Stupid Tax

Scott Hambrick

Twitter: @hambrickscott

https://scotthambrick.com

#11 - 10 Tax Hacks for Business Owners Nov 13, 2023

Show notes

Mitchell says that small business is the best tax deal in America, and in today's episode he expalins why! He outlines 10 ways business owners can take advantage of tax credtis, deductions, legal entities, and investment vehicles to lower their taxable income in the business and on their personal returns. Some of these hacks are simple, others are complex, so if you need advice on whether you qualify and how to implement them, reach out to Mitchell's accounting firm Baldridge Financial in the links below.

Mitchell's ongoing Twitter thread on tax savings and personal finance:

https://twitter.com/baldridgecpa/status/1333953486208241665

Get in touch with the show!

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

https://scotthambrick.com

#10 - What You DON'T Need to Start a Business: Avoid These Common Mistakes! Nov 06, 2023

Show notes

There are a few things you need to start a business, which Mitchell and Scott covered in episode #8, and a whole lot of things you don't need: investors, a business plan, core values, conference rooms, shirts with your company logo... Mitchell even says you don't need accounting! Many would-be business owners get caught up in the trappings of owning a business without actually nailing the core aspects of business: getting customers and closing sales. It's easy to work on business plans and mission statements, but without customers it's meaningless and, ultimately, a waste of valuable time and effort. In today's episode, Scott and Mitchell keep on the straight and narrow path to financial success as a small business owner.

Get in touch with the show!

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

https://scotthambrick.com

#9 - How to Find a Lawyer with "Diamond" David Keesling Oct 30, 2023

Show notes

The worst time to look for a lawyer is when you have a big legal problem and need help. Nevertheless, that's exactly the position many people find themselves in when they start looking for a lawyer. Early on at Data Storage, Scott had a lawyer -- that is, the one appointed to him by his insurance company -- but not a good one, as he found out during a disastrous deposition while dealing with an employee harassment suit. The plaintiffs, on the other hand, had a great lawyer, and after the smoke cleared from the ordeal and Scott calmed down, he sought him out to represent Data Storage in the future.

His name is David Keesling, a highly accomplished civil litigator at Federal Practice Group who has represented thousands of clients ranging from small businesses to large, domestically and globally, in state and federal court. In this episode "Diamond" David, as Scott calls him, offers advice on how to find a good lawyer, how to develop a long-term relationship with a lawyer, and some of things small business owners need to be aware of when it comes to insurance and lawsuits.

You can contact David Keesling at:

Email: dkeesling@fedpractice.com

Web: https://fedpractice.com/meet_our_team/david-keesling/

Get in touch with the show!

Email: show@stupidtaxpod.com

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#8 - Business 101: Everything You Need to Get Started Oct 23, 2023

Show notes

Mitchell and Scott outline the basic things you need to get a business going: which legal entity to pick, how to register for it, how to setup a bank account, and more. As Scott underlines, the most important thing for starting a business, that comes before anything else, is a customer! In Scott's view, the customer comes even before the product, and should be the primary focus of the young entrepreneur.

Mitchell agrees. Many people get hung up on setting up an LLC, opening a business bank account, and other legal and administrative tasks before they even have a viable business. As he explains, while those things are very important, you have plenty of time to set them up after you've started making money. Since you may change your product or service, and maybe your whole business model, after getting into the market and interacting with customers, you shouldn't let legal tasks block you from just starting.

Mitchell and Scott's list of items, in order of importance and complexity:

A customer
Incorporation, EIN, tax status (S Corp vs C Corp vs Partnership)
Bank Accounts
Credit Cards
Accounting software
Insurance
Office Space
PEO/Payroll service

Get in touch with the hosts!

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#7 - Freelancing: Owning Your Job Oct 16, 2023

Show notes

Freelancing is very common in today's "gig economy," and in a way it's a lot like owning a business. The freelancer has to be her own sales force, her own marketing division, her own bookkeeper, etc. Freelancing is essentially owning your own job, which comes with a unique set of challenges. Scott and Mitchell discuss what the freelancer needs to know to develop a successful enterprise.

In most cases, the freelancer does work independently that could be done as an employee at a company. The freelancer, like the employee, trades time for money. This differs from the business owner who executes and manages a business model which can be scaled up with additional employees, raw materials, and so on. Nevertheless, a freelancer is responsible for many of the same bookkeeping requirements, taxes, marketing and sales operations, so it's important to develop a basic operating model and learn to price new business accordingly. An employee, by nature, earns less than the value he delivers to a business (otherwise the business would not stay in business very long!). A freelancer therefore can and should make more money than an employee doing the same job, since he has to pay his own taxes, buy his own equipment, manage his own pipeline of business, and other costs of doing business.

