Article by: Jeffrey Skolnick, CPA, M.S. Taxation
You’ve embarked on your career as a small business owner / entrepreneur. You are extremely excited by the products or services you sell or provide. Your self-esteem is high, after all you’re the head honcho. Everything is going well and then it happens. Overwhelm sets in. You had no idea how much paperwork business owners need to deal with. Regulations, how to advertise, handling employees, income taxes, payroll taxes, sales taxes, insurance premiums, record keeping and bookkeeping. In addition to the issues just mentioned, every time you go on the internet you see an advertisement for something that looks like you should have in your business. How can you keep all these things straight and still find time to actually sell your products and services? You start to panic and as I mentioned overwhelm sets in.
I have worked with many business owners in precisely this position. They come to me paralyzed by business management decisions that are taking so much time that their sales have fallen. At this point they may even start thinking about selling new and different products. Some are angry, some are in tears. It’s total chaos! In reality they are just individuals dealing with being overwhelmed.
The first thing I tell them is to step back, take a deep breath and relax. The key to relieving the stress and anxiety of this situation is organization. I know it sounds overly simple but let me explain how this removes the paralysis and begins the process of relieving your stress.
DEFINE YOUR GOALS
The first step you must take is to define your goals. I know you’ve heard this one before. There is a reason why you’ve heard this so often, it’s true. Whether you realize it or not you do set goals. Some individuals may have just a rough idea of why they are in business and what they are trying to accomplish. The most organized individuals will write down their goals. Actually, putting pen to paper (or in today’s world, typing in word), changes your mindset. Some business owners will even use vison boards and a variety of other tactics to cement their goals in place. If that’s you, great, but that may not be for everyone. Whether that is you or not, however, you still need to set some goals. I believe your goals will usually be uncovered by answering a series of questions. Some examples would be:
- Is your business going to be your main source of income or a side hustle?
- How much do you need your business to net and how many hours are you willing to put in to make that happen?
- How soon do you need to reach your goals?
- How do you supplement your cash flow while you are initially building your business (in other words, before you’ve reached your goals)?
DESIGN A PLAN TO ATTAIN YOUR GOALS
Once you clarify your goals, the next step is to formulate a plan that will be your roadmap to success.
You would start by listing every function that must be performed. I’ve already discussed many of the administrative tasks that must be completed. Keep in mind there are others. The administrative tasks I’ve mentioned would be pertinent to any business. Granted your business may not be required to perform all of these tasks but these can pertain to almost any business. You as a business owner also have decisions to make relating to your specific business. These might include pricing (including what your competition is charging and what you can afford to charge) or managing cost of goods sold (examples such as whether you can receive early payment or volume discounts) to name a few.
Once each task is listed you make informed decisions on each one. The key to remember here is how to make informed decisions. You should start by looking at each item on the list and deciding which decisions are best made on your own, and which may require some assistance.
If I start with assessing your insurance needs, I recommend getting a good insurance agent. You want someone with expertise to be able to ask the right questions and make sure you’re protected.
You would hire a great accountant (more on this in a bit).