I’ve read a bunch of books about how to run a successful small business. So far, none of them ever come out and tell you what to avoid and why or what to do to avoid what you should avoid to succeed. So, here you go. Wildly increasing your chances of success in running your small business is a 2 step process:1. NEVER go into debt
2. ALWAYS pay your taxes--We’ve all heard that dooming statistic that 90% of small businesses fail within the first 5 years and 80% of that remaining 10% fail within the first 10 years.Would you like to know why?There are 2 reasons why this statistic rings true today.
1. Folks go into huge personal debt to start their business.
2. Folks don’t hold back a third of every dollar they earn.Let’s take a moment and talk about these reasons.1. Folks go into huge personal debt to start their business.You’ve got a great idea, you’ve acquired a needed skill set, you’ve found a way to solve someone’s problem that they, for some reason or another, can not solve for themselves. You, Sir or Madam, have a business. If you go by what your friends do or what your parents did or told you or what you read on a blog somewhere written by someone who is selling you on some sort of “easy business system” that will make you millions, you just might lose your shirt.If however, you look, move, act, operate, buy, sell, create, help and serve totally different than what the culture is telling you, you’ll win. Okay, what is that supposed to mean? I’m glad you asked.The failure statistic you read earlier is based off of business that follow the cultural wisdom of the time. The only problem with that is the “cultural wisdom of the time” has been sold to you by large banks and credit card companies.Not ME!
Yes, you. They have done their job so well in the past four decades that they have totally ingrained the lie in your head that you can’t succeed in business without going into huge personal debt. But, it’s not personal debt, it’s business debt.
Come on, did you sign your name for it? Then it’s PERSONAL debt. That’s right, business debt IS personal debt. If you don’t believe me ask one of the thousands of home builders that lost their shirt in the housing market burst of late 2008 or anyone who invested a bunch of money in internet companies in 1999. They are all now personally responsible for every dime of “business debt” they acquired chasing after something that failed. The lesson here is that storms will come and only the prepared will survive and thrive.So, what do you do?
First, you recognize and accept the fact that debt is poison to your life and your business. Then, you move forward slowly and with cash no matter how much you get laughed at by your broke friends. Getting laughed at by broke friends is like losing weight and being laughed at by big fat people. If you want to be skinny, don’t eat the food and do the things that your fat friends eat. Eat the food and do the things that skinny people do. It’s not rocket science but it is more difficult to do.If you don’t have the money for it, you can’t buy it. Weird I know. You’d be amazed at how many grown children whine and cry to get their way and end up totally wreaking there families’ finances. Not to mention running their business/means of income into the hard and enlightening ground of truth.But I need big heavy expensive equipment to run my business and don’t have the money to buy it right now.
Buy used equipment or rent the equipment you need all while saving money to fully purchase it later, or purchase it used later. When you actually have the money, you can buy it. Not having the cash right now does not mean you’ll never have it. It means you’ll have to use your brain and find another way to get the job done.Imagine with me, if you will, that bank loans and credit cards don’t exist. How would you do what you need to do to get your business up an running? You’d be forced to use your brain to think, plan and devise another way to do it. So, because it’s up to you anyway, think, plan and devise another way to do what you need to do without debt. Doing so will shoot you light years ahead of your competition and protect you from the unpredictable and inevitable storm that’s sure to come.--2. Folks don’t hold back a third of every dollar they earn.You, Sir or Madam, live in the greatest country the world has ever seen. God has blessed this nation beyond belief and has given you the freedom to openly pursue your passion for serving others. For that freedom, your country asks an ever rising and frustrating price. Weather you like it or not, YOU MUST PAY YOUR TAXES.The second biggest crasher of small businesses is not paying taxes. Taxes are very confusing and complicated. The IRS, basically, has unlimited power to come stomp you and your businesses into the ground if you don’t play by their rules. If you don’t like it, educate yourself and vote. There are whole professions centered around helping you with your taxes and it never ceases to amaze me how folks totally ignore them until it’s too late. The fact is, paying your taxes is part of running a successful business. If you want to run a successful business, you must do as successful businesses do and pay the proper amount of taxes. The simplest and best way I’ve found is to put 33% of ever dollar I earn into a separate business savings account and never touch it until my CPA tells me to in April.I do this because I need to give myself boundaries with money because I like to spend it. It feels great to spend the money I earn; but if I spend too much of it, I’m sunk. So, by placing it in a separate business savings account at a bank across town, I make it more difficult to get to which is a good thing because IT DOES NOT BELONG TO ME. It belongs to Uncle Sam, for now.What do you mean “for now?”
