What Entrepreneurs Lack, But Need

Episode Transcription

00:00:06 – Glenn

Hello, everybody. Welcome to another edition of Empowering Entrepreneurs Podcast. I’m Glen Harper. Julie Smith, what’s going on?

00:00:06 – Julie

Hey, you know, it’s just another day. We switched up our day. So it’s Friday, so it feels a little different.

00:00:12 – Glenn

I know she didn’t bring me a coffee today. Your role is barista fail.

00:00:17 – Julie

Maybe I’ll get fired.

00:00:18 – Glenn

But that’s okay. You can only hope. You can only hope. Well, we just had today’s podcast. We had a couple of interesting things happen over the past week. And one of them. Few articles came out and it just kind of corroborated some things that we hear as prospects that come into our our advisory office. And one of them is that 70% of entrepreneurs and small business owners do not have an accountant.

00:00:44 – Julie

I find that very interesting because I didn’t think the world could survive without the ten key.

00:00:48 – Glenn

It is a that is a true statement. We have accounts, love ten keys, and it’s how everything gets done. But I find it odd and it and it basically affirms a lot. When new prospects come in the door, the fact that they try to do a lot of this stuff on their own.

00:01:04 – Julie

Well, I think a lot of people think, well, it’s just the task of entering in this cheque or this number or this transaction. And I mean, I could have my six year old do it kind of type of mentality when in reality it’s a huge, bigger picture than that.

00:01:18 – Glenn

Right there is. I think that’s the part that as an entrepreneur you kind of want to understand or small business owner that there’s really two things you do. You have a compliance piece which is just data entry, and pretty much anybody can do data entry. You can have a bookkeeper, you can have yourself do it. Most people can type in data.

00:01:35 – Julie

The problem really, he’s really making sure everyone understands that I could do that task if if needed.

00:01:40 – Glenn

It’s highly doubtful because you don’t do numbers, but if you had enough training, you possibly could do it. But what it comes down to is that even if you can type in data, are you putting it in the right spot? Is it going to generate a report that’s going to tell you something that’s relevant? And most people do not know how to do that. We see clients books all the time that come on board. They they’re QuickBooks even set up properly.

00:02:05 – Julie

But I think it’s even, you know, take a take it a little deeper than that. It’s you know, as we know that the our team does things like that in those tasks. It’s having the wherewithal to say, whoa, this number doesn’t look correct or, oh, what if we did this instead of this and we have the, you know, enough amount of time to kind of make those pivots inside of, you know, our our year.

00:02:27 – Glenn

Right. The the entrepreneur is generally so busy doing so many things that they think that they can do this too. And then you start thinking, well, wait a minute, if you’re an entrepreneur or a small business owner, why would somebody hire you? To do something when you’re not even willing to hire somebody to do something you shouldn’t be doing. So it’s kind of a nice dichotomy, like how do you even rationalize that? But I think it’s the the what entrepreneurs think accountants do versus what accountants really do.

00:02:57 – Julie

Well. And I think, you know, for us, our firm has changed so much. And I think the industry is going to continue to see this change just with all the regulatory issues coming down and all the compliance. And then not only that, but taking the knowledge and having it being so much wider as to what is needed for those small businesses in order to thrive, in order to even survive, and being able to make good decisions so that your future looks bright.

00:03:24 – Glenn

Literally, if you’re just entering data into a program and then you just enter that in your tax return, that is a function that needs to be done. But if you’re not interpreting that, if you’re not looking at things and trying to find out what our margin really is, are we really profitable in this division? What are we really make a profit at? What are these expenses higher or lower, and am I the right entity type? What’s my tax situation? If you’re just literally throwing data against the wall and then doing a tax return? And as an entrepreneur and you don’t even know if it’s in right category, how can you possibly assess how your business is doing? And that’s like that got to be the number one thing. As an entrepreneur you really need to do is have great financials and great tax advice, so you at least have a baseline of what you’re trying to accomplish. What actually happened?

00:04:06 – Julie

Well, I think you can’t even make any financial decisions without having that, because you truly don’t know where you stand and you’re really unable. You know, we talked in a podcast before about having goals and moving the needle towards those. And if you are simply putting your information in, you know, even quarterly or, you know, semi-annually and you know, a lot of times when we get the clients that he’s speaking about, they’re only doing it annually and they’re doing it after the fact. So they’re not even doing it till January, February, sometimes in March in order to understand how their past year went. And as you can imagine, a whole quarter’s now went by and you kind of missed out on the opportunity as to what you could have maybe pivoted and done differently.

