Episode Transcript
[00:00:00] Speaker A: Welcome to the Marketing Zone. I'm Marilyn Jenkins and today we unlock the marketing that actually works. You're watching now Media Television.
Welcome to the Marketing Zone. I'm Marilyn Jenkins. On this show we talk about the strategies that help businesses grow with clarity, visibility and measurable results. Today we're looking at a part of growth that too many entrepreneurs treat as an afterthought.
Tax planning and financial strategy market. My guest is Joseph Reyes, certified public accountant, business strategist and founder of the JL Reyes and accounting and tax CPAs. Joseph helps entrepreneurs and business owners reduce tax liabilities, improve profitability and build stronger financial foundations. Joseph, welcome to the Marketing Zone.
[00:00:44] Speaker B: Thank you for having me. It's good to be here.
[00:00:46] Speaker A: Absolutely. I'm excited about the conversation.
Now. Many business owners often only really think about taxes is when it's ready to file. Why is that approach so, so limiting?
[00:00:57] Speaker B: Yeah, it's.
When you do that, when a business owner does that, they're going to get a surprise. Nine times out of ten you're in for a surprise. And guess what, when it comes to taxes, it's usually not a good surprise.
So let's not be reactive. It's good to plan ahead for sure.
[00:01:15] Speaker A: I love that. Absolutely. Because I mean it's, it does make a big difference. And how do you define proactive tax planning and how is it different than traditional tax prep?
[00:01:26] Speaker B: Yeah, so those are two separate services and two different activities, so to speak. The tax prep side of course is historical. All you are doing is just reporting history, whether good or bad. Of course, tax planning is more like this is what's going to happen if you do this, if you don't do this, etc.
And if done in time before 12:31, you can influence that tax bill that may be coming your way. Of course, if your business is losing money, then you don't have to worry about paying a tax usually. But at the end of the day, planning is just another service that not every accountant of CPA is comfortable doing. But one is reactive, one is proactive. Huge difference.
[00:02:12] Speaker A: Okay, so when an entrepreneur comes to you, what are the financial blind spots that you see most often?
[00:02:20] Speaker B: Yeah, well, if it's a first time entrepreneur, it's usually a mess. You know, if it's a small business, you know, a person can be a great chef, perfect at cooking any meal that you want and then has the idea, well, I can do better than my current boss, let me go into business and start a restaurant or something like that.
Well, you know, running a business is not the Same thing as cooking a great meal.
So what we find a lot of times is people are going into business who are not business savvy. They don't have the mindset that they have to take off that hat, the chef hat, and put on another hat. Being administrator, you know, payroll specialist, you know, all these different things of running the financial picture and setting up the financial structure, integrating personal and business transactions through their check, the business checking account.
Not having the mindset of the tax side of the business is later.
No, the tax side of the business is now. You know, we're kissing cousins, so to speak. You're the CEO and the cpa. You're kissing cousins. You're, you're, you're doing two different things, but at the same time, you're in the same boat. You know, you're same family. And if you're not careful, you, you don't properly structure the way you're going to report your numbers and track your numbers.
You're setting yourself up for failure. We see that all the time. And we try to change people's minds about how to treat the accounting, the accountants and the accounting world, which a lot of people have misconceptions about what an accountant is.
[00:04:03] Speaker A: I agree. I think when you start a business, you think, well, I know how to handle my checkbook, so how hard can it be?
[00:04:09] Speaker B: Right?
[00:04:12] Speaker A: So much more.
[00:04:14] Speaker B: Business owner's last words.
[00:04:16] Speaker A: Yeah, exactly. How hard can it be? So what should business owners know about the relationship between tax strategy, profitability, and cash flow?
[00:04:26] Speaker B: Well, they're all interrelated. You know, everybody knows usually that cash flow is the lifeblood of a business.
You really got to be careful with that. And, you know, I, I, I like to bring attention to public companies that have filed for bankruptcy or insolvency, you know, and these, you know, public companies, large companies, they're usually managed by financial professionals and financial departments. Yet it's not uncommon to hear about a company going bankrupt or insolvent and then they have to file, know, figure out, well, do we go out of business or do we try to get our debts forgiven and things like that? So at the end of the day, we want to see people pay attention to the cash, regardless of where it's coming from and where it's going. You got to keep your eye on the ball. Patricia saying for, so at the end of the day, you have a cash flow problem. The question becomes, well, is it because we're not making profit on the products that we sell? Are products properly priced or not? Are we selling enough you know, what's going on there?
Taxes are, you know, if you're making money, you got to sock money away to pay the tax.
You know, and a trap that a lot of people fall into is we're making money. Let's just take that money and keep pumping it into marketing span, you know, more equipment, more people, etc, and then next, you know, without proper planning, you could be profitable and not be able to pay your taxes. We see that all the time. Because of mismanagement of the finances.
