For the full show notes and access to resources mentioned in this episode visit: https://www.easyscaling.com/blog/episode16
Tune in as we discuss all things money and the confusion that often comes along with it. We dive into the need for transparency in the online space, how to pay yourself, and why you shouldn’t be afraid to dive into your numbers.
As usual, this was a fun one because we get down into the nitty gritty and I even offer up details about my own finances in the spirit of transparency and to hopefully start a more open dialogue about money.
My guest is Kimberly Tara, one of my amazing clients and a CPA and certified tax coach. She started her tax practice six years ago and focuses specifically on profit and tax strategy for female small business owners. She's also the host of the Messy Wonderful podcast and blog, which focuses on motherhood, money, and business.
Topics discussed:
Connect with Jordan Schanda King:
Connect with this week’s guest, Kimberly Tara:
Love what you heard? Reviews really help us out! As a thank you, you can get my 90-Day Planning Formula ($97 Value) by submitting a screenshot of your 5-star review at easyscaling.com/podcastreview
For the full show notes and access to resources mentioned in this episode visit: https://www.easyscaling.com/blog/episode16
Tune in as we discuss all things money and the confusion that often comes along with it. We dive into the need for transparency in the online space, how to pay yourself, and why you shouldn’t be afraid to dive into your numbers.
As usual, this was a fun one because we get down into the nitty gritty and I even offer up details about my own finances in the spirit of transparency and to hopefully start a more open dialogue about money.
My guest is Kimberly Tara, one of my amazing clients and a CPA and certified tax coach. She started her tax practice six years ago and focuses specifically on profit and tax strategy for female small business owners. She's also the host of the Messy Wonderful podcast and blog, which focuses on motherhood, money, and business.
Topics discussed:
Connect with Jordan Schanda King:
Connect with this week’s guest, Kimberly Tara:
Love what you heard? Reviews really help us out! As a thank you, you can get my 90-Day Planning Formula ($97 Value) by submitting a screenshot of your 5-star review at easyscaling.com/podcastreview
16# - How to get comfortable talking about money and the shit you need to know to be more profitable with Kimberley Tara
[00:00:00] Jordan: Alrighty. In today's episode, we are talking about money, money, all things, money. This is a really fun one for me because I have some pretty strong opinions and big frustrations about how money is talked about, or actually how it's not talked about in this online space. And I think that causes much confusion.
There are many misconceptions, there's much lack of transparency around money. And so we try to, we try to combat that a little bit. In this episode, I share how much I pay myself, and how much this business has made. You know, we're, we're a fair newbie business, but we've grown very quickly, and so we dive into specific numbers, which hopefully is helpful, and we'll even just start some type of open dialogue about.
What's happening on the money side of things in business is pretty important. So my guest is Kimberly Tara. She is one of my amazing clients. She is inside the Advisory Mastermind, a CPA, and a certified tax coach. She started her tax practice six years ago. She focuses specifically on profit and tax strategies for female small business owners.
She's also the host of the Messy, Wonderful podcast on blog, which focuses on motherhood, money and businesses. She's going to talk a little bit more about that. She's amazing. She's a total rock star. She is the mom of four little kiddos, all under the age of five. So she's essentially a superhuman. So we get into some good stuff around just, just accounting, money tax, all kinds of stuff.
That may sound boring, but it's not, and it's important. So I hope you enjoy this conversation.
Hello? Hello everyone. Hello Kimberly. Hi. Welcome
[00:02:00] Kimberley: to the podcast.
I'm excited to be.
[00:02:02] Jordan: Yeah, me too. This is going to be fun again. I say that every time. It always is. I know. So, I want you to tell us who you are and what you do, and I'll add that you are one of our clients inside the mastermind, inside the advisory, which is pretty cool. So I think we're going to dive into a bunch of different stuff related to your business, how you've grown, and stuff on this financial side.
Mm-hmm. of running a business that sometimes gets talked about, sometimes gets talked about in a way that people tune out. Yep. . Yeah. And sometimes doesn't get talked about at all. So I, I think we're going to have some cool, relaxed conversations here. But why don't you go ahead and give us the context?
what
[00:02:44] Kimberley: you do. Yeah. And I can even ask answer advisory questions too if you want mastermind questions. Happy to, happy to share. So, hi, I'm Kimberly Tara, and I have a tax practice, the Tara CPA firm, where we work with female service providers on specific tax planning. And I think Jordan and I are gonna dive into all of that.
