Stupid Tax

Scott Hambrick

Twitter: @hambrickscott

#20 - The Fifty Year Plan: How Gen Z Will Build Their Lives and Businesses Jan 22, 2024

Show notes

Mitchell and Scott pick up today's episode in the middle of a conversation about whether "the kids are gonna be alright." As Gen Z enters the workforce en masse, they do so with very different expectations than the millenials before them. Zoomers are well aware of the long and ongoing slide in real middle class wages, as well as employment uncertainty. They have less of the entitlement and belief in institutions compared to millenials, and they exhibit no lack of work ethic. In spite of this, says Scott, many Zoomers lack creativity and ambition when it comes to building their lives, and, in turn, structuring their business activity around their life.

Mitchell and Scott discuss the concept of a "fifty year plan," developing a long-term plan (a liftetime view, for most Zoomers) for your life and business. Once you identify the things you want in life, it begs the question: is your business getting you there? Can it get you there? Because if it's not, or it can't, then it might be time to re-examine your priorities, or the way you do business. The years will pass you by whether you like it or not, as Mitchell points out, so you owe it to yourself to create a plan and set a course toward what you want in life. Of course things will change -- it's a fifty year plan, after all! -- but it gives you a framework to evaluate the actions you are taking, or not taking, on a day to day basis.

Settlers of Catan TikTok: https://www.tiktok.com/@justindarnellcomedy/video/7167012784339717418

Ask Mitchell and Scott a question:

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#19 - Should You Switch to Accrual Accounting? Also, Why Tax Write Offs Are Overrated Jan 15, 2024

Show notes

Mitchell Baldridge and Scott Hambrick answer a listener question asking about switching from cash accounting to accrual accounting in his farming buinsess, and a potential tax bill that would arise from that switch. Listener Austin also asks about the common practice of spending money on new equipment to reduce taxable income, even when the business doesn't need the equipment. Scott and Mitchell explain why spending money on equipment you don't need to save on taxes is a bad decision, and why tax planning around write offs is a poor strategy for the small business person in general.

Ask Mitchell and Scott a question:

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#18 - Grift or Marketing? Getting Customer's Attention in The Internet Age Jan 08, 2024

Show notes

It's popular nowadays to throw around the term "grifter" when it comes to getting people to check out your product or service. After all, it seems like it takes either tons of frequent exposure or outlandish behavior to get attention on the internet, especially social media and YouTube. Grifting implies some level of fraudulence, however, or at least a failure to deliver the value you promised customers. What some people call "grifting" is just marketing in the modern age. It's not enough to simply describe your product any more. You need to signal what your company is about, the kind of person that buys your product or service, and do it often!

Ask Mitchell and Scott a question:

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#17 - The Customer Is NOT Always Right Jan 01, 2024

Show notes

Somewhere in the early part of the 20th century, retailer Marshall Field famously declared "the customer is always right," underlining his emphasis on customer satisfaction as an important part of the retail experience. It's a catchy saying, and variations of it have appeared throughout the retail and customer service industries. However, as Scott points out, the 21st century customer experience has been shaped by online shopping and services. Behemoths like Amazon deliver a faceless service with a priority on rock bottom prices, free shipping, and no hassle returns. Customer expectations have changed accordingly.

This puts the small business in a precarious position when it comes to customer satisfaction. Small businesses do not have the margins or scale to compete on price and volume like Amazon, and they usually can't offer instaneous service either. The small business customer experience typically thrives on personal connection, good communication, and direct access to the owner or product designer/experts -- the things you can't get from very large companies. Consequently, small businesses need to be picky about the customers they deal with. Demanding customers with expectations well out of line with what your business can offer (or should offer) can cost you a lot of hassle, grief, and ultimately, profit if you don't identify them and create a plan for steering them away early. Mitchell and Scott talk about their own experiences dealing with problem customers and how they have defined their ideal "customer avatar" in the process.

Ask Mitchell and Scott a question!

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

Merry Christmas! We're Taking a Quick Break Dec 25, 2023

Show notes

We're taking a short break for the week of Christmas and New Years. We'll be back on January 1st with more small biz talk. In the meantime, Merry Christmas and Happy New Year!