[00:06:09] Speaker A: Yeah, it's, it is interesting, you know, they're having to getting in the mindset of, okay, I've got money, but then not thinking far enough ahead that I've got to have that money to give to the government.
[00:06:20] Speaker B: Exactly. And, and so proper planning prevents poor performance. Ever hear that? The five P's I think it is. So, so you gotta, you gotta plan. If you're a business owner, you have to plan. If you're an employee, well, you don't have to plan for the business, but, you know, would you run your household without a little bit of planning? Your personal finances also require some planning, so. Yeah, totally agree on that.
[00:06:44] Speaker A: Yeah, budgeting and spreadsheets are a great thing for personal. I agree.
And how can better accounting give business owners more confidence when they're making growth decisions? Because that's kind of a big thing as well. When can I grow and then still be able to handle all of the strategy?
[00:07:01] Speaker B: Yeah, that kind of piggybacks on what I just said. Right. So if you want to grow your business, you want to scale, it comes with a lot of risk. You know, maybe in order to scale, maybe you need to buy $100,000 machine.
Well, do you have $100,000?
No, I don't have 100,000. Well, how are you going to buy that machine? Well, we're going to finance it. Well, can you finance it? Does the business have enough of a credit score, for lack of a better word, to handle the purchase of a large machine?
Do you have what it takes to scale it? Do you need to hire another employee? Can you wait to hire or buy the machine or buy whatever you need to scale? There's a lot of planning that goes into it, and then of course, it comes back down to, you know, cash flow.
You know, the way I work with clients is we try to find money to put back into your pocket instead of just giving the IRS a check at the end of the year, when you don't necessarily have to do that. There's some things you could do in advance that can, you know, you can find $50,000, you know, through some proper planning. There's strategies out there that a lot of people know nothing about that even a lot of accountants don't know anything about. And there's things that you, you'll be surprised at, strategies that you can implement to release cash flow and properly plan. So we just encourage people to talk to a financial advisor, CPA and CFO and at least get their input and carefully plan. Because you make the wrong move, you can put yourself out of business even though you're growing.
[00:08:37] Speaker A: Wow. That is absolutely true. And I know sometimes it's as simple as categorizing things correctly because that was, you know, for a couple of years, we had some things in my company categorized wrong and it was cost effective to spend the money to fix that and refile our taxes.
So I mean, you need someone that's. That knows what they're doing. I agree. People like you are worth your weight. I agree.
So thinking about year end coming up, what records, reports, or financial habits should every entrepreneur have in place before the next. The end of this year?
[00:09:10] Speaker B: Yeah, the.
So what we see, and I've been doing this for a long time, the financial side of the business usually is people dread it.
They just hate it, you know, but something is dreary as make sure that your accounting or bookkeeping team has monthly bank statements, monthly credit card statements. Make sure that everything is being tracked monthly, not yearly.
And.
But that doesn't really make us money. I want to focus on marketing. I want to focus on selling, you know, wheeling and dealing. It's exciting and all that stuff. And that accounting stuff, that financial stuff is boring. We'll deal with it later. We have to. No, you can, you can save a ton of money and actually make money from proper planning. So we just recommend that on, at least on a monthly basis, get your books done and have your financial advisor take a quick peek. I can look at a set of financials and in 10 or 15 minutes I can see where you are. Car. And something can jump out at me and I can just pick up the phone and give you a call. I'll send you an email. So it's not that big of a deal from my side, but a lot of business owners. I'm a business owner. I'm an entrepreneur also. Right. I have an accounting firm, but I'm a business. I'm an entrepreneur and I. And you know, there's some things that, you know, you just don't want to do and you're busy and you're tired. Most business owners, startups, they're tired, you know, and they're not sleeping a whole lot and their brains get a little fried. Our brains get a little fried.
And it's really easy to push off something that's not screaming urgent, urgent, urgent. So financial accounting is urgent?
[00:10:48] Speaker A: Yes. Yeah, I agree. And it's, it is something that as an entrepreneur, when you're growing your business, it's not something you want to think about. You know, you're like, okay, I've got to get in this growth mode. So that's great information. So, Joseph, this is such a great and important foundation because growth is not only about bringing in more revenue, it's about understanding what the business keeps, what it owes and what decisions create stronger financial performance. When we come back, we will talk about how accounting can evolve from basic compliance into a true advisory system for business owners.
We'll be right back with more tools, tactics and truths to elevate your marketing. This is the marketing zone of NOW Media Television.
And we're back. I'm Marilyn Jenkins and you're watching the Marketing Zone on NOW Media Television. Let's dive into our next breakthrough.