So I'm just gonna leave it at that. We work on primarily tax planning for female service providers. and we also do tax preparation. I am a mom to four kids that are all ages five and under, so they're all 22 months apart. I'll do the math for you because everybody's brains just start. You can see the eyes.
so they're all 22 months apart. And, we have three boys and a girl. Yes, we're done. We were done either way. Four kids is a lot. So we actually also started a blog after. Second child was born and we focus on motherhood, money and business, on the messy wonderful blog. And that is just because parents were asking us how do we travel with our kids?
[00:03:42] Kimberley: How do we talk to our kids about money? How do we, what's the difference between responsibilities and chores? All of these questions that, I guess we're a little bit ahead of many of our friends having kids. So they were asking us all of these questions. So we decided to condense it into one area and it has just grown from there.
And, my my husband's an engineer, I'm an accountant, so we are very like numbers people. We are very analytical. So in some ways the blog is our creative outlet and something that we can share with our kids, because obviously we can't do engineering or tax with them quite yet. so the blog is kind of our area to enjoy those times with our kids and kind of just put it out there with the world.
[00:04:21] Jordan: I love it so much. I love it. I can't believe you're juggling. Four kids under the age of five, I'm over here like drowning with two .
[00:04:30] Kimberley: It does, like, in some ways it, like, you know how people talk about, like, the more you have, like, you kind of just stop noticing. I don't know that that is true, but I will say that the, the, the switch from two to three was definitely harder than the switch from three to four.
you like, you just kind of get, you move from that. Like, what's the football reference? It's not man to man coverage. It's zone defense at that point. And it really is like, you just kind of, everybody takes a turn. You're over the guilt. I feel like there's a lot of guilt that comes with not being able to focus as much attention on each child, and you've worked past that at number two.
[00:05:05] Kimberley: Then you work past that at a little more at number three, and by the time you get to four you're like, Look, I've given you siblings. That's like, play with each, play with each other. I don't like, I can't give you, I can't give you all my time and attention. I've given you siblings for the rest of your life, You know, play with each other.
And because they're close in age, they can play with each other. .
[00:05:22] Jordan: Oh, that's so funny. I love that. I was just thinking about that this morning. I'm like, Oh man, our second gets so much less attention than our first did. Like, is he gonna be okay? I'm like, Actually, he's probably better off for it. So he
[00:05:35] Kimberley: is, he is better off.
I'm reading books about that. You know, subsequent kids actually usually are better off. but, it's funny because our five year old, he has autism and, but he's very high functioning and so he reads, he's in pre-K four, but, and I'm sorry, he's in kindergarten. See, you can't even remember what grade your kids are all in
but he, but he reads at like a third or fourth grade level. So I'm like, Here, read to your sister. Read to her. Right. Because like we used to sit one on one with him all the time and read to him. And I know that we don't read to our third and fourth the same amount. So I'm like, Hey Hunter, come read to your sister.
[00:06:08] Kimberley: Like, you know, get that, get that mnemonic sit and all of that. I'm like, Come read to her. So, you know, we just ask him to read instead of us having to read. Yeah, it
[00:06:15] Jordan: works out. I love it. I love it. Yeah. It just changes. Okay. well that's the motherhood side of things, and I'm sure that's gonna come back up in our conversation.
Totally. But let's dive into money stuff and Okay. Maybe I'll start us with like a juicy topic and then we'll get to all the other stuff,later. So one thing that I was talking to you about was this lack of understanding, lack of transparency. General, just confusion. I feel like in the online space, or even just lack of awareness, it, it's lack of awareness and it's, it can be kind of confusing around when people are talking about numbers and people are talking about money.
Yes. I made this much amount of money. I had this amount of a launch, I had whatever, and there's not, A lot of like standardization in how people talk about that stuff. And this is something that I actually learned, I feel like, kind of late in the game maybe like, maybe like end of last year, beginning of this year.
And I assumed, cuz there's, there's layers here. I assumed that when people were talking about how much money they made in a month, it was like how much money went into their bank account. Like that's how I've always talked about if I have a 50 K month, it's like that's the amount that people actually paid to me in real money in my bank.
and then someone in, I think is in the mastermind that I'm in was like, Oh, cash or sales. And I was like, what? ? Yep. People say it differently. Yes. So. That is mind boggling to me, . And then there's also this other layer that you brought up that I was probably less concerned about, but also makes sense to talk about is revenue versus like your net profit.
