WEBVTT 00:00:06.030 --> 00:00:09.269 Hi, everyone. This is the How to Lower Your Tax 00:00:09.269 --> 00:00:12.429 Bill podcast. I'm your host, Terrence Hutchins. 00:00:12.929 --> 00:00:15.410 I'm a financial and tax advisor in the Dallas 00:00:15.410 --> 00:00:18.190 -Fort Worth area. And the goal of this podcast 00:00:18.190 --> 00:00:20.809 is to help you listeners get educated on different 00:00:20.809 --> 00:00:23.589 tax strategies that you can implement to improve 00:00:23.589 --> 00:00:26.750 your tax situation immediately. Each episode 00:00:26.750 --> 00:00:29.769 will break down useful tax tips you can use to 00:00:29.769 --> 00:00:32.350 save money, no matter what your personal or business 00:00:32.350 --> 00:00:35.950 income situation. because our motto is keep more 00:00:35.950 --> 00:00:39.210 of what you earn. So let's get into today's episode. 00:00:47.009 --> 00:00:49.210 So welcome back to the how to lower your tax 00:00:49.210 --> 00:00:53.329 bill podcast. We have been discussing the starting 00:00:53.329 --> 00:00:56.090 of a business and some of the things that should 00:00:56.090 --> 00:00:59.869 be going through your mind as it relates to when 00:00:59.869 --> 00:01:02.049 you want to start a business. What goes into 00:01:02.049 --> 00:01:03.710 it? What are some of the things you should be 00:01:03.710 --> 00:01:06.010 planning ahead for? And then what are the tax 00:01:06.010 --> 00:01:08.969 implications that come along the way? So today 00:01:08.969 --> 00:01:10.629 we have a very special episode. We're actually 00:01:10.629 --> 00:01:13.349 going to talk to our co -host Tamiya Kelly about 00:01:13.349 --> 00:01:16.969 her thoughts in starting her business. And this 00:01:16.969 --> 00:01:19.989 is going to be kind of a Q &A format. We'll kind 00:01:19.989 --> 00:01:22.170 of get her genesis around some of the thoughts 00:01:22.170 --> 00:01:24.290 she had. I'm going to ask her some questions 00:01:24.290 --> 00:01:27.260 and we'll help to hopefully. resonate with some 00:01:27.260 --> 00:01:29.099 of the listeners on Dead Decision because we 00:01:29.099 --> 00:01:32.140 know post pandemic, a lot of people got laid 00:01:32.140 --> 00:01:35.680 off or they kind of start reimagining what their 00:01:35.680 --> 00:01:38.500 next move would be as maybe they were now remote 00:01:38.500 --> 00:01:40.760 and they like the flexibility. So a lot of people 00:01:40.760 --> 00:01:43.540 like the idea of owning a business, but we're 00:01:43.540 --> 00:01:45.340 going to kind of get to the nitty gritty of what 00:01:45.340 --> 00:01:48.540 it actually takes to be successful. And we'll 00:01:48.540 --> 00:01:51.079 kind of give Tamiya the floor to one, introduce 00:01:51.079 --> 00:01:54.469 herself. and talk about her journey as she looked 00:01:54.469 --> 00:01:57.730 to start her insurance agency. All right. Hey, 00:01:57.829 --> 00:02:00.170 y 'all. Hey, hey, good people to me in here. 00:02:00.329 --> 00:02:04.269 And this is the infamous couch session that Tansy 00:02:04.269 --> 00:02:06.849 has been talking about where I spill all the 00:02:06.849 --> 00:02:09.210 beans and truly, truly, hopefully you all can 00:02:09.210 --> 00:02:12.669 learn from me of what not to do and what to do 00:02:12.669 --> 00:02:15.169 going forward if you plan on starting a business 00:02:15.169 --> 00:02:19.449 for sure. All right. So first, what led you to 00:02:19.449 --> 00:02:22.569 make the decision? Okay, so it's interesting 00:02:22.569 --> 00:02:25.330 you mentioned the whole 2020 situation because 00:02:25.330 --> 00:02:28.629 in 2020, I actually, I've been in insurance for 00:02:28.629 --> 00:02:31.169 a long time and I wanted to stop my own agency 00:02:31.169 --> 00:02:34.189 and in 2020, but the sky was falling, right? 00:02:34.250 --> 00:02:38.090 So I said, let me be still, be still, don't move. 00:02:38.430 --> 00:02:42.370 But in November of 2024, I was laid off and I 00:02:42.370 --> 00:02:44.620 felt like, okay, this is my time to... start 00:02:44.620 --> 00:02:46.740 this agency. And one of the things that you talked 00:02:46.740 --> 00:02:49.759 about is, we've talked about a lot on the podcast 00:02:49.759 --> 00:02:51.620 is, is it a hottie, right? Is it something you 00:02:51.620 --> 00:02:54.539 can do? Is it like knitting or baking cakes or 00:02:54.539 --> 00:02:58.500 just a side hustle? And with the insurance world, 00:02:58.740 --> 00:03:01.719 you actually have to be licensed and educated. 00:03:01.919 --> 00:03:04.699 You can't just start an insurance agency. It's 00:03:04.699 --> 00:03:07.360 highly regulated. And so for me, I was like, 00:03:07.780 --> 00:03:09.939 well, I know I'm going to have to start the business 00:03:09.939 --> 00:03:12.939 because this can't be a hobby. This is not like 00:03:12.939 --> 00:03:16.879 a side thing. Even if I wanted to just spend 00:03:16.879 --> 00:03:20.000 my time educating people, I still need to be 00:03:20.000 --> 00:03:21.840 licensed. I still need to have insurance for 00:03:21.840 --> 00:03:24.479 even doing that. So that's what made me start 00:03:24.479 --> 00:03:26.439 the... I'm passionate about insurance. I'm passionate 00:03:26.439 --> 00:03:28.520 about educating people. And so that's what made 00:03:28.520 --> 00:03:32.680 me start the business. I see. All right. What 00:03:32.680 --> 00:03:37.360 made you pick insurance? Oh man. So... I want 00:03:37.360 --> 00:03:40.259 to say low hanging fruit, right? So I can do 00:03:40.259 --> 00:03:43.479 a lot of things, but for me, I didn't want to. 00:03:43.780 --> 00:03:45.460 I know this probably sounds like the chicken 00:03:45.460 --> 00:03:48.060 way out of things, but I'm good at insurance. 00:03:48.340 --> 00:03:50.419 I've been doing it. I sold insurance. So it was 00:03:50.419 --> 00:03:53.379 like low hanging fruit to me. And honestly, I 00:03:53.379 --> 00:03:56.879 thought it would be a great segue into entrepreneurship 00:03:56.879 --> 00:04:00.159 because I've been in it for 20 years. Got it. 00:04:00.180 --> 00:04:02.479 So for your listeners, you did what you knew. 00:04:02.639 --> 00:04:04.819 Yeah. Yes. So that's where you started. Yes. 00:04:04.840 --> 00:04:07.180 That's where I started. Yes. Yeah. That's where 00:04:07.180 --> 00:04:09.780 I started. Yeah. Where did you, obviously you've 00:04:09.780 --> 00:04:12.620 been working in this series as an employee. So 00:04:12.620 --> 00:04:14.699 what was your vision of what you thought things 00:04:14.699 --> 00:04:16.600 would look like when he started the business? 