— I wrote Friday about the central role that good, crisp decision-making plays in effective organizations. Over the weekend I came across an HBR Working Knowledge article that proposed a “Litmus Test” to determine if you have what it takes to be an entrepreneur. Their key questions are:
- Are you comfortable stretching the rules?
- Are you prepared to make powerful enemies?
- Do you have the patience to start small?
- Are you willing to shift strategies quickly?
- Are you a closer?
I generally do well on this: I can do wonders at finding creative approaches, getting a lot done with a few resources, recruiting partners, staying flexible, focusing and prioritizing work, and leveraging early results.
‘haven’t made any powerful enemies yet, thank goodness.
Closing, in the article, means both coming to closure on decisions, which I do well, and closing deals, where I have a mixed record. I am good at communicating and getting consensus, at negotiating to common ground and building goodwill. But drilling down to the sale, getting the money, taking favorable terms, is hard. A deal slipped through my fingers over the weekend because of a moment’s wrong choice. It’s frustrating.
But then I nailed another one today. So, I’m not hopeless. Just not good at landing the big fish, in time, every time.
— The Financial Times ran an article about looming tax penalties for US expats. Where expats from most countries need to file returns only where they’ve earned income, US citizens need to file both home- and work-country returns. Hypothetical US tax is calculated on income earned abroad, then foreign taxes are deducted: you pay the difference (no refunds or carry-forward, generally). This has generally worked by the honor system, but from 2013 “banks across the world will be required to hand over details of accounts containing at least $50,000 belonging to US clients or face a withholding tax” Failure to comply means a penalty of 20% of the value of the account.
I have accountants in the Netherlands and the US who watch over me, and file diligently in both countries. Even so, I had to do a reset of my situation last week: the complexity of paying US, Dutch, and UK taxes had overwhelmed my system.
It’s not just taxes. It’s getting correct VAT advice and refunds, establishing the correct reporting basis for the business at inception (you live forever with what you choose), and securing tax breaks (eg: the wonderful Dutch 30% Rule). Truly vast amounts of money can drain away to state coffers unless you take reasonable care (and pay about $1000 per year per country for advice and filings)