[00:08:11] Jordan: Yes. Yep. So talk to us about your opinions on that .
[00:08:15] Kimberley: Okay. I, I have lots of opinions. My husband doesn't always appreciate all of my layers of opinions. so I love that you said lack of awareness, Right? Because I, that's a big thing that I've been doing since I've moved only from brick and mortar to the online space is really the education.
A lot, a lot of, especially women, because we didn't grow up having the same money conversations at home that a lot of our male counterparts did. Right. Like it was hidden from, from the girls. Right. We didn't have the same conversations. Is this awareness? A lot of, a lot of female business owners are not problem aware.
[00:08:49] Kimberley: So that's, that's been, I've really been trying to bring a lot of education to the space because it's really important to me. so yeah. So let's tackle the cash versus sales. Let's start there. So in accounting there are actually two different ways that you can, track report your income, the way you file taxes, and you can either do it on a cash basis or an accrual basis.
So that cash basis is like you were talking about, the cash that actually goes into your account. Then you. Mastermind peer who was talking about the sales, that's more the accrual basis, right? So you send it invoice out and you have actually sent that person, Hey, you owe me money. That's a sale. And so some people track their income by how much money has hit their bank cash, and some people track, their income by how much they've actually invoiced out.
One is not right or wrong. I know you're like, No, it needs to be cash. From an accounting perspective, there is no right or wrong. I think from. I think from a transparency perspective, and when we're having those conversations, I think the most important thing is to remain consistent. So don't say that you had a 50 K month because you invoiced out 50,000 and then come the next month and say you had a 50 K month, because now you're receiving that money because that's not transparent and that's not factual unless you actually did bill out another 50,000.
So I think for me, where where I look at it is I really want you to be consistent and I want you to be transparent. Tell me this is, this is 50,000 in sales, 50,000 in cash, Right? Like, like define it, be consistent, be transparent, be truthful about it. because my problem is people are just all about the click bait.
Like, Oh, I had a 50 K month. Oh, I'm a seven figure business. They want the click bait. They want people to click and, and think that they're, and it's almost like, like, Like they need people to think more highly of them because they have this, this dollar figure. And so you were saying that it bothered you.
And that people might be saying that they had a 50 K month, but that wasn't cash. What really bothers me is when people say they have a 50 K month, but they only kept 2000 of it, and I'm gonna lead with the caveat that maybe it was a month where they were really heavily advertising investing in their team.
So I'm not saying that every month you need to have a really high profit percentage, but for me it's really important that when we're talking about numbers, when we're talking about what kind of month you had, I wanna talk about your profit. I wanna talk about your net income. I don't care how much you made, if you had a $50,000 month, but you spent 40,000 in Facebook ads and you're doing that month over month, right?
Not, not a one off investment, not a let's get things rolling, but if every month you are making, quote, unquote, 50,000, but you're only keeping two. You know, so you're making what, $600,000 a year and you're keeping 24,000 of it. That's not okay. You're working way too hard to keep nothing. So we need to talk about how, how we're being smart with our money, how we're being smart with the money that we bring in so that we can keep as much of it in our pockets as possible.
And there's a lot of things that go into making sure that the amount you actually keep relative to the amount you're bringing in is, is good enough, right?
[00:12:09] Jordan: I agree there to be more transparency here with the amount that people are actually making. I guess it's less of a pet peeve for me, even though I do wanna talk about it more because I feel. Essentially everyone across the board is using revenue numbers. I don't know anyone who's throwing out numbers that are not revenue, that are like, Yeah, I made, I had a 50 K month in profit.
Like, no one
[00:12:32] Kimberley: says that. No, they're not talking about it. But I think we need to talk if, so, if you wanna throw it out there for marketing, use your gross revenue numbers all day long for marketing purposes. As long as you're being honest, you know, you can use it for marketing purposes. Please just be honest.
But when you're coming to someone like me and we're really getting down to the nitty gritty numbers and we're talking about the health and wealth of your business and your personal situation, we need to get down to those net figures and how much you're actually keeping. And so that's great for marketing purposes, but when we're actually talking about the viability and success and health of your business, we need to talk about those bottom line numbers.
because that's really what's for sure, that's what's going to sustain your business in the long run. .
[00:13:17] Jordan: Totally. And, and let's, let's go deep into this because I found, I have found that there's not a ton of information about how much you even should be paying yourself. So I read Profit First when I started, or right after I started my last business.
