Starting a small business is not for sissy’s!

Starting a small business is not for sissy’s!  This I have learned many times over in the last 10 years!  Since before I married my husband, we have been building a business.  We have used every extra bit of money we have to invest in the business we were developing at the time and it has always scared the crap out of me. My husband is an entrepreneur and well, he sees money as numbers in a column.  Not me!  To me, money is a measuring stick of how hard I have worked.  “Work hard, be a good person, and it will all work out!”  That is what I was told growing up.  But in my family, everyone got a job and a paycheck.  So I went to college, became a nurse, and always knew I would have a job.  That was a great support to our family while we were growing but after we sold the first business and Jay started out in private practice as the digital CPA, things began to change.   The long hours working for someone else and the frustration of putting yourself into something so hard, only to have leadership change direction and go the opposite way was soul killing!  So I started graduate school, quit my job, and starting helping my husband build his firm.  This last 2 years has been like going to business school with no guarantee of a job afterward!  Since we specialize in helping small businesses with their bookkeeping, accounting, taxes, and integration of technology, I have watched many small businesses struggle with similar things.  It does not matter if you are an accountant or a real estate agent, a plumber or a lawyer.  There are a couple of universal laws that can kick us all in the pants if we do not put the first things first.  So here is what I have learned:   1.     Good bookkeeping is the first and last thing you should have at the end of the day!  Cash flow is the lifeblood of any business but in a small business, bleeding out (to use a nursing analogy) impacts you faster.  If you do not know where the money is going to and coming from each month, you will make decisions based on incorrect information.  I am no longer surprised when a small business spends 80% of its time on the thing that does not make it any money and 20% of it’s time on the thing that does.  To flip this equation, you need accurate numbers.  Monthly bookkeeping, reconciled and reported in an organized format can save any small business time and money.  Trying to do it yourself can work when you are small but ask yourself these questions: Are you doing it? Are you doing it right? Do you have a simple report at the end of the month that tells you where it all went?  Do you know who your 5 or 10 best clients are and why?  Ignore these questions for too long and you can cost yourself too much unnecessary cash and a lot of stress! 2.     Everyone pays taxes but it does not have to be so painful!  My favorite clients are the ones who listen to what I tell them.  These are the clients that know what they know really well, know what they don’t know and ask for help.   One fact is true in our country.  The more you make the more taxes you pay.  While maximizing your deductions is really important, recognizing that when you make more, you will pay more is something better accepted sooner than later.  The key is to have a really good strategy for how you are going to pay them.  Whether you estimate the tax and pay quarterly or save the money aside all year for the one time payment, the bill will come do.  Creating a really stressful unknown for your business every year in March or April is just bad juju!  Nobody needs that.  Also, having your CPA tell you “what you should have done” really stinks.  In October, you should be looking at those reports we talked about in above and estimating your tax with the help of your CPA, and planning for how that is gonna get paid.  In March and April when other people are negotiating terms with the IRS, you are already set and you have another fixed expense for your business, instead of an unknown debt! 3.     There really are ways to work smarter not harder!  10 years ago, small businesses where limited in the tools they had at their electronic disposal.  In our first business, we build a system to track inventory and report to our accounting system the raw materials in, the finished goods out and the cost of goods sold.  That system cost us over $100K and countless hours of labor.  I am thankful that Jay Kimelman, the digital CPA, had the know how to do it.  It saved us tons of employee hours on inventory, tracked our products, and gave us good numbers to work off of for profit margins when raw material prices fluctuated.  Today, for very small monthly fees, there are applications available that do so many features small businesses need like point of sale, inventory management, job management, recurring billing, invoicing and so much more.  Now you can make your accounting system the hub of your wheel and all the information should feed through it to produce really valuable performance indicators that you review in your monthly staff meeting and make good decisions.  We do this at my dining room table but it works just the same in the boardroom! 4.     Some laws are universal!  I am really amazed by the laws that don’t change, apply to us all, and have been talked about since the world began.  One of them is, “almost everything will take longer than you think”!  For every business, there is a period of time when you just have to keep working harder, keep believing, keep putting one foot in front of the other.  It is important to have trusted advisors that you can count on who tell you when you need to make key changes or need to cut expenses.  One of my favorite authors right now is a social worker, shame researcher, and faculty member at The University of Houston, Brene Brown.  She has written several books, her most recent “Rising Strong”.  She talks about the “messy middle”.  The period of time when things just feel bad and you are working it all out.  I have seen in my business and my clients businesses the messy middle and it is not pretty or comfortable.  Pilots call it the “dark middle”, the point in the flight  when you have gone to far to turn back or you will run out of fuel.  But the universal law that tells me that things will always take longer than I think, also tells me that if I keep going, don’t give up, work hard, and do the right thing by people, things work out.  And they do!!!  Now go grow your business!