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Before the break, Joseph and I discussed why tax planning should not begin at tax season. Now we're going to go deeper into the role of accounting as a strategic tool for entrepreneurs. Clean books and accurate reports are not just back office tasks. They're important information systems that help owners decide where to invest, where to slow down, and where opportunity may be hiding. And Joseph, for our viewers who want to learn more about your work, tax planning, accounting strategy, any of your advisory services, where's the best place for them to reach out to you?
[00:12:42] Speaker B: Thank you for that. The easiest place is My website, Reyes accounting.com has all my contact information in there. Address everything that you could possibly need. It's a good place to start.
[00:12:55] Speaker A: Fantastic. Very good information.
So you built JLRAE's accounting and tax CPAs from a traditional tax prep firm into a broader accounting and advisory practice. What changed in the way business owners needed support?
[00:13:10] Speaker B: Well, you know, we've been in this and this Business has been around for over 15 years now. And over time, you know, your reputation starts to get out there.
You start to attract. If you're saving people money and you're adding real value, you know, you start to get nice referrals. You know, so we have a couple of clients that, you know, they make their revenues just astronomical for a small accounting firm like ours.
And, you know, the attraction was, you know, the tax planning side, you know, showing them how to, you know, maybe save 100,000, $200,000 in taxes. We're working on a client right now. We're trying to save $2 million in taxes. They're having a great year. You know, they're going to make about $10 million in profit. So their tax is going to be, you know, somewhere in the $2 million range. And guess what? We have a plan for how to not do that, at least not right now. Maybe we can pay that tax in 15 years and the time value of money will kick in and assist in that regard. And I do have a master's degree in finance as well as an accounting degree and the CPA license and all that stuff. So the financial side of the business is, you know, natural outgrowth for my practice. But, you know, we do get clients all the time asking us, hey, we want to talk about, you know, I have some questions. You know, do I borrow against my property to finance the business, to hire employees? What should I do?
Or is there anything that we could do to execute a tax plan to save $100,000, which we can then use to buy the machine that we need? You know, so for the clients who get it, the. The planning is not enough. I mean, planning is. Is absolutely critical. Preparation is not enough.
So it depends on the client. And we try to educate, educate, educate, but a lot of times, you know, people just.
They're not listening. They're busy. And so, you know, it. It. You know, it just doesn't come out as well as we want to see them. And sometimes it's just standing there watching traffic, an auto, you know, automobile crash in slow motion. We just. We see what's coming. We're trying to get their attention, and, And. And they're just not responding properly. And then at the end of the year, you know, we have to deliver bad news, which we're not happy about.
So they would not be ideal clients, but we. We keep them because we're trying to help them and we'd like to help people. So that's what I love it.
[00:15:37] Speaker A: Education is so important because, I mean, Just one of the simple things that I, I learned early on is, you know, small businesses a lot of times use their recurring charges on a credit card, you know, for points or whatever. Well, when you, if you end up letting your credit cards get too high, I learned about a business line of credit that is a dramatically low credit interest rate. And it's just such an amazing difference. And that was something that, again, education, you know, so.
[00:16:04] Speaker B: And it's a small thing, right. It's not a large, it's not a big, it's not a big deal. You know, something simple like that. You could save 10 points on your interest rate.
[00:16:13] Speaker A: Yeah. And when it's not your business, you're not, you're not in the accounting business. We rely on you to help us educate on those things. That'll, that'll help us better. So. Absolutely. So what is the, what is the difference? Okay. We're talking strategy and stuff. So if I've got someone that just files my taxes, then what I really need, and as a growing business, is a strategist. So that would be somebody that would. I need both or could I have you do everything for us?
[00:16:39] Speaker B: Well, we, we do it all.
So we do the tax prep. We like to do the tax prep because then we have the raw data that we need and make sure that it gets into the tax return properly.
Tax preparation business is very, very sloppy and complex, is very easy to make mistakes, even with the technology that we have today, like AI. Right. So AI is making tax preparation a lot more efficient. But still, you can miss something. And then if it flows right through the tax return, then maybe the advis. The financial advisor is not seeing the true picture. But if you have the financial statements and the tax return, when I do it, when my team does it, I've got a lot of control over what's happening. And then I feel a lot more confident that what I'm looking at is good data, you know, and then from there we can then start, you know, picking up the phone and say, hey, we did your tax return. We need to talk. And again, if it's somebody that we don't do advisory services for, then we just say, hey, you know, again, we need to get you on some kind of advisory process. Maybe it's monthly, maybe it's quarterly, maybe a semi, annually, certainly by Q4, by October or thereabouts.
Let's at least have that conversation and see, you know, how you're doing. And, you know, is there anything we could do to tamp down your tax bill if you have a tax bill coming your way, but otherwise, otherwise you're, you're flying blind and it's not good.
A good business person, a well run company is going to pay attention to this stuff. And so we'd like to do the tax prep, we'd like to do the bookkeeping, and we'd like to do the, the planning and advisory side.
