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Sunday, February 12, 2017
How "Do-It-Yourself" is Killing Your Business
As technology has exploded over the last decade, business has the opportunity to work with more apps, programs, cloud services, and self-driven media than we could even have imagined. There is little in the business world that you can't do yourself: HR, payroll, marketing, sales management, logistics, accounting, taxes, photography, banking, investing - almost anything you can think of has an app ready to download to your phone. Largely overlooked is the quality of these solutions - they are not right for every business.
There is no question that it's wiser to save money than spend it when you're likely to achieve equal or better results. What causes trouble is the number of businesses who don't realize when to use an app or program, and how to audit the program's success. I can cut my own hair, but I assure you that though it's cheaper, the results are not equal or better! It's wise to start with a professional, and move to an app or program over time as the needs of your business become consistent. Some apps can then support systems on their own, but many systems will need the occasional tweak from a qualified professional to achieve optimum results.
Example: There would be no Turbo Tax without tax professionals, and many of us do just fine using it, or another program to complete our taxes. But how many of us have taken our taxes to a professional to confirm the numbers given to us by our program? Just because we can file through a program doesn't mean we should. These programs don't offer advice on capital spending and improvements, or the allocation of human resources. Tax planning is the art of arranging your business purchases and expenditures in ways that delay or avoid tax liability. Good tax planning keeps you from paying unnecessary expenses, leaving more money invest or spend as is best for your business. The tax professionals who designed popular tax preparation software are well aware of the limitations of the product. Most small- to medium-sized business owners are not, and that's the problem. (Did you notice that you no longer have the option of having your returns reviewed by a certified public accountant within the program?) In order to save a few hundred dollars on professional tax prep now, many companies run their taxes through a computer program, only to discover months or years later how costly a lack of tax planning truly was. Tax software is just one example where a professional probably should be part of your system.
Many small businesses exist due to the need for outsourcing. Attorneys, CPAs, payroll processors and other professionals who serve small business and individual consumers urge us to buy local, and keep local dollars in our communities. What is happening by dependence on apps and programs is "downsourcing." We are self-limiting our resources. Not only are we not getting the insight and advice we need from the professionals in our community, we are limiting our businesses to the actions available to us through a mouse-click. The money spent on the app or program leaves the community. We are making our options fewer, our possibilities weaker, and we're putting ourselves and our neighboring professionals in an ever-declining economic position.
As you move through the next few weeks, take note of the number of parts of your business you run via an app or program. If you don't have a means to audit the success of the program, it's probably time to check in with a professional for a consultation. By pairing your programs with the right advisers and consultants you'll breathe new life into the infrastructure of your business.