On Governmental Regulations
Entrepreneurs are of a type. Most of the entrepreneurs I have seen are the ambitious, go -getter types. Many of them are “big picture” guys who are extremely goal oriented. They do not have the time for the fine print. They know what they want and they know how to get it.
The world of business, though, is not always about the big picture. Many a times (and possibly, more often than not) it’s the small print which matters. May it be a contract with a vendor or an agreement with a buyer, it is usually the party which is more diligent about the fine print which comes out victorious if things don’t proceed amicably.
The emphasis on fine print is even more accentuated when dealing with the Biggest Brother of all-the government. Many entrepreneurs I know (including me) usually see the government as a hindrance than a facilitator. In a governance deficit country like India, the contempt of the entrepreneurial class towards the political class is even more vicious and many a times, not unjustified. Unlike in several first world countries, where the government sees the positive co-relation between the capitalist class and jobs and thereby their own political survival, in many third world countries the political class seems to have a mindset embedded in archaic bureaucratic principles which were created to choke entrepreneurialism and stifle the ambitious. Thus, most entrepreneurs like to avoid the government and if possible, completely by-pass it. There comes the hitch.
Death and taxes. We have all heard it before. Try as you may, you cannot outsmart them. You might be the shrewdest businessman alive, but you cannot outwit the taxman and the Reaper. While Death usually collects it booty once in your lifetime, the wrath of the taxman can make you want to make your appointment with the Grim Reaper a.s.a.p. In a bureaucratic country like India, which is riddled with multifarious entities for taxation (Income Tax, Professional Tax, Fringe Benefit Tax, Minimum Alternate Tax, the list is endless) the situation only gets worse. Akin to having several mother-in-laws, each government department can make your life misery by arriving at your doorstep at different but regular intervals, to seek their loot. The cumulative effect of this is that you end up spending more time in managing the taxman than on managing your business. And we all know what happens to a businessman when he takes his eyes off the business.
So how do you avoid getting caught in the governmental conundrum? Easy, firstly acknowledge that the government has a right to put its hand into your till and take their due. Secondly, however inept they may sound, your government does need money to put in place basic infrastructure that powers your business (the roads, airports, power, phone, etc). Thirdly, hire an all-star team of an accountant, a lawyer, and (in India) a company secretary. Put your faith in their hands. Occasionally, they might send you the totally inflated bill, but go ahead and pay it. These guys are your best shield against the Big Brother. In the unlikely event of having your account books scrutinized by the taxman, your CPA and lawyer are going to be your Ma and Pa, and shield you from the wrath of the tax guy. And fourthly, (and most importantly), get well versed with governmental regulations (tax laws, and other yada yada). Meet regularly with your accountant. Ask him every stupid question. I know you will hate it, we all do. But its your money, and you got to protect it. And it’s also a rite of passage. If you can come out to the other side, you will emerge undefeatable. You will be golden. Your accountant will admire you in awe as you spew forth different slabs of taxation for different types of corporations to the tax guy. He will know that you cannot be messed around with.
Running a successful business is a daunting task. Between increasing sales, managing deliveries, ensuring client satisfaction, bringing in the collections and keeping employees happy, your hairline would have receded quite a bit. To avoid total baldness, do not mess with the government. Hire a good team of an accountant and a lawyer, and put your faith in their hands. And as they wrestle the government on your behalf, you can start working towards that first million and the much deserved vacation in the Bahamas.
