Your Story Matters

My wife and I were fortunate enough to take a few days in the final stretch of tax season to attend the Inc Magazine GROWCO (Grow Your Company) Conference in Nashville, TN. My preconceived notions of the potential benefits were quickly blown away as we attended the sessions. It was so much more than I expected.

While we listened to the many successful CEOs and energetic business leaders talk about their start-up days, successes, failures, near-bankruptcies, and recoveries, I was enthralled. Not just because some of these folks had only existed in the pages of my favorite business magazines up to that point but because I was struck with the stories. 

You can read any number of articles out there on how important your “story” is to your customers. The way to drive that point home is to listen to someone’s story and feel this twinge in your gut because you remember how it felt to be there. 

You can remember exactly how it felt to get that first paying customer;

You can remember the fear of opening bills you had no money to pay;

You can taste the first bottle of champagne you bought to celebrate a major victory;

You can feel the handshake from the customer that thanked you for advising them against making a huge mistake.

I love telling our stories, and I thanked every attendee at GROWCO who chose to share theirs with us. I could see the evidence that stories matter.  They matter to those who lived through them and they offer hope for those who haven’t yet reached your plateau. They show a human side to what can seem like superhuman success. They form this common bond in arenas where no other discernible bond exists. They give us built-in empathy, and who doesn't benefit from our relating to them at such a visceral level? The story is the ONE thing we all have.

Great people have said that customers don’t buy what we do until they buy why we do it. We all win when we share our stories. 

Kind Words, Bees, Honey, and All That Stuff

“Wise sayings often fall on barren ground, but a kind word is never thrown away.” 

-Arthur Helps

As entrepreneurs know all too well, it’s easy to become isolated.  We can become isolated in our thoughts, our work, our actions, and certainly our words.  We sit in our offices some days and forget to drink water or eat healthily; we become so “head-down” on some days that no one sees anything of us except the top of our head; and sometimes we simply forget to be kind to those whose paths we cross. It's not personal, we are just stuck in our own head. Since we are so isolated, not only do we forget to speak kind words, we also don’t hear them either.

This plays havoc with your mind.  One day, you look up and say “This sort of sucks.”
I had this happen to me this weekend.  My CPA firm is, of course, heavily involved in completing tax returns (it’s 2/23/15 as I write this). It is the noisy, do-it-now, emergency that is our first quarter. Everyone needs something done at the exact same time. We are all on real and perceived deadlines; busily rushing to the next thing on our to-do list. I know that if I am feeling this way, then so is someone else. It's at this point I walk away from what I am doing and intentionally shift my focus.

Compliment a vendor/customer that you know is in the same boat as the rest of us.  
We work with many small companies, and I find that when I feel isolated, it’s best to reach out to one of those entrepreneurs and remind them that they are not being ignored.  A phone call, a thank-you note (yes, those are still around, and they don’t involve the hated e-mail), or even a visit in person would do great things for her and also for you.

Light up social media with something nice.  
We have a Facebook page and we also have a Twitter account.  Nothing makes me smile more than someone sharing a good experience they’ve had with us or just saying something complimentary on those social media sites. 

Send an inexpensive gift card, just to say hi and thank you. 
Little things matter.  Every now and then, we receive a gift card from someone to whom we have referred a prospect.  I can’t tell you how much joy I get when I use my $5 coffee shop gift card that was sent to me by a satisfied colleague.  I LOVE IT!  So, you can spend $5 and make someone’s day.  How much easier could it get?

We all need to hear compliments and positive commentary.  I don’t care who you are.  Entrepreneurs spend so much time thinking….our brains are always churning.  Many days we perform what feels like thankless work.  Trust me when I say you aren’t the only one feeling this way, so why not send out some good karma in the form of a compliment or a thoughtful, inexpensive thank-you?  Do it, right now.

“If You’re Ever in an Accident, How Will I Buy Stamps?”

When Meghan and I decided to embark on the adventure of working together as well as being married, she quickly learned what I had known for a long time….my CPA firm had NO documented processes.  I had utilized a number of different individuals in the position of Office Manager, and we had no fewer than three different lists purporting to contain our clients’ contact info.  Not one of them was complete, however.  This quickly grew to become a problem.

Over the past (nearly) four years, Meghan has compiled a detailed and powerful master binder of everything that she does to run my firm like a well-oiled machine.  There are screen shots, Word documents, receipts, samples, and spreadsheets.  Nothing is missing.  I put this binder to the test recently when she was traveling and I needed to print a stamp for mailing a large package.  My initial thought was “Wait, Meghan isn't here and I didn't ask her how to print postage before she left. I guess I’ll have to call her.”  But I remembered the binder, and sure enough, there was a tab for “Postage.”  I was going to be OK!