00:04:46 – Glenn

Right when the actual thought of. Measuring what you’re actually doing and putting a context to it to evaluate it. It is it is absolutely crucial as a small business owner to do that. And most entrepreneurs and business owners, they run their business from their checkbook and if they have money, they do something. If they don’t, they don’t well, they forget about employer taxes, they forget about income taxes. They forget about, you know, sales taxes and whatever. And they never really have the money that they think they have that’s sitting in their bank account because it’s already allocated something else that they’re not even aware of. So I think the main takeaway is that if you’re going to be run a business, you have to recognize that you cannot possibly know it all. And if you think you know it all, that’s cool and you’ve got to do what you got to do. But ultimately you need to invest in your advisors and your CPAs and your attorneys and your bankers and all those people to help you do those things. They bring you the advice that you need instead of trying to struggle and figure out on your own. If you can’t get your numbers right, how can you possibly think that anything else is going to be right?

00:05:50 – Julie

Right. And I think something that also comes from that 70% of people that are just out there floundering is, you know, really understanding what is the foundation of that or are they truly maybe terrified to actually know how they’re doing? Do they just not want to know how they’re doing? I think some people kind of tend to just put their head in the sand and keep going, thinking, well, if I have $20 in the bank account, I can keep working this week or whatever the case may be. And I think oftentimes people it’s just a tough conversation to sit and talk about money.

00:06:20 – Glenn

I’m telling you, that is spot on because it’s really both sides that really it’s hey, I don’t I’m scared to know that I might be doing really poorly financially. And that is a terrifying thing. And if you don’t know that or you ignore that and you put your camel, you know, it was under the sand, you don’t even think about it. You’re going to just keep grinding over here and it’s going to be fine. Well, the reality is that’s that’s not the way to do it, because now you’re running out of fear instead of confidence and just knowing. And like any entrepreneur, once you kind of know what your goal is and what your target is, you generally can go get it. So when you don’t know is when you just kind of meander on through the desert. But to your point, the second thing is when you make money, a lot of people that are you have a certain income strata and they hang around certain people that make a certain amount of money and all of a sudden they become very successful financially. They don’t know what to do either because they don’t fit in anymore. They don’t fit in their in their little tribe anymore, or they’re people they hang around with. They’ve got all this money, they’re writing big tax checks. They really don’t know what to do. And it’s like put people at the lottery. They just they can’t handle it. They can’t handle making money. So ultimately, it’s just the education to get them comfortable with. It’s okay to make money. And if you make money, do it with purpose, you’re probably going to lose money at some point in your career. And that’s okay. I mean, you don’t want to, but you at least got to recognize it, own up to it, and then know what changes to make.

00:07:40 – Julie

Right. And I think that’s the biggest difference, you know, between our firms and several other firms, you know, surrounding and in the nation have changed that mindset is we don’t keep all the information to ourselves because that’s not fun, right? Because then you’re unable to make an educated decision. So it’s that transfer of knowledge from our team to the client so that they are able to better understand it. And they don’t they can’t necessarily have their head in the sand because we’re making them pick it up and, you know, put forth a valiant effort in regards to educating themselves for their business.

00:08:11 – Glenn

For I think for a for us, the premise with our clients is to say, look, we’re going to be proactive. And if you don’t want us to be proactive, if you want to just dump your stuff off on April 10th for the whole year, you’re not our client because you’re not going to value what we do. You look at us as just a transaction, and that’s probably how most entrepreneurs and small businesses look at their account. They just they’re just doing this task of a tax return. Well, it doesn’t work that way with us. Like we are working with you all year to monitor and evaluate and coach the whole year what’s going on. So in tax season it comes around. There’s no surprises. We already know. And now you valued that advice.

00:08:50 – Julie

Well, you also take the stress off the table of having to talk about those numbers, right? So if it’s a constant, you know, conversation and, you know, evolution of that conversation, it takes the stress of tax season off, off the table. We had we had a client that, you know, said, oh, my gosh, I used to hate Christmas. I’m like, oh, my gosh, it’s my favorite holiday. Why would you hate Christmas? She hated Christmas because she knew she had to spend X amount of money and then she knew tax season. There was this big unknown of what she would owe in tax season. And it’s it’s funny that trickle down effect of not knowing and being in unchartered territory how it could ruin Christmas for someone. But it’s small business owner, it’s paralyzing.

