simply because I haven't seen that many business plans. I know successful business plans exist. But most people who take the time to complete one often struggle when faced with something that is outside of the plan. They need to be flexible and real life trial and error is often the better approach.

I think people are scared so they spend their time analyzing, writing and rewriting their business plans until they are perfect. But guess what? They aren't perfect. Because I have yet to find one business that is perfect. Life isn't perfect.

If you are too worried about making everything perfect you may never do anything in life. If you worry about every detail before you start a business, there's a good chance you won't be in business very long. And isn't that what it's all about? Chasing your dreams, making money and growing your business.

Sometimes life requires you to just dive in. This may not work great in marriage, but it often is the key to success in the business world. Over analyzing details will drive many stupid people crazy. You start your business with preconceived ideas of the way you think it's going to work. But do we really know? Your business will change and evolve as you learn more about your customers, your vendors and the marketplace.

Understand your strengths

There are many important questions to ask when starting a business. I am just not sure how many of them are drivers of long-term success. Some of the more successful clients I have would probably not even file a tax return if I didn't tell them they have to (I'm exaggerating a bit here). It's not that they want to be deceitful or cheat the government. It's just that they are so focused on their business that they often have blinders on.

Fortunately, I am there to insure that they file their taxes and pay their tax bill. They allow CPAs, attorneys and other advisers in their business life to give them direction and prevent them from getting into trouble. This allows them to focus on their business.

So if you're a smart person who is starting a business you may want to play a little dumb. Take all of your questions and narrow them down to the core ones that will not overwhelm you. Then hire the right professionals to keep you out of trouble.

Make sure you understand the important things. If you try to do everything you may find yourself out of business soon enough.

Published on: Jan 23, 2018