028 Mind the Gap

There’s a gap between being an employee in someone else’s business, and running your own small business. Many folks start a side-hustle and it quickly grows, whether they intend that or not. Do you want your side-hustle to be a fully launched endeavor that is your main source of income? Let’s cover this gap together.

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Hey everybody, I'm coming to you to record this podcast episode today. I'm really excited to talk about this topic with you all. I love this work in particular, this is really the core passionate thing that I'm excited about for new business owners is that journey. Being an employee in someone else's business and being someone who owns a fully launched business, whether or not you work in it full time doesn't matter, but running a small business that is actually the main source, the primary source of your income, how you pay yourself. So I'm really excited to talk about this topic and describing to you what I think of as the gap between being that employee and being a business owner and why that gap can seem so wide and what you can actually do to cover that gap, to step over it, to move through it and to come out on the other side being empowered and being able to run your own business. So let's talk about what that gap is. The space between being an employee and someone else's business. And being someone who owns and runs a small business that provides the majority of their individual income. So you can get a W2 at the end of every year. Or you can have financials at the end of every year that you use to prepare your tax return, that is the income that you report to the IRS, to the state government usually. To report where your income was so that you can pay the appropriate amount of taxes. So we all know that that's how small business owners pay taxes. Is by reporting their business income and expenses and profit and loss and all of that good information. So being an employee of course means that you are working for someone else. You're following someone else's rules. You have limited decision-making power, so really you probably if you're an employee, have some way that you make decisions day-to-day. In the business that affect the outcome of certain things in the business you're following someone else's rules, though they're kind of telling you what their expectations are for the work that's going to be done, how it's going to be done when it gets done and all that good stuff. You actually need to navigate that company’s policy. And that could be their pay policies. You know how you get paid. That could be time off. So paid time off or unpaid time off, when you can take time off. How much time off you can take before they would, you know, have some sort of punitive action against you. Like if you just stop showing up to work, somebody is going to say, well, that's it. They're not an employee anymore. Or there's actually got to be a policy for that. How and when you want to work so you know, if you work from home, if you have to go into the office, that's something that the company dictates you maybe can, you know, manage expectations with them. You maybe can talk to them about what you would like to do, but ultimately if you want to be employed somewhere it ends with the company and the company’s policy and the decisions that are made by the leadership in the company. You know most people aren't working at night or over the weekends, if they're an employee, if the business is operational, hours are 9:00 to 5:00, Monday through Friday. You know, if you’re salary maybe sure you can work on the weekends or in the evenings to get projects done and to get work done if needed. But for the most part they have business hours that they said, that they expect you to be there or to be available for meetings and for communication work and all of that. Usually this means that you're on a fixed income, so you either have a salary that you get paid or you know you track hours and they pay, they pay you an hourly wage. There's also the case that you could be paid Commission. So, this is one way that being an employee in someone else's business, you still have control over how much money you make because you make Commission and so you can go out and seek out new business and new clients and increase your wages that way by receiving Commission for growing the business. So and then of course, there's things like benefits that you get that you can have company sponsored healthcare, you can have companies matching your retirement contributions. All of those are considered benefits of working for somebody. So, you know that's working for somebody else versus when you're somebody that's running a small business. This is not even something that is taught in Business School. You can go get a degree at an accredited institution. You can go get an education and still come out of that still graduate with that degree, not really knowing how to run a small business. I actually met somebody recently who has multiple business degrees. And they offered up and told me that they don't even know how to run a small business in practice. So, we have running a small business in theory, which is that you understand, maybe tax law, you understand how businesses operate, you may have managerial experience you have. All the how tos right you know. Ohh I would know how to do this or that in a business and then you have instead of the theory the actual practice of running the business. So, the practice is the struggle and overcoming day-to-day challenges and running a small business. Practice is laying down on the floor and crying because you don't have the results that you expected or that you want from your business and it's up to you to figure that out. It's up to you to make that happen. Nobody else is coming in and saving you. You're the one that gets the work done. You're the one that decides what the work is going to be. You're the one that decides what other people are going to pay