Well, that’s the beautiful part. Taxes are confusing and easy to screw up with huge dangers and consequences if I do happen to screw it up. Because I am better at serving folks than I’ll ever be a math and accounting, I hire professional help. This is the part where I am going to absolutely gush over the services of an intelligent, qualified small business CPA.If you don’t know (and that’s totally okay if you don’t because I had to learn too), CPA stands for Certified Public Accountant. These folks love, love, perversely love numbers. They love crunching them, playing with them, making them do extraordinary things, and making them work really hard to benefit you and your business.They also, and this is the kicker, know how to get you the biggest and best tax deductions so you can keep more of the money you’ve worked really hard to earn by helping folks. They can take a look at that business check register (that you’ve been extremely diligent and self-disciplined in keeping) and advise you on how to do business better, faster and at a higher profit all while paying as little as possible to Uncle Sam. CPAs have gone to school for a long time and taken really hard tests to be able to server you in this way. It’s foolish and egotistic to think you know something they don’t when it comes to accounting and taxes (two of the most confusing and boring subjects on the planet). Another thing, their services are a tax deduction! How great is that?!Your CPA will take a look at all your books, calculate how much you owe Uncle Sam, total up your expenses, research and find all applicable business deductions, deduct those things from the money you’ve saved all year and give you a running total of how much you owe for both your state and federal taxes. If you or your CPA screws up and the IRS audits you, your CPA has the ability to represent you in court - if it should ever come to that. All of this is built into the cost of their services and barely scratches the surface of what a good CPA can do for you and your business. They love helping businesses to succeed and are a wellspring of knowledge and advice to help you steer your financial ship toward prosperous waters.After you pay your taxes, the money that’s left over in your business savings account is yours to keep to smooth out the hills and valleys of the upcoming business year! It becomes your business emergency fund, or what they like to call “retained earnings.”If you run a small business, it’s just plain smart to hire the services of a CPA. Why? Because all successful businesses do. That’s one of the reasons they became successful businesses. CPAs are worth far more than their weight in gold. To find the absolute best CPA in your area who will teach you and won’t rip you off, go here: http://www.daveramsey.com/elp/tax-services/--Never mix business and personal expenses (bonus business killer).What a weird thing to call a “bonus.”If you mix your personal and business finances, you’ll create what is technically known as a GFFM (giant freakin’ financial mess).So, open a free business checking and savings account at a separate bank all the way across town. Have one personal debit card from your local community bank or credit union and one business debit card from your business bank.Use only the business debit card for business purchases/expenses. Both have all the protection of a credit card without letting you go into debt, which is aforementioned poison to your life/business.Keeping these two things separate makes your CPA (that you’re paying money to) very happy and will result in you paying less for his or her services. It will also add an incredible amount of much needed clarity to both your business and personal life.Another principal to note is that the business feeds the home, not the other way around. If your business is not making money, it’s not a business, it’s a hobby. Time to get a job working for someone else or time to go nuts and book more work so your business becomes profitable again.Work at telling yourself “NO.” The better you’re able to delay the pleasure of the purchase, the greater and faster your business will prosper. It’s easy to do and hard to implement: If you don’t have the money, you can’t have it yet.--The truth is, if you can successfully operate a checkbook, you can successfully operate the finances of your small business. Of course, the larger your business grows the more complicated running that checkbook might get, but that’s another ebook.The following is an example of how to do it. It’s just an example, so if you don’t like it or don’t agree with it, do something else. But please, do something to keep your business dreams from becoming a nightmare.This example assumes that you are either Jewish or a Christian and that you are debt free except for the mortgage with a fully funded emergency fund of 3 to 6 months of expenses in the bank and that you have a written budget that you follow at the beginning of each month:• Put 33% of every dollar you earn into a separate savings account and never ever touch it until your CPA tells you to in April.• Keep a receipt for everything you buy for your business and put it in an envelope marked with the month in which you made a business purchase. Keep in mind that whatever you buy to use in or for your business is a tax deduction.• Write one paycheck to yourself at the end of the month after all business expenses have been paid from your business checking account. i.e. $1000 comes in:
• $333 get put into business savings AND NEVER GETS TOUCHED• You pay your business expenses out of the reaming $667 (let’s say they total $300)• At month’s end you write one check to yourself from the business checking account for $367• Once that $367 is in your personal account you tithe 10%, save 15%, pay for food, mortgage, utilities and insurance, etc.If you wish to tithe before you separate out taxes and expenses that’s totally up to you. I prefer to only work with the money that’s in my hand to work with.--To sum up:• ALWAYS avoid debt at all cost.• ALWAYS pay your taxes by setting aside 33% of every dollar you earn.• SEPARATE your business and personal accounts.• The business feeds the home, NEVER the other way around.• Work like it all depends on you (because it does), pray like it all depends on God (because it totally does).• Business is like tennis, those who serve well win.• If you do not have integrity you will fail, and you should.• Tell yourself “NO” so you’re able to tell yourself “yes” later.• Discipline turns into Self-discipline.• Failure toward a goal is called progress.• Forward failure is part of the process.• Move through fear by colliding with challenges, never run, never retreat.• Embrace and respond to change, it is always happening whether you like it or not. If you refuse to change, or are constantly reacting to it, your business will die, and it should.• Old folks are old. Old rich folks are smart, ask them questions.• If there is no trail, make one. Bridge the gap and write the manual.• It’s up to you. You’re the problem, but you’re also the solution.• Do as Winston Churchill said, “Never, never, never, never give up.”Thank you for taking the time to read this through. It’s been my extreme pleasure to write these thoughts and ideas down for you to read. If this information has helped you in any way shape or form, please look around and find someone else who could use it. Doing so will benefit you and your business.It’s my sincere hope that you take this wisdom and run with it. If at any point in your career you have questions about planning, researching, gaining clarity about a decision, organizing and/or wondering what to do next, please don't hesitate to contact me.Clint Walkingstick
clint@eyesaydesign.com
405 627 1193
2. ALWAYS pay your taxes--We’ve all heard that dooming statistic that 90% of small businesses fail within the first 5 years and 80% of that remaining 10% fail within the first 10 years.Would you like to know why?There are 2 reasons why this statistic rings true today.
1. Folks go into huge personal debt to start their business.
2. Folks don’t hold back a third of every dollar they earn.Let’s take a moment and talk about these reasons.1. Folks go into huge personal debt to start their business.You’ve got a great idea, you’ve acquired a needed skill set, you’ve found a way to solve someone’s problem that they, for some reason or another, can not solve for themselves. You, Sir or Madam, have a business. If you go by what your friends do or what your parents did or told you or what you read on a blog somewhere written by someone who is selling you on some sort of “easy business system” that will make you millions, you just might lose your shirt.If however, you look, move, act, operate, buy, sell, create, help and serve totally different than what the culture is telling you, you’ll win. Okay, what is that supposed to mean? I’m glad you asked.The failure statistic you read earlier is based off of business that follow the cultural wisdom of the time. The only problem with that is the “cultural wisdom of the time” has been sold to you by large banks and credit card companies.Not ME!
Yes, you. They have done their job so well in the past four decades that they have totally ingrained the lie in your head that you can’t succeed in business without going into huge personal debt. But, it’s not personal debt, it’s business debt.
Come on, did you sign your name for it? Then it’s PERSONAL debt. That’s right, business debt IS personal debt. If you don’t believe me ask one of the thousands of home builders that lost their shirt in the housing market burst of late 2008 or anyone who invested a bunch of money in internet companies in 1999. They are all now personally responsible for every dime of “business debt” they acquired chasing after something that failed. The lesson here is that storms will come and only the prepared will survive and thrive.So, what do you do?
