Sellwood CPA reveals Hierarchy of Business Needs
At one of its monthly educational seminars recently, members and guests of the East Portland Chamber of Commerce (EPCC) discovered an interesting and unusual approach to accounting and bookkeeping from a Sellwood resident - Kevin R. Minkoff, CPA, who describes himself as 'Not Your Ordinary Bean Counter'.
'Did you pay more tax than you expected to, this year?' Minkoff quizzed. 'Did you get a refund you didn't expect? If not - as business owners, why do you not know how much income tax you're going to be expected to pay at the end of the year?
'Why is it always a shock?'
If you have an accurate financial statement for your business, and it's multiplied by the appropriate factor, then you should have good approximation of your tax liability, Minkoff told the group.
Speaking before some 30 people, Minkoff said he was struck with the idea of 'raising the consciousness' of businesspeople - and Maslow's 'Hierarchy of Needs', a theory in psychology proposed by Abraham Maslow in a 1943 paper 'A Theory of Human Motivation', came to his mind.
'Many people 'play' at being business owners. After every tax season, accountants and tax preparers shake their heads,wondering why so many people spend more time planning a dinner party than they do managing their finances,' Minkoff frowned.
Thus, he said, he has come up with 'Minkoff's Hierarchy of Business Needs' - a list which compares and contrasts Maslow's list with his own. Here's his list…
Air, water, food - 'In business, this means one develops a basic understanding of cash flow that goes beyond 'management by checkbook', into planning.'
Security needs. Clothing, shelter, safe environment - 'Running a successful business requires that one has an operational financial information system. Bookkeeping is the process of gathering and recording information. Accounting adds two more things: Reporting and Reviewing. Without summarizing information, the mere reporting of information is useless; reviewing and analyzing adds to success in business.'
Friendship, companionship - Minkoff has a list of 75 tasks that every business manager must perform. 'In business, this equates to finding and using the services of a person who is qualified to produce reports you can review, and which you can use to plan.'
Ego and esteem needs
Competence, mastery, and recognition from others - 'Operating at peak performance means one is focused on expertise. Most small businesspeople are generalists; they try to do it all, including minding their own financial situation. Isn't it better to bring into your business someone - an outside consultant, or an internal staffmember - who can allow the owner to focus on their real areas of competency?'
Become everything you are capable of becoming. When you have mastery of your finances, it opens you to participating in activities that improve your society, your physical environment; helping and teaching others.'
So - where to start?
'Keep track of every penny you spend - even your personal spending,' advised Minkoff. 'It's your personal spending that's taxable.'
For more information on the East Portland Chamber of Commerce, contact Teeneke Barresi at the Chamber office: 503/788-8589.