Okay. which I, I don't own anymore. And so when I started this business, it was very much like, okay, well paying myself is the number one priority. Yes. And that's how we're gonna approach things. And so that's always been a priority. But you know, there's some numbers in that book, like Percentages and I have asked around to like people who I consider peers and mentors and can.
No information from people about how much they're paying themselves. If it's like based on any kind of formula. What are the general like recommendations or guidelines? Nobody knows. It's like the wild, wild west out here. People are like, either, I feel like people are either not paying themselves at all or they're paying themselves Like the bare minimum.
Yes. which you would never notice from the outside looking into their business. Okay. Um,or they're not willing to disclose it. And I'm like, come on, like, help me out here. How much should I be paying myself? And to me that's always been just like a, what feels good. What feels appropriate for the amount of work that I'm putting in and also is sustainable based on my revenue and expenses.
And so it's kind of just been like a gut thing that I've gone with. but I'm also brand new in my business. Right? Right. Like this business is barely over a year old. So I have had months that have pretty significant expenses as I've been building things. and now as I'm bringing on team and more team and probably will have in the double digit of employees, by the end of the year.
And so it's definitely a growth phase for me, but the pain myself is still a non-negotiable . Right, right. So agree. Um,and I'm, and I'm happy to talk specific numbers because I think. Again, like there's just not good information out there. There isn't. So where should we, where should we go? Oh my
[00:15:21] Kimberley: goodness.
Where do, where do we start, Jordan? Where do we start? I have so many thoughts on this. and we wanna try and keep it logical for people listening cuz this, it's a confusing topic, right? So it's, yeah. It's kind of, again, it goes back to you remember, like, you don't, you didn't talk about your salaries in the corporate world.
Like you don't talk about money. Right. And I, I grew up in a family where internally my family, we learned a ton. I, as I've gotten older, I've realized how, how grateful and how fortunate I was for my parents to have money and entrepreneurship conversations with us. But we didn't talk about it outside of our family unit.
Right? And so, like you, I'm, I'm fairly transparent, with a lot of things and I think that we do need to have more conversations around this and support one another. So let's see. You can't just pay yourself what you want. In essence, there are, and I guess I should leave with, this is not tax advice for anyone listening.
I, I am, I am not your tax professional unless you engage me. I am not your tax professional. So this is not tax advice specifically for you. I have to leave with that disclaimer here is, here is my, here's my knowledge and I'm going to share it with you. So basically there are some IRS rules that you need to follow, and then there are things that we need to look at internally within your business, your situation, what you do.
And remember, every niche industry profession is going to be different. And it is, it's going to change as your business grows, right? Because what you might do in the beginning, you're not going to do two years in, five years, in, 10 years in, it's going to change and adapt with your business. So, Let's talk about, First thing I wanna hit on that's very technical is there are some ways that you can and cannot pay yourself depending on how you file your taxes.
So that is the first thing that you need to know and you need to talk to your tax professional, whoever you work with. when it comes to filing your business taxes, you need to know how your business files its taxes, because that's going to dictate how, the ways that you can pay yourself. So that's really important to know.
and one quick example that I see a lot, if you file your business taxes on Schedule C of Form 10 40 as a sole proprietor, you cannot pay yourself on payroll with withholding taxes, Social Security, Medicare, the IRS does not allow that. And it is a mistake that I actually have seen multiple. Even from people who are professional tax preparers, I get it and I'm like, What?
[00:17:52] Kimberley: What were they thinking? This is not allowed. So that's the first thing, is you wanna make sure that you are following all of all of the IRS rules and you wanna make sure that you're working with a qualified professional to make sure you're following all the rules. But I think we wanna talk more Jordan about like how to calculate that amount because anybody can.
Well, I say anybody. I've seen a lot of mistakes. Most qualified tax professionals can guide you on how to do it. So I have read Profit First. It's, it's been a really long time since I read Profit First, and I don't disagree with everything in the book, and I don't agree with everything in the book. And here's my take on profit First.
For anybody listening who's Red Profit first is, it's a great starting point. If you have no other advice, if you have no other money management, it is a really good place to start because it is absolutely better than nothing. But like you said, Jordan, when you start moving past those beginning stages and a 1% or a 5% figure no longer works, there's more calculation that goes into it.
The Profit First methodology isn't, it's not gonna serve you anymore. So things that I like to consider, in the beginning, you're probably not going to be paying yourself a consistent salary, paycheck, however you wanna define it, because like you said, you have a lot of those upfront cost things that you didn't expect.