First, you recognize and accept the fact that debt is poison to your life and your business. Then, you move forward slowly and with cash no matter how much you get laughed at by your broke friends. Getting laughed at by broke friends is like losing weight and being laughed at by big fat people. If you want to be skinny, don’t eat the food and do the things that your fat friends eat. Eat the food and do the things that skinny people do. It’s not rocket science but it is more difficult to do.If you don’t have the money for it, you can’t buy it. Weird I know. You’d be amazed at how many grown children whine and cry to get their way and end up totally wreaking there families’ finances. Not to mention running their business/means of income into the hard and enlightening ground of truth.But I need big heavy expensive equipment to run my business and don’t have the money to buy it right now.
Buy used equipment or rent the equipment you need all while saving money to fully purchase it later, or purchase it used later. When you actually have the money, you can buy it. Not having the cash right now does not mean you’ll never have it. It means you’ll have to use your brain and find another way to get the job done.Imagine with me, if you will, that bank loans and credit cards don’t exist. How would you do what you need to do to get your business up an running? You’d be forced to use your brain to think, plan and devise another way to do it. So, because it’s up to you anyway, think, plan and devise another way to do what you need to do without debt. Doing so will shoot you light years ahead of your competition and protect you from the unpredictable and inevitable storm that’s sure to come.--2. Folks don’t hold back a third of every dollar they earn.You, Sir or Madam, live in the greatest country the world has ever seen. God has blessed this nation beyond belief and has given you the freedom to openly pursue your passion for serving others. For that freedom, your country asks an ever rising and frustrating price. Weather you like it or not, YOU MUST PAY YOUR TAXES.The second biggest crasher of small businesses is not paying taxes. Taxes are very confusing and complicated. The IRS, basically, has unlimited power to come stomp you and your businesses into the ground if you don’t play by their rules. If you don’t like it, educate yourself and vote. There are whole professions centered around helping you with your taxes and it never ceases to amaze me how folks totally ignore them until it’s too late. The fact is, paying your taxes is part of running a successful business. If you want to run a successful business, you must do as successful businesses do and pay the proper amount of taxes. The simplest and best way I’ve found is to put 33% of ever dollar I earn into a separate business savings account and never touch it until my CPA tells me to in April.I do this because I need to give myself boundaries with money because I like to spend it. It feels great to spend the money I earn; but if I spend too much of it, I’m sunk. So, by placing it in a separate business savings account at a bank across town, I make it more difficult to get to which is a good thing because IT DOES NOT BELONG TO ME. It belongs to Uncle Sam, for now.What do you mean “for now?”
Well, that’s the beautiful part. Taxes are confusing and easy to screw up with huge dangers and consequences if I do happen to screw it up. Because I am better at serving folks than I’ll ever be a math and accounting, I hire professional help. This is the part where I am going to absolutely gush over the services of an intelligent, qualified small business CPA.If you don’t know (and that’s totally okay if you don’t because I had to learn too), CPA stands for Certified Public Accountant. These folks love, love, perversely love numbers. They love crunching them, playing with them, making them do extraordinary things, and making them work really hard to benefit you and your business.They also, and this is the kicker, know how to get you the biggest and best tax deductions so you can keep more of the money you’ve worked really hard to earn by helping folks. They can take a look at that business check register (that you’ve been extremely diligent and self-disciplined in keeping) and advise you on how to do business better, faster and at a higher profit all while paying as little as possible to Uncle Sam. CPAs have gone to school for a long time and taken really hard tests to be able to server you in this way. It’s foolish and egotistic to think you know something they don’t when it comes to accounting and taxes (two of the most confusing and boring subjects on the planet). Another thing, their services are a tax deduction! How great is that?!Your CPA will take a look at all your books, calculate how much you owe Uncle Sam, total up your expenses, research and find all applicable business deductions, deduct those things from the money you’ve saved all year and give you a running total of how much you owe for both your state and federal taxes. If you or your CPA screws up and the IRS audits you, your CPA has the ability to represent you in court - if it should ever come to that. All of this is built into the cost of their services and barely scratches the surface of what a good CPA can do for you and your business. They love helping businesses to succeed and are a wellspring of knowledge and advice to help you steer your financial ship toward prosperous waters.After you pay your taxes, the money that’s left over in your business savings account