Essential External Expertise for Business Owners

There are two fields of external expertise that all business owners need access to when establishing and running their business: legal and accounting.

Fine Print

Paul developed a digital marketing product that quickly became very successful. In a matter of months he was approached to be bought out by another company. Paul asked an old university friend who is a lawyer to go through the contract for him. Paul’s father was a retired MD who knows what happens in business.

As a result he suggested that Paul find a lawyer with the right expertise to help ensure that the contract safeguarded him adequately. Paul was confident that his friend had covered everything.

The new owner, Greg, was a shrewd and calculating business man who made use of corporate lawyers. The latter were highly experienced in drawing up contracts to protect their clients.

Outcome: as soon as Paul signed the contract, Greg started to make life extremely difficult for him. Greg side-lined Paul completely, ignoring the fact that he had developed the product. Eventually Paul left, only to find that a 2 year restraint of trade had been placed on him. The fine print was worded so subtly that Paul’s friend failed to pick it up.

Share Split

Damian and Tod went into business together. They knew each other from previously having worked together. Damian is dynamic and a go getter. Tod is the accountant and by nature more passive. Initially when they went into business it was on a fifty-fifty basis. However, after three years Damian became frustrated. He felt he was doing all the work to grow the business and was carrying more of the responsibility.

Damian consulted their accountant as well as the lawyer who originally drew up their contract. They understood his situation and suggested that he talks to Tod about changing the share split. In this case the outcome was positive: Damian’s share in the business was increased and Tod’s decreased.

It could have been very different if Tod had chosen to fight this though.


A business owner, James, decides after much consideration to go into a BEEE deal and merge with another company. James meets the owner, Andile, who seems easy enough to get on with. They proceed with negotiations and soon sign the required contracts.

After 6 months it becomes very clear that their approach to business and management styles differ dramatically. The personality differences between James and Andile just become too great to resolve. Andile is only interested in getting his hands on all the profit and adds no value to the company.

James approaches his lawyer and accountant. He buys his new partners out. It was a costly exercise for him. He has a highly successful manufacturing business that could carry this cost. Smaller companies however would most likely be forced to remain in a business relationship for a fixed period of time to avoid having to pay a large amount of tax.

These are only three real-life examples of what can happen. What each of the cases highlights is the need for access to external expertise. Not only must the person be well qualified but also have extensive experience in business matters.

Sound Legal and Accounting Experts

Sadly, very often one hears of business owners who have had bad or costly experiences.

In a lawyer’s own words: “Law and justice or morality are strangely not always bedfellows. When you are involved in commercial transactions (even between family…or maybe especially when it involves family) you should have a relationship with an attorney who you can phone up for a quick chat about it. An attorney will quickly be able to tell you whether you need to put, for example, better paperwork in place. If necessary you can consult formally with your attorney and go about the matter in a more professional way. Having a professional guide you in matters of this nature e.g. commercial matters (sales, leases), trusts, wills, deceased estates and so on, is really very essential. It must be done before the transaction is undertaken and not afterwards.”

So your response may be: “I cannot afford their expertise”. The question you need to answer is: Would you rather find the finances to get the correct advice upfront or be locked in financially and have to pay a bigger price in the long-term? And here we are not even talking of the emotional or mental stress of having to live with this financial burden. Your significant relationships will also suffer.

Instead, learn from other’s mistakes as opposed to having to go through this nightmare experience yourself. If you find yourself in a dilemma, you may want to make use of coaching that will provide an objective sounding board.


Posted in Business, CEO.