you. So, you have running a business in andyou know, that's just click this. Here's how you file this tax return. Here's the type of business entity you can be set. As you know, a lot of that how to stuff is things that I present to you on this podcast, but then there's the actual practice. That's the times that I'm telling you, like, here's what the actual lessons have been that I've learned from going through it myself. Or the lessons that my clients have learned that I'm turning around and sharing with you because that's valuable information from someone who is running their own business. Running a small business involves taking risks and learning how to actually calculate risk, so there's not really like a formula that you can like plug all your anxiety into and determine. And like what is actually going to be the risk of running this business or maybe investing in the business a certain way. You are going to have to learn how to calculate risks based on a myriad of factors and then actually taking action. So, taking action can be either deciding that the risk is going to be worth the outcome. You do get it, and it's a good enough risk that you want to take even though you may fail, or it may not work out or, you know, evaluating a risk and deciding, yeah, even if I were to succeed with this or I did get my return on investment, it's not actually worth what would happen if it didn't work out, or if I failed. So, taking a risk comes from evaluating risk and learning how to do that. And that comes from practice and experience. And then taking the action or not or taking the risk or not. You know, those are kind of your two options. You can also learn how to manage finances and business operations. And like I said, you know you can have the how to do this and that guides you can download. All the PDFs. I have resources that are available that are PDF guide downloadables that teach you how to do certain things in your business. And you can do all of that and learn how to manage your finances, learn how to operate a business, but you know it's up to you. It's up to you to implement strategies. It is up to you to decide on those operations. It is up to you to manage the money. And manage the finances of your business and it's not up to anybody else unless you have a partner, maybe. And this really, of course, takes a different mindset to being a business owner because you are ultimately in charge of how much money you do or don't make. No one else really has a say in it. The way that someone else has a say when you're an employee in someone else's business, you can't really negotiate. You can only negotiate so far as an employee in someone else's business. There's of course room for negotiation, and any job interview in terms of, like your salary or your wages. But when you're a business owner, of course there are other people who are making their own decisions about whether or not they want to hire you, or whether or not they want to purchase a product that you're selling. But you can have 10 Nos. You can have 10 people tell you no, I don't want to hire you and you can still be successful. You know you can still you still have the say in who you get to work with and how much money you make. And so, the way that I like to think about this is that every no leads to a yes, and that's how I like to show up to my consultation calls because I really want folks to have an informed decision making process when they want to hire me. You know it's not about me trying to bamboozle anybody or like trying to convince anybody to hire me when that's not really what they want to do. Of course, if you don't want to hire me, please don’t. But I still get to have a say in how I show up and in how I present the services that I offer and how to, I get to decide how I want to show up and “make the sale” or close the sale or however you want to describe it. But like I have control over that for the most part. Like these are my services. It's really not up for negotiation most of the time, and so if you don't want to hire me, that's fine. Like I have more control in that scenario than if somebody is hiring me to be an employee in their business and they're like the salary is capped at like let's say seventy thousand. So if they've got a salary cap, you know that's telling me that they literally just don't have the budget room to move around and to negotiate for that. And so, it's pretty much a hard no. And so I only have so much control, but ultimately it's the company who's hiring you that decides to hire you. You know you can't, like, negotiate that. So, you have a lot of flexibility as a business owner and that is flexibility of time, flexibility of work. You can really say actually you know what, I don't want to do this thing anymore. I don't want to offer this service, or I don't want to make this product anymore and sell it. And I just get to decide that I want to stop doing that. I don't have to ask permission for somebody else to like, stop doing something. And so when you control your own schedule, when you control the work that you do, you have a lot of flexibility, but at what cost? So as a business owner, it is so important to have good self-discipline. It is so important to have that trust with yourself, that when you say you're going to do something that you actually follow through and do that thing no one else is checking your work. Yeah, of course. Maybe your client is “checking your work”, but you need to have an accountability system for yourself to be accountable to yourself and say I'm going to do this work and then do the work and then evaluate how well the work was done and then go back and refine your procedures or processes to make sure that you can be accountable again to yourself. On the next instance of, whenever you have to do that thing, whether it's for the same client or it's another client, you have to develop that self-discipline and that self-accountability yourself. And I don't think that there's a business owner out there that