The freelancer can also make MUCH more money than the employee by establishing himself as an expert in his field, or the go-to person for a specific set of problems. Scott and Mitchell discuss freelance consultants they know who have written white papers, books, articles, and otherwise distinguished themselves as THE guy for a particular job. These consultants secure steady work due to their visiblity and are able to charge very high rates for their work, because they provide a huge value to companies -- those companies don't have to reinvent the wheel in order to solve a problem the consultant has already solved and perfected. With enough experience, these consultants can usually work multiple jobs at the same time, and further increase their earnings by scaling their solutions.

Get in touch with the hosts!

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#6 - Build It Or Buy It? Oct 09, 2023

Show notes

Most people thinking about starting a business assume they would build that business, but it's not the only way. There are many businesses that can be bought, sometimes for suprisingly low multiples, and they offer a number of advantages for the budding entrepreneur.

Buying a business is, at one level, buying a book of clients, which are already bought in to the service that the business offers. There's no customer acquisition cost for these clients, and the hard work of marketing has already been taken care of for you. Then there are the assets. In some cases, such as lawn mowing businesses, the assets are sold along with business for little more than the value of the client book -- which is a great deal! Professional grade lawn equipment might cost tens of thousands of dollars, and if you can buy that at a steep discount along with the client book, you get to start in an advantageous position. As Scott argues, many businesses like this are far from optimized, and have poor customer relations processes, poor marketing, and sloppy bookkeeping. Buying a business like this and bringing some consistency and process optimization to it is a clear path to profits. It's not easy work, but it can be much easier than building a business from scratch!

Get in touch with the hosts!

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#5 - Keeping the IRS Off Your Back: What You Need to Know About Business Taxes Oct 02, 2023

Show notes

Nothing induces cold sweats and sleepless nights like the thought of a letter from the IRS, or heaven forbid, an audit! After all, there are famous examples in the news about people going to prison for not paying their taxes, or being accused of tax fraud. Many new business owners needlessly worry about taxes and the IRS, however. With a little bit of knowledge, basic record keeping, and a good accountant, business owners can ensure they know their tax liability and pay taxes on time, every time, and avoid scrutiny from the IRS.

Mitchell Baldridge is a CPA and works with business owners every day to help them understand their tax situation, and file their taxes correctly and on time each time. Mitchell walks through the basic taxes every business owner needs to know about and pay, and Scott shares his experience in records management on keeping clean records and making tax time a stress-free process.

Get in touch with the hosts!

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

https://youtu.be/bkjfZctGMq8?si=9iCeb8II6ECX54rQ

#4 - Life Is a Funnel: Build Your Funnel, Learn Your Business Sep 25, 2023

Show notes

All businesses are sales businesses. Without sales, business operations to make and deliver products and services can't happen, and without revenue, there is no business. So, how do you get sales? What you need is a funnel, a sales funnel. In today's episode Mitchell and Scott introduce the concept of a sales funnel, but point out that funnels are not just for sales, they are everywhere in life.

To get sales, you need to talk to people who need what you are selling AND have the money to buy it. Before you can talk to those people, you need to find out where they are. And then you need to let them know about your business. If you're talking to the wrong people, in the wrong places, or no one knows that you exist, then it stands to reason that you're not going to make many sales. That's where the funnel comes in -- the funnel defines the activities that will put you in the right place to meet the right people, and have a chance to make proposals and close sales.

Constructing your funnel requires you to think about your business deeply. Who are your best customers? Where did they come from, and how can you find more? And so on. As it turns out, this process works well for many things in life -- from shopping for a house to finding a spouse!

Coffee is for closers! The famous scene from Glengarry Glen Ross:

Get in touch with the hosts!

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott

#3 - Accounting: What Is It Good For Anyway? Sep 18, 2023

Show notes

Accounting, as Scott Hambrick says, is the scientific method of business. It's a process of data collection and testing hypotheses about how your business works. For Mitchell Baldridge, CPA, accounting is about the numbers -- debits, credits, chart of accounts -- but it's also about so much more. Accounting is not just about tracking the dollars that go in and out of the business, it's about tracking the precursors to those dollars: sales calls, proposals, engagement letters, etc. Properly done, accounting gives you invaluable information about the types of activities that make your business function, and which activities are the most valuable for your business.

A business' need for accounting grows with it's revenue and operations. The young man just starting his power washing business doesn't need audited financial statements and complex chart of accounts for tracking income and expenses -- he needs to worry about making sales! When there's money coming in the door, then he can start tracking and making a basic profit and loss statement. For most people starting out, this is not much more complicated than what it says each month on the transaction log on the bank statement. However, as the business begins to grow and employees are added, and more complex projects arise requiring various costs and inputs, a good accounting system becomes critical to ensuring that the business is both cash flow positive and also deploying its resources in the most efficient manner.

Get in touch with the hosts!

Mitchell Baldridge

Twitter: @baldridgecpa

Scott Hambrick

Twitter: @hambrickscott