00:04:16.959 --> 00:04:19.639 And then what was your kind of apex mountain 00:04:19.639 --> 00:04:22.829 experience? Listen, let me tell y 'all. I just 00:04:22.829 --> 00:04:25.790 want to continue to give you a plug for this 00:04:25.790 --> 00:04:27.790 podcast, how to lower your tax bill. Honestly, 00:04:28.089 --> 00:04:30.290 because there's so many nuggets in here. Go back 00:04:30.290 --> 00:04:32.889 from podcast one and listen all the way through, 00:04:33.290 --> 00:04:36.970 because what I thought in my mind, the way my 00:04:36.970 --> 00:04:39.449 mind was set up, Terrence, I was like, I'm about 00:04:39.449 --> 00:04:42.129 to start this agency and I'm about to just be 00:04:42.129 --> 00:04:46.250 rolling. Okay. No, ma 'am. No, sir. So my idea 00:04:46.250 --> 00:04:49.879 was to have one location. you know, be the only 00:04:49.879 --> 00:04:52.199 employee for about six months to eight months, 00:04:52.660 --> 00:04:55.699 and then gradually grow. I also thought I was 00:04:55.699 --> 00:04:58.259 gonna have just revenue, just customers calling, 00:04:58.699 --> 00:05:02.019 you know, and policies galore. That's what I 00:05:02.019 --> 00:05:06.040 thought. But the reality is, it takes a long 00:05:06.040 --> 00:05:08.980 time to get started with an insurance agency, 00:05:09.060 --> 00:05:12.899 a long time. It's a long time. It's not just 00:05:12.899 --> 00:05:16.060 like what Terrence mentioned on the... last podcast 00:05:16.060 --> 00:05:18.779 about going to your state and getting registered 00:05:18.779 --> 00:05:21.920 as a business. So, you know, I registered as 00:05:21.920 --> 00:05:26.819 an LLC. And as we know, S -Corp is a tax designation. 00:05:27.019 --> 00:05:30.579 So don't say I have an S -Corp. No, I have an 00:05:30.579 --> 00:05:35.040 LLC, a disregarded entity, and I got my EIN. 00:05:35.199 --> 00:05:37.259 All of those things are easy to do, literally. 00:05:37.600 --> 00:05:41.000 It's very easy to do. What's not easy to do from 00:05:41.000 --> 00:05:44.459 the insurance agency standpoint, is get the appointments 00:05:44.459 --> 00:05:47.139 for the insurance carriers that you want to sell 00:05:47.139 --> 00:05:49.899 through. And that's what I did not. That's the 00:05:49.899 --> 00:05:52.540 reality I'm dealing with currently, right, is 00:05:52.540 --> 00:05:55.759 you want to get started. You have your 30, 60, 00:05:56.399 --> 00:05:59.600 90 -day plan. I read all the books, Terrence. 00:05:59.680 --> 00:06:02.420 I'm like, get your 30 -day plan, your 60 -day, 00:06:02.480 --> 00:06:07.600 90 -day. Yeah, no. Absolutely not. And that's 00:06:07.600 --> 00:06:10.699 the reality I've been right now. I see. All right. 00:06:10.699 --> 00:06:12.740 So just to think about taxes for a high second, 00:06:12.759 --> 00:06:14.439 then we'll come back to your specific story. 00:06:15.300 --> 00:06:17.699 So when you look to start a business, you have 00:06:17.699 --> 00:06:22.060 the free phase, which the IRS calls the exploratory. 00:06:22.060 --> 00:06:26.259 Okay. Startup phase. They will allow you to deduct 00:06:26.259 --> 00:06:30.680 up to $5 ,000 of expenses in that category. This 00:06:30.680 --> 00:06:33.060 could be research costs. It could be travel. 00:06:33.259 --> 00:06:35.759 It could actually be hiring the training people, 00:06:35.759 --> 00:06:38.519 but you're not really open for operation yet. 00:06:38.589 --> 00:06:42.629 Right. Okay. When you open your operation, meaning, 00:06:42.670 --> 00:06:44.769 Hey, I can actually start servicing customers. 00:06:45.129 --> 00:06:47.790 That's where the business actually starts. Then 00:06:47.790 --> 00:06:50.790 all the expenses would then go under the ordinary, 00:06:51.209 --> 00:06:54.550 necessary, reasonable. Hey, I spent this money 00:06:54.550 --> 00:06:56.910 once I started the business and I could deduct 00:06:56.910 --> 00:06:59.649 it if it fit into one of those ordinary, necessary 00:06:59.649 --> 00:07:02.529 or reasonable categories. Now, in your case, 00:07:02.730 --> 00:07:05.529 What were some of the expenses new of ahead of 00:07:05.529 --> 00:07:07.269 time and then other expenses that you got more 00:07:07.269 --> 00:07:11.850 surprised by? So I knew ahead of time that the 00:07:11.850 --> 00:07:14.490 LLC was going to cost, you know, getting set 00:07:14.490 --> 00:07:16.389 up your articles of incorporation with the state. 00:07:16.930 --> 00:07:19.529 I knew like getting my license to do, you have 00:07:19.529 --> 00:07:21.610 to have a license agency in the state of Oklahoma. 00:07:22.370 --> 00:07:25.529 So I knew those factors. Like I knew I needed 00:07:25.529 --> 00:07:28.269 a new computer. I was working on a laptop, but 00:07:28.269 --> 00:07:31.360 I needed like a desktop situation. needed a new 00:07:31.360 --> 00:07:34.860 monitor because mind you all I was a corporate 00:07:34.860 --> 00:07:38.740 employee for over 20 years so all of my Computers 00:07:38.740 --> 00:07:40.860 and monitors and just different things came from 00:07:40.860 --> 00:07:46.899 work came from my employer and so I was like 00:07:46.899 --> 00:07:50.199 Now where my stuff at so I knew I was gonna have 00:07:50.199 --> 00:07:52.160 to do that And so those were just some of the 00:07:52.160 --> 00:07:54.300 things off top like, you know printer printer 00:07:54.300 --> 00:07:56.560 paper ink Those were some of the things I knew 00:07:56.560 --> 00:07:58.319 I was going to have to get. Now, what I didn't 00:07:58.319 --> 00:08:00.959 realize, what I didn't realize I was going to 00:08:00.959 --> 00:08:05.740 need is programs. I mean, like, everything costs. 00:08:06.779 --> 00:08:10.600 Everything costs. Like, if you want to do programs 00:08:10.600 --> 00:08:12.459 like a cell phone, right, when people want to 00:08:12.459 --> 00:08:14.720 call, you need a business phone, right? Not your 00:08:14.720 --> 00:08:17.600 cell phone. You need a business phone. You need 00:08:17.600 --> 00:08:20.839 errors and omissions. You need all these different 00:08:20.839 --> 00:08:24.930 things that go with insurance. Like, how do you 00:08:24.930 --> 00:08:27.430 receive your commission? You need a certain system 00:08:27.430 --> 00:08:30.709 for that. You need a certain system for your 00:08:30.709 --> 00:08:33.230 expenses, like your, I don't have payroll per 00:08:33.230 --> 00:08:36.889 se, but how you document it. You need to have 00:08:36.889 --> 00:08:41.929 money for just anything that literally comes 00:08:41.929 --> 00:08:46.309 up. And when I tell you it has marketing, a website, 00:08:46.870 --> 00:08:49.309 my website, I thought I was just going to make 00:08:49.309 --> 00:08:51.490 my, create my own website, you know, Canva, something 00:08:51.490 --> 00:08:56.529 like that, you know. No, no, it it costs a lot 00:08:56.529 --> 00:09:00.289 more money than what I anticipated for sure Got 00:09:00.289 --> 00:09:02.529 it. So thinking about more of the planning for 00:09:02.529 --> 00:09:05.429 the listeners. So we think art I have this initial 00:09:05.429 --> 00:09:07.669 idea Ideally, I want to start with something 00:09:07.669 --> 00:09:10.529 that I know or have experience with then I got 00:09:10.529 --> 00:09:12.730 to figure out art What are the costs to start 00:09:12.730 --> 00:09:15.590 the business that enjoy what people think when 00:09:15.590 --> 00:09:17.649 they think people tell you? Oh, you know, you 00:09:17.649 --> 00:09:19.389 need to start a business so you can save on taxes 00:09:19.389 --> 00:09:21.759 as you're mentioning the items to meet at your 00:09:21.759 --> 00:09:24.399 website, software, all that stuff. That was money 00:09:24.399 --> 00:09:28.860 you spent. Now, if you had, you know, you had 00:09:28.860 --> 00:09:31.159 a W -2 kind of the end of the year for 2024. 