BUILT TO LAST A Q & A with
The Experts by John Guthrie
John Ferguson is a Partner at Cobb Cole Attorneys at Law . Mr . Ferguson has 30 years of experience and practices in the areas of merger and acquisitions , business organization and transactions , franchise law , commercial finance , international law , and general corporate and contract law .
1 . As you think about the importance of sustaining a business over time , what guiding principles should entrepreneurs be thinking about from a financial / legal point of view ?
John Ferguson : Fiscal responsibility is the most important component in starting and sustaining a business . In my opinion , all aspects of your business survival and success flow from fiscal responsibility . Setting reasonable liability protection measures is part of the fiscal responsibility because the costs arising from not setting reasonable liability protection measures can ( and often do ) result in business failure . Those reasonable liability protection measures include setting sound operating procedures for the protection of your workforce , vendors , and employees and include setting reserves to cover unexpected liabilities and maintaining proper types and amounts of insurance coverage ( while not overpaying or paying for unnecessary coverage ). The setting of reasonable liability protection measures is an on-going process that grows and changes with the growth and change of the business . With sound fiscal responsibility , a business can focus on the business ’ ultimate goals , whether it ’ s solely profitability ( which is definitely okay ) or any other social causes which are important to the stakeholders ( e . g ., employee empowerment or betterment or community endeavors ) … without fiscal responsibility , your business may not be around
Suzanne Forbes , CPA , is a Managing Partner with Jame Moore & Co . With more than 30 years of experience in the accounting industry , Ms . Forbes specializes in accounting , tax and business consulting services . She is the managing partner and also leads the Real Estate Services Team .
to focus on those social causes or will not have the resources to impact any social causes .
Suzanne Forbes : The saying cash is king is true . Successful businesses are able to forecast and manage cash flow at the highest levels . The process has to start with sales forecasts and related costs of production . The more growth the company is experiencing , the more working capital is needed . For example , if expenses have to be paid within 15 to 30 days of incurring them , and revenue from those expenses takes 30 to 45 days to collect , there is 15 to 30 days of expenses that the company has to finance .
2 . Are there financial / legal issues entrepreneurs typically overlook ?
JF : Yes , all day – every day . No business plan can address all potential financial and legal issues that a new or existing business may face . But if a future business owner does not take an honest look as to their business plan , the risk of failure increases exponentially . Taking an honest look as to your business ’ place in the future market place , who the realistic patrons will be , what they will be willing to pay , what competition that you will have and how you will get your brand messaging delivered ( rather than assuming that “ everyone will love my idea ” and winging it ) will enhance the chance of
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