Mastering the Money Part of Your Business
I often say that there are two parts to any business: There is that thing that you love, that got you into your area of business or industry in the first place, and then there is the everything else.
For example, at a florist, the owner and his or her employees obviously have a passion for flowers. But to be successful in that business they must also be proficient at the “everything else” part. Like what? Well,
- Law and taxes
- Marketing and advertising
- Hiring and firing
Unless the florist also learns how to be a businessperson, she won’t be a florist for long.
Apropos of that, it is probably safe to say that accounting and finances may not be the florists’ strong suit; it rarely is for most small business people (unless, of course, they are bookkeepers!) Yet, of all the things a businessperson needs to master, in adding to that first, passionate part of their business, the financial / accounting aspect of business may just be the next most important.
The reason is that, whether you like it or not, getting a basic grasp of accounting is critical to one’s long-term small business success. It is the sign of a mature, growing business when records are properly created and filed, profit and loss statements are regularly updated, and balance sheets are kept current.
One of the best parts of running a business today is that learning what you need to learn is easier and more convenient than ever. Whereas even a generation ago, a florist who needed to learn about accounting would have had to take a class at a community college or find a good book. But today there are online resources that help guide you.
For example, here at Greatland.com, there is an excellent W-2 and 1099 Fact Center. Is there an advantage to filing a W-2 electronically vs. manually? It turns out there is.
Learning important distinctions like that can mean the difference between business success and failure, and that is not just hyperbole. Back when I used to practice law full time, I had not a few clients who got into trouble for missing what they thought were minor things, be it in their accounting or legal matters. But no, they were not little things.
The good news is that if you take advantage of the resources out there and master this “everything else” part of your business, it will, ironically, will free you up to spend more time on that part of your business that you love.