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Status Update and Tax Lessons for a Small Business

Posted by Al Doan under Gaining Experience

25

Feb
Hard Knock MBA (Personal MBA)

So I got my books Friday.  I’ve been reading away and things are going swell.  I have my goal of 40 pages a day and initially started out with giving myself 2 hours each morning.  A better fit for me, as it turned out, was an hour in the morning right as I get up, and then an hour of reading before I go to bed.  It’s actually working great with me because I’m tight on time, 2 hours is a lot to block out, no matter how well intentioned I was.  Even so, I’m not trying to read the whole book at once, nor am I just reading until I get tired, I’m hitting an easy quota and often get into the book and blow right through the 40 page mark, but it’s a consistent mark that I’m going for every time I pick up the book.  This is something i’m very conscious of, because I have 34 books to get through, I don’t want to put myself on a track that will burn myself out 3 months down the road.  So my takeaway from a week in is to set your pace wisely.

In addition to reading books, this week has been tax week for one of my small businesses (details on this later).  But there are some significant lessons to be taken from working the finances of a business as I am learning.  Some key take-aways or things that have been useful for me are

  • Don’t be afraid to insert yourself in the process and look like an idiot asking questions.  A huge key to running any business successfully is your ability to remove ambiguity from a conversation.  Enter financial demands and information requests and people often have a tendency to nod their head through meetings and explanations. DO NOT DO THIS.
  • Start early.  January 1 should get you out of the starting blocks, start pulling your data together, run and analyze your reports, figure out where your efforts need to go.  We had questions come up regarding some of the numbers we arrived at, but starting as early as we did, we had the luxury of verifying numbers, rerunning calculations, and confirming inventory counts.  It is pretty nice to not be running scared of the looming April.
  • Document your assumptions.  The biggest lesson I’ve learned in my consulting experience is to document your assumptions.  Your numbers or reports do you and everyone involved no good at all if you can’t defend your results quickly.  Document your steps of how you got to the result, you’ll thank me later.
  • Keep it simple.  If you’ve worked with Quickbooks or PeachTree or similar software, they have a tendency to get very granular, as a result my first run at a balance sheet ended being almost two pages long.  Pull financials from huge corporations and they are simpler than what these small business software programs will try to lead you into.  By making your approach simple, your process becomes simpler, your bookkeeper will love you.
  • Lastly, about that bookkeeper.  Find a good one and hang on.

Happy tax season :-)

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Hard Knock MBA (Personal MBA)
Hard Knock MBA (Personal MBA)
   
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