So, I’m a huge, avid book reader and being in business working with other business owners I’m very interested in reading as much as I can about business. And what better book to kick off my book review series than by the classic book, The E-Myth Revisited, Why Most Small Businesses Don’t Work and What to Do About It, by Michael E. Gerber. If you haven’t read it and you’re in business or looking to start a business, then this is a must-read. But here’s where my book review is going to differ from your average book review. I’m going to remind you why hiring an outsourced CPA to manage your books fits perfectly into the sage advice given in this and other books.
I could cover the entire book, but let’s start with the three persons of a business owner, the Technician, the Manager and the Entrepreneur (Gerber, pg 19). We all know who the technician is, the one who wants to do the work, they enjoy burying their nose in detailed work, the work they’re good at. This is the person who realized that they’ve been doing this work the whole time for “the man” and now they’ve struck out to do the work on their own for themselves. This person is great. They’re the ones that are good at fixing clocks or making a back adjustment. The technician doesn’t usually have time to be a manager or an entrepreneur because they’re busy with customers and fixing clocks or making back adjustments. And they don’t have time to manage their financials and know how the business is progressing financially.
The manager on the other hand is great at organization and delegation. This is the person that often has no problems keeping up with the books. They need someone to go do the work of fixing the clocks or being the Chiropractor who makes the back adjustments, while they get all the systems in place. There’s few of these, but some business owners are more than capable at keeping a system going and organized, so long as there’s someone there to do the technical work. The catch is whether they have a system to organize and manage. They can do their financials, but they don’t usually have the experience to know what it means or why it should be done.
The entrepreneur is our dreamer. The one who had that “entrepreneurial seizure” (Gerber, pg 11). They need desperately someone to do the detailed work that they know they can do but are too busy dreaming of where the business could go to get it done. They need a manager to organize the system and make all the parts work together. And they, more than a manager or a technician, need someone to help rein them in or give them support to pursue their dreams by keeping track of the financial details and analyzing the possible future growth of their business.
As a business owner, you can identify with all three persons. There’s usually one or two that are definitely you’re strongest suit. Most often, it’s the technician in us that realizes we’re good at making clocks and if we went out on our own we’d get to keep that profit “the man” is keeping for himself. We could build a better chiropractic office because we know what a customer actually needs working with them first hand. Then the entrepreneurial seizure happens and our entrepreneur comes out and kicks us in the rear end and we try to start our own business.
But how many of you actually went and took accounting classes to learn what debit and a credit means or an asset and a liability, and why any of it matters? How many of you know why it’s important to reconcile a bank statement every month? If there’s cash in the bank account, doesn’t that mean we’re making money?
As a technician, you need someone who can tell you that the rates you’re charging aren’t high enough to cover your expenses and whether that check you wrote cleared your bank once or twice. As a manager, you need someone that can give you a financial report that will analyze your month over month trends to see what services are actually producing your best income or a budget to help manage your departments. As an entrepreneur, you need someone who can take your dream and put numbers to a forecast that’ll help determine what you need to start it and where it could go if you pursue it.
That’s where a CPA comes in. A CPA can do all of that and meet all 3 persons that make you up.
In it’s infancy, also known as the “Technician’s Phase”, (Gerber, pg 34), a CPA will help take that burden off the technician to help focus on the detailed work that they know how to do best. A CPA lifts that burden by monitoring the bank statements, monitoring cash flow, paying the bills, so the technician can start their business doing that work that they know how to do so well that they don’t need “the man” to run their show. Instead of working 14 hours a day, hiring a CPA can reduce that daily, weekly and monthly burden. Hiring a CPA leads a business to the adolescence stage.
In its adolescence, also known as “Getting Some Help”, (Gerber, pg 43), you’ve finally realized that you can’t do it yourself. This is where you’ve realized that you can’t work those 14 hours a day every day. Wasn’t the point of going out on your own supposed to free your life? Once you’ve admitted you need help, you’ve reached adolescence. It’s a time for transitioning into a manager, or at least hiring one. Gerber has some strong words about managing by delegation versus abdication, and it’s important that by hiring a CPA, your CPA should be an active partner in your business. Just because they work remotely doesn’t mean you don’t have a clue what is happening with those reports you get every month. This is why I am more than just a CPA. I will take the time regularly to discuss the results of your financials and discuss your direction in the business and how I can help you reach that point where you’re “working on your business, not in it”, (Gerber, 97).
I could go on and on about this book, but those are some key thoughts and how they support my assertions that it is a business necessity to hire someone to support the business and monitor and manage the financial aspect. There are different avenues, such as hiring a bookkeeper versus outsourcing a CPA. These are discussed in other blog posts, but the end result is I want to talk to you and determine what would best meet your needs and the direction of your business. Ultimately, I hope you’ll trust me to support your business and give you your time back to focus on doing the work that you know how to do, by letting me do the work I know how to do.
Contact me today to start that discussion!