[00:18:23] Speaker A: Fantastic. Yeah. Now, when it comes to financial reports, obviously people that are running businesses, this is not their specialty. What, which financial reports should business owners actually understand, even if they don't have an accounting background?
[00:18:38] Speaker B: Well, you know, one of the things I like to do with clients is, is I, if they own a home, I bring it back to their home, right? So it's a concept that most people will understand if you bring it to the personal level.
So there's a balance sheet. Well, what is a balance sheet? Well, it's a, it's a statement that shows what you own, what you owe, and the difference is equity.
Well, I liken that to a home. I just tell people, look, look at your home. They don't understand that. Simple. Counselors, look at your home, you know, what is your home worth right now? And they'll say, oh, my home is worth 500,000 and what do you owe on it? What's your mortgage? And they'll say, oh, the mortgage currently is 200,000.
So then the equity is, and almost everybody knows the answer to that. Oh, the equity is 300,000. The same thing with a business. The balance sheet. The balance sheet is what do you own and the value of what you own, what do you owe, your liabilities, credit cards, etc. And the difference is your equity. And if you're in a position of negative equity, you could be technically insolvent and not even know it. You know, if you have creditors like the sba, the banks, whatever, maybe they have loan covenants that require you never to be insolvent.
So we try to bring it home so that people understand that the balance sheet is what you're, is a snapshot of where you are right now. So you got to know that. Right? Especially if you have loan covenants or if you have investors, right. Who they want to see your financials every month. Right. Or you're trying to do a fundraise. Well, if you want to do a fundraise, people are going to take apart your balance sheet. They want to know, you know, where do you stand?
And then of course, the profit and loss statement, that's the easy one for most people. They get that, okay, am I making money or am I losing money?
Right. But then, you know, if the law, the bigger your company grows, you may be required to switch from one method of accounting called cash method for small businesses. Or, and if you, once you grow to a certain level, then you are required to file accrual basis financial statements. And accrual basis is not the same as cash basis. Accrual basis is when you incur a sale or when you incur an expense. That's when you have to record it.
Whereas cash basis is when you pay it or when you receive the cash. That's how you report. So that's very easy. So it's showing people that distinction is important.
And also, you know, and accounting is not so simple. Financial world is not so simple. Because if you want to do a fundraise, if you want to start talking to, you know, private equity firms or, you know, rich investors, they're probably going to want to see your financials in the accrual basis. Because that is what we are taught in accounting school. We're not taught cash basis accounting, at least not when I was a kid. You know, we're taught accrual basis. That's true accounting. So we try to explain that to people who can grasp it. Otherwise we just try to, you know, bring it down to a level where it's personal, like with their home or with their going in the bank. Yeah, thank you.
[00:21:49] Speaker A: Yeah, that's a great example. It's very clear.
What is the one financial process every growing company should tighten before scaling up any further.
[00:22:00] Speaker B: Watching your books every single month, every week if you can, but every single month, you know, I recommend people look at there and I, I've worked for large corporations, we watch the cash every single day.
Small companies and big companies, we watch the cash, we log into the bank, we watch the cash, you know, where are we with the cash? And then from there project out. What are the expectations for the day, for the week, for the month, as from where we are today? So my biggest recommendation is watch your cash every single day. And then the next best thing is keep your books up to date, monthly, at a minimum, monthly, and have a good financial control in place. Use a book, a good bookkeeping firm, a good accounting firm to help you set up your financial structure so that every single day, every single month, you know where you stand. If you need to. Like if you wake up 2am in the morning and I something hits you like a ton of bricks as you're a business owner, the next day you're going to call your accountant and say, where do we stand with this? Where do we stand with that? You can't do that if your books are not up to date daily or monthly.
[00:23:05] Speaker A: Good. Absolutely. Great points. And that's a powerful distinction. The numbers are not just for reporting the past. They should help us guide the next decision. After the break, we're going to connect financial strategy to marketing, growth and roi because it's not enough to spend money to generate attention if the business can't measure whether that spending is producing profitable results.
We'll be right back with more tools, tactics and truths to elevate your marketing. This is the Marketing Zone on NOW Media Television.
And we're back. I'm Marilyn Jenkins and you're watching the Marketing Zone on NOW Media Television. Let's dive into our next breakthrough.
Welcome back to the Marketing Zone. I'm Marilyn Jenkins and I'm here with Joseph Reyes of JL Reyes Accounting and Tax CPAs. In this segment, we're connecting marketing decisions with financial discipline. Business owners often want more leads, more campaigns, and more visibility. But without strong financial intelligence, they may not know which growth activities are actually profitable.
Joseph, from a, from a financial perspective, what should business owners know before increasing marketing spending?
[00:24:15] Speaker B: Well, the first thing they need to know, and I'm sure they, I hope they understand that, is that don't go spending money on marketing unless you can afford it. Right?
