Over the past few years, since just before Covid, I returned to a traditional practice of serving small businesses on a one-on-one personal basis. This was a change from the background of handling a national firm with thousands of clients operating through automated internet technology.
I made some mistakes and learned some things the hard way. Here are some that stand out:
- STATEMENTS BEFORE TAXES: Do not attempt to prepare a business or nonprofit tax filing until management has signed off on the financial statements. Make it clear that there is an additional cost to amending the filing if the financial statements change.
- NO RECEIVABLES: Reaffirm: no receivables! Every time I make an exception, I regret it. Pay in advance is the only practical way to operate.
- STOP FREE CONSULTATIONS: Although I personally prefer to give free consultations because they make me feel more comfortable with taking a new client, they were not useful from a business perspective, and sometimes were even harmful.
- BOOKKEEPING: If I offer microbusiness clients the option of not handling their bookkeeping, they will make a mess or not do it at all. The only way to achieve reliable bookkeeping it to oversee it myself.
- PERIODIC REVIEWS: If clients do not pay in advance for mid-year or periodic reviews, they will not schedule it, costing themselves much lost profit opportunity.
- COACHING VS ADVISING: Clients do not recognize the difference between coaching and advising, it doesn’t really matter to them, so I should not draw attention to it.