10 Decisions Not to Make Alone

We all make financial decisions every single day, some small, some large. Do I cook at home or go out to eat? Do I change banks? Do I clean my own home or hire a housecleaner? Do I buy a used car, a new car or lease a car? Do I start my own business or buy a franchise?

The original title for this blog was “10 things you might want to talk with your CFO about,” but most people don’t have a Chief Financial Officer (though I’m trying to change that.) Many people do, however, have a financial planner, a tax accountant, a business coach, or some trusted advisor. Rising in popularity is the type of financial and money coaching that I believe is so valuable.

Over the years I’ve had many a client announce, during their scheduled monthly appointment, “I leased a building last week,” or “my attorney submitted all the paperwork to change my business to an S corporation,” or “I took out a home equity loan.” I always wonder why they wouldn’t have waited just one more week to discuss the decision with me. I suspect it’s often our subconscious telling us to move forward before someone tells us "no."

Accountants get accused of being naysayers, and there’s a bit of truth to that. We’re conservative by nature. I’ll be the first to tell you: don’t always take your accountant's advice. But: do always ask for it. Discussing the facts of major decisions, as well as the feelings and the what-if’s, is invaluable.

What are the 10 things you should discuss before you jump in?

1. Taking out a loan, or a line of credit, or a home equity loan, or even a loan from your dad. Are you taking the easy way out of a bind? Is there a revenue solution to your need for the cash? Do you understand the terms of the loan?


2. Spending a windfall. We all know, no way do you want to discuss this with your accountant. You want to go spend it all! Or put every dime in savings. Or pay off every debt you have. Most of us are hard-wired toward one of those three options. Talking it over will help you achieve a balanced decision.


3. Leases…of any kind. Office leases, car leases, copier leases. We know stuff. We work with a bunch of other companies that have gotten great deals, or have been greatly ripped off, or something in between, and we can tell you where your deal falls within that range.


4. Hiring a new employee, or a new contractor. We’ll ask you about your revenue plan to cover the new employee and shine a light on potential cash-flow concerns.


5. Getting into a lawsuit. This is rarely a good idea. It is a money drain, but more importantly, it's an energy drain. Attorneys might not agree, but I’ve rarely seen a business owner "win" as a result of a lawsuit, whether they won the suit or not.


6. Closing down a part of your business. This discussion should begin long before you even start thinking about it. In fact, the day you start discussing closing or selling your business should be the day you open it--sage advice from Michael Gerber in the eMyth Revisited.


7. Changing banks. We know banks. We know bankers. We can help, advise and direct you to the type of bank that will suit your long-term needs.


8. Changing your business structure. Again, attorneys might not agree, but there is rarely a good reason for someone whose gross revenue is less than $100,000 (as is true of many very small businesses) to be either an S Corp or an LLC. The numbers just don’t compute. They just don’t.


9. Making a major purchase. If you’re quickly buying something, like a $2,000/month professional development program, on the day before your CFO appointment, you might ask yourself, “what part of me thinks this isn’t a good idea?”


10. Hiring a new CFO, or financial planner, or tax accountant. An uncomfortable conversation? Yes. A necessary conversation? Absolutely! Most relationships eventually come to an end. If it’s time, talk to us. It’s our professional responsibility to smoothly transition your work to another advisor. And, having done many transitions, we know how to do them: professionally.