00:09:32.080 --> 00:09:34.240 So if you had spent money on the business to 00:09:34.240 --> 00:09:36.799 get it started, you could have taken deductions 00:09:36.799 --> 00:09:40.059 for that to offset the income from your W -2 00:09:40.059 --> 00:09:42.840 job. And that would have lowered your actual 00:09:42.840 --> 00:09:46.759 tax bill. However, you spent that money. It wasn't 00:09:46.759 --> 00:09:49.549 as if it just came out of thin air. and the Irish, 00:09:49.970 --> 00:09:51.950 out of their goodness of their heart, gave you 00:09:51.950 --> 00:09:54.070 a deduction. Right. Either you spent it out of 00:09:54.070 --> 00:09:56.610 your cash or you borrowed the money. So either 00:09:56.610 --> 00:09:59.870 way, you had some skin in the game. That's really 00:09:59.870 --> 00:10:01.870 where you're getting the deductions for. And 00:10:01.870 --> 00:10:03.690 the reason the Irish is giving you that deduction 00:10:03.690 --> 00:10:06.269 is because they want you to be able to save money 00:10:06.269 --> 00:10:08.649 on taxes, not out of the goodness of their heart, 00:10:08.730 --> 00:10:11.269 because they know you're looking to create something 00:10:11.269 --> 00:10:13.649 that could potentially also not only implore 00:10:13.649 --> 00:10:16.389 you where, hey, if you start making more money, 00:10:16.529 --> 00:10:18.820 you're going to spend more money. But you also 00:10:18.820 --> 00:10:20.860 might eventually hire people. And those two are 00:10:20.860 --> 00:10:23.340 going to pay taxes and look at it as an investment 00:10:23.340 --> 00:10:26.139 on their side into the economy when they give 00:10:26.139 --> 00:10:28.639 you a tax break. And so you have to think about 00:10:28.639 --> 00:10:30.779 the same way you're spending this money. And 00:10:30.779 --> 00:10:32.539 I'm, you know, I'm just not a business to the 00:10:32.539 --> 00:10:34.679 same on taxes. No, no, this is an investment 00:10:34.679 --> 00:10:36.620 in your future. And so you have two components 00:10:36.620 --> 00:10:39.440 that invest it. You have your the capital, which 00:10:39.440 --> 00:10:41.539 is the money that you're putting out of your 00:10:41.539 --> 00:10:44.860 pocket. But then you have your time. So we call 00:10:44.860 --> 00:10:47.700 that sweat equity. So you have those two components, 00:10:47.840 --> 00:10:50.100 which you need to think of sweat equity in my 00:10:50.100 --> 00:10:53.240 capital equity. Those are my investments in the 00:10:53.240 --> 00:10:55.539 business. I need to be able to figure out what 00:10:55.539 --> 00:10:58.539 is the return I should get as a result of me 00:10:58.539 --> 00:11:01.139 putting money into this and putting time into 00:11:01.139 --> 00:11:03.240 this. Now, when you start it, were you thinking 00:11:03.240 --> 00:11:05.860 of the along those lines or what what have you 00:11:05.860 --> 00:11:10.919 been doing now? Absolutely not. I think one of 00:11:10.919 --> 00:11:14.929 the things I've learned is. And I and you mentioned 00:11:14.929 --> 00:11:17.789 it during the last podcast as you really I would 00:11:17.789 --> 00:11:20.330 encourage everybody to do what I didn't do and 00:11:20.330 --> 00:11:23.970 really take time out every time you There's an 00:11:23.970 --> 00:11:27.070 expense to just kind of stop and process Why 00:11:27.070 --> 00:11:29.330 am I spending it in trying to understand the 00:11:29.330 --> 00:11:31.909 ROI because I did not I was just like, okay I'm 00:11:31.909 --> 00:11:35.909 I was focused on my 30 60 90 days and I was I 00:11:35.909 --> 00:11:38.490 had a timeline that I needed to be up and running 00:11:38.490 --> 00:11:42.480 and money, I didn't stop and reflect. And it 00:11:42.480 --> 00:11:46.759 really wasn't until I started to put all my expenses 00:11:46.759 --> 00:11:49.539 and stuff into it, like the little system that 00:11:49.539 --> 00:11:51.740 kind of shows you what you're spending. And I 00:11:51.740 --> 00:11:54.480 was like, did I need that? Now, how is this going 00:11:54.480 --> 00:11:57.360 to help me? And so that's really what I want 00:11:57.360 --> 00:11:58.940 to know from you. And I'm sure the listeners 00:11:58.940 --> 00:12:02.759 do too, is really understand when you were talking 00:12:02.759 --> 00:12:05.700 about the return or the initial investment in 00:12:05.700 --> 00:12:08.570 the time, right? What does that look like? How 00:12:08.570 --> 00:12:11.509 can we slow down and find out what we should 00:12:11.509 --> 00:12:14.509 be really spending more time on? What can we 00:12:14.509 --> 00:12:17.450 get? What can we deduct right? Because we've 00:12:17.450 --> 00:12:19.370 said this a lot on the podcast is that every 00:12:19.370 --> 00:12:21.210 time I spent money on something that was like 00:12:21.210 --> 00:12:23.889 Oh, you could just write it off. I mean literally 00:12:23.889 --> 00:12:27.350 Every single time I bought some type of software 00:12:27.350 --> 00:12:29.570 or something. Oh, it's an expense You could just 00:12:29.570 --> 00:12:31.750 write it off and I'm just like every you can't 00:12:31.750 --> 00:12:34.919 write everything off, right? But I didn't stop 00:12:34.919 --> 00:12:37.120 to think about it. I knew that I could write 00:12:37.120 --> 00:12:39.240 everything off. But one of the things is I just 00:12:39.240 --> 00:12:41.600 didn't stop to think about what can I, and then 00:12:41.600 --> 00:12:43.919 try to be intentional about doing the things 00:12:43.919 --> 00:12:47.080 that could lower my tax bill, right? So hindsight 00:12:47.080 --> 00:12:49.940 is always 20 -20, but certainly I'm still in 00:12:49.940 --> 00:12:52.100 that space, right? So your question is, have 00:12:52.100 --> 00:12:55.139 you stopped to think about my ROI? Oh, I stopped. 