Quick note: These Perk@Work comics were meant for a syndication packet. I have been working on another title in an attempt to syndicate. As of this moment, I haven’t posted those online. We’ll see what the syndicates say. In any case, I will most likely finish up the Perk@Work syndication packet, but it may be slow going. Thank you for your patience.
The idea of getting into a business seems simple. motivational speakers will tell you to “do it now!” I won’t say they’re wrong. I will say that going into business is like going on vacation – if done right, it’s a wonderful experience, but if done wrong, it can wreck your life.
In this comic, Henna is simply trying out a new business idea with no real regard to how she should operate; how she should follow the tax rules of business. There’s a strange beauty to that. It’s risky, but it may be less “risky” than trying to do things right. Sound confusing? Believe me, it is.
Quick disclaimer: I do not advocate tax evasion in any way. Render unto Caesar and all that jazz. You’ll see why in a moment.
In any case, here’s something that motivational speakers won’t tell you: business can be difficult to navigate if you try to follow the rules. This is for a few reasons:
- You won’t know all the rules (e.g., taxes, licenses, etc.) so you can get caught up in trying to figure out all the rules and get stuck
- Once you do find out the rules, the work that you will need to do may seem daunting, especially for a non-expert AND if you don’t have the money to hire someone to help, you can set things up wrong
- Early success in business sometimes means not following the rules until you have enough revenue and experience in the business to get on board with the rules
If you didn’t catch the subtext, I’ll put it here in bold: business is tough for conscientious people.
Now, you may be saying, “Hogwash! I know plenty of business folk who are conscientious!” That may be true. However, take a step back and look at what it means to be conscientious. Those business people whom you know may not be conscientious, but rather, open or extroverted (if we’re talking about the Big 5 Personality Types) who are acting responsible.
Basically, your average conscientious person will practice “Ready, aim, shoot,” while your business owner/entrepreneur will practice “Ready, shoot, aim.”
Let me give you a real world example: I have a conscientious personality. Once I got a few books under my belt (particularly, my novel), I wanted to have a book tour of sorts. Sounds simple enough – travel from state to state, town to town with book signings at various venues. But… as a self-published author, this means I have to do all the accounting myself. Being conscientious, I looked into what may be needed to meet my tax obligations in each state. Needless to say, it wasn’t as simple as I had thought.
Each state does their sales tax differently. Regardless of how they do it, each state, wants a cut of sales done in their state. Book publishers wholesale books to booksellers and taxes are taken care of that way (mostly by the local bookseller selling to the customer). If I take a bunch of books and sell them in another state, I have to account for the sales tax which the customer pays, whether it’s added to the price of the book or backed out. Regardless, it has to be paid.
In addition, each state has a different way of registering to do business in said state. They have to link you to the sales in their state. This is where it gets confusing. In my real world example, I decided that a multi-state tour involved too much tax planning so I limited my “tour” to various comic cons and such, two of which were in Texas (I was living in NM at the time). I called up the Texas state tax office to ask them how to get set up. It was very confusing and I set it up all wrong.
I paid Texas what I thought was the appropriate amount of taxes per city (the tax rates differ from city to city), and I thought that was the end of it. As it happened, I moved from one address to another and didn’t think about notifying Texas; it didn’t occur to me.
Long story short, I had a few hundred bucks in sales, but the licensing I set up with Texas somehow “predicted” that I would have thousands of dollars in sales, probably based on those few hundred bucks I made in the amount of time I made them. When I didn’t pay taxes on those thousands of predicted dollars, Texas got mad. They sued me for the unpaid taxes and sent the summons to my old address. I did not realize it (how could I?) and I had no idea I was being sued. When I didn’t explain myself nor show up in court, Texas got a verdict by default and, by way of a court order, froze my business bank account and set up a system that automatically extracted any money deposited into that account to pay for the taxes which they thought I owed. Don’t mess with Texas, eh?
It was a nightmare. It took me weeks to get everything cleaned up. I don’t blame Texas for anything, they were just doing what they do. It was my fault for not setting things up correctly in the beginning and not notifying Texas of my new mailing address. But a guy can only remember so many things and figure out so much when it comes to taxes.
That one incident consumed a great amount of my time and energy, not to mention the stress and worry it created. All because I wanted to “do the right thing.” My conscientious personality bit me in the butt. Maybe you’re thinking I should have hired a tax person to set everything up for me. That’s a great idea… if I had the money to do it. Expertise in these matters isn’t exactly cheap for a starving artist. Besides, I was selling my books to make extra money – the money I could’ve used to set up the sales of the books, I guess. Kinda backwards.
Yes, I know that many states allow a certain amount of revenue to be generated before a person has to start paying taxes, and that amount can be used to hire a professional. However, I think that goes for residents, not outside vendors. Not sure. See? It’s confusing.
There are lots of people who don’t care about the taxes and just go sell their stuff wherever. I spoke to one random guy at a comic con and he seemed oblivious to the whole idea of paying sales taxes. And that’s my point. Guys like this fly under the radar and make money while doing so. At some point (maybe when some nerd like me points out the concept of sales tax), they use that money to hire someone to get them set up right. Then they fly straight from that point forward. Good for them, not so good for the conscientious nerd (i.e., me).
You’ll hear successful people say things like, “When I started out, I was too stupid to know any better.” I’ve talked with people like this. Sometimes they have stories about business endeavors that, if attempted by the letter of the law, would have been impossible. But they made some initial cash and used that money to get set up instead of trying to get set up beforehand.
And that’s the whole point. If these guys had been a nerd like me, they may not have gone forth bravely into a new frontier. “Leap and a net will appear,” they say. And, for the most part, they’re right! “Make sure there’s a safety net,” I say, and I get lost in trying to find the best way to set up a net.
Obviously, I have a lot to learn about business. I’ve been too timid, too scared, too analytical. I realize I have a limiting mindset and I’m trying to expand. Part of me wishes I didn’t care and would just leap and have that net appear. Maybe I would be further along in my personal endeavors. Shame on me. But I can’t go back and do it all over. Besides, I am who I am – conscientious. I will find the best way for a nerd like me to find success and I’ll work on being more bold and faithful.