is yours to keep to smooth out the hills and valleys of the upcoming business year! It becomes your business emergency fund, or what they like to call “retained earnings.”If you run a small business, it’s just plain smart to hire the services of a CPA. Why? Because all successful businesses do. That’s one of the reasons they became successful businesses. CPAs are worth far more than their weight in gold. To find the absolute best CPA in your area who will teach you and won’t rip you off, go here: http://www.daveramsey.com/elp/tax-services/--Never mix business and personal expenses (bonus business killer).What a weird thing to call a “bonus.”If you mix your personal and business finances, you’ll create what is technically known as a GFFM (giant freakin’ financial mess).So, open a free business checking and savings account at a separate bank all the way across town. Have one personal debit card from your local community bank or credit union and one business debit card from your business bank.Use only the business debit card for business purchases/expenses. Both have all the protection of a credit card without letting you go into debt, which is aforementioned poison to your life/business.Keeping these two things separate makes your CPA (that you’re paying money to) very happy and will result in you paying less for his or her services. It will also add an incredible amount of much needed clarity to both your business and personal life.Another principal to note is that the business feeds the home, not the other way around. If your business is not making money, it’s not a business, it’s a hobby. Time to get a job working for someone else or time to go nuts and book more work so your business becomes profitable again.Work at telling yourself “NO.” The better you’re able to delay the pleasure of the purchase, the greater and faster your business will prosper. It’s easy to do and hard to implement: If you don’t have the money, you can’t have it yet.--The truth is, if you can successfully operate a checkbook, you can successfully operate the finances of your small business. Of course, the larger your business grows the more complicated running that checkbook might get, but that’s another ebook.The following is an example of how to do it. It’s just an example, so if you don’t like it or don’t agree with it, do something else. But please, do something to keep your business dreams from becoming a nightmare.This example assumes that you are either Jewish or a Christian and that you are debt free except for the mortgage with a fully funded emergency fund of 3 to 6 months of expenses in the bank and that you have a written budget that you follow at the beginning of each month:• Put 33% of every dollar you earn into a separate savings account and never ever touch it until your CPA tells you to in April.• Keep a receipt for everything you buy for your business and put it in an envelope marked with the month in which you made a business purchase. Keep in mind that whatever you buy to use in or for your business is a tax deduction.• Write one paycheck to yourself at the end of the month after all business expenses have been paid from your business checking account. i.e. $1000 comes in:
• $333 get put into business savings AND NEVER GETS TOUCHED• You pay your business expenses out of the reaming $667 (let’s say they total $300)• At month’s end you write one check to yourself from the business checking account for $367• Once that $367 is in your personal account you tithe 10%, save 15%, pay for food, mortgage, utilities and insurance, etc.If you wish to tithe before you separate out taxes and expenses that’s totally up to you. I prefer to only work with the money that’s in my hand to work with.--To sum up:• ALWAYS avoid debt at all cost.• ALWAYS pay your taxes by setting aside 33% of every dollar you earn.• SEPARATE your business and personal accounts.• The business feeds the home, NEVER the other way around.• Work like it all depends on you (because it does), pray like it all depends on God (because it totally does).• Business is like tennis, those who serve well win.• If you do not have integrity you will fail, and you should.• Tell yourself “NO” so you’re able to tell yourself “yes” later.• Discipline turns into Self-discipline.• Failure toward a goal is called progress.• Forward failure is part of the process.• Move through fear by colliding with challenges, never run, never retreat.• Embrace and respond to change, it is always happening whether you like it or not. If you refuse to change, or are constantly reacting to it, your business will die, and it should.• Old folks are old. Old rich folks are smart, ask them questions.• If there is no trail, make one. Bridge the gap and write the manual.• It’s up to you. You’re the problem, but you’re also the solution.• Do as Winston Churchill said, “Never, never, never, never give up.”Thank you for taking the time to read this through. It’s been my extreme pleasure to write these thoughts and ideas down for you to read. If this information has helped you in any way shape or form, please look around and find someone else who could use it. Doing so will benefit you and your business.It’s my sincere hope that you take this wisdom and run with it. If at any point in your career you have questions about planning, researching, gaining clarity about a decision, organizing and/or wondering what to do next, please don't hesitate to contact me.Clint Walkingstick
clint@eyesaydesign.com
405 627 1193
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