00:12:55.340 --> 00:12:58.240 I thought about it. But have I really did the 00:12:58.240 --> 00:13:01.850 assessment? Absolutely not because I'm still 00:13:01.850 --> 00:13:04.429 kind of in the thick of things and still trying 00:13:04.429 --> 00:13:07.049 to figure it out with expenses coming. They're 00:13:07.049 --> 00:13:10.629 still coming, you know? Got it. So one thing 00:13:10.629 --> 00:13:12.990 that I will look to help clients with in the 00:13:12.990 --> 00:13:15.070 same way, if you were, you know, you're in Oklahoma, 00:13:15.149 --> 00:13:17.370 I'm in Texas. We got people across the country, 00:13:17.529 --> 00:13:21.389 maybe listening. And when you are preparing for 00:13:21.389 --> 00:13:23.730 vacation and you're going to a different place, 00:13:23.809 --> 00:13:27.179 you will look at the forecast. to determine how 00:13:27.179 --> 00:13:29.559 you should prepare for that new place. That's 00:13:29.559 --> 00:13:32.000 good. And that's going to help you dictate what 00:13:32.000 --> 00:13:35.100 do you bring? How do you dress? Do I need an 00:13:35.100 --> 00:13:37.919 umbrella? Do I need sunscreen? All those factors 00:13:37.919 --> 00:13:41.100 are going to help you prepare ahead of time. 00:13:41.460 --> 00:13:44.639 Because when you get there and it's raining and 00:13:44.639 --> 00:13:46.220 you don't have a park or you don't have an umbrella, 00:13:46.700 --> 00:13:48.920 you're going to have to try to scramble. And 00:13:48.920 --> 00:13:51.840 usually it's going to cost more to do that when 00:13:51.840 --> 00:13:54.139 you're not prepared ahead of time. And so it 00:13:54.139 --> 00:13:55.840 would be good for you when you would look to 00:13:55.840 --> 00:13:59.059 start your business is do a, at minimum 12 months 00:13:59.059 --> 00:14:02.860 forecast. So if you have this idea around expenses 00:14:02.860 --> 00:14:04.820 where let's say you do have a job and you're 00:14:04.820 --> 00:14:06.840 like, I got to spend X amount. Many of the things 00:14:06.840 --> 00:14:09.460 she mentioned are deductible. The software, all 00:14:09.460 --> 00:14:11.840 the things are deductible. So what am I currently 00:14:11.840 --> 00:14:13.820 paying in taxes? What do I need to spend on this 00:14:13.820 --> 00:14:16.919 business? How would that lower my tax bill? But. 00:14:17.070 --> 00:14:20.409 depending on your income, we know that it's only 00:14:20.409 --> 00:14:23.330 going to reduce your taxes proportionate to your 00:14:23.330 --> 00:14:25.750 tax bracket. If you're in a 24 % tax bracket, 00:14:26.129 --> 00:14:29.210 this software costs $100. Oh, yes, deductible. 00:14:29.370 --> 00:14:32.110 It's really only saving me $24. Yeah, I still 00:14:32.110 --> 00:14:35.669 got to spend $76 out of my pocket in order to 00:14:35.669 --> 00:14:39.090 finance that expense. So that $76, although the 00:14:39.090 --> 00:14:41.389 IRS is giving me a break on off the hundred. 00:14:41.590 --> 00:14:44.549 And ultimately, if I make a dollar. the return 00:14:44.549 --> 00:14:48.269 on $76 is higher than the return on for mad purposes. 00:14:48.490 --> 00:14:50.870 It allows me to increase my return because my 00:14:50.870 --> 00:14:54.870 after tax amount is lower, but I still want to 00:14:54.870 --> 00:14:56.730 be able to do that forecast so that I can say, 00:14:56.909 --> 00:14:59.210 how much am I going to spend? And then if you're 00:14:59.210 --> 00:15:02.129 paying money in taxes, the also the objective 00:15:02.129 --> 00:15:05.710 would be, you know what? Let me adjust my withholdings 00:15:05.710 --> 00:15:08.970 so that if I'm going to spend $5 ,000 or whatever 00:15:08.970 --> 00:15:10.629 on this business and that's going to reduce my 00:15:10.629 --> 00:15:13.720 tax bill by $1 ,200. Well, hey, let me not pay 00:15:13.720 --> 00:15:16.500 that $1 ,200. Let me recoup it before I file 00:15:16.500 --> 00:15:18.259 my taxes. Cause that's what we talked about in 00:15:18.259 --> 00:15:21.879 the past about people love refunds, but if you're 00:15:21.879 --> 00:15:24.539 investing in a new startup business, you want 00:15:24.539 --> 00:15:28.200 as much money as possible at your disposal. So 00:15:28.200 --> 00:15:31.039 that ultimately, if you need to invest in something 00:15:31.039 --> 00:15:32.620 with the thought that it's going to help you 00:15:32.620 --> 00:15:35.240 make more money, then you have it sooner versus 00:15:35.240 --> 00:15:37.019 having to wait, you know, three, four, six months 00:15:37.019 --> 00:15:39.299 or whatever to get the money back that you overpaid 00:15:39.299 --> 00:15:41.759 on your taxes. Transitioning to your situation 00:15:41.759 --> 00:15:44.720 leading up and then even now, what would be some 00:15:44.720 --> 00:15:46.620 things you would feel like you would do differently 00:15:46.620 --> 00:15:49.580 from a tax approach or business approach? Now 00:15:49.580 --> 00:15:51.159 that you're looking back, let's say when you're 00:15:51.159 --> 00:15:54.240 done with that 30, 60, 90 day. So what would 00:15:54.240 --> 00:15:57.039 you have added to the list? So one thing I did 00:15:57.039 --> 00:16:00.600 do you all from listening to this podcast and 00:16:00.600 --> 00:16:03.759 working with Terrence is I actually kind of hit 00:16:03.759 --> 00:16:06.620 on it a few podcasts ago, but I actually opened 00:16:06.620 --> 00:16:08.799 a business account and then I opened a business 00:16:08.799 --> 00:16:12.759 savings account. to start preparing for said 00:16:12.759 --> 00:16:16.159 taxes, whatever, because clearly I am taking 00:16:16.159 --> 00:16:20.580 a loss of this first year in 2024. But even still, 00:16:20.740 --> 00:16:22.980 just preparing for taxes. So that is something 00:16:22.980 --> 00:16:25.960 that I did do. Just try to estimate based on 00:16:25.960 --> 00:16:29.139 tax brackets to see what my projected tax bill 00:16:29.139 --> 00:16:31.139 would be. Even though I'm trying to lower my 00:16:31.139 --> 00:16:34.440 tax bill, something I would definitely do different 00:16:34.440 --> 00:16:37.620 is I would literally spend more time. with the 00:16:37.620 --> 00:16:39.480 forecasting, because as you were saying that 00:16:39.480 --> 00:16:42.480 I was writing it down, I did not forecast properly 00:16:42.480 --> 00:16:46.980 in terms of expenses, right? So when you do a 00:16:46.980 --> 00:16:48.940 business plan, and I encourage everyone to do 00:16:48.940 --> 00:16:51.840 that, you do a business plan as it relates to 00:16:51.840 --> 00:16:54.539 your business, like to the thing that you're 00:16:54.539 --> 00:16:57.840 trying to do. So for me, my business plan was, 00:16:58.059 --> 00:16:59.799 how many leads do you anticipate that you're 00:16:59.799 --> 00:17:02.220 gonna get in a month? And how much premium do 00:17:02.220 --> 00:17:04.140 you think you're gonna write? So that's my business 00:17:04.140 --> 00:17:06.220 plan. What's your game plan on getting in front 00:17:06.220 --> 00:17:10.309 of people? My business plan did not include your 00:17:10.309 --> 00:17:12.369 expenses. How are you going to pay for these 00:17:12.369 --> 00:17:15.289 expenses? Are you self -funded? Because you mentioned 00:17:15.289 --> 00:17:17.529 that in terms of capital, right? I didn't spend 00:17:17.529 --> 00:17:19.369 a lot of time in my business plan for capital. 