Entrepreneur Is Another Word For Utility Player

Self employment calls for several skill sets beyond the core competence featured  by the business.  The Giants new catcher Chris Stewart had five different baseball gloves in his locker when he reported, one for each of the different  positions he plays on the field.  So, too, the small business owner.

The entrepreneur not only manages the team, even when the team is a team of one:  he is the front office,  the traveling secretary, the scouting organization, and stadium operations.    Most likely, none of those roles were what drew him to the game. Yet, those other roles have an importance that is easy to understate.

Whether self employment is your first choice or your fall-back position, you need to devote some off-field time and energy to those other positions you play on your team.  Bookkeeping has to be the small business equivalent of playing right field:  the position no one wants.  Let me suggest that skill at bookkeeper is critical.

Starting at “Bookkeeper….”

Counting the beans is important for the reason Jay explored:  a business has tax obligations.   It’s also important so you know what it costs to stay in business, and whether the balance between income and outgo will keep you in business.  If there is a common characteristic to the small businesses I see in my bankruptcy practice, it’s ignorance about any part of the business finances other than the checkbook balance.

Well begun is half done, goes the old saw.  It’s easy to neglect record keeping in the rush to open the doors, yet the longer you ignore the books, the more daunting the task becomes.  Set up a simple system from the start, and at minimum, sort the receipts, bills, and orders, by month.  Take a look at the tax form you’ll be completing at year’s end to know how you have to break down expenses.

Credit cards, often the center piece of small business finance, are not an accounting category.  To know how your business is doing, you need to know what you bought on the credit card.  You also must factor in the cost of that credit.  Profitability is elusive when your “business loan” is in the form of plastic bearing 22% interest.

Trade for bench help

If you employ others, I strongly recommend getting a payroll service to calculate paychecks, make tax deposits, and prepare reports.  In my experience, the process is simply too complex to be worth your time to master, as the game is going on around you.  Not to mention that shortcuts around the complexity, like treating your employees as contractors, or borrowing the tax money rather than paying it over to the government, lead to costly and sometimes game-ending encounters with authority.

Suppose you know yourself well enough to know you don’t have the discipline or the skill set to play this position.   Scout  for a bookkeeper, whether it’s someone in the profession, or someone moonlighting.  For people who crunch numbers regularly, this is not difficult.  You can make them an everyday player on your team, or just call them up for some pinch hitting.  A good manager plugs the weaknesses on his team.

Learn to read simple financial reports and do a numbers workout periodically.  Be able to spot whether your challenges are expenses that are too high or too little revenue to support necessary overhead.

Then, pick up your glove and play ball!

Image courtesy of bsv1990.

No related posts.