Alright, this blog is going to jump around for a bit, as I attempt to chronicle the different startups I’ve worked with as well as working on my own (The PLAN and others yet to be revealed). I’ve been trying to figure out the best way to organize it, and decided a mission statement of sorts would work. So, as I’ve already used the term threefold once, I’ll say it again: my reasons for this blog are threefold: to be an accounting resource for startups, to document the journey of my own startup lessons and heartaches, and hopefully find some other people who are trying to think outside the box and want to share/learn themselves.
Today I was thinking about a good buddy of mine who has his own startup that has taken off quite nicely. I was attempting to get in touch with him the other day to chat about books/music/life – all things he is well versed in and in which I wanted some of his wonderful insight. He tells me that his business has started to take off and he’s been super busy and says can we catch up that evening. My interest is immediately piqued. How much has it taken off? What made it take off? And then, as a CPA – what has he done about his accounting?! So I ask him the latter and he replies with some grunts, to which I tell him that we probably need to talk sooner than later. He agrees and we fix a time.
That’s when I realize that my friend has a very common startup problem: S hit the fan – before an accounting structure was in place. So as orders and requests are coming in, the phone is ringing off the hook, people are running around, hair on fire – and there’s hardly any sleep and no time to think – you’re accounting problem is just sitting there, festering and growing until you’re going to have to pay someone quite a bit to untangle the mess.
So we get on the phone and I’m amazed at what I hear. There is a separate bank account just for business expenses, but it’s not always used, sometimes in a crunch the personal one is used. There’s no LLC formation (State specific) and no FEIN (IRS Website). No chart of accounts, classifications of expenses or break even analysis. He’s so busy fulfilling orders and keeping up with things to move his top line, he’s forgetting that tracking/understanding expenses and leads to higher profits! I almost can’t take it! I tell myself to breathe and hear my yoga teacher’s voice in my head: relax your forehead, arms, eyebrows… (ps, whoever would have thought you needed to relax your eyebrows?)
Anyway, I give myself a few seconds to recover from the shock that one of the smartest people I’ve ever known and learned so much from had made such a huge oversight. Then the excitement set in – I was ready to help! And so excited that I could give back to an individual who’d taught me so much! ….I was giddy like I hadn’t been whilst discussing accounting, ever. And that’s when I realized that I’d found it. My own passion: helping others grow their passion. And as my Dad always says at the start of a journey: And we’re off…like a herd of turtles!