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I was on another sales call this week with a typical want-trepreneur. Nothing out of the ordinary, except this time, as the prospect was describing to me the nature of his incredibly complicated operations, how many bookkeepers he had already burned through, and the very specific, high-level, unicorn type bookkeeper he just hasn’t been able to find, on the inside I began to feel a bit… scrappy.
“I just can’t seem to find someone who really wants to take ownership of the accounting process in my business” he said. “Someone who is reliable, has solid internal systems, can stay organized as the business grows, and who doesn’t bail when the job gets tough!”
At face value, his passionate description along with the frustration in his tone might trick the inexperienced hearer into believing his kvetching. But I’ve been in this scenario too many times to still be naive to the moans of the want-repreneur. It’s not that I can’t empathize, it’s that I can’t bare hearing people lie to themselves. Being as it was a phone call, I found myself rolling my eyes into the back of my head. Indignation is the word that best describes my feelings in that moment.
What pushed me over the edge is when he used the phrase “It’s really simple” for the 7th time, and I could no longer take it.
“You know, brother” I said. “I have calls just like this all the time. I’ve heard so many bookkeeper horror stories that you couldn’t possibly tell me anything I haven’t heard yet. And it’s funny, ya know. Everyone I speak to who is seeking the type of bookkeeper you’ve just described tells me the same thing… that it’s easy. Well, if it’s so damn easy, why are your books such a bloody mess?”
I paused. Silence. Then he started laughing at himself.
For some reason, there is a pre-conceived notion that permeates the want-repreneur (operational-entrepreneur) mindset that bookkeeping is a low level, low cost, low risk, and low impact activity in your company. If that’s what you think, the hard data makes you a fool. Why is that? Glad you asked!
*Generational Differences: Pre-computers, back when Boomer started his business, double-entry bookkeeping was a helluva long and complicated process designed for a full-time, in-house employee. The bookkeeper would record an actual physical ledger, use ancient techniques like spreadsheets to stay organized, and the type of individual that kept the books was not in any way entrepreneurial so they required micro-management. With the advent of computers and software, everything about the job has changed, and now with AI, it’s changing again.
*Definition: In today’s market, everybody seems to have a different idea about what bookkeeping is. There are basic bookkeepers, virtual bookkeepers, in-house bookkeepers, low-level admin bookkeepers, large corporate bookkeepers, AI bookkeepers, CPA bookkeepers, and specialized bookkeepers. They all have different service offerings and customizations. Bookkeepers now perform many tasks that only CPA’s used to perform, like state, local, and most federal tax filings.
*Pricing Confusion: Why are some bookkeepers so inexpensive to hire, and others are much more expensive? “It’s just bookkeeping, right? It’s simple, right?” SMH.
*Entrepreneur Type: Different types of entrepreneurs require different types of bookkeepers. If you’re a one-man-show that isn’t concerned with growing your business, then a low-level, side-hustle, part-time, friend or family member bookkeeper might be right for you. But if you’re a high capacity entrepreneur with multiple businesses, multiple locations, multiple employees, and lots of moving parts that wants to delegate everything and not worry about it, I’ll tell you now, your friends mom who has an accounting background ain’t going to be your best choice.
So, Which Type Should I Hire?
To answer this question:
First: Determine what type of entrepreneur you are. Are you more hands on, or hands off? Are you satisfied with maintaining where you’re at, or do you want a lot more from your business? Are you in growth mode, or a one-person operation? Do you have an easy time delegating, or do you micro-manage and want to be heavily involved in the accounting process?
Second: Determine what type of a business you want to have. Do you want to serve other high level entrepreneurs? Are you “all-systems-go” with your sales and marketing? How many moving parts do you have going on? Lots of employees, or just a couple part-timers? Multiple entities or one s-corp?
Third: Do you want to hire an individual who is themself a one-person-show, or do you want to work with a team that has established systems in place and can handle the growth you want to see in your business?
Fourth: You must understand that most bookkeepers are horribly behaved entrepreneurs. They can only handle so much because they don’t typically have very good internal systems, and many of them are one-person operations. This creates issues as they grow their clientele. Once they hit their ceiling, the cracks in their business begin to show up in yours. What I’ve seen happen so many times is that the entrepreneur starts building a lot of momentum, the business begins to grow significantly, they expand their internal processes, scale their team, and just as they’re about to BREAKOUT onto that higher playing field, their BREAKOUT point becomes the bookkeepers BREAKING POINT! This BREAKING POINT usually takes place over a period of about 3-6 months, and once the entrepreneur realizes what’s hapened, it’s too late and all of that momentum is often lost. It can be a major setback.
Now, Back To My Story…
This is exactly where my prospect currently finds himself. He’s stuck in a doom loop. He wants to get to the next level in business, but he’s not prepared to let go of want-repreneur pricing. HA! Sound like anyone you know??
“What it sounds like to me” I said, “is you're at a turning point in your journey. You're wanting to get to the next level. Being as familiar as I am with my industry, the frustrations you've described to me, burning through multiple bookkeepers, etc., entering a new playing field requires a more sophisticated and organized service delivery, but you’re still thinking that old solutions are going to solve new problems. YOU ARE IN THIS PLACE BECAUSE OF THE DECISIONS YOU HAVE MADE.”
The hard truth about aspiring to be an entrepreneur, is leveling with the fact that everything that happens in the business, good or bad, is your fault. That includes who you choose to partner with. The things I’ve written about in this blog have been smashed against the anvil of truth. I’ve paid a great price to learn what I know about this subject. I trust that, if nothing else, you are able to glean some wisdom from my experiences.
To your success,
- Speakeasy Bookkeeping