A long time ago, in a galaxy far, far away, I was a brand new business owner.
And just like many creative types, I didn’t love accounting. Math wasn’t my strongest subject and I loved everything about marketing, branding, and eCommerce. That part of my business was interesting and fun. And I dreaded anything that wasn’t fun.
That was my philosophy until the day I was audited by the IRS and they took every single dime I had.
We had hired an accountant who said he would “push the boundaries but not break them” and we would pay less in taxes. We were overjoyed. Who doesn’t want more money and fewer taxes? I never questioned anything he did and signed anything he put in front of me.
Unfortunately, 3 years later our crooked accountant was arrested and went to jail for tax fraud. The IRS took about $30,000 from us (every account, including our retirement, was taken). The IRS eventually cleared us of any wrongdoing but we never got our money back.
I didn’t want to learn accounting when I first started my business. I happily outsourced it and focused on building my business. I never even looked at the papers our accountant talked about. I never questioned anything because I had no idea how taxes worked.
I just trusted him to do the right thing.
I’ve always found math, economics, and accounting to be extremely boring. You may find marketing and social media completely tedious and uninteresting. Yet, these are all important aspects of our business.
And we need to understand each part of our business, not just the stuff we like.
Learn the Basics
As a business owner, my lack of accounting education hurt my business. We almost went bankrupt and barely survived. It was a huge hit for a young couple, with two small children and a business to run. I didn’t even have money to feed my kids. It was a wake-up call that I couldn’t ignore learning the boring side of my business any longer.
Take the time to read articles like 4 Useful Tax Deductions to Grow Your Woman-Owned Business. We don’t need to become a CPA’s, but we do need to have a basic understanding of our tax strategy. We don’t need to become a lawyer, but we need to know the basic laws of our industry and what can happen if we overlook certain regulations or practices.
The goal isn’t to master all aspects of your business but learn enough to have an intelligent conversation with our advisors.
Ask for Help
It was humiliating to be conned by our accountant. I didn’t trust anyone for a few years and that also hurt our business. But you don’t need to go through a crisis like mine to be reluctant to ask for help. In The Professionals, Ken DiPrima explains:
“There are times when business matters require a level of technical expertise beyond the scope of a business owner’s day-to-day skills. Most people are often reluctant to reach out for help, especially during early years of running the business, when cash is so critical.”
Know the basics and don’t attempt to learn along the way. You can mess up a Facebook campaign without many consequences. Mess up something legal like insurance or corporate filings and you put your business at risk. Find someone trustworthy and ask for help.
Partners Not Advisors
The lesson from my story isn’t that you shouldn’t trust advisors (accountants included). The lesson is that you should know what’s going on in your own business. You should know the difference between gross and net, and understand how to balance a ledger.
Find advisors that want to work with you and not just for you. Be an active partner with your advisors and take the time to learn the stuff you hate doing. We all have skills that come easy to us and those that we’d rather pretend didn’t exist. Let my story be a warning – embrace the boring side of your business.