But at the end of the day, is it the right time to engage in marketing activities?
Sometimes people just want to grow because they think they're going to make more money by growing.
But if you are not making the money you should be making, and if the cash flow is not where it should be based on your current status, then maybe marketing is not the right decision. Maybe you need to take a deep look inside of the business to see, well, is something wrong? How do the numbers look? You know, are we efficient?
Are we losing money or bleeding cash by doing A versus B? And now we want to start selling and marketing for C.
Well, let's make sure that what you're doing currently is efficient and profitable before you go start doing something else.
Because marketing is not cheap. It's very, very expensive.
And you know, it can do really well for you or it can bomb on you. You don't know until you give it a try. But I always say, well, how are we doing so far? You know, and because marketing and growth comes with a whole nother level of stress, always does. It's more work. It' a, a lot of activity.
And is it really necessary at this Time.
So it comes from, it's planning. You know, it's just sitting down with your advisors and thinking through where you stand and is it time?
And maybe it is time. It happens all the time. You know, look at Amazon, right? We're like crazy, right? So they, they know what they're doing. So.
But professional business managers and executives, they don't just do stuff without check with the cfo, the controller, checking the tax impact of the project that they're embarking on, you know, staffing, hr. You know, there's a lot that goes into the decision making for large corporations to, you know, to, to grow and to expand.
But it's the same problem for small businesses. You know, it's just a matter of scale. So the small businesses tend to not plan, they just tend to just, you know, just wink it. And that could be the case of that. Now if you're making money hand over fist and you know, everything's going great and you're like, oh, let's expand into this and the money's there, then, yeah, okay, go for it. You know, but you better make sure that if you, if you have a restaurant, you better make sure that that coffee is properly priced. You better make sure that every time you, if you, that cup of coffee is priced at a penny less than what it should be, that every time you sell a cup of coffee, you know, maybe you're just one penny closer to bankruptcy of being out planning. You know, you just can't do it. You just gotta talk to the pros, people who understand what you're trying to do and make sure that your books are in order and that it tells you the story that you need in order to make that good decision. And marketing is always great because, you know, we've done marketing many times and it's always produced, but you know, up front it's expensive, it's scary.
[00:27:26] Speaker A: And I think when you, one thing that you pointed at is efficiency. You know, you can't just throw marketing money out there. You, you need to have the team. And with my clients, that's the first thing we analyze is, you know, this marketing is going to make this happen. Do you have the processes, the sops, the team in place to make all of that work, otherwise the new clients aren't going to be happy.
So you have to make sure that you can handle it. So that's, that's part of the planning as well. So I love that you help with, with the whole package deal and making sure that you are in a position to spend money on Marketing.
[00:28:00] Speaker B: Good point. Absolutely. Totally agree.
[00:28:03] Speaker A: So how should entrepreneurs evaluate whether a campaign is producing real ROI or just activity?
[00:28:10] Speaker B: Yeah, so that's where you get into the weeds on the. What a CFO or financial advisor does. You know, I'm happy to say that today we have AI, right? And it is absolutely killing it for the financial world and the analysis world. But, you know, you can, if, if you, if your business is steady and doing well with the current state of affairs and you want to expand and grow, okay, you want, you want to do some marketing. So, you know, marketing firms, a lot of people think that. And I used to think this way, Mark. People thought marketing firms were, you know, coming up with ideas and pitches and labels and all that good stuff. But there's a whole world of marketing analytics out there that they, they're expensive.
You deal with a lot of data, massive amounts in those days, Excel spreadsheets, that would be a million lines, you know, big. And you do all kinds of analytics. So there's a lot that goes behind making a marketing decision.
So, yeah, roi, you know, so what is the projection? You know, do we know what our client acquisition cost is or what is a client acquisition cost? You ask any small business owner. Well, they understand the English language. You can say, well, client acquisition cost. Oh, what it costs to get a client. Okay, yeah, right. And what is the lifetime value of that client or that prospect or customer?
Can we calculate that? And believe it or not, it can be calculated. You know, you have people who specialize in this area, they can calculate this stuff for you, and they can figure out, well, this is what's probably going to happen in this industry. Especially if somebody specializes in your industry, they're going to know it upside down and left and right.
So at the end of the day, knowing what you're probably going to be spending, what you're probably going to be making, what your costs are going to be for the product or service that you're selling. And you can pretty much figure out to a pretty great degree what a client is going to cost you to get. That's your marketing spend and what you're going to sell, what your profits are, your net profit, and then there's a gross profit. There are technical terms, but, you know, some. A business owner who sits with you for an hour, with me for an hour, it's gonna, they're gonna understand these concepts because we can, you know, explain it to them relatively easily.
But then the trick becomes staying steady with tracking what the marketing campaign is actually how it's performing and so a product has to be properly priced, you know, because if you sell more of a losing product, you're just expediting the inevitable. So we strongly recommend to.
