Complacency Is Destructive
What I learned from a business that I didn't know I had opened
Last week I learned that a business in another country had been opened in my name ten months earlier. This isn’t a case of fraud but it was a shock. I learned I had missed VAT submission deadlines and had just a couple of hours to stay compliant with my annual returns too.
That’s not the best formula for a quiet Thursday evening.
I stumbled over this whilst signing up an accountant to start handling things for me once I did start a business. I was planning to rent out a property, one I had spent the preceding months renovating. As the accountant looked at my fiscal system, he shared the reality of what the dates and entries showed. A business was live and I was already defaulting on submissions. I had four hours to locate core documents and proof and complete a delayed annual return if I wasn’t to incur real problems and more fines.
I was fortunate to have all my administration close to hand, with reams of receipts for the renovation work and preparation costs I’d incurred, so I set about itemising and separating VAT. I hadn’t actually done any business. There were no invoices issued.
Ten months earlier I’d started the process to get a rental license. After six months I was told it was granted, and only four months after that was I in a position to start - welcome a customer and issue an invoice.
As far as I was concerned, until that point I was an individual, I had no business. The problem was that I didn’t realise I owned a business the minute I asked whether I was allowed to rent.
It’s important to acknowledge that I’m fully responsible for how this landed, no one else is. But it’s easy to see what went wrong. My lawyer had told me she’d started the fiscal process. In her mind, that sentence meant a company was live. In mine, it meant paperwork was underway. I had the words. I never checked what they meant.
We don’t seek to clarify
This happens all the time in business, not necessarily in the opening of businesses, but whenever decisions get made. Parties run off in directions with completely different understandings of the same words.
How often do we take implicit information and fail to make it explicit enough because we simply assume the other party believes or means what we believe or mean? We don’t take the time to check.
Sometimes we’re too busy. We simply rush past these moments. Other times we make poor assumptions and fail to challenge or check them.
My mistake happened despite all parties being aware of, and in favour of, the decision to undertake commercial activity at some point. But sometimes we expect people to act, and they’re not even aware a decision has been made. In these moments, the communication is critical, yet we overlook it frequently.
A decision isn’t done the moment it is made. It is only complete once everyone who needs to act on it has carried it and it has been implemented
Checking in avoids rushed work, mistakes and omissions
I was very fortunate to find an accountant who took the time to walk me through the implications, the fines that were likely coming my way, and the remedial action I could take to put it right within the next couple of hours.
I was lucky. I had every little receipt needed, and though it was exhausting, I was able to get last year’s admin over the line with minutes to go to midnight.
The problem wasn’t that it wasn’t communicated. That would be easy to call out. Rather, the assumptions I held about what “started” meant stopped me asking the one question that would have changed everything: started by whose definition?
It’s a strange thing to ponder. The word was accurate. My lawyer had started the process. I hadn’t been lied to, or left out of a loop, or kept in the dark. I’d been given a true sentence and had understood it perfectly, on my own terms rightly or wrongly. Wrongly as it turned out. That’s what makes this harder to spot than a straightforward miscommunication. There was nothing wrong to notice. The sentence did its job. It just did a different job in my lawyer’s world than it did in mine.
It’s a painful and embarrassing lesson hence my reflection and sharing, but it is all too simple to do and repeat. If she’d said “I’ve opened a fiscal entity in your name,” I’d have stopped and asked what that implied in that country. That step would have forced me to check. But “started the process” sounded done to me precisely because it sounded unfinished, a thing still in motion, not yet a thing that existed. The vaguer the words, the safer they feel, and the safer they feel, the less we look at them twice.
Looking through what the accountant saw, the trail was there all along, had I been able to read it the way he did, with the patterns he had learned. He saw the steps and the dates. The same for the lawyer. She was used to using certain words and knowing exactly what they meant locally. I wasn’t.
Leadership reflections are everywhere
In leadership, as in tax law and procedure, the things that catch us out are rarely the things we don’t know. It’s the things we’re so sure we understand, that we stop looking altogether.
A process is approved, and we assume everything inside the process is approved and that we all mean the same thing by “approved.”
A decision is made, and we assume everyone touched by it, including those expected to carry it out, heard the same decision we did. When we feel something is clear, settled, or not needing any further detail, we simply don’t give it a second glance.
Pausing to double check is powerful. It’s precisely when we feel most certain that it matters most.
I didn’t misunderstand what a business was. I misunderstood a sentence, and never looked again to check. A costly mistake, but a lesson learned eventually.
Look Again This Week: What’s one thing in your environment, role, or company that you’ve stopped looking at, because you’re sure you already understand it?
Have a great week
