Tax Day=Annual Scorecard

Every year at “tax time,” small business owners and entrepreneurs find ourselves writing checks to our friends at the state and federal government. Some years (like this one) they are smaller than others. Unfortunately, this does not mean we found a new “loophole,” but rather, it means one of two things:

1. We spent the year re-investing in our business to make it stronger in the long-term, or

2. Our business did not perform as well as we expected it would.

Conventional wisdom suggests that small business owners and entrepreneurs make lots more money than they report on their taxes and that they are very good at hiding their “real” income by running it through their businesses. While there are some that are well-versed at “gaming the system,” most of us are focused on scrapping for new business and looking for a) new ways to add value for our customers; b) pinch pennies to boost our slim margins; and c) keep our employees and families happy while we juggle multiple responsibilities to maintain our independence and keep our dream alive.

Our egos drive us to find ways to keep our business moving forward even when our bank accounts ask us why. We take on a multitude of personnel and financial liabilities in the belief that there is “Gold” at the end of the rainbow (full disclosure, I graduated in 1987 when Spandau Ballet was cool and their song Uncle Sam True was a “hit”). Believe it…

Selling yourself, your team and your business value are the order of every day. And, like most things in life the rewards come in small doses often times when you least expect them. These range from a new business opportunity with a long-time business contact, a phone call out-of-the-blue from a long-time prospect or a completely new business opportunity within an existing customer.

But, on Tax Day, reality is front and center. Good times are rewarded with large tax bills and lean times are met with mixed emotions… smaller payments to Uncle Sam, and more conservative financial behavior.

Have fun at your local Tea Party!