I’ve previously posted about my recent experiences in the JMI Small Business program and a takeaway I had from one of the sessions is how often small business owners “don’t fit the profile.” The problem relates to how we small business owners so often can’t answer the questions on the form like a “normal person” who works for someone else. One particular JMI session provided a good example of my point. It was a session by a bank loan officer on how to obtain financing. He presented good information, helpful in general, but, when the group started asking questions, it got interesting. Banks have loan applications asking things that often don’t really make sense in the context of a small business – and they ask for the owner’s personal income, etc. as part of that process. They ask “For whom do you work”; if you own the company, what do you say? “Self employed or I work for (in my case) Magnus Research.” Because, if you say “self employed” that appears to have a negative connotation to a bank, but it is not much better when you name the company and the next question is either, “What do you do there?” (Own the place) or “Who is your supervisor?” (I wonder how Bill Gates answers that question…) It’s not just banks for business loans; having bought a car this year, I know. Trying to complete the car loan application was challenging as is, of course, any type of credit application. It is also an issue when they ask salary. As is common with many small businesses, including S-Corp business like ours, the owners take a small salary and are then paid dividends, also known as “the leftovers.” Try writing that on a loan application. It is times like these when one realizes (another) challenge of small business ownership!
David and I lament about our inability to answer trite questions in ways that satisfy unimaginative questioners. For example, when a banker or other financial person asks, “How much money do you earn?” I attempt to explain I cannot answer without being asked “When?” because my job is such that, last week, I earned absolutely nothing but this week, my company (but not me, personally) earned more than most people earn on an annual basis. My salary is so low that it does not comport with my education and experience, however, when I am able to derive profits from my company, after all of the bills are paid, my earnings can be quite substantial. This type of explanation has, thus far, never been well received by people who are prying into my financial status; in fact, they have always looked at me as if I am from another planet! David and I are, indeed, the square pegs who cannot, and will not, fit into the tiny round holes in which bankers would like us to fit. Our business ownership is also misunderstood by our friends and family, as well as people in the financial arena. David and I recently took a vacation after a busy period at work. One of my friends asked me how I could take a vacation after this busy period and before another busy period in our business. I patiently tried to explain that it is I who decides the work flow in my company; thus, when I have finished all of my work on behalf of my clients, I can choose to delay the start of other work, just because I want to do so! On another recent occasion, I helped a dear friend with a medical issue in a city other than where I live. I was planning to meet another dear friend who lives in the same town I was visiting, however, I cancelled this meeting due to a new obligation with a client. My friend said, “But, I thought you took the whole day off work,” to which I replied that I had, but now that I was needed at my office, I cancelled my fun time in order to hurry back to work. Working for oneself requires discipline, flexibility, and will never be understood by those who get a regular paycheck, regardless of the circumstances.