Ask Mitchell and Scott a question!

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#16 - Return on Hassle Dec 18, 2023

Show notes

Business is frequently reduced to numbers -- revenues, costs, ratios, and percentages -- but not every aspect of business operations can be described purely numerically. As Mitchell and Scott discuss on today's episode, the hassle of any given business activity has a cost measured in misery and frustration, if you have the wrong clients for your business. The best clients, that is, clients who are easy to work with and don't ask for customization that doesn't fit into your processes, are often the most profitable clients. On the other hand, even clients that offer you a lot of money can end up causing more problems than they are worth with complex, high-touch projects. Every business has it's sweet spot, and a customer avatar that will fit in best with the business model, and as Mitchell says, just do more of that!

Ask Mitchell and Scott a question!

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#15 - Should Matt Take Over His Mom's Cleaning Business? Also, RIP Charlie Munger Dec 11, 2023

Show notes

Mitchell and Scott ruminate on the life of Charlie Munger, legendary investor and vice chairman of Berkshire Hathaway who recently passed away at age 99. For decades, Munger was the right-hand man of perhaps the most famous investor of all time, Warren Buffett, and made a long string of successful invstments in diverse sectors such as insurance, banking, retail, and food. Munger amassed a fortune in the billions, but Scott questions the motivation of a man still working hard and chasing deals into his 90's.

Mitchell and Scott also address listener Matt's question (the same Matt who asked about purchasing his uncle's pest control business last episode) of whether he should work for, and potentially take over, his mother's cleaning business. The short answer? Probably not. As Mitchell puts it, whatever skills and hustle Matt could bring to the table for his mom's business could be put to work in another business -- his own business -- with far more upside.

Ask Mitchell and Scott a question!

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#14 - Matt Wants to Buy His Uncle's Business: Mitchell and Scott Weigh In Dec 04, 2023

Show notes

Matt recently wrote into the show to ask about best practices for buying a business, and more specifically his uncle's pest control business. Matt has worked in the business some, and has an opportunity to buy the business, but isn't sure about the best way to go about it -- generating a letter of intent and purchase agreement, how to value the business, how to stucture terms, financing, etc. Mitchell and Scott review his email and offer advice for aspiring business owners in a similiar situation, sharing their own successes as well as lessons learned from deals gone wrong.

One key takeaway -- once you decide you want to buy the business, get the purchase agreement signed as soon as possible. Don't delay! Many people in similar situations have gotten with a verbal agreement to buy the business, but the owner procrastinates, the papers never get drafted and executed, circumstances change, and the deal never comes to fruition. The potential purchaser wastes months and years with nothing to show for it. You owe it to yourself and your family to get serious about making a deal, or move on and look for the next one.

Get in touch with the show!

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

https://www.betterbookkeeping.com

#13 - Stop Looking in the Rear View Mirror: How to Do Effective Accounting Nov 27, 2023

Show notes

Too many business owners use accounting to essentially stay out of jail, or at least out of trouble with the IRS. They close their books once a year so they can file their taxes, then move on, having learned little of value about the business' financial health in the process. Everything they learn by this accounting process is late, by months and months, usually far too late to do act on. Other business owners might be better, closing their books every quarter, or even monthly, but the problem remains -- they are always looking in the rear view mirror while trying to steer the ship forward.

Mitchell and Scott outline what an effective, useful accounting system looks like. It gives a business owner close to real-time information about the health of the business -- not just the cash flow and the operating income, but things like customer acquisition, number of proposals compared to closed deals, advertising effectiveness, and so on. A good accounting system is like the instruments on an airplane, and the business owner is the piliot. The accounting system is the business "console," with all the critical information for the business owner to steer things in a profitable direction. It also offers deeper insight into the business model. You can learn which levers move the needle on sales, and what actions you can take to grow when sales begin to slow. You can learn which activities are the most profitable, and which ones need to be discontinued. All of these things emerge from an effective accounting system.

That said, most business owners are experts in their field, not in accounting. An excellent bookkeeper can take all of this off your plate and give you the real-time insight you need, while saving you tons of time in the process! Visit Better Bookkeeping for the ultimate solution for small business owners:

Get in touch with the show!

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott