U.S. Campus Life

Running a business

By Masako Yamada

The middle of April always seems very busy to me, since three major events take place in rapid succession: my birthday, the Boston Marathon and tax day. My birthday is a personal event, and the Boston Marathon is a city event (that I happen to like very much), so not everybody can understand their significance. However, tax day is universally dreaded, since it is when one has to confront the loose ends that inevitably crop up as one tries to summarize a year's worth of financial activities.

It has been a month since I settled my taxes for the year 2000. I spent many, many hours hunched in front of receipts and instruction manuals in order to fill out my forms. This year, I had to fill out even more forms than usual, and in my haste to get everything in on time, I wasn't able to research all of the possible tax deductions that I could make. Now that I've had a month to review my financial activities from last year, I also realize that I could have budgeted my personal expenses better. In addition, I see that I could have set up different investment accounts that I hadn't even heard of before.

I write and do translations for several publications including ST, and in the eyes of the government, this makes me a small business owner. I'm the big boss and the only employee. I've never thought of myself as either a boss or as an employee, but in reviewing my financial activities, I realize that I must start thinking in those terms. I've always paid taxes on my freelance earnings, so I'm not concerned about legal issues, but I now realize that I've always considered this to be something like "pocket change." I never paid much attention to the bottom line: to minimize expenses and maximize profits.

As a boss, I must pay the government Social Security taxes for my employees. I must think of what expenses I have for running this business, and which of these expenses I can deduct for tax purposes. I must set up pension plans for my employees, as well. As an employee, I must demand that my company have a reasonable retirement plan, and I must decide what percentage of the money I want to put into my company's retirement plan.

In the past month or two I have realized that there are many options for small business owners to make day-to-day operations easier, and to lessen their financial burdens. Small business owners cannot rely on HR departments or accounting departments to handle these issues. Many commercial banks and investment companies provide brochures outlining the different services they offer especially to small business owners. Many Web pages dealing with financial advice have special sections for small business owners. Even government agencies can provide support and advice. I have just started to investigate these support networks.

Although I have not utilized these services before, I see now why these services exist: there must be an incentive for people to start and maintain their own businesses. For many people, the American Dream involves working for one's own company. However, the fact is that most small businesses fail. Running a small business involves a lot of work, and small business owners need all the help they can get.

It's not only the owner/employees that benefit from small businesses. I think American consumers really like seeing many choices on the market. And I think many of them secretly hope that large companies fall victim to some small business that is run out of a lone entrepreneur's home. The combination of free market thinking, pioneering spirit and love for the underdog makes the potential for small businesses seem unlimited.

I must admit that even though I've newly acknowledged my position as a small business owner, most of my accounting methods are still primitive. I still keep my receipts in a shoe box. I still divide my weekly expenses in paper envelopes. I still save quarters in a an old jar. These methods have worked for me so far, and they still work now.

Shukan ST: May 25, 2001

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