In my experience, the first rule of business is to pay your lawyers, accountants and all your professional advisers well. Always pay well for the best advice because it ends up being cheaper in the long run.
I've been in business nearly 20 years, starting my first business when I was 18. Twenty years in business is not a particularly long time but it is long enough to have learned that cheap advice is eventually the most expensive. I can safely say that every single time I've failed it has been because I either found the cheapest advice or didn't take any advice at all.
Most of the time, not only is the best advice expensive it's also usually not what you want to hear. But it is what you need to hear. I know this to my cost, so since 2008 I have always sought out the best advice from the most experienced professionals and it has generally paid off.
It is important to choose your professionals carefully. Look at their CV, ask them questions, look at their previous work and if needs be, ask to speak to their clients. Better still, always seek out others who may have used a certain of type of professional previously and find out about their experience.
Nearly eight years ago, after losing a high-profile court case against a bank, I realised that having a good lawyer is not just an advantage - it is essential. At the time, I was young and naïve; I believed I knew best and thought I didn't need expensive advice and assistance. I realised afterwards that I had lost my court case simply because I lacked the legal expertise necessary to match the other side - a hard and expensive lesson to learn.
Whether you are setting up a new business or expanding an existing one, always budget to spend much more than you think you will need. Not because lawyers and accountants are always hugely expensive but because a good lawyer or accountant will always charge well - and they deserve it.
Over the last 20 years, lawyers and accountants have changed. Forget the old stereotypes, they are now much more entrepreneurial and can add so much more value. They have great connections and experience on top of their core advice. A good lawyer will always try to find you a solution to the problem quickly and swiftly so whilst their hourly rates may seem high, the speed at which they get things done will make the overall final cost much cheaper.
I met a lawyer recently who saw an ongoing case I had against someone; a case where someone had blatantly wronged us. However the lawyer, who is paid very well, said: "Forget it, settle the case". I was angry and shocked. But then he did a quick calculation in front of me on a piece of paper and showed me that even if I went all the way through the courts and won it would cost me tens of thousands of pounds - most of which I wouldn't be able to recover. His expensive advice and subsequently even more expensive negotiations with the other side actually worked out a great deal cheaper than going to court. Afterwards several lawyers including the one who told me to go to court initially said I had done the right thing by settling out of court.
Accountants are the same. The world has changed and accountants don't just do your accounts anymore - that is their least beneficial skill. Accountants can help you structure your finances, your business, help you get the right type of money to grow your business and save you from making expensive wrong decisions when borrowing the wrong type of money.
Be it recruitment, HR, law or finance, always make sure you pay for the right advice from the right type of person - don't just choose the cheapest option.