Maybe some additional legal and professional fees, all of these things while you're getting going. And so the way that I look at that is you're really reinvesting into the business instead of paying yourself, you're, you're leaving that money in the business so that you can grow the business, but then you reach.
Plateau, let's say, where you're like, Okay, I know that this is the minimum that I'm going to be bringing in every single month. And to me, that's when we can really establish how much you can start paying yourself. And sometimes that is going to be percentage based if you're not bringing in a large amount each month.
Maybe it just does need to be a small percentage. but the key for me that, and this is one thing that I do like in the Profit first, but he talks about being consistent. And I think that that's really important too. You don't wanna pay yourself 10,001 month, a thousand dollars the next month, $5,000 the month after that, because one, that doesn't allow your business to know what your business expenses are going to be every month, because paying yourself is a business expense, right?
and then it doesn't allow you to know on your personal side what your income is going to be every month. So we need to have that balance there and. Then from there, from making sure that we have a consistent amount every month, we wanna talk about how much, And it depends. Again, it can come back a little bit, and I try not to get too technical with this, but it can come back to how, how you file your taxes.
[00:20:33] Kimberley: But the IRS does have some rules surrounding reasonable compensation. So I remember when you messaged me, you were like, I feel like I wanna pay myself more. And I'm like, Well, your feelings are valid, but the IRS does not care about your feelings. I'm so sorry. The IRS does not feel care about your feelings.
we have to take a little bit more of a methodical approach to it. Right. And I wanna say that we don't wanna overpay ourselves because if you overpay yourself in reasonable compensation, then you're just overpaying and payroll taxes. And that can, that can be a slippery slope and a, and a very detailed conversation.
[00:21:10] Kimberley: But that's the nugget that I wanna leave listeners with, is you don't want to overpay yourself. If you don't have to, if you've met all of the IRS standards and regulations and you have justified, your reasonable owner's compensation, you don't wanna overpay yourself because then you're just overpaying in taxes and payroll taxes and you don't wanna do that.
So,
[00:21:34] Jordan: I have a question here because I think an important distinction, and I just learned about this and I wanna make sure I've got it right. So for instance, in my first year in business, which was only a half year last year, I filed just as a sole proprietor. Correct. cuz I wasn't making enough money to pay myself on payroll.
Correct. this year, Different situation. And so my accountant is actually switching me over to an S corp. Yes. For the purpose of tax filing. Yes. Hope, hopefully I'm saying
[00:22:04] Kimberley: all this stuff. Well, it's for a bonafide business purpose. Right. But you will file your business Yes. As an S corp for the 2022 tax year.
Yes.
[00:22:13] Jordan: Correct. So yeah. so that means that the way that I pay myself this year is different. Correct. And we have to go back and like retroactively do that. But that, that's besides the point. That's not giving details there. Yes.
[00:22:26] Kimberley: It's doable. What's important. That's the important thing to know. Right. It's, it's doable.
[00:22:31] Jordan: Yes. So what I think you're mentioning on this like reasonable compensation piece and not overpaying yourself is. For your salary specifically. So from what I understand as an S corp, I actually designate like a specific salary to myself as the owner, which has to be, a reasonable amount. Correct. Based on like my job duties and different things like that.
Yes. So my accountant is helping me do the research on what is a reasonable salary Yes. For me in my business specifically. Correct. And you set that salary and that's what you don't want to overpay yourself on because you're gonna pay payroll taxes on that salary as if you were an employee now. So it's kind of like finding this sweet spot of not underpaying yourself and the, and then the IRS is like, you didn't pay yourself enough, which means you didn't pay enough taxes.
Yes. But not overpaying yourself so that there, so that then you're paying extra in taxes that you don't really need to pay. Correct. But the thing that I wanna add that maybe you can touch on is, You can still pay yourself more on top of your salary. Right. So that's not the specific thing that you're mentioning on like Right.
Like if my salary is, is set for, let's call it a hundred thousand, 60,000. Yeah.
[00:23:44] Kimberley: Okay. Let's say I like to use even, I like to use even numbers. Let's say a hundred thousand, well,
[00:23:48] Jordan: let's say 50,000. Okay. Because in my opinion, that's not enough like that. No, that's, that's not enough. That's not enough for me. So, but let's say that the reasonable compensation that we come up with for my business for this year is 50,000.
Mm-hmm. . And that's good on paper. Right. And the IRS is like, Yeah, that's good. I can still do distributions to myself. Yes. Right? Yes. To actually take home more money.