00:09:31 – Glenn

And remember, if you’re an entrepreneur again, you’re not lying like anybody else out there, but you’re making a choice every day. Are you going to acquire information and be proactive and figure things out and be a great business owner or you’re just going to wander and do your task or whatever it is that career that is a. As an entrepreneur, what is it that you do? If you’re going to be like a dentist, you’re just going to drill and fill teeth, or are you going to run a business? Once you decide that that’s on you, nobody can make you do that. You’re making a conscious decision to ignore your business or to be active in your business. And if you’re going to be active, empower people. Get out of your own way. Bring in the skill set of people to help you. You’re not going to lose money on that deal. You’re going to get value from. It doesn’t matter what it costs.

00:10:16 – Julie

And I feel like there’s going to be a huge weight lifted off your shoulders that maybe you didn’t even know was there.

00:10:20 – Glenn

Can think about this And again, any entrepreneur listening to this that is not doing this I know we’re going to reach your this is resonating with you. You literally spend all year, January through December worrying what’s going to happen. Then you’ve got to start starting in January. Now you’ve got to go find all your information, get it somewhat assembled. That takes you a couple of months, and then you’re going to go hand it off to your accountant and you’re just going to be like, Oh God, what this is going to be? And then you’ve got to wait for the hammer to drop. And the accountant goes, Oh, here’s what you owe, and this is the deal. And I wish you’d have came and saw me back in September because we could have made a bunch of moves to save you 50 grand in tax. And you’re like, Oh my God, no. Don’t delay the inevitable. Get it. Start doing it as you go. Don’t wait till the end of the year at tax time to do those things right.

00:11:11 – Julie

Get out of your own way and set yourself up for success.

00:11:15 – Glenn

I love it. And again, it’s the the industry is changing, obviously, the accounting industry and there’s just a lot to know. You know, people, you know, for instance, want to invest their own stocks or do their own financial planning. They want to do their own dentistry on themselves. They want to do their own home surgery. They want to go do their own accounting. Well, there’s a thing you can do, and then there’s a thing that you can’t do you really shouldn’t be doing and what you think you read on the Internet and what you read in a publication about the new changes that are there. That is literally the tip of the tip of the tip of the iceberg. What accountants and any person in any business, their continuing education requirements and the changes that come into that is unconscionable. What you can’t imagine what you think your account has to know and take that times a million. And that’s every year. New regs come through every single year. How if it counts, literally, I think one of those stats you we read in that article that accounts are struggling to even keep up because there’s just too much to know.

00:12:13 – Julie

I think it was a little over 50% are feeling that the heat from the regulatory coming compliance coming down and not being able to keep up.

00:12:21 – Glenn

Right so if if the account can’t keep them, that’s their job. How are you the entrepreneur think you are in a position to understand and execute on that. I mean, you can try. Good luck.

00:12:33 – Julie

People have time between 2 a.m. and 4 a.m.. I think to read things like the the tax law.

00:12:37 – Glenn

I mean, that’s my favorite time to read about it. So but that’s me.

00:12:42 – Julie

Me too. When I’m sleeping.

00:12:44 – Glenn

Well, that’s if you’re lucky that way. But no entrepreneurism is a is a wonderful thing. And why make it harder when you don’t have to? So yeah, hopefully that’s helpful for our listeners out there. We look forward to our next podcast. I think we’ll be going up again next week, so have a great, great day. And again, empower yourself, get out of your own way. Make the the cause of call to action to make some changes to make. Put yourself in a better position. I’m Glen Harper. Julie Smith. Take care, everybody.

Episode Show Notes

We had a couple of interesting things happen over the past week. A few articles came out and they just kind of corroborated some things that we hear our new clients say when they come into our advisory office.

One of them is that 70% of entrepreneurs and small business owners do not have an accountant.

Most entrepreneurs handle “the books” themselves. But what it comes down to is that even if you can type in data, are you putting it in the right spot? Is it going to generate a report that’s going to tell you something that’s relevant?

If you’re just entering data into a program and then you just enter that in your tax return, of course, that is a function that needs to be done. But if you’re not interpreting that, if you’re not looking at things and trying to find out what our margin really is, say, are you really profitable in this division? What are you really making a profit at? Why are these expenses higher or lower? Are you the right entity type? What’s your tax situation?

This happens if you’re just literally throwing data against the wall and then doing a tax return. And as an entrepreneur and you don’t even know if it’s in the right category, how can you possibly assess how your business is doing?

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