Before you go into a marketing campaign, let's have a conversation about what to expect and whether it makes sense or not based upon current results for the business. And then if it's a new line, well, there's plenty of data out there that you can look at a particular product or service to figure out how other companies doing. What is the industry standard nationwide? What is the industry standard locally?
You know, because a cup of coffee, you know, in the Midwest may be a lot less expensive than a cup of coffee in New York City.
Right. So, you know, you can, you just can't wing it. You know, it's not a good idea to just wing it.
[00:31:33] Speaker A: No, I think you have to follow the data. Absolutely.
So what mistakes do owners make when they focus on. Only on revenue, but they ignore margins and cash flow and tax impact.
[00:31:44] Speaker B: Yeah. So there's an organization called the Risk Management Association. They maintain a lot of data by industry, you know, so, but now, you know, with AI, you can just take your financial statements and dump it into.
And anybody could do this, right? Not anybody can do the books, but anybody can take a, take a P L profit loss statement. They can dump it into an AI product like Claude or Chat, GPT or Gemini, whatever and say, hey, you know, analyze this financial statement for me and it'll. These AIs will do a pretty good job of explaining where you stand. So if your margins are bad, any decent AI today is going to tell you, yeah, every time you, you should be a 70% gross profit margin. Well, what is that? Well, gross profit margin is the product cost subtracted from the sale.
So if you have $100,000 in sales and your gross profit and you and the cost to make the product was $30,000, well, you had a $70,000 gross profit. And that gross profit is the first thing that, you know, people have to understand about their business. And then that gross profit is what's going to feed and provide the cash for salaries, rent, utilities, you name it, sales, you know, commissions and all kinds of day to day expenses that you have to incur in order to run the business. So you have to know these ratios. And there was a day where it was, you know, a lot of work to do it with Excel spreadsheets and whatnot. And now with AI, you get it done relatively quickly. So maybe your bookkeeper gives you your, your books if they're done monthly and then you can just go into AI. But then to understand it, I certainly recommend talk to a financial professional who can unpack it and give you guidance and, and more information. But at a bare minimum, with today's AI, I would just recommend just running through AI and see what it says. And they call your cpa, say hey, I want to talk to you about these numbers. But at least you had your informed and it's less time that we have to sit there explaining different things. But the small business person is not going to do that, I can tell you that. So. But that's my recommendation.
[00:33:59] Speaker A: I love it. I haven't tried to do that with, with AI. We use AI for a lot of stuff. But analyze your financials. That's a great idea.
[00:34:07] Speaker B: It's easy. Yeah. And I mean there's things you're not going to understand probably, but at least you can contact your accountant to your financial advisor and say, okay, I understand my financials and everything, but I have questions. Explain this, this and that to me. And it just eases the conversation. And you spend less money on fees because now I don't have to spend, you know, two hours talking to you about stuff. I may have to spend an hour. But you save money on the fee. Right? So it behooves you to do that monthly.
[00:34:32] Speaker A: Education. Never stop learning.
[00:34:35] Speaker B: Never stop learning.
[00:34:36] Speaker A: Love it. Joseph. This is where marketing, finance really meet. Visibility can open the door, but a strong financial strategy helps business owners decide which opportunities to pursue and which ones that may not be worth the cost. When we return, we'll talk about long term wealth, leadership, discipline and the habits that help entrepreneurs create lasting financial freedom.
And we're back. I'm Marilyn Jenkins and you're watching the Marketing Zone on NOW Media Television. Let's dive into our next breakthrough.
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Before the break, Joseph and I talked about connecting marketing investment to profitability and smarter decision making. Now we're closing with the bigger picture. How business owners can use tax planning, financial intelligence, personal discipline and strategic advisory support to build lasting financial freedom.
Joseph, your mission is to help business owners use strategic tax Planning and financial intelligence to build wealth. What does lasting financial freedom mean to you?
[00:36:10] Speaker B: Well, of course, everybody's different. For me, it's just making sure that I provide for my family and that I have enough for a good retirement and live comfortably in retirement. That's a big thing for me. I want to leave a legacy, you know, I want to make sure that I leave money for my church, you know, so it can grow and stay strong. Lovely people.
Make sure my son, I have one child, a 22 year old son, that he's comfortable financially and that, you know, God will, he has kids and they got, they have a good foundation.
Personally, I don't need a lot of wealth. You know, I didn't grow up with a lot of wealth. So I know what it's like to be poor. I know what it's like to be comfortable and I don't really have great, great needs. My wife, however, would say differently.
She would love to have, you know, a lot of nice things and I don't blame her.
So it's different for everybody. But you know, just to be comfortable. For me, I think it's important not to not having to stress about money and you know, as a man that I like to build things, I like to build a business. And I'm working on a couple of other businesses right now as we speak.