[00:24:12] Kimberley: More money, yes. You wanna talk about distributions a little bit? I'll try and keep it high level. Yeah, Yeah, let's do it. Okay. So distributions.
So the way that we sort of look at it is that reasonable owner's compensation, that 50,000, let's stick with that $50,000. That is your efforts, your day to day work that you do to bring in money to the business to keep the business running. When we think about the distributions, that is money that you can also take from the business.
When you take a distribution, it is not an expense to your business, but it is not income to you individually and it's, you just get to take. So we all know anybody who's ever received a paycheck. If you get paid, $5,000 a month, you know that you don't actually get $5,000. You don't, you don't get a check for $5,000.
It's probably like between 3500 4,000 by the time you've paid in all of your payroll taxes. Right? When you take a check for a distribution, if it's a $5,000 check, you get $5,000. There are no taxes that you're paying on it. But what happens is, is your business has to have income in order for you to take a distribution.
it's what we call basis that would be getting very in the weeds, but basically you need to work closely with your tax professional to make sure that you're not taking out more in distributions than what the business has accumulated for you to take. And so the great thing about distributions is that you don't have to pay taxes.
[00:25:45] Kimberley: So if you're like, I'm gonna take, I need, I need $5,000 in, you know, personally and I, the business can support me taking a $5,000 distribution. The beauty is you get all $5,000 of that money and we wanna think about that as. That's like what you're being paid for, like the risk and reward of being a business owner, right?
Because anybody who's a business owner knows that while there are some amazing benefits to being a business owner, there are some not so great parts and risks of being a business owner as well. And so this, this distribution piece, this K one income piece is like, that's like the benefit, Like that's the, like, that's your blood, sweat, and tears of like five years of trying to get to this point and make it right.
So that's outside of your day to day contributions of running the business. That's where this, this distribution and, and the extra, right, because, let's say, can we, can we, can we use an example and say your business makes a million dollars. You pay yourself a hundred. Let's,
[00:26:47] Jordan: can we do that? Let's u let's use my specific, Okay.
You've seen my taxes? Yeah, you've seen my income, You've seen my projections for the rest of the year. I'm happy to be fully transparent and let's give
[00:26:56] Kimberley: some examples there. Okay. So let's start with you. Tell me, let's pick, pick what you think your number is going to be for the year when you like your gross, which number, your gross revenue number, your top number of income for 2022.
What do you think that's gonna be at the end of the year?
[00:27:11] Jordan: So I've done a little over 180 in revenue this year so far, and I think we can expect that I'll. I would say probably at least at three 50 revenue for this year, which again is like, this is our first full year in the business.
Right, Right. Okay. And so three 50 I think is what we'll do revenue wise. Okay. So,
[00:27:32] Kimberley: and I think I then what makes sense? So, and then we need to think about what you're, So remember everyone, that's the big number up top. Total income is three 50. And I think based on the numbers that I've seen, you're probably going to be.
100,000 net income. So that means after you've deducted all of your expenses, advertising, contractors, employee wages, everything, you'll be around 100,000. So let's say you're gonna pay yourself, in this first year, a reasonable compensation of 50,000. That 50,000 has to come out of that 100,000, right? So now you're only going to have 50,000 of net income from the business, but we're also paying you 50,000 in wages.
So Jordan is still reporting 100,000 of income on her tax return, right? It's just 50,000 is being taxed sort of one way, and 50,000 is being taxed in a different way. So I do think, and I know you were saying you don't think 50 thousand's enough, I think 50,000 is good for this first year. Right? And again, I would, I have for the salary, For
[00:28:43] Jordan: the salary, so like, because again, I think, I think we can figure actually that net income will be somewhere between a hundred and 150,000.
Yes. Because I think actually expenses will level out as well here at the end of the year. and that a lot of my income will come from things that, from some other things that don't have direct expenses tied to them. So as income as my revenue goes up, my expenses are actually gonna stay essentially the same, which is wonderful.
I think actually probably for the sake of this conversation, 150,000 net would be a good number. And my accountant has said, Okay, we're gonna do a salary now that we're doing the S corp, situation. We'll set a salary for you at $55,000 as that would be reasonable. and is the, is the reasonableness based on.
Duties, but also. Your business revenue and like, is that part of the calculation? Yeah,
[00:29:45] Kimberley: so I don't know how she's coming up with her figures. I have a software that assists me in calculating reasonable compensation and in my software I have to put in the inputs and I put in things like job rule, job title, job duties, hours spent in business.