can do without self-discipline and can do without accountability to themselves. So, it's so important that yes, we do have a lot of flexibility, but that it is also important to have accountability. It is also important to have systems in place to make sure that the work is getting done. Because at the end of the day, you're the one that has to answer for it. So, let's take a quick break and then we're going to come back and talk about how do we mind the gap and actually overcome it. So now let's look at how do we mind this gap and how do we overcome it? So we've talked about what the gap is between being an employee in somebody else's business and being a small business owner. And that small business providing your main source of income, and I'm talking about MIND as in M-I-N-D as in “dog”. Mind the gap, not mine. MIND. The gap. Mind the gap. So, we want to bear in mind that there is a difference between being an employee in someone else’s business and being a small business owner. I personally think that gap, everybody is capable of crossing that gap. Everybody is capable of developing the skills and using the resources that are available to you to overcome that and to become a small business owner and to actually be successful at it. I think everybody is capable of that. Even though everybody's business is unique, and we are all special snowflakes, business has to be done in a certain way. Across the board. And there are correct ways to do that, and you can still within those ways be very unique and hold true to your values and have different processes. We're doing things that other people are also doing, but that are unique to you and your brain. But for the most part, especially in the United States especially because what you're doing has to get reported like there is a certain way that things have to be recorded, reported and done. So how do you mind this gap between being an employee and being a small business owner and overcome that gap? You're going to work with me. Here are what my current offers are that help bring you from where you are right now, whether that's in somebody else's business, or you're running a business yourself, but you're really not sure if you're doing things correctly, you can hire me to be your bookkeeper. And the way this works is that you engage in monthly bookkeeping services with me. How you do that is you get on a consult, so consults are complementary. They are free. It's a 30 minute one-on-one virtual session with me. To discuss what your current bookkeeping procedures are and how we can get you where you want to be in your business and make sure that you're doing that bookkeeping correctly. Of course, as your monthly bookkeeper, I'm the one doing it, which means that you know it's going to be right. You're going to get a lot of questions from me. You're going to get a lot of communication from me. You're going to get reports on a regular basis that is going to show you exactly what's happening in your business, and then you're going to actually learn how to read those reports so that you can use them to make decisions, make good decisions that are informed and empowered so you can get where you want to be in your business. So, if you want me to be your bookkeeper, I can help you mind the gap between having worked on somebody else's business and finally being in business for yourself. You can get on a consult call with me to discuss monthly bookkeeping. Another way that we can mind the gap is by getting you trained up to do your own bookkeeping. Not everybody wants to hire bookkeeping services to a third party independent contractor like myself. That is perfectly fine, but I think that everybody should have the tools that they need and the procedures that they really need to be doing. I do offer training on QuickBooks Online to help get you to where you need to be doing your bookkeeping yourself on a regular basis. That's at least monthly and making sure that you're doing it right. So, I have a few things that I need everybody to be doing on a monthly basis. #1 is. Categorizing your transactions. Understanding why things get categorized a certain way in your business, making sure that you do it correctly so that it makes sense to you, and it makes sense for the way you are in your business. #2 would be reconciling your bank account and I will teach you how to do that on a training. I've talked about why reconciliation is so important, but this is how we make sure that your books, this is how we catch mistakes and fraud. Most of the time that is caught on reconciliation, and I have personal experience with that. My clients have personal experience with that. Reconciliation is necessary. And then finally the third thing that you need to be doing every month is reviewing your reports. So, in a training these are the three things that I teach you. I pull up your QuickBooks online company. We actually work in your data and I walk you through step by step and show you what you need to be doing, where you need to be doing it, what it's going to look like when it's actually correct and that way you can go off and do the bookkeeping yourself. I want to empower you with those procedures and with my knowledge and expertise so you can be successful even when you have not hired out bookkeeping yet for your business. Another thing that comes along with the training, and especially for folks that are getting ready to move into being a small business owner is setting up your new business correctly. So I also offer business setup services and I'm kind of looping this into the training on QuickBooks Online service because it kind of goes hand in hand. So, if you're ready to set up your new business, I do offer those services. That's making sure that you get your EIN Number applied for correctly with the IRS so that your business is set up the way that it needs to be. And then I also can file LLC documents with your Secretary of State. Whoever manages businesses in your state specifically. And then I can also help