Choosing an Accountant to Help You Prepare for Venture Capital Part 2 © Paul Wetton

Now that you have the proper expectations to have for an accountant, how do you find one?  Like in any relationships, common interests and compatibility are important.  It helps if you like the person and have a rapport with them.  Practical matters such as hours of operation and location of their office are important factors too.  Even though this is the age of the internet there are some matters that have to be discussed in person, or times you'll have to drop off paperwork at the last minute (especially during tax season) so a convenient location is helpful.

Ask your friends, business associates and local Chamber of Commerce for referrals.  Even if you are a large business and hiring an entire firm of accountants to work for you, you will most likely be dealing with one primary accountant at the firm.  So when you meet with potential accountants you should find out the following information

• Do they have a CPA?  CPAs have to pass state tests and take re-certifications tests periodically.  Some business actions require a CPA, such as loan applications and audits.  CPAs charge higher fees than non-CPAs, of course.  There are many excellent accountants without CPAs who can provide consulting to you.  It all depends on your needs and type of business that you have.

• What kind of business advice can they offer? You want an accountant that can offer a range of financial and business advice.  To see how creative and knowledgeable the accountant is, ask him for some ideas about how your business could start saving money right now. 

Ask them for examples of clients who have benefited from his advice in the past and what the end results were.  Obviously you don't want an accountant that is creative with the accounting but you do want an accountant that can brainstorm creatively and pose reasonable solutions to your problems and help your business grow in the process.

• Do they view themselves as proficient with technology?  Accounting software such as QuickBooks can be very powerful, assuming the user knows how to use it properly.  What type of software does he use? Can the accountant work with your computer files or is he reluctant to deal with your file format?  Is the accountant at ease with computers and demonstrate competence?  Does he use the internet?

• Who are their clients?  You want to make sure that the accountant has had business clients similar to you.  It would be very unfortunate if you hired an accountant only to find out later that the accountant has only worked with private individuals and never with business owners.  It's ideal if more than half of the accountant's clients are business owners like you.

• What are their fees?  As the accountant what their typical fees are for certain project and what their hourly rate is and what they charge for expenses.  Request a copy of a rate chart that you can refer to later.  Give him a copy of your previous year's tax returns so that the accountant has a clear idea of the services you will need and can give you accurate quotes. If he charges for very trivial things, like a fax or a two minute phone call, look elsewhere for an accountant.

• Is the accountant active in the local community?  Who does he know that can help you in other aspects of your business?  Do they have connections with bankers, real estate agents, venture capitalists?  Ask him to describe times when he has connected clients with contacts who have helped them grow their business.

• Ask the accountant to explain why you should hire him/her.  Give the accountant an opportunity to explain their skills and why they are the best accountant for your business at this stage.  If you are at the start up phase and seeking seed capital or at a later stage where you need venture capital it's very important that the accountant explain their experience in this area.

Ideally you should interview at least three potential accountants and also contact their references. 

Don't rush your decision; the success of your business depends on a strong support team, of which the accountant is a very important part.

Choosing an Accountant to Help You Prepare for Venture Capital Part 1 © Paul Wetton

An accountant does far more than keep your books and prepare your taxes.  An accountant can serve as an advisor in important decisions, including whether or not to pursue venture capital, and help you map a plan for your future.

They are part of your team, therefore it's important to pick the right accountant the first time. Once an accountant assumes that role for your company it's inconvenient to switch to a new accountant because they have acquired a lot of information about you and your business and re-explaining all that information to a new accountant is too time-consuming.

An switched-on accountant can provide the following services:

• Tax Planning.  Planning involves far more than filing your taxes.  Your accountant can advise you throughout the year on changes in tax laws and help ensure that your business is fully benefiting from tax breaks.

• Financial Insight.  Your accountant can advise you on your personal finances too and help you prepare for retirement and helps with estate planning, trust funds, etc.  Your personal and business finances are connected; one impacts the other.  A good accountant realizes this and makes sure that your business decisions are also beneficial to your personal finances.

