The worst advice I have ever received was from someone I really looked up to about 7ish years ago.
This horrible piece of advice cost me about $10,000 and caused me to waste MONTHS of my life going around in circles. In hindsight, it’s pretty ridiculous how badly this piece of advice affected my life. Now that some time has passed and the “wound has healed”, let me tell you the story of how this happened.
I’ve had a CPA/accountant since the first year of operating a business. The particular person who was my CPA during the early years of my business was an incredibly direct and abrasive person. She meant well, of course, but it was always intimidating talking to her…she never explained things in a way that my newbie business owner mind could understand, and whatever she said, I just did because she seemed so confident in everything she told me.
My first year of business, she told me to keep my business and personal expenses in the same checking account. I was a sole proprietor, so from a tax law standpoint, this is fine to do.
However, from a business and bookkeeping standpoint, it’s an absolute nightmare and it took so much time to organize.
Everything has since been organized and separated now (which it has to be since I’m now an LLC), but it took MONTHS to sort through everything and clean it up. Along with that, there was so much from that year that she improperly labeled, meaning there were a lot of business expenses that could’ve been a write-off that she didn’t label as business, and I was too new to know what was going on.
She’s no longer my CPA/bookkeeper and I’m a much more thorough business owner and very much on top of my finances.
As the saying goes: What doesn’t kill you makes you stronger.
I truly believe that.
Failures will only make us stronger and help us learn and grow.
Do you want to start a business? Or maybe you do operate a business, but you don’t have a good handle on your income and expenses?
There’s so much to learn when it comes to managing finances, I even have a few episodes on my podcast that cover the topic to hopefully help you avoid these bad advice moments:
The Legal Crash Course Every Business Owner Needs to Hear with Grant Atkinson
Building Good Money Habits for Your Business with Justine Lackey