Just being able to be comfortable enough to do other things and take chances and you know, exercise my mind, have time to exercise my body too. So I'd rather be. Than have, let's just put it that way.
[00:37:39] Speaker A: Wow. Admirable. Absolutely. And the whole thing is like when is enough enough? Right.
[00:37:45] Speaker B: So I love what you're gonna take.
[00:37:47] Speaker A: Yeah. And I love that you have a vision of what you want. And I think that's something we have to get down to. Our, our basic why, why are we doing what we're doing? What are we working for?
[00:37:57] Speaker B: Exactly.
[00:37:58] Speaker A: So what happens? Separate business owners who stay financially reactive from those who build long term, long term stability?
[00:38:08] Speaker B: Well, you know, I, I'm not going to use the word lazy because if you're a business owner, you're probably not a lazy person.
But not giving the financial side of the business it's due and in particular the bookkeeping and the record keeping and the, and the planning, it's an afterthought for a lot of people.
And that is the case of that. You know, if a company wants to scale and grow, you have to pay attention to that business. It's a baby and you don't feed babies. Once In a while. You don't pay attention to babies once in a while. You're doing it every single day.
So the financial side of the business is part of feeding the baby.
You got to watch your money every single day. You got to talk to your advisor regularly, the businesses that do well and let's say, you know, you know, I remember when Bill Gates, you know, came out with his Microsoft product and you know, he, he just went to town on it, you know, and it flew off the shelves, you know, when he brought out Windows Explorer, Windows, it just flew off the shelf and all that. But most businesses are not that fortunate. You know, you just, most small businesses, they're starting from scratch, they're trying to grow something and it's a, it can be a grind.
And so the financial side of the business, the bookkeeping, the planning side, oftentimes gets ignored.
And what people don't understand is that it can be critically important, especially let's say you're making money, right? So as an example, when we do tax planning for people, you know, we can find money, we can find money from your taxes to buy a piece of machinery or buy a building. And that building can create long term wealth for you.
But if you, if you don't, if you see tax preparation and tax planning as just some kind of compliance thing you have to get done and it's just unpleasant, that's where you can shoot yourself in the foot. As a business owner, we, we have saved people a lot of money in from tax planning. So instead of giving money to the government, we can redirect that money to something else that's allowed by tax law that then creates an opportunity to create more wealth.
[00:40:26] Speaker A: Love that.
[00:40:27] Speaker B: But if you're not paying attention, if you're not talking to your advisor, then you're not taking advantage of what we know and you just assuming, you know what we do. And a lot of times, you know, in life, you know, we're human beings and sometimes we just hear what we want to hear.
So the big thing for me is for people to talk to the, talk to the advisor, get the books done regularly, ask the advisor, what do you think, what are you seeing? And not just go off of what you know because you've not been trained in this process. So talk to somebody who's been pro, who's been trained and has experience.
I think that's the biggest thing that I see with a small business owners, they don't have enough confidence in what financial professionals can provide because they think we're in it just for the money.
And. But yeah, we're in it for the money for you, for your money, for your wealth. And if you succeed, we succeed. Because then you're not going to be angry about our fees because our fees pay for themselves.
[00:41:25] Speaker A: That's a great way to look at it. And I, I agree. I mean, it is a misconception.
You guys can do a lot. Now let's move into, okay, we've got profitability. How can entrepreneurs think more strategically about compensation, reinvestment, savings and wealth creation?
[00:41:42] Speaker B: Yeah, I've seen businesses start and they, you know, their product goes gangbusters and they're selling like crazy. And within a year, you know, the, the owners are paying themselves huge amounts of money and salaries.
I'm like, guys, you just got started, you know, you went from very little income to making a whole lot of income.
Maybe scale that back a little bit. Don't be so generous with yourselves and with your employees. You know, pay a fair salary, of course, a fair rate. But let's leave money in the business so that we can use that money as, you know, to water the growth of the business.
And let's just be careful, make sure we have enough socked away in the event of a liquidity event, you know, or some surprise, you know.
So I would say don't pay yourself so handsomely in the, in the get go. Don't be so.
Don't be a spendthrift and, and just spend, spend, spend. Oh, I got a nice business. Let me go out and decorate my office and make it look stellar, beautiful with the latest artwork and all that good stuff.
I tend to be very conservative when it comes to money.
I'm not a fan of just throwing it away.
If you got the cash, you can put it into a money market and let it grow. But let's grow that. Let's spend a few years up front building the business and making sure that it's going to produce is going to grow and then compensate us later. But a lot of young people especially, they tend to start paying themselves a very rich salary up front, which is a mistake in my opinion. Unless the business is like, you know, going gang buses up front and everything's rosy, then, yeah, go for it, of course, you know, but I like, I'm gonna count them. We're cautious by nature, so.