00:17:19.630 --> 00:17:21.589 And I think that's something that everybody should 00:17:21.589 --> 00:17:24.430 do, even from a tax standpoint, from a business 00:17:24.430 --> 00:17:26.869 standpoint and a tax standpoint, is spend time 00:17:26.869 --> 00:17:29.089 on your capital. Because one of the things that 00:17:29.089 --> 00:17:31.650 I should not have done, and Terrence, I want 00:17:31.650 --> 00:17:34.470 you to speak on this, from a tax standpoint, 00:17:34.650 --> 00:17:41.089 is that this is self -funded. In hindsight, I 00:17:41.089 --> 00:17:43.569 think I should have just got me a loan and did 00:17:43.569 --> 00:17:47.089 it that way. Because when you're self -funded, 00:17:47.869 --> 00:17:50.369 you have money going out. There's no money coming 00:17:50.369 --> 00:17:53.250 in until you start having revenue, right? And 00:17:53.250 --> 00:17:55.950 I think that loan piece of it would have helped. 00:17:56.190 --> 00:17:57.970 Now, I don't know necessarily, Terrence, you 00:17:57.970 --> 00:17:59.910 can tell us what that looks like when you file 00:17:59.910 --> 00:18:04.410 your taxes in terms of it being a loss or a debt. 00:18:04.480 --> 00:18:06.640 But certainly I feel like those are some things 00:18:06.640 --> 00:18:08.619 I should have done. I should have paid more attention 00:18:08.619 --> 00:18:12.480 to my expense forecast for sure. And then also 00:18:12.480 --> 00:18:14.859 spent more time with the capital forecast as 00:18:14.859 --> 00:18:17.579 well. All right. So just to address two things 00:18:17.579 --> 00:18:21.140 that you mentioned. So there's one, the decision 00:18:21.140 --> 00:18:24.640 to actually self -funded or to get outside financing. 00:18:25.599 --> 00:18:27.759 When you get outside financing, either you're 00:18:27.759 --> 00:18:30.480 going to give up ownership in exchange for money. 00:18:30.700 --> 00:18:33.460 So that's where you get equity or you're going 00:18:33.460 --> 00:18:36.289 to. We're going to basically exchange terms. 00:18:36.410 --> 00:18:38.210 I'm going to borrow a certain amount of money 00:18:38.210 --> 00:18:40.089 and I'm going to pay back more than I borrowed 00:18:40.089 --> 00:18:42.470 over a certain schedule. So that's the debt part. 00:18:42.609 --> 00:18:45.150 Now that difference, what I borrowed and what 00:18:45.150 --> 00:18:47.470 I eventually had to pay back, that is interest. 00:18:47.990 --> 00:18:50.150 That is what's going to be deductible. So if 00:18:50.150 --> 00:18:52.589 I borrow 10, I ended up paying back 11 ,000. 00:18:52.690 --> 00:18:55.170 That thousand dollars is deductible. I can use 00:18:55.170 --> 00:18:58.289 that to deduct on my taxes. Now what challenges 00:18:58.289 --> 00:19:00.829 people, they will, and then whenever you use 00:19:00.829 --> 00:19:03.809 that $10 ,000 on, you can actually deduct as 00:19:03.809 --> 00:19:06.099 well. So remember, you didn't come out of pocket 00:19:06.099 --> 00:19:08.720 at all. You just borrowed the money. Now the 00:19:08.720 --> 00:19:11.119 extra money you had to pay back is the deductible, 00:19:11.119 --> 00:19:13.839 the $1 ,000. And then the $10 ,000 that you spent 00:19:13.839 --> 00:19:17.119 money on, that is deductible. But you only get 00:19:17.119 --> 00:19:19.819 to take advantage of that in the year that you 00:19:19.819 --> 00:19:23.220 do it. Oftentimes people will borrow money. They 00:19:23.220 --> 00:19:25.599 spend the $10 ,000. They get the $10 ,000 tax 00:19:25.599 --> 00:19:27.779 deduction and they're excited. Like, okay, I 00:19:27.779 --> 00:19:30.920 got a refund. Then they start paying back the 00:19:30.920 --> 00:19:33.910 loan and they realize what If I'm paying back 00:19:33.910 --> 00:19:36.230 the load, the only amount that's actually deductible 00:19:36.230 --> 00:19:38.869 is the interest part. The principal payment, 00:19:39.009 --> 00:19:41.309 the $10 ,000, I already got a tax benefit for 00:19:41.309 --> 00:19:43.529 that. That's right. I'm not going to get a future 00:19:43.529 --> 00:19:47.190 tax benefit. And so I have to now think, well, 00:19:47.190 --> 00:19:50.990 look, if I pay back $10 ,000 and I made $10 ,000 00:19:50.990 --> 00:19:55.049 on paper, the IRS says, well, look, your profit 00:19:55.049 --> 00:19:58.509 was $10 ,000. We already gave you a tax deduction 00:19:58.509 --> 00:20:01.190 for that. Oh, that's right. The profit. So you 00:20:01.190 --> 00:20:03.640 made $10 ,000. You paid us, you paid the loan 00:20:03.640 --> 00:20:06.119 back. But you're so if you look at the math, 00:20:06.119 --> 00:20:07.839 you're thinking, all right, I'm in a paying taxes 00:20:07.839 --> 00:20:11.319 on profits. Yeah. But I don't have any cash to 00:20:11.319 --> 00:20:12.960 show for it, right? I think that the thousand 00:20:12.960 --> 00:20:16.880 paid back the loan. Then I now have a deficit 00:20:16.880 --> 00:20:18.839 between, hey, the IRS is going to tax me on that 00:20:18.839 --> 00:20:21.779 10 ,000. But the cash that I made actually went 00:20:21.779 --> 00:20:23.819 to paying back what I already borrow. And so 00:20:23.819 --> 00:20:26.180 a lot of business owners, it's really challenging 00:20:26.180 --> 00:20:29.319 for them to manage that. relationship. And I'll 00:20:29.319 --> 00:20:31.799 get into maybe some thoughts on strategy for 00:20:31.799 --> 00:20:33.859 future episodes, especially at bigger scale. 00:20:34.220 --> 00:20:36.980 So when you have inventory, accounts receivable, 00:20:37.079 --> 00:20:38.920 accounts stable, those are all things that you 00:20:38.920 --> 00:20:42.200 have to plan ahead for relative to your cash 00:20:42.200 --> 00:20:44.519 flow, but also your tax situation. So in your 00:20:44.519 --> 00:20:47.660 case, the interest part, that is also what you 00:20:47.660 --> 00:20:50.089 need to factor into your return. you think, all 00:20:50.089 --> 00:20:52.150 right, if I borrowed this money and I got paid 00:20:52.150 --> 00:20:54.549 back more than I borrowed, then ultimately the 00:20:54.549 --> 00:20:57.069 return that I expect should not only compensate 00:20:57.069 --> 00:20:59.630 me for the capital I put in out of my own pocket, 00:21:00.170 --> 00:21:02.109 it should compensate me for the loan that I borrowed 00:21:02.109 --> 00:21:05.029 plus the interest plus my time. That's right. 