Small Business Services
Stop and Think About The Best Use of Your Time and Talent
Over the years, I have seen many entrepreneurs begin the exciting and scary journey of starting a new business. In many others, they are purchasing an existing business or buying into a franchise.
They're filled with hope and optimism fueled by the excitement of possibility. Just like in life, some win, some lose, and some seem to muddle along. Is that surprising? There are so many variables involved and it is extraordinary that anyone would take this tremendous leap in some respects. Many are unaware they are jumping into the abyss while others have their eyes wide open and have a good idea of what to expect.
Believing in your abilities, a positive attitude, and lots of desire to work hard will only get you so far. In my many years of experience, CONTROL is often a central issue in working with entrepreneurs.
What I see too often is the entrepreneur's inability or unwillingness to ask for help.
WHOM DO YOU KNOW THAT KNOWS ALL ABOUT EVERYTHING
Yes, I thought so. But I run across many who seem to think they don't need help and can figure it out on their own. Many times, especially in franchise operations, you see the new franchisee asking other franchisees what they have done or what they suggest in whatever area is the day's crisis.
"Crisis of the day" typically defines an entrepreneur's day. This is especially true when they are unwilling to delegate or ask for help. Everyday advertisements are telling them:
It leads you to believe that entrepreneurs can literally start their business without knowing anything about some critical things and succeed!
Of course, the truth is a little different. Keep in mind that all of those ads are there to sell you something.
It is in their best interest to tell you that yes, you can do it all and save thousands!
But EXPERIENCE is what you get when you get what you didn't expect. And unfortunately, there are lots and lots of entrepreneurs gaining experience every day.
Most of the time, it is an experience they didn't want, expect or ask for. But typically, that experience comes with a high tuition charge. Welcome to the University of LIFE!
SO WHAT DO YOU DO?
The first step for the recovering entrepreneur is to admit they don't begin to know it all and that they can't (or shouldn't) do it all themselves. CONTROL is an illusion. Burn that into your brain.
Admit that you are going to need help and probably a lot of it. Depending on your level of investment, resources, capital, and time, the budding entrepreneur may have to do most of the work themselves.
But guidance by those experienced in the many areas of business the entrepreneur requires saves time, money, and heartache. It becomes about efficiency and effectiveness. Work smarter, not harder, is an oft-repeated mantra.
But no one is kidding you about this. You know it to be true, but are you going to follow a process to achieve working smarter?
WHOM DO YOU WANT ON YOUR TEAM?
FIRE, READY, AIM
I am always amazed by the number of people who have started a business without creating a business plan. Typically they have not set down to find an experienced business attorney (or any attorney for that matter). I have received many calls from payroll companies referring a new business owner who has set up a legal entity, purchased a franchise, signed a lease, and is about ready or has opened their doors. They look on the internet and call a payroll company because they need to pay their employees. But then the fun starts. They can't answer most of the questions the payroll company needs answers to.
This story happens over and over every day. Why? I suspect it is about not spending money. It isn't really about spending money as much as what the entrepreneur receives for what they are paying?
Dropping $325 to register an entity with the Secretary of State is not a large amount of money to spend. But typically, they have no idea of what they have gotten other than it is called an "LLC."
They lack the understanding of whether an LLC meets what they have set as objectives and no idea of the potential income tax or legal implications. It all sounds simple on the radio.
Time after time, I have a new business owner come in for a meeting. I ask them what their tax entity is. They respond, "it's an LLC." "No," I say, "not your legal form but your tax structure? What election did you make, if any?" They are unaware that an LLC may take on many forms of taxation from sole proprietorship, partnership, S Corporation, or C Corporation. And that is just the beginning.
In most cases, we must take several steps to adjust, fix, backpedal or otherwise work with what the new business owner has begun. Sometimes it can be fixed, and other times, fixing it is more expensive than starting over. Whatever does happen next really comes back to setting the goals, writing the plan, and beginning a course of action that will significantly enhance the business owner's opportunity to succeed.
No matter what the business' focus may be, it boils down to fundamentals. People, processes, and products or services form the core focus of every business.
Asking for help will significantly enhance your chances for success. Having a collaborative team of advisors who work for you and want to see you succeed forms the critical foundation. Don't build your house on a foundation of sand.
PLAN, EXECUTE, SUCCEED
WHO'S ON YOUR TEAM
A genuinely collaborative team works with you and each other to guide you to the very BEST decisions you need and can make. Every business is a bit different. Collaborative advisors help you discover your needs and address problems you didn't even realize you had.
Here is a small sample just in the accounting area: the typical business owner has little or zero understanding of the accounting process.
Accounting has very little to do with QuickBooks or any other accounting software. They are just tools. What's the difference when tools are in the knowledgeable hands or inexperienced hands? In the end, what are you going to get?
Accounting software is a tool to collect financial information. However, how it is organized is a critically important aspect. It requires careful setup and planning.
The software collects the necessary information for 1099 reporting at year-end. Failure to report to the IRS may cost thousands of dollars in penalties.
Payroll is another critical aspect. Failure to make accurate and timely tax deposits may cost thousands in penalties and subject you to personal liability your LLC or Corporation can't shield you from.
IRS payroll penalties are the most aggressive in the tax code. Do you want to risk having an IRS agent at your door?
One example is we recently had an entrepreneur who had made some simple payroll reporting errors and spent more than five years attempting to fix themselves. By that time, they had run up over $150,000 in penalties.
Far too many business owners never really look at their financials until tax time and only then about three months after year end. They ignore what their financials could provide them which is extremely valuable feedback on how their business is doing!
Looking at the numbers 15 months later won't help you much.
Financial accounting controls, point of sale, cash and internal control, financial integration for sales tax reporting, TABC liquor reporting, personal property taxes, unemployment tax reporting, and so forth begin to tell the story.
The more significant part of the story is how you plan and implement a plan to have your various accounting tools integrate to maximize technology use to achieve important efficiency.
It is all about working smarter!
I can tell stories and provide examples of what to do and errors that others have made. That might be entertaining or frightening, depending on your point of view. The most important point I can make is if you aren't asking for help, then seriously, see where you need help. How?
Suppose you are attempting to be the technology person, sales representative, bookkeeper, payroll service provider, and generally trying to do everything else. When do you have time left for the essential things like growing and managing your business and having time for family?
Do those things you are good at performing and leverage the rest to others.
The accounting and advisory firm of Steven E. Miller CPA PC has a network of collaborative and highly experienced advisors who work as a team with clients of all sizes. Our team includes legal covering numerous specialties of practice, banking, commercial insurance, health insurance, personal insurance, web services, technology & networking services, mortgage banking, financial advisors, payroll services, human resource capital management, and international business resources. These have been carefully vetted over the years to ensure their client service and expertise are at very high levels of performance.
If you believe you are ready to explore a path to greater achievement and success, meet with us. Let's see if we are a good fit.