I have in my software, it even takes into account market factors based on location. And so I. Multiple reports that are printed out to, to, to guide me in suggesting. So it's, it's using the software but also using my brain and my experience and the inputs and making sure that the software is spitting out the right information and that it's logical and practical.
[00:30:25] Kimberley: So I don't know how she's coming up with her 55, but yes, you wanna take into account job title, roles and responsibilities, hours spent in the business. I even think that location is still an important consideration. you know, North Carolina, where you are is, does probably not, have the same. Pay rate as somebody living in California or New York or, Right, right.
It's, it's all, it's, it is still somewhat relative. I know it's becoming less relative as we move into the online world, but I do still think there are market factors to take it to consideration based on cost of living. So you're thinking about all of those things and that's where those, And so that's why when I'm working with clients on a tax plan, that software is printing out those reports and we're using those reports as substantiation and filing it away with, with the tax plan for the year.
Should the IRS ever come back and say, Mm, we don't agree with your reasonable compensation number. How did you come up with it? B bam, boom, we have these reports to substantiate, Here are our inputs, here are the outputs. Here's where we, came up with this figure from, but mm-hmm. , you would also. . So if you say 150,000 and you're gonna be paid 55,000 in your reasonable compensation for your day to day duties, you still have $95,000 left over.
That is where those distributions would come from. So if you needed an additional $5,000 a month, it would pull from that 95,000 that's remaining.
[00:31:49] Jordan: Okay. Yeah. I love it. Yeah. And, and I guess part of why I'm asking on like, does your, your revenue or your expenses and things like that come into play? Because I mean, What if we do the calculation and my reasonable salary is like 250,000 because of what I'm doing, but I'm not making enough to support that.
Like what do you, what do you
[00:32:11] Kimberley: do? Right? And that's where you make an argument. That's where you would bring that revenue. Equalizer in and say, Yeah, okay. I mean, I think a lot of us in the beginning, we're wearing all the hats, right? Like literally, you should be paid every single dollar that your business is making.
Because in the beginning, most of us, when we start our businesses, we start off doing most everything right? But your business, by the time you pay your expenses, you usually don't have anything left over. A lot of businesses actually operate at a loss from tax purposes for the first year or two potentially.
So there really legitimately is no money left over to pay yourself. So that is where you would kind of bring that in, and that's to me where. The software is beneficial. Tax, tax planning software, tax preparation software, reasonable compensation software, those softwares are wonderful tools, but that's what they are.
They're a tool. And that's why you still need to be working with a qualified tax planner, tax professional, because it's still that knowledge, that brain, that human component is still a really important factor in making sure all of the numbers actually work and that you find something that's consistent.
Because again, I've seen it too many times where people are like, Oh, my business is doing great. I'm gonna start paying myself $10,000 a month, and three months later they're like, We have no cash left. Well, that's a problem. Yeah, that's that. Doesn't that? So we have to be smart and we have to think this through.
And the way that I, something that I do with my clients, and I don't know if your accountant has suggested this, is we do bonuses quarter. Annually we do bonuses, right? So, so we have our consistent paycheck, and then if it's been a really great quarter, we, we give a bonus and the bonus is still subject to the payroll taxes, just like your payroll tax.
but we give a bonus and it ups it increases their salary, right? But we don't do that until we know that the business has had a good quarter. And I think either twice a year, once a year, quarterly, no more frequently than quarterly, you can look at that and see if you've, have you earned a performance bonus, right?
[00:34:12] Kimberley: A lot of corporate, corporate corporations give bonuses. I know I got a, I got a busy season bonus every year when I was still in corporate accounting after tax season was over. and it was kind of performance based slash you know, profit based. And, so I think that that's a great thing to do if you set your base salary as something that your business can consistently afford month in and month out.
And then give yourself a bonus if you've had a really good
[00:34:33] Jordan: quarter. . Yeah. I love that. And it's so interesting, and I, I know we've got probably like a good mix of people listening in a lot of different situations. Right. And, and I feel like I've kind of , I've experienced many different situations when it comes to paying yourself and owning a business and like essentially didn't pay myself, I, I would call it not paying myself in in some of my other businesses or paying myself an amount that.
Did not make what I was doing.
[00:35:04] Kimberley: Worth it. Yes. And unfortunately that is too many, especially it's super common female business owners, and it's like, you know, we didn't start our businesses to work harder than we did in corporate or whatever we were doing. Right. We started our businesses, one because we're probably really, most people are really passionate about what they do in their business.