This sounds a bit foolish, but think of the things that happen inside a business that owners take for granted.  In the very beginning, the owners are in charge of these things.  In fact, they create the very first processes.  But, if those processes aren't communicated to the very first person hired to take over, new processes will emerge.  The owner now has no clue how to print postage, or prepare invoices, or when the copier lease ends and auto-renews.

Here are three reasons why documenting your business’ processes is vital:

1.     You are reminded of what you do and why you do it.  It’s amazing how many of our processes were antiquated and useless to us.  I had told Meghan how I used to do things, and for a time, she did them that way.  But, she quickly figured out that I hadn't revamped any processes since the Bush-Kerry election.  Now our processes fit the business we have become over the past 14 years.

2.   You eliminate redundancy and inefficiencies.  Nothing is more frustrating than looking through three contact lists and not finding the email address for your long-time client who needs to receive a tax organizer.  That’s what we kept running into.  I had all the contacts in my Outlook Contact List at the time, but I wasn't the only person emailing clients anymore.  Meghan researched and found a fantastic web-based CRM (Customer Relationship Manager) and now everyone has access to contact information for all our clients.

3.     You create something of value for a buyer. Service businesses like ours are difficult to sell.  You basically sell the hope that your clients remain with a buyer.  Buyers like a sure thing, and CPA firms don’t generally offer that.  But, if you create processes for everything you do, document them, and rely on them to produce predictable, successful results, you've created something of value to a buyer.  Would you rather buy a client, or the way that we managed to build a firm of 400 clients?

Entrepreneurs have enough to do without worrying about how to print a stamp or replace the toner.  In my first month of business, I would have loved to change the toner because I had time on my hands.  These days, I don’t even know where the toner is.  But I bet I know where to find out.  Trust me when I say that building a resource containing your documented business processes will take time, but it will be of great value to you as you grow.  Do it now, instead of changing that toner again.

Lip Balm Will Not Save You

I once worked with a new business owner who started her own hair salon.  She had been in the industry for more than 20 years and felt ready to leap out on her own.  This sounds like a great story so far…frustrated technician is ready to begin running her own business and do what she loves.  Right?

Here were the problems:

•  She had signed a non-compete with her former employer, and she had to move more than 5 miles outside the radius of her previous location.
•  She couldn't, of course, gain access to her client list.  So, she couldn't call them to tell them where she was.
•  Before my client had even vacated her rental chair, her soon-to-be former employer was calling her clients and telling them their stylist had quit and had left no forwarding address.  All they had to do was come in, and someone else could start working with them.

It took weeks for even her most loyal former clients to find her in the new location.  Her expected revenue took a big hit, and she had little to no advertising budget.  She was a frustrated technician.  She had no experience in running a business.

When I met her, things were at the point of no return.  She was done, and out of business, only she didn't know it yet. In one conversation, we were discussing these troubles, and she said, “Maybe we should get one of those Burt’s Bees displays and start selling lip balm. Surely that will drive up sales.”  These were not the words of an expert business-builder or marketer.  These were the words of a demoralized, exhausted, scared technician who finally realized that she didn't know what she was doing.  How had she gotten here?  All she wanted to do was cut hair and make her clients feel beautiful.

When a business owner is in this position, it’s very easy to make mistakes.  Throwing a Hail-Mary works in movies, but seldom do you connect with your intended receiver in real-life.  My client’s problem was that she didn't know how to move retail.  She didn't have enough traffic, nor did she know how to increase it.  But, she also didn't have enough money to hire someone full-time to assist her, and she didn't have enough time to do it all herself. Her chair might have not been full, but she still had to be there every day to answer the phone. She had to make sure there was color and product for the clients she did have. She had to pay the utilities. She had to learn a new scheduling software. The laundry did not do itself. The landscaping and the sign needed to be maintained. And even though she wasn't making much money she now had to worry about sales tax, business returns, property tax returns and who needed a 1099.

This is the dreaded catch-22 some business owners find themselves in.  The sad thing is that she had no one to turn to before the trouble started, to mentor her and offer some advice on how to start things on the right foot.  She felt helpless now and like a failure.  She lost her building, she filed for bankruptcy, and then had to start over again.

How do you know if you’re in trouble?

•  Have you taken out a mortgage to help fund your business, over and above the mortgage you owe on your house?
•  Do you think that “one big insert event here” will help you turn things around?
•   Are all of your credit cards maxed out?  Have you considered debt consolidation so you can get another one?
•  Have you offered up junky self-prepared financials to someone interested in buying your business, only to hear them say no?

This is a true story for far too many people. Owning a business is high stakes game for the business owner. They have everything to gain, but they also have everything to lose. I still wonder how things might have gone differently for her if she had someone that could have helped her locate the landmines before something catastrophic happened. A person who would have helped bridge that gap between the theory of owning a business and the reality of running one. 

I really wish that in this case it had been as easy as selling lip balm.  

"My Spouse Will Just Do My Accounting."

Wow, if only I had a nickel for every time I've heard that one.  You know who’s never in the room when a business owner makes that comment? The spouse.

