We’re at the midpoint of 2024 already, and if you’re looking forward to the second half of the year ahead, wondering how to better navigate your finances, or gain a better understanding of how your business runs, and what it’s going to take to make your life easier a the end of the year, you’re in the right place! But my guidance may surprise you, because it centers around holding yourself accountable and developing your financial awareness in your business.
Now you may be thinking, “Yes, but that’s why I hire professionals for this.” Well, you are absolutely right. There’s a myriad of financial professionals and good reasons to hire people that are experts to help you make decisions in your business. The problem lies when you get advice from financial professionals, yet you may not have any idea how to implement that advice, or whether or not it’s what you want to see come to fruition in your business. No matter how good a professional is at their job, they are never going to be able to make those decisions for you, and replace your judgment about your own company. YOU are the owner and it’s YOUR business to shape as you desire.
As a business owner, you had a vision when you started your company for what you wanted to see happen. If you don’t know how to accurately describe your vision to a financial professional you hire, that person isn’t going to be able to maximize their knowledge to help you and to help you reach your end goal. Because as much as we, as the financial professionals, want to be able to help you, we need vital information from you to be able to do so.
What Every Business Owner MUST Know
There are two things that a business owner MUST grasp to meaningfully participate in their business decisions:
Basic knowledge of their business structure. (This is paramount!)
What questions to ask. (Don’t be shy - ask, ask, and ask some more!)
For example, you must be aware of what type of company you are. There are many different business entities and each one is very different from one another. When you set up your company, you might do so with the help of an attorney, who can explain in detail the benefits of what they’re recommending and why. If they set you up without explaining why, then you need to ask ‘what is the benefit of this entity choice, and are there any challenges or important factors I need to be aware of?’ Take notes and keep these important documents saved somewhere that’s easily accessible, because most business professionals that you work with will need to have copies of these documents.
If you choose to do things yourself, without the help of an attorney, do your research and don’t just pick what you’ve heard through the grapevine is a good choice. Starting a business is a lot of work and research, and you shouldn’t just rely on armchair advice to set it up. Use the state and IRS resources that are readily available if you’re not working with some type of professional in the beginning.
Hold Yourself Accountable for How Your Business Works
This is where some of you are going to feel uncomfortable, but it’s vital for you to hear it: You have to know how basic things work with your business and can’t only rely on a financial professional.
The alternative? You won’t know how to critically consider the advice you get and it will consistently frustrate you. Advice is only helpful within the context of understanding.
To have a positive working relationship with any business professional you work with, you must have a basic understanding of your business structure and what is required of you by the IRS and the state. For example, you must understand when the deadlines for your tax filings are. You hire a tax accountant to give you advice around those filings, and to prepare them for you, but unless you understand when your taxes are due, and the related requirements, you are going to feel confused and behind if they’re constantly a surprise to you each year.
So you may be thinking, how do I figure this stuff out if it’s not something I already know? If you have a good professional working with you, they are more than happy to help you understand these things. Most times, financial professionals don’t want to assume you don’t know something, because they don’t want to insult you. So it’s up to you to say, ‘hey, I’m not sure what’s happening with all of this, can you please explain it so that I know how to move forward?’ and they’ll be happy to outline everything for you!
You can also find a lot of courses and resources online offering financial and business operations guidance. Often, these courses are designed specifically for business owners that want to understand on a basic level how their business works from the tax and legal standpoint.
This advice just isn’t for a harmonious relationship with your financial professional, it’s primarily for your personal benefit. If you feel like you’re constantly in the dark about your business operation, you’re going to eventually feel like your practice is running you. It will start feeling like a beast you have no control over.
If you’re ready to empower yourself with knowledge to take ownership of your business in a practical way, we have DIY resources available for practice owners! A great place to start is with one of our free webinars:
Bottom line, take action! Don’t let your practice happen TO you!
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This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. GreenOak Accounting is an accounting firm that specializes in working with counselors and therapists in private practice. We provide monthly accounting & bookkeeping services, 1-time services and online courses. For more information on our specialized services for therapists please visit www.greenoakaccounting.com
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