• Business Consultant.  An accountant can help your business increase its profits and expand its operations.  You'll be surprised at how your accountant has knowledge about many things:  insurance, marketing, how to set prices, inventory and more.  They also have connections and can refer you to other professionals who may have expertise in an area where you have questions.  Don't hesitate to run your business decisions past your accountant for an opinion, even if it seems outside his or her area of expertise.

• Technology Guru.  Accountants tend to be whizzes with the computer and are experts in financial software as well as small business software and analyzing strategic business data with the proper software.

• Connections.  If you need a recommendation for a lender, a venture capitalist, angel investor, and wholesaler for your product your accountant is a good referral source.

Venture Capital and Getting A Professional Image For Your Australian Company Part 2 © Paul Wetton

When it comes to raising venture capital for your business, there are several things you can do to be better prepared and to make your business more ttractive to a potential investor. One thing is to make sure that you have a professional image. In part two of this aticle I want to look at the impact your business cards, stationery, dress and speaking skills can have on influencing a potential investor.

Get Business Cards.  Even if you don't have physical office space yet or office number you still need business cards.  And not just any business cards.  Make them stand out from the crowd. 

The designer who works on your web page can probably design them for you (or at least refer you to someone who can). 

Your logo, name, business name, mobile phone number, e-mail address and website are all you need at the beginning. 

Glossy cards with U.V. coating on thicker card stock (15 pt is fine) will serve you well and stand out from 95 percent of all other business cards out there.  

Double sided cards - with a slogan and logo on one side and contact information on the other - can be especially eye-catching.  

Matte with satin is nice, too, as is a textured card.  It depends on the type of business you have. 

IMPORTANT: Whatever you do, don't print them out yourself on your own printer.  Business cards are so inexpensive now there's no reason not to order them online or from a local printer.

Get Stationary/Postcards/Greeting Cards.  At the beginning you will be making presentations to investors, talking with potential customers and potential suppliers. 

You'll be asking for favors upon occasion. 

After every single business meeting and  lunch you should send a thank you note. 

You should also send notes when someone receives an award, has a company anniversary or some other milestone.  Or even just to say hello and keep in touch.

Ideally you should use cards or stationary with your company logo and name.  Handwrite the notes, if possible, or at least sign them by hand.  If your cards are attractive or creative enough the person might tack it on their bulletin board, thereby keeping your company name more visible.

Dress like a Professional.  You represent your company, so you need a professional image too.  It doesn't matter if you created your product in your basement while wearing ripped jeans or if your business is an internet business that requires little interaction with the outside world. 

While you're meeting with investors, interviewing potential managers, meeting with suppliers, attending chamber of commerce meetings, etc. you should wear business attire. 

Even while on the golf course you should not look overly casual.  Save the cargo shorts for home.  It doesn't take a lot of money to look professional. 

Proper fit is as important as anything and tailors are not expensive.  There are probably at least a couple of people in your life with good fashion sense; ask them for their input. 

Develop Public Speaking Skills.  Chances are you will be giving presentations to investors or at local community business meetings or explaining your business to potential employees.  If you have never taken speech or acting classes and do not have experience speaking in public you may want to consider signing up for BNI or another similar public speaking group where you learn public speaking skills and practice before fellow group members.  Fumbling your way through a Power Point presentation at a VC firm will not help your cause.  Even if you are entirely at ease speaking in public you should take care to make sure your talk is focused and organized and does not ramble.

Venture Capital and Getting a Professional Image for Your Australian Company  Part 1 © Paul Wetton

Your company should have as polished and professional a look as possible even if it is still in the start up phase and you haven't received funding yet.  In fact, a professional image at this stage will pay huge dividends.  Thinking about your company's image will help shape the type of corporate culture you want to establish someday. 

Let's look at several things you can do:

Get a website.  This might seem obvious but, surprisingly, this is a detail that is often overlooked at the very beginning.  You've probably at least purchased the domain name (I hope!); now make the extra effort and hire a web designer and purchase hosting and launch a site. If you like, contact me and I'll gladly put you in touch with my own web design team.