Right. But then we also need to make our business work for us, not the other way, for around. And that's, that's what I love about what you do with easy scaling, right? Is you bring that operations component into it so that your business isn't running you. But we also need to make sure from a financial perspective that your business isn't running you, that you are running your
[00:35:39] Jordan: business.
Yeah. Yeah. Honestly, I think that was the biggest takeaway for me from Profit First, because I haven't applied like a lot of the set up all these bank accounts. Mm-hmm. , like, I, I just never, like, just felt too complicated for me to actually do and, and I don't. , I guess, budgeting and like keeping an eye on my money isn't really like a problem.
So I, I didn't, I didn't feel like I needed to do that, but just the duh! Moment that I had when I read that book, that was like, oh my gosh. Of course, like pain myself should be the first thing, not an afterthought. Right. That's the whole point. Right. You
[00:36:14] Kimberley: know, and, and I will say that I think that there's a time and a place because again, and I do, I agree with you.
I think if you're a good money manager, then you don't need five accounts, right? I mean, yeah, we have a lot of accounts because I'm neurotic, but, and I can manage them, but I actually think that sometimes having five or more accounts can do the o have the opposite effect on business owners. It can stress about like, where's this account where, Okay, what's that account?
Yeah. Like, it, it becomes too much sometimes. and so sometimes less is more. But you know, it's one of those things where. You, you have to decide what you want your business to do for you. And one of the things for me that I, and you talk about this a lot, is having kids, Having kids will make you realize in a hurry how much time you actually don't have.
And so it forces you to work in a way where you have to be smart about it. And you know, that's, that's kind of one of the things that tax planning and being smart about your business finances can do is you wanna maximize, so you're bringing in this money, let's maximize what you're bringing in. Instead of focusing on getting out more, let's make sure that we're maximizing what you're already bringing in.
So you don't have to work harder to bring in more. and I guess I will say like there's nothing bad with bringing in more, but don't bring in more and then just spend more and you're still ultimately ending up with the same amount of money, but you're working harder to bring in more money.
[00:37:36] Jordan: Yeah, yeah, for sure. And and I think the one caveat that I'll give, even though I agree, is you're gonna have different phases of your business. Absolutely. Those seasons and your business. And again, like going from, for us, going from like, Idea to bringing in multiple six figures of revenue in a year is, I think a Okay.
People throw around all kinds of flashy numbers in this space. Yeah. But like for me, that feels like a pretty fast growth trajectory. It is. In, in like in practice, like having lived it. Now granted I was pregnant and had two under two during that. So like I had an extra layer of complexity in my life and moved across the country and all kinds of other things.
But, that I think is a pretty fast growth. It is
[00:38:25] Kimberley: trajectory. It is in a year. I've seen a lot of businesses. It is. And the way that you've done it in not only a sustainable way from the operation side, but also. Net income. Right. Not not having negative income.
[00:38:39] Jordan: Right? Yes. And, and let's exclude my first six months in business mm-hmm.
because I made a massive investment to start my business. But, but again, like paying myself was a priority from the beginning. And I think when I started paying myself, I was trying to pay at least this year for sure, like four to $5,000 a month is what I felt was like, okay, this covers, this covers some big expenses that we have.
Personally, it feels good knowing that I have a baby business. Mm-hmm. , you know? Yeah. and also like you have to balance, in my opinion, you have to balance like what you can do in the moment with where you know you're going. So like, again, that feels like a fast growth trajectory. And I think we'll con like our business will continue to see, I think a pretty fast growth trajectory.
I think it's. In my mind, essentially a for sure thing that we'll do seven figures in revenue next year, which feels like, again, a huge jump for like second full year in business. Yes. To do seven figures, that's a huge jump. . Right? Right. It's a huge jump. so it, it's tough because like, I feel like some people who are kind of in this.
Revenue arena. I, I don't know what they're making for all I know. Again, they're, they're making three to $500,000 in revenue a year, but they're only paying their self two, or maybe they're paying their self 20. I have no idea. And this is like the frustrating thing in this space is that there is no transparency.
And so when I'm talking about my numbers, like I'll just, I will tell people, like if you ask me, people have messaged me on Instagram when I talk about money and, and behind the scenes business, and they'll be like, Well, what did you actually net? And I'll be like, Well, I paid myself $10,000 this