you with things like payroll and sales tax account setup. So if you're going to hire employees or if your business has sales tax, I can get all that set up for you. So that's new business set up and it kind of goes hand in hand with the training on QuickBooks Online. But you can do one or the other. So if you want to book a training, that link is at my scheduling link and that is All Ease Accounting dot A-S dot me. You can just go to that link and that is where you will find the training for QuickBooks Online. It's a 2-hour training initially and then after that we can schedule as needed, but the initial training is going to be at least two hours. That is pretty much down to the minute exactly the amount of time it takes everybody to go through the training with me. So, it's just enough time, but we can always schedule more as you need. So, to get on a training with me, you can go to my calendar. All ease accounting dot a-s dot me, you can just go to that link or you can go to that link forward slash training on QBO. So that link will be in the show notes, but just know that you can go ahead and book the training yourself. We don't have to do a consultation before doing the training. If you want to do a new business setup, however, that will require you to set up a consultation and once again, that link is in the show notes. So, the consultation is free to do business setup, but the actual services that I provide for new business setup there is a fee associated with that and we will discuss that on a consultation. The third thing that I can offer you right now is to allow me to host a webinar or a workshop for your small business group. So, if you're in a business mastermind or business coaching group or you want to get together a panel of experts for small business information and teaching things like marketing and product development. Let me be your finance expert, your small business finance person to sit on your panel or to teach a workshop or a webinar. This can be in person. This can be virtual. This can be a hybrid thing. So, if you want to let me host and teach a class on all this information to your small business group of folks, get on a consult with me to discuss what topics you'd like me to teach on. Let's talk about what kind of supplemental materials I can provide to your group as part of that workshop, and then we can look at actual dates on the calendar and I am willing to host that workshops for free. But that's really dependent on if your group is comprised of people who live in marginalized identities. So that would be people who are Black, Indigenous, People of Color. That can be anybody who is a group mostly focused on small business owners from the LGBTQ+ community, that can be the disabled, small business owner groups. If any group is focused on small businesses, but also has that specialty of like gathering people who have been historically marginalized, historically oppressed, I will consider doing that webinar workshop for a discounted or completely free of any of my normal fees and rates because it is so important to me to provide myself as a resource to the small business community, especially to folks that have been marginalized historically. And finally I do want to tell you about an upcoming offer that is not available yet, but will become available at some time in the near future and me talking about it on here in a public forum means that I'll make it happen. Right, so this is going to be an upcoming offer. For you those of you that want to mind that gap, those of you that need something that is going to take you from where you're at working at somebody else's business, to owning your own business and having that be your main source of income. This is going to be a fully digital self-paced course that will teach you how to manage your finances and some of your operations. Not all of them. But a good bit of operations for running a small business. And this is coming from my 8 plus years of experience doing accounting for small businesses. This is me consulting with small businesses, you know, being their cheerleader, being that person that sees exactly what goes on behind the curtain. For all sorts of different industries, for all sorts of business entity setups, for everything. I have a lot of experience doing this for small businesses and so I want to help more folks get into running a small business and actually being successful at it. So, this is also coming from me running a business for 12 months. My own business. This is how you're going to learn to do your bookkeeping yourself and how to do it right. This is also going to teach you how to pay yourself as a small business owner, how to hire a workforce and pay other people to work in your business. And finally, this is going to teach you how to make a process for everything you do in your business so that hiring and delegating is more successful. Because you can't just hire somebody and then not have anything for them to do, or not know what they even need to be doing, that you want to delegate. And not having a way for them to know whether they did the thing right and to evaluate their work. So, we're going to help you make sure that your work does not fall through the cracks. But it's also going to help you learn how to manage a workforce, and that comes from creating a process for everything you do in your business. So, this course is going to be available in the future. But it is not ready yet and that is OK. You're learning about this in the development stages, which is so exciting for you. I love that. If you want to be the first to know about beta testing for this course enrollment for this course, if you want to be on the ground floor of this exciting endeavor, I want you to come get on my e-mail list. So the link to specifically sign up for interest, information, about this digital course is going to be all ease accounting.com/mind the gap. And not no spaces, mindthegap. So, thank you for tuning in and I'll talk to you all soon. Bye bye.