It's easy to focus all your energy on writing a business plan, researching investors and performing a feasibility study.  While you're doing all those things why not let a website work for you 24/7? 

Your  website should have the following:

• A Good Corporate Image and Logo. 

• Description of the product or service that you intend to sell.  A copywriter can help you with this.

• Contact information. 

• And, perhaps most importantly of all, a squeeze page.  That is, a field about the fold where visitors can type in their e-mail address and put their name on your e-mail list. You should offer an enticement such as a free report or simply offering a special discount once the product is released. 

* The point is to make your site as "sticky" as possible.  If you develop a large mailing list this gives you a little bit of extra leverage when sharing your idea to investors.  A website is one tool that will help you test the market and see if your business idea is feasible

• Make sure all the links work, have someone proofread it; make sure your contact information is easy to find.  You only have their attention for four seconds.  If you make it hard for them to find pertinent information they'll move on.  It's also important that the site loads quickly.  Don't get too carried away with graphics that take forever to load. 

• Traffic.  In the early stage you won't want to spend much, if any, money on online advertising.  But there are various Web 2.0 tools you can use that are free, such as blogs, forums, and social networking sites such as Facebook.  You may want to consider a PPC campaign with Adsense if you can keep the costs low.  You can have the fanciest site in the world but without traffic it won't mean much.  If you already have a steady flow of traffic to your site before your business launches you'll be in a strong position once your business opens.

Ask around and find a competent designer.  If you are under severe budget constraints you can find someone on the cheap on a site like elance.com but it's much better if you can work with one designer for your website and other graphic design needs for consistency.

Australian Venture Capital Explained - The Feasibility Study © Paul Wetton

When your business is ready for seed capital it's tempting to focus on the business plan. 

Don't overlook the feasibility study, however.  You must do this first before thinking about a business plan. 

It will help you determine whether or not your business will be profitable. Simply put, it will show if there is demand in the marketplace for your product. 

You need to show that there are enough customers who will purchase enough of your products so that your business will show a profit.

At the most basic level the feasibility study will answer these questions:
1.    Who are you selling to?  Other businesses?  Consumers?
2.    How many of these customers live in your area?
3.    How much do customers typically spend on your type of product every year? 
4.    Do they make the purchase based on price or based on value?
5.    What are the total sales for your type of product in your region every year?
6.    Does your market have a few dominant competitors or are there dozens or hundreds of small players? 
7.    Is there room in your market for another business?

If you determine that there is no market for your product in your region then you will have to decide whether you should give up on the idea or target different customers or a different region.  Eighty percent of businesses fail in the first two years so it's very important that you perform a feasibility study.

The feasibility plan should address the big picture and assess your competitiveness. It should contain the following elements:

1. Technical assessment.
2. Equipment and technology that will be needed and the suppliers of the equipment.  How long will it take to obtain this equipment? 
3. What warranties are available from the suppliers? 
4. Is credit available?
5. Raw material needs and suppliers and credit terms that can be arranged with the suppliers.
6. Cost of purchasing the equipment.
7. Location of suppliers.
8. Costs to maintain and repair the equipment.
9. Facility.  Size, location, costs.  Will you rent or own?
10. How accessible will it be to your customers?
11. Show how the current economy will impact your business.
12. Financial projections.
13. Cost of land and building costs.
14. Start up cost.
15. Wages, utilities,
16. Financing sources.  Venture capital, bank loans, credit from suppliers
17. Projected profit/loss during the first five years.
18. Projected income.  When will the business show a profit? 
19. When will it break even (ideally within 18 months).
20. Management.
21. Organizational structure.
22. Cost to recruit and retain managers.
23. Qualifications for managers.
24. How easy is it to find managers for this type of business?
25. The types of positions that will need to be filled.

Your feasibility study will look at supply and demand and detail all your competitors and examine how your business will fit in your geographical area. 

Study raw materials, trends, market share. 

It will help you see if your financial calculations and projections are realistic. 

It should also describe worst-case and best-case scenarios. 

It is best if you use a third party to conduct your feasibility; someone who will be unbiased and doesn't stand to gain from the success or failure of your business.