00:21:05.029 --> 00:21:08.349 So when you borrow money, you just are expecting 00:21:08.349 --> 00:21:11.029 to get a even higher return than if you were 00:21:11.029 --> 00:21:13.250 to finance it yourself because you're basically 00:21:13.250 --> 00:21:15.470 pulling forward money that you would have made. 00:21:15.490 --> 00:21:18.230 You're just giving it to yourself today. That's 00:21:18.230 --> 00:21:20.069 good. And as a result, let me spend that to run 00:21:20.069 --> 00:21:22.430 faster in the future to compensate for the money 00:21:22.430 --> 00:21:25.490 you pull forward today. That's good. Y 'all hear 00:21:25.490 --> 00:21:28.970 that? That's a word. Okay. I like that because 00:21:28.970 --> 00:21:30.750 those are some things you got to think about. 00:21:30.789 --> 00:21:33.890 And if I decide to borrow some money, I will 00:21:33.890 --> 00:21:38.809 definitely make sure I run it by Terrence. Let's 00:21:38.809 --> 00:21:41.849 do this proper forecast here to make sure I'm 00:21:41.849 --> 00:21:45.029 not, you know, put myself in a, in a further 00:21:45.029 --> 00:21:48.150 deficit for sure. So that's that's really good. 00:21:48.150 --> 00:21:50.250 Thank you so much for that because that's kind 00:21:50.250 --> 00:21:52.029 of where I'm at another thing that I think people 00:21:52.029 --> 00:21:54.250 need to think about is if you do decide to self 00:21:54.250 --> 00:21:57.950 -fund you need to be adequately funded and what 00:21:57.950 --> 00:22:00.910 I mean by that is that you can't pull from the 00:22:00.910 --> 00:22:05.150 same pot, which is something I would say I I 00:22:05.150 --> 00:22:07.970 did and do and it's not wise to do that from 00:22:07.970 --> 00:22:10.869 a business standpoint is you pulling from the 00:22:10.869 --> 00:22:14.170 same pot to pay your own bills versus and also 00:22:14.170 --> 00:22:17.039 paying the bills of the business so Certainly, 00:22:17.579 --> 00:22:20.519 you're planning, which means that you may not 00:22:20.519 --> 00:22:23.799 be able to start as soon as you like. And that 00:22:23.799 --> 00:22:26.759 piece has to be okay. You know, if you don't 00:22:26.759 --> 00:22:29.339 start as soon as you like, you have to be flexible 00:22:29.339 --> 00:22:32.079 with your 30, 60, 90 days because you want to 00:22:32.079 --> 00:22:34.400 use wisdom. You want to start. And Terrence has 00:22:34.400 --> 00:22:36.440 said this to us all the time. You want to get 00:22:36.440 --> 00:22:39.980 in business to be profitable, right? Otherwise, 00:22:40.180 --> 00:22:42.569 it's a hobby. And this is not a hobby for me. 00:22:42.589 --> 00:22:45.029 This is for real. This is a career. This is like 00:22:45.029 --> 00:22:47.849 to set my family up, et cetera. So you want to 00:22:47.849 --> 00:22:50.069 make sure you do it wisely. So I would certainly 00:22:50.069 --> 00:22:55.029 say plan and spend time planning, including not 00:22:55.029 --> 00:22:56.250 only how you're going to scale the business, 00:22:56.490 --> 00:22:58.829 but how your expenses and then your capital on 00:22:58.829 --> 00:23:01.940 doing that. And so when I talk to business owners, 00:23:02.180 --> 00:23:05.180 I will tell them that generally you are the biggest 00:23:05.180 --> 00:23:07.480 constraint and the biggest asset of the business. 00:23:07.599 --> 00:23:10.500 And a lot of times you're going to wear two different 00:23:10.500 --> 00:23:12.440 personalities. You're going to be the labor, 00:23:12.619 --> 00:23:15.079 the talent, but you're also the owner. And those 00:23:15.079 --> 00:23:17.059 are two different skill sets. Many times people, 00:23:17.059 --> 00:23:20.039 they start a business because they have a talent 00:23:20.039 --> 00:23:22.079 or a skill set and they think, Oh, you know, 00:23:22.099 --> 00:23:23.779 I can really cook or let me start a restaurant. 00:23:24.140 --> 00:23:26.410 Well, owning and operating a restaurant is way 00:23:26.410 --> 00:23:28.569 different than just making food. There's a whole 00:23:28.569 --> 00:23:30.829 lot of other components and there's really six 00:23:30.829 --> 00:23:33.529 parts of any business. You have sales, marketing, 00:23:34.130 --> 00:23:37.349 finance, operations, fulfillment, and strategy. 00:23:37.750 --> 00:23:39.269 When you don't have anyone else helping you, 00:23:39.390 --> 00:23:41.730 you're going to wear all six of those hats. And 00:23:41.730 --> 00:23:43.569 most people aren't going to be good at all six 00:23:43.569 --> 00:23:45.750 of them. You're going to be deficient in one 00:23:45.750 --> 00:23:48.269 of those areas. where that's why you have to 00:23:48.269 --> 00:23:50.549 get educated or, hey, I'm going to outsource 00:23:50.549 --> 00:23:52.849 this function on a part -time basis or a full 00:23:52.849 --> 00:23:55.289 -time basis eventually to help me to where I 00:23:55.289 --> 00:23:58.049 can lean into my strengths and ultimately be 00:23:58.049 --> 00:24:00.309 able to try to generate more revenue that will 00:24:00.309 --> 00:24:03.569 allow me to either retain it back into the business 00:24:03.569 --> 00:24:05.990 or reinvest it. And the other part that I say 00:24:05.990 --> 00:24:07.950 people that are constrained is the fact that 00:24:07.950 --> 00:24:10.430 you have to pull money out of the business. If 00:24:10.430 --> 00:24:13.170 this business is a machine that's supposed to 00:24:13.170 --> 00:24:16.319 return money and is an investment, that you like 00:24:16.319 --> 00:24:18.559 to be able to leave money in it if possible so 00:24:18.559 --> 00:24:20.859 you could reinvest back in the more stuff back 00:24:20.859 --> 00:24:23.599 in the marketing back into people so that frees 00:24:23.599 --> 00:24:25.980 up your time or this is something i'm not very 00:24:25.980 --> 00:24:27.920 good at so i could hire someone else who's better 00:24:27.920 --> 00:24:30.559 at it to actually enhance the function overall 00:24:30.559 --> 00:24:32.759 but one of the things you have to think about 00:24:32.759 --> 00:24:36.500 is okay here's my personal money here's my business 00:24:36.500 --> 00:24:39.140 money i gotta also think all right am i going 00:24:39.140 --> 00:24:41.410 to be able to make the same personal financial 00:24:41.410 --> 00:24:43.950 decisions I made before. If I go out to eat all 00:24:43.950 --> 00:24:46.470 the time, can I afford to do that now that I 00:24:46.470 --> 00:24:48.130 have this business that I'm also supporting? 