b. Ethical Accounting & Finances

Honesty as a Foundation Community Business Principle!

Financial issues are one of the greatest reasons that communities fail. At Hedonisia, we try to be transparent and honest in all of our dealings—with customers, community members, businesses or the government. Unlike many alternative communities, we pay taxes! Being honest means you have nothing to hide. You can walk into any office without fear.

Of course, this is easier in some countries than in others. But even in countries known for corruption, it is better to challenge the system as much as is possible. Do things honestly and challenge your government to do the same. Even if it means going to court or dealing with government or business bureaucrats.

Honest accounting is perhaps one of the best methods to demonstrate the ideals and morality of your social business enterprise!

Page Shortcut Menu
A. Five Reasons It Pays to be Honest
B. Hedonisia Hawaii Transparent Community Accounting
C. Hedonisia Sustainable Community Income
D. Fixed vs. Variable Costs

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A. Radical transparency: Five Reasons it Pays to be Honest

1) Honesty breeds honesty in all business dealings. When you have a reputation for honesty with money, people have much less hesitation doing business with you. We have made many deals on a handshake because our reputation for striving to be fair and honest gives people trust and confidence when they do business with us.

2) Honest accounting means you don’t have to fear the government This brings ease in dealing with the tax department. You can say, ‘I proudly pay my taxes.’ To be able to say this is to be able to walk confidently into any government office with your head held high. Being a taxpayer means you have rights. You are helping to pay for the system, and that gives you a voice in how that system is run.

3) Honest business practice means you’re less subject to blackmail or criminal acts. It’s easier to run a business when you don’t have two sets of books, or when you are making backhanded deals. Crooked behavior is contagious. Many businesses fail because of shady accounting practices. If all monies are not properly accounted for, it is a recipe for eventual failure.

Dishonesty brings short-term gain, but often a long-term loss. The Community Director once worked for a business owner in Maui who did not believe in using credit cards because there was a record of transactions which he did not want to pay taxes on. He dealt in cash only. His manager ended up stealing thousands of dollars from him and when he threatened to prosecute, the manager counter-threatened to call the IRS and report him! In the end, the owner had to pay a bribe of $14,000 to get this manager to ‘resign’!

4) Honesty makes business activism more sustainable. Though we are an activist community enterprise working for social change, we obey the law and pay our taxes. As a result, when we are faced with dishonesty and persons who break the law we simply call the police. An honest business can utilize all government services much more easily than a dishonest one!

5) A reputation for honesty is one of the best forms of advertising! Word of mouth really is one of the most effective forms of advertising. A customer who knows that a business is honest and moral will have no hesitancy in recommending their friends and relatives.

Many of our eco-tourist guests and volunteers came to our community as a result of recommendations from friends and relatives who were impressed by our place and the integrity with which we try to run our community.

5) An Honest Idealistic Community allows the Owner to enjoy ‘Vision Vacations’! In our CAFE Entrepreneur model we stress that, in order for a business to grow and evolve, the owner needs to create systems for management so that the owner ‘works themselves out of a job!”

When a business has social, environmental or feminist goals as part of its business plan then it should be designed to survive and grow even when the owner is no longer there. For example, if a feminist business enterprise is helping women achieve equality and then the owner dies, that business’s good work should not die with the owner!

So when a Community Enterprise is at a certain age of maturity, the owner should leave on what we call working ‘Vision Vacations’. By being far away from the business the owner has to manage problems remotely and to develop policies and practices to make it sustainable.

This is what we do in our community. It is when we are away and problems happen that we develop solutions and business practices which we then put into the Hedonisia Handbook.

While on the road, the owner can choose to have vacations or stay in places where they can learn and network to grow their business. This is the so-called vision thing!

For owners, it is easier to leave when the business is operated honestly and is idealistic. Because then it attracts workers, interns, volunteers who also are honest, idealistic and ethical. Like attracts like!

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B. Hedonisia Hawaii Eco-Community: Radical Transparency in Accounting

As part of our transparency policies, Hedonisia interns can view our community expense breakdown so they can appreciate the income levels needed to ensure a viable operation.

Currently, our average Monthly fixed expenses are as follows:

  1. Property  Taxes:  $75
  2. Electricity Bill:  $250
  3. Water Bill:  $75
  4. Propane Gas Bill: $100
  5. Community Fiber Optic Internet:  $50
  6. Community Cell phones & Skype: $175
  7. Budget for Intern Stipends: $500
  8. Supplies (toilet paper, pillows, cleaning, cat food):  $180
  9. *Vehicle Expenses (gas, repairs, insurance, safety):  $250
  10. *Lodgings and Facilities Repairs and Maintenance:  $500
  11. Community Website Domains and Hosting:  $100
  12. Business Banking, Paypal, Square Credit Card Fees:  $90
  13. Legal Shield Fees: $25
  14. Turbotax Accounting Fees: $20
  15. Hawaii State Transit Accommodation and GE Taxes: $360
  16. Portland Micro-community rental with utilities: $1100 per month
In sum, the Hedonisia Hawaii Community fixed monthly expenses total $3,850 per month. This is what we need to break even!
Our transparency is meant to show why it is important to be very efficient in the Winter/Summer high seasons to offset the lesser income we receive in the Spring/Fall low seasons.

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C. Hedonisia Sustainable Community Income 

Our Gross monthly earnings vary from $1,800 to $6,000. This does not make us rich but combined with living efficiently and using tools like Home Exchange we are still able to have a pleasurable traveling life whilst earning less than the average American salary!

In fact, this is what we are trying to show with our Activist Entrepreneur eCourse; that it is possible to live a stimulating and rewarding life on a shoestring budget!

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D. Fixed v. Variable Costs

Most of our expenses are fixed. However, there is room for interns to conserve cleaning supplies, water, electrical and propane usage to lower average costs.

Additional Variable Costs:

  • Special Vehicle Repair or Construction Projects: The cost for things like facilities or lodging repairs are averages. Sometimes for an important improvement—the cost for an electrician, construction worker, auto mechanic or plumber—is easily over $300.
  • Reserve. We try to keep additional funds in our business account to have a reserve for lean months.

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