[00:43:35] Speaker A: Yeah, no, that totally makes sense.
Yeah. So you're a lifelong learner, fitness enthusiast, and Brazilian jiu jitsu practitioner. How do those disciplines influence the way you approach business and client strategy?
[00:43:49] Speaker B: Yeah, so the word is disciplines, right? These are disciplines.
And so you're not going to see any good results in martial arts and fitness and diet without some level of discipline. You got to have that discipline. And if you don't have discipline and, you know, a lot of us struggle with that, you know, it's very easy to go home, kick off your shoes, sit in front of the tv, get that remote and just watch tv, you know, So I definitely have my struggles with fitness. In fact, I just recently bought a rebounder. It's like a small trampoline, and I put it right in front of my TV in my living room. And so it's sitting right there. In order for me to see the tv, I have to see that trampoline. So I will get up and go to the trampoline and jump up and down 5, 10 minutes, which is a good workout. And. And, you know, and just build in something to keep me disciplined and focused.
So discipline is what's going to decide your fate and business on any endeavor that you're doing, because you're not going to get a good at something unless you're disciplined. Look at the professional athletes, right? They were. They're working on and training every single day. You know, those guys must be tired of ladies nowadays. But so it requires this. Any good thing is going to require a good amount of discipline, but it pays. And the people who are not doing so well in life, they might want to rethink their. Their life of discipline and lack of a lack thereof. Especially in the United States, where it's not hard to develop a, you know, comfortable lifestyle.
[00:45:26] Speaker A: Right.
[00:45:26] Speaker B: That's my take on that.
[00:45:29] Speaker A: Right. I love that. So what is one practical step that viewers can take this week to strengthen their financial foundation?
[00:45:36] Speaker B: So the very first thing I would say to a business owner is take. Take stock of your. Where your books are and your financial structure. Have an accountant take a look at your financial structure. Make sure that the books are being maintained properly, that things are being categorized. Like you mentioned earlier, that, you know, maybe things have not been categorized properly and that can impact the analysis of your business. So the very. And it's very easy. Just have your books done on a monthly basis. And if you can't do it and I don't think you should have a bookkeeper do it and then have an accountant take a look at that, the final product that the bookkeeper does. Or if you're like us, we have bookkeeping in house and accounting at the same time. We just look at it all. And just that one thing, keep your books up to date, monthly, and then talk to your accountant monthly or at least quarterly. That alone. And if your advisor, if your CPA is an advisor who likes to look forward, is not just a historian, then the advisor is going to say this, like myself, I'm going to look and see. Okay, you know, everything looks fine, whatever what happened here, what happened there, let's talk about that. And you'd be surprised how many times we pick up stuff that is critical. I picked at one client, we picked up that, you know, we looked at his insurance spend. We're like, something's missing here. And when the further we talk, he didn't have liability insurance. All of a sudden I'm like, we have to get liability insurance. And it quickly called the insurance agent said, hey, and we've, you know, we got a surprise. And we fixed that surprise. Now just imagine if he had an incident.
You could be personally liable, you know, and have a just a nasty surprise so that you know something as simple as that. A CPA who looks forward.
We see you making money. Hey, I have an idea. Let's talk about it. Let's try to save you some money. Maybe you have to make estimated tax payments normally, but because of the way the year is looking, hey, scale back in the estimated tax payment. Take that estimated taxpayer. You don't need to make it, just take it and put it in your pocket or put it into paying off debt.
Right? Lower your debt, you lower your interest rate. Right. You low your interest expense and that makes you wealthier.
So it's not enough nowadays for an accountant to just be a historian. In my opinion. You got to be looking forward and trying to figure out how do I make my client richer and more financially sound. That's the advice I would give to any business owner.
[00:47:58] Speaker A: Love that. So Joseph, for viewers who want to learn more about your work in tax planning, accounting advisory services, where can they reach out to you?
[00:48:06] Speaker B: Yeah, my website is raiseaccounting.com. it's got all my contact information in there. We're on now Media tv. Of course I also host a show.
So yeah, we are very easy to work find. We have clients all over the country. We're basically a virtual accounting firm. We're into modern day technologies. We have very few clients who come into our office nowadays. We have clients in Florida, Texas, California. I have one client in Indonesia, so a couple of clients in Canada.
So we are a virtual business. So we can field calls and work with anybody basically at this point in the world.
[00:48:43] Speaker A: Fantastic.
Raise a tank. Thank you so much. Joseph, for joining us on the Marketing Zone. This conversation reminds business owners that growth is not just about being seen. It's about knowing your numbers, making smarter decisions, protecting profitability, and building a business that can support long term wealth. I'm Marilyn Jenkins and this is the Marketing Zone.
Welcome to the Marketing Zone. I'm Marilyn Jenkins of State. We.