00:24:48.690 --> 00:24:50.390 Can I go on vacation? Can I do these things? 00:24:50.450 --> 00:24:53.190 Yeah, you might. And you might think, you know 00:24:53.190 --> 00:24:57.009 what? I work hard. I deserve it. Well, you can 00:24:57.009 --> 00:24:59.690 have that approach. But to me this point, you 00:24:59.690 --> 00:25:01.809 also got to be thinking about as I'm forecasting 00:25:01.809 --> 00:25:05.009 this ahead of time, it's really challenging for 00:25:05.009 --> 00:25:08.789 people to get to the point where they're comfortable 00:25:08.789 --> 00:25:11.329 and it's hard for them to sacrifice to get to 00:25:11.329 --> 00:25:14.029 that point. It's almost like the snowball going 00:25:14.029 --> 00:25:15.990 up the hill. It's like, okay, once you get to 00:25:15.990 --> 00:25:18.349 the top of the hill, coming down, it's just way 00:25:18.349 --> 00:25:21.309 easier. It's really a sacrifice to get up to 00:25:21.309 --> 00:25:23.230 that point. Once you have a million dollars, 00:25:23.430 --> 00:25:25.509 it's way easier to make money on that million 00:25:25.509 --> 00:25:27.829 than when you have a thousand, right? And I got 00:25:27.829 --> 00:25:31.710 40 % on my thousand. Oh, wow, I got $1. But if 00:25:31.710 --> 00:25:33.829 I got 20 % of my million, that's a couple hundred 00:25:33.829 --> 00:25:36.109 thousand. The thought process is different. So 00:25:36.109 --> 00:25:38.650 I think you have to forecast not only your financials, 00:25:38.710 --> 00:25:40.769 but also your personal decision making so that, 00:25:40.970 --> 00:25:43.349 hey, how long am I willing to sacrifice for this? 00:25:43.869 --> 00:25:46.150 Because ideally, within 12 to 24 months, your 00:25:46.150 --> 00:25:48.650 idea should be getting trashed. Right. Now, do 00:25:48.650 --> 00:25:50.769 you have enough money to survive that long? That 00:25:50.769 --> 00:25:53.150 part. That's what you have to figure out. And 00:25:53.150 --> 00:25:56.579 I think that Hopefully we can do another podcast 00:25:56.579 --> 00:25:58.599 series where we talk about how you're going to 00:25:58.599 --> 00:26:02.119 get paid, right? Because you alluded to it, I 00:26:02.119 --> 00:26:04.220 think, a couple of podcasts ago, where when you 00:26:04.220 --> 00:26:07.140 are a disregarded entity or an LLC, you don't 00:26:07.140 --> 00:26:09.220 have an S -corp, the way you pay yourself is 00:26:09.220 --> 00:26:11.519 different than the way you are. If you have a 00:26:11.519 --> 00:26:13.980 tax designation as an S -corp, you are an employee, 00:26:14.259 --> 00:26:17.019 and you literally need to have to be compliant, 00:26:17.240 --> 00:26:20.579 you have to have a W -2, right? You have to be 00:26:20.579 --> 00:26:23.400 a W -2 employee. but your LLC disregarded entity, 00:26:23.539 --> 00:26:25.920 not at the S corp, it's different. And so maybe 00:26:25.920 --> 00:26:27.799 we can talk about that because that is something 00:26:27.799 --> 00:26:31.859 too that you have to consider. So just to recap 00:26:31.859 --> 00:26:35.200 of my couch session, and then maybe Terrence 00:26:35.200 --> 00:26:38.019 can give us some actionable items to be better 00:26:38.019 --> 00:26:41.579 at how to lower your tax bill is one, please 00:26:41.579 --> 00:26:43.480 do your business plan. When you're planning, 00:26:43.920 --> 00:26:45.680 consider the business that you're in, but also 00:26:45.680 --> 00:26:48.680 consider your person, yourself, like he said 00:26:48.680 --> 00:26:51.819 so eloquently just a second ago because You I'm 00:26:51.819 --> 00:26:54.059 telling you unless you are a multi -millionaire 00:26:54.059 --> 00:26:57.359 your funds will run quick. They will go quickly 00:26:57.359 --> 00:27:01.859 the unexpected expenses and Also be honest with 00:27:01.859 --> 00:27:05.039 yourself. He gave us six things right sales market 00:27:05.039 --> 00:27:08.400 finance operation fulfillment and strategy You 00:27:08.400 --> 00:27:11.279 may think you're Superman a superwoman However, 00:27:11.440 --> 00:27:14.660 so comma I am telling you now that is taxing 00:27:14.660 --> 00:27:17.259 that is taxing every day. You have to get up 00:27:17.259 --> 00:27:19.950 and be intentional about how you start your day 00:27:19.950 --> 00:27:23.029 and how you show up for that day and what you're 00:27:23.029 --> 00:27:25.109 gonna do on that day, right? Are you gonna do 00:27:25.109 --> 00:27:26.869 the fulfillment? Are you gonna focus on strategy? 00:27:26.950 --> 00:27:29.190 Are you gonna do these different things? And 00:27:29.190 --> 00:27:32.109 so you may need to spend the money to outsource, 00:27:32.170 --> 00:27:35.009 but that all goes into planning. And then from 00:27:35.009 --> 00:27:39.049 a tax standpoint, pull up the IRS, get with your 00:27:39.049 --> 00:27:42.410 tax professional and say, okay, this is what 00:27:42.410 --> 00:27:44.950 I need to spend money on. What does this look 00:27:44.950 --> 00:27:48.049 like from a tax standpoint, right? If you have 00:27:48.049 --> 00:27:52.369 to take a loss like myself, what do I need to 00:27:52.369 --> 00:27:55.150 be prepared for to take a loss? And if I end 00:27:55.150 --> 00:27:57.529 up getting a refund, how am I going to make that 00:27:57.529 --> 00:27:59.690 refund work for me in the long run? And then 00:27:59.690 --> 00:28:03.789 if you decide to get a loan, what does that really 00:28:03.789 --> 00:28:06.369 look like? Because don't just get money. We saw 00:28:06.369 --> 00:28:08.960 how people got those PPP loans. We're not going 00:28:08.960 --> 00:28:10.559 to talk about it, but don't just get the money 00:28:10.559 --> 00:28:12.279 and think you're just going to blow it. You still 00:28:12.279 --> 00:28:14.440 need to be strategic about this business. And 00:28:14.440 --> 00:28:17.319 then lastly, you mentioned it so well, is sacrifice. 