I am about to give you a cheat-sheet that will guide you through this terrible idea, in the hopes that your decision will change when you’re done.

•      Question 1 – "Spouse, is this something that you want to do?" Please record the answer to this question on your handy, dandy iPhone thingy.  I want to hear the response.
•       Question 2 – "Spouse, how long will you be willing to help me to do this?"  If the first answer is anything other than “as long as it takes you to find a CPA,” I will buy you a steak dinner.
•       Question 3 – "Spouse, when did you last study accounting?"  This can go two ways.  Either the spouse replies “Never.”  Or “I cannot remember what happened last week…you want me to recall what happened 10 years ago in college?”  Either way, you have detected a problem with your spouse’s level of accounting expertise.  Houston, we have a problem.
•      Question 4 – "Spouse, when will you have time to do this for me?"  Whoa, you need to take a step back….right now.

I get it.  When you have 3 nickels in your business checking account, it makes perfect sense to think long and hard about hiring someone to help with your accounting needs.  It’s ironic that this is also the time that you need someone the most, isn't it?

How your hard-earned money is accounted for affects more than your bank account.  Accounting records are used for preparing tax returns, applying for business loans, and enticing investors to help you out.  If that information isn't classified properly, then you could cause yourself some serious heartache. 

•  For instance, when recording money that you have deposited into your company bank account, do you classify it as capital or a loan?  Do you know the difference?
• Do you know the proper way to record the purchase of a new piece of equipment, like a company car or leased office furniture?  How about that land you purchased, on which your new building is about to sit?
• Do you have the proper tax identification numbers?  Did you know that you can’t start processing payroll until you have them, nor can you open a bank account until you can prove to your bank that the business is legitimate?

Fast-forward two years. Assume you’re still married and that your spouse is still doing the accounting for your business

• Do you know how to respond to that latest tax notice from IRS?  They’re expecting a response in 30 days, and it’s day 28.
• Are you ready for the worker’s compensation insurance audit next week?  Do you have all those payroll reports printed, along with copies if your last four quarterly payroll tax reports?
• Do you know who is supposed to receive a 1099 at the end of the year?

Shoving something you don’t have time to do onto someone who doesn't have the expertise can cause some tense moments at your office, and at your house.  Trust me.  But, if your spouse is willing to continue to help you, it could only help matters to have a professional who can serve as a resource to him/her.  You started this business to enhance your life, not fast-track your ride to divorce court.  But if you take for granted that accounting is “no biggie” and your spouse “can just handle it”, you may be in for a bumpy road.

"Do-Everything" Could Mean "Forgets Some Things"

Sometimes, when you are a “do-everything” entrepreneur, you forget things.  You leave your cell phone at Starbucks; you leave your iPad in the car and it slides underneath the seat, and you find it three days later after tearing apart your home; you forget one of the 3,267 passwords you have for websites you access, and it happens to be the most important one.

On the scale of seriousness, forgetting to file a tax return is at about a 7 (with 10 being what we call a "tax-evader"). 

For business owners, it’s like flossing.  You hate doing it, so therefore you push it to the back of your mind.  It wasn’t intentional, but IRS and SC sometimes don’t care whether you meant to do it or not.  You didn’t file the return, it’s late, and you owe penalties and interest and the fatted calf.  Like Stanley, who owned a construction company and didn’t file a corporate or personal tax return for 4 years.  His corporation was dissolved by the state of SC; he paid nearly $6,000 in penalties for late filing and late payment of taxes; and his poor wife was about to pull all of her hair out.  We helped reinstate his business and get caught up, but the cost for all of this in time, worry and cash was completely avoidable.

We chose to establish Start-Up School to help entrepreneurs understand as many facets of running a new business as our time will allow.  One of those topics covers how the IRS and state agencies can be persnickety when it comes to filing tax returns accurately and on-time.  We seek to arm you with as much information as possible....think of us over the 10-week period as your concierge in the hotel of entrepreneurship.

How is a Business Partnership Like a Marriage?

Partnerships are complicated….sort of like marriages.  You've heard of pre-marital counseling?  I think that every entrepreneur needs to discuss adding partners with someone else who’s also done it….like me.

I have discussed the issues that surround partnerships with many of my entrepreneur clients, as my experience draws both from having a partner of my own for a while and from years of advising clients.  The potential questions that arise often pertain to tax and accounting, since those are the obvious ones.  But what about the touchy-feely questions, like whether or not you actually LIKE the person with whom you are about to share profits and business; what about whether your strengths compliment each other?  Are you risk-averse and prone to hives when things don't exactly go your way, while your partner takes risk believing that "no risk equals no reward"? Not every business question needs to have a dollar sign in front or behind it.

My partner experience ended badly.  Bad experiences fuel great cautionary tales, which is one of many reasons why we established Start-Up School.
Plus, a business partnership cautionary tale is a lot less painful when it has happened to someone else.