A prospective customer approached our incorporation service and asked me what would be better, ?a LLC or a Corporation?? I get this question all the time so the answer was easy, ?Thank you for the question,? I said, ?however, we offer a filing service and not legal counsel or advice. I would highly recommend you find a good corporate attorney and ask him/her this question.? This of course was not the answer he wanted to hear. He wanted the quick answer and he certainly didn?t want to speak to an attorney. But, he was making a critical mistake that most small business people make when taking the next big business leap (starting their business, leasing a store or office, signing a contract, taking out a loan, etc.).

Most small business owners are independent and like to do everything themselves. They are often very proud of their ability to buy all of their store?s equipment for 50 cents on the dollar, so they surely can negotiate their store?s lease themselves too. ?It?s amazing what small business owners will do without legal counsel,? said Peter Beren, a Tucson small business attorney. ?I used to represent a shopping mall operator and negotiate leases with the store owners. One guy spent $300,000 in improvements but because he didn?t consult with an attorney, he didn?t even think to add an ?Option to Renew? in his lease. At the end of his lease, he?ll have to pay substantially more to renew his lease or risk loosing his $300,000 investment by relocating.?

What should you do? Find the best (or top two or three) corporate attorney (ies) in your area. Ask what the hourly rate is and schedule one hour of time. Before you meet with the attorney, have a list of all the questions you want to ask or concerns you may have for your business. Don?t be afraid if you miss something, that?s what they?re there for. A good attorney who has worked with new businesses will already know the issues important to you.

Want to do your own work after the meeting? No problem. Often, after identifying the potential problem areas, you can continue to do your own research or legal work. For instance, if you were negotiating your own lease, you would now know to ask for an Option to Renew. Or if negotiating a bank loan, that you should ask that the loan be put in the corporate name so it stays off your personal balance sheet. I often wrote my own real estate contracts and partnership agreements, but then had my attorney review them. This was a lot less costly than having the attorney write the agreements from scratch.

This same philosophy applies to accountants. Often, the way you will run your corporation or LLC will be determined by the tax strategies outlined by your CPA. So, find the best CPA, who will really understand your business. Interview several, asking them how you should run your business. Bring up what other accountants or business people have said, ?What do you think about LLCs?? or ?Should I operate as a Sub S?? or ?Have you handled any IRS audits before?? As you ask more questions of more CPAs, you?ll find one that you not only feel comfortable with, but one who will save your business money!

What about the costs of the best attorneys or accountants/CPAs? The most important rule here is, do not skimp! If the very best attorney charges $300 for one hour and he/she saves you from making a mistake that could have cost you thousands of dollars, which was more expensive? If the very best CPA charges $500 to file your corporate return, but he/she finds a tax loophole which saves you thousands of dollars, which was more expensive?

Lastly, how do you find these top-notch professionals? First, check our database of small business service providers at www.smallbizemarket.com and www.smallbizguru.com. Second, ask others in your profession or industry who they use. If you don?t want to ask your competitor, ask someone in a complementary industry, such as a supplier. If you ask around, you?ll usually hear the same name come up more than once. Third, ask other professionals. Ask the CPA you are interviewing, ?Can you give me one or two names of a good business attorney??

Do not make the critical mistake. Seek the advice of a professional when making big decisions. You?ll be glad you did!