"What's worth doing is worth doing for money."

Joseph Donohue

It's that time of year again.  This is the time when business 
owners get letters from CPAs and tax attorneys announcing that 
it's time to get ready to file taxes.  Getting ready to file 
taxes brings up one of the biggest challenges any business owner 
faces.  What do you do about handling the money?

I once took a daylong course called "Accounting For Non-
Accountants."  The CPA who taught the class said that the biggest 
mistake business owners make is to hand over their accounting to 
someone else. His point was not that business owners have to do 
all of the accounting tasks, but that business owners need to 
understand what is happening with the money.

"Do what you love and the money will follow."

Marsha Sinetar

For many business owners, dealing with the money is the worst 
part of business.  They got into business to do something they 
love.  Paying attention to the money feels like a distraction 
from what they really want to do.  This belief is nurtured by the 
hopeful notion that money will miraculously appear when you do 
what you love.

I once attended a seminar featuring a charismatic speaker.  He 
could command the audience with the power of his personality. 
During the course of the seminar, he talked about his wonderful 
office manager.  He talked about what a gem she was and what a 
gift it was to him that he had someone so competent handling his 
finances so that he was free to do what he loved to do.

Less than a year later, I took another seminar with the same 
charismatic speaker who talked about how heartbroken he was. He 
had recently discovered that his wonderful office manager had 
embezzled more than $1 million from him.  This brilliant speaker 
had made the mistake so many business owners make.  He had handed 
over complete control of his finances to someone else, thinking 
that money was a distraction from his real work.

In the process, he missed the fundamental difference between a 
hobby and business.  The function of business is to make money. 
The IRS has criteria to determine whether you have a hobby or are 
running a business.   The difference concerns whether or not you 
make money with what you do.

When you have a hobby, you can do what you love and forget about 
the money.  When you start a business, forgetting about the money 
can be the quickest path to business failure.

"The surest way to ruin a man who doesn't know how to handle 
money is to give him some."

George Bernard Shaw

Isn't it ironic that the one thing that stands between doing a 
hobby and running a business is money and yet the one thing many 
business owners find most distasteful about being in business is 
handling the money?  When you stop to consider that the reason to 
have a business is to make money, it seems very shortsighted to 
surrender the most important part of your business to someone 
else.

The other extreme is to spend so much time keeping track of the 
finances, paying bills, and doing data entry that there is little 
time or energy left to do what you love.

So what do you do about the money?    Money is the lifeblood of 
your business.  And knowledge of money is power.  When you give 
up control of your money to someone else, you're giving way your 
power as a business owner.

"Where large sums of money are concerned, it is advisable to 
trust nobody."

Agatha Christie

There is no royal road to business success that will allow you to 
simply hand off all knowledge and responsibly about money to 
someone else.   At worst, you will become victim to embezzlement 
or incompetence.  At best, you will never feel in control of your 
business, because you don't understand what is happening with the 
money.

The solution is to understand that your business exists to make 
money.  As a business owner, it is up to you to control the money 
coming in and going out of your business. You don't have to do 
the data entry, but you do need to understand the data. 

Kalinda Rose Stevenson, Ph.D.
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Investor Training."  http://www.nomoneylimits.com