00:28:17.759 --> 00:28:24.940 So I love hair, nails, baby. I got to do it myself 00:28:24.940 --> 00:28:27.000 now. I got to do it myself now, right? Because 00:28:27.000 --> 00:28:29.259 you got to make those sacrifices, especially 00:28:29.259 --> 00:28:31.500 when you are self -funding for sure. So what 00:28:31.500 --> 00:28:34.839 can we do? Help us, AKA help me. What can we 00:28:34.839 --> 00:28:39.789 do? What are some takeaways? So, so yeah, I think 00:28:39.789 --> 00:28:41.789 depending on if you're thinking about starting 00:28:41.789 --> 00:28:43.750 or you're already in the middle of it, I think 00:28:43.750 --> 00:28:46.269 you can always go back and assess, all right, 00:28:46.549 --> 00:28:48.970 where am I today? So in the same way, if you 00:28:48.970 --> 00:28:52.130 were looking at Google Maps or Apple Maps, where's 00:28:52.130 --> 00:28:55.170 the pin on the map? Where are you at? And then 00:28:55.170 --> 00:28:57.869 where do you ideally like to be so that you can 00:28:57.869 --> 00:29:00.809 just reorient your plan? And then we talked in 00:29:00.809 --> 00:29:03.009 the past, okay, if you have these six functions, 00:29:03.369 --> 00:29:05.789 how are you approaching your time? A lot of people 00:29:05.789 --> 00:29:08.819 love controlling their time. but that also means 00:29:08.819 --> 00:29:10.700 you need to be disciplined with how you spend 00:29:10.700 --> 00:29:13.380 your time. That was your biggest commodity when 00:29:13.380 --> 00:29:15.819 you own the business is how you spend your time. 00:29:16.220 --> 00:29:19.460 So how is your time best suited in those six 00:29:19.460 --> 00:29:22.200 functions? And ideally, more of it is going to 00:29:22.200 --> 00:29:24.579 be going towards revenue generating activities. 00:29:25.099 --> 00:29:27.359 If you're in the office and you're doing stuff, 00:29:27.539 --> 00:29:29.599 I'm looking at software, I'm checking this out, 00:29:29.640 --> 00:29:32.240 I'm checking this out. Well, you need to check 00:29:32.240 --> 00:29:34.210 and say, hey, are these things that are actually 00:29:34.210 --> 00:29:36.730 helping me make money? Am I just kind of in the 00:29:36.730 --> 00:29:39.849 office like I'm busy? Ideally, if you can identify, 00:29:40.029 --> 00:29:42.569 okay, what are the activities that lead directly 00:29:42.569 --> 00:29:45.710 to me getting more revenue? Then I need to have 00:29:45.710 --> 00:29:49.349 a plan at the start of the day to make sure that 00:29:49.349 --> 00:29:51.450 I'm going to spend the majority of my time on 00:29:51.450 --> 00:29:53.809 those activities. The stuff that doesn't generate 00:29:53.809 --> 00:29:56.609 revenue obviously can wait. Now, in order to 00:29:56.609 --> 00:29:58.930 be compliant, you might have to do some things 00:29:58.930 --> 00:30:01.349 that you didn't plan on that day. But for the 00:30:01.349 --> 00:30:03.740 most part, Most days you have complete control 00:30:03.740 --> 00:30:06.079 of what you do. So that's where I would start. 00:30:06.579 --> 00:30:08.940 Do I have a plan for how I approach my time across 00:30:08.940 --> 00:30:11.440 those six functions? What are my revenue generating 00:30:11.440 --> 00:30:14.059 activities? And then let me at least run a, you 00:30:14.059 --> 00:30:16.359 know, that 30, 69 days. Let me at least run a 00:30:16.359 --> 00:30:18.380 forecast and then if we can't get out to a year, 00:30:18.740 --> 00:30:20.799 let me at least do that. You know, we think, 00:30:20.859 --> 00:30:23.019 all right, we're in June right now. What expenses 00:30:23.019 --> 00:30:25.319 am I going to have in July, August and September? 00:30:25.539 --> 00:30:28.019 On the personal side, what am I reoccurring expenses 00:30:28.019 --> 00:30:30.339 on the business side? So I know, all right, how 00:30:30.339 --> 00:30:32.910 much cash do I have on hand? And what is my cash 00:30:32.910 --> 00:30:34.910 balance going to get low enough to where my heart's 00:30:34.910 --> 00:30:37.049 going to start palpitating? Because only your 00:30:37.049 --> 00:30:39.670 business is emotional. Part of it is just managing 00:30:39.670 --> 00:30:43.970 yourself on the good days and the bad days. And 00:30:43.970 --> 00:30:46.990 even if you are, you can be Jeff Bezos and there 00:30:46.990 --> 00:30:49.089 are certain days where they will get to a point 00:30:49.089 --> 00:30:51.329 where they question, why am I doing this? Now 00:30:51.329 --> 00:30:53.809 they may happen shorter and shorter, but everyone 00:30:53.809 --> 00:30:55.650 goes through it, whether you're a multi -billionaire 00:30:55.650 --> 00:30:57.410 or you're just starting day one. You're going 00:30:57.410 --> 00:30:59.369 to have those emotions because we're all human 00:30:59.369 --> 00:31:02.259 at the end of the day. So being able to forecast 00:31:02.259 --> 00:31:04.819 that 30, 60, 90 days, assess how you're spending 00:31:04.819 --> 00:31:07.740 your time across those six functions. And are 00:31:07.740 --> 00:31:09.720 you spending the majority of your time in revenue 00:31:09.720 --> 00:31:12.359 generating activities? If you can look at those 00:31:12.359 --> 00:31:15.099 three things. And then I think on our next podcast, 00:31:15.160 --> 00:31:19.460 we'll go through maybe some examples around how 00:31:19.460 --> 00:31:22.279 you think about the money that comes in the business 00:31:22.279 --> 00:31:25.019 and what goes out. So we'll talk about, okay, 00:31:25.160 --> 00:31:28.599 your profits, your cashflow, the taxes on those 00:31:28.599 --> 00:31:31.779 so that you can ultimately help Make better the 00:31:31.779 --> 00:31:35.119 final two decisions right and also this is the 00:31:35.119 --> 00:31:36.559 name of the pot because it's how you lower your 00:31:36.559 --> 00:31:39.359 tax bill but doing it in a strategic way not 00:31:39.359 --> 00:31:42.380 just to scramble and Say well, you know, I don't 00:31:42.380 --> 00:31:44.019 want to pay this extra thousand dollars that 00:31:44.019 --> 00:31:46.079 the government got me. Oh, what can I find that 00:31:46.079 --> 00:31:49.559 right off? Right that is a strategy, but it's 00:31:49.559 --> 00:31:51.619 not a great one and it's generally not gonna 00:31:51.619 --> 00:31:54.839 provide the long -term benefits for your business 00:31:54.839 --> 00:31:56.880 So yeah, so any pardon thoughts before we sign 00:31:56.880 --> 00:32:01.670 off. Oh my word No, just y 'all listen plan plan 00:32:01.670 --> 00:32:04.009 and be honest with yourself That's all I'm gonna 00:32:04.009 --> 00:32:07.230 say be honest and then seek out professional 00:32:07.230 --> 00:32:09.869 help. I'm very grateful to have this relationship 00:32:09.869 --> 00:32:14.230 with Terrence Y 'all reach out, you know to Terrence 00:32:14.230 --> 00:32:18.049 Or or a tax professional for sure, but listen 00:32:18.049 --> 00:32:20.609 get some professional help. Don't just wing it 00:32:20.609 --> 00:32:24.269 That's that's the quickest way to failure. Please 00:32:24.269 --> 00:32:27.410 use your resources research get professional 00:32:27.410 --> 00:32:29.759 input and make sure you're setting yourself up 00:32:29.759 --> 00:32:32.079 for success. And like he said, if you're in the 00:32:32.079 --> 00:32:36.339 middle of it, like I am, it's okay to stop, stop 00:32:36.339 --> 00:32:39.460 and assess. It's really okay to make sure you 00:32:39.460 --> 00:32:43.000 set up for success moving forward. Awesome. Well, 00:32:43.019 --> 00:32:45.220 as we say, keep more of what you earn and we 00:32:45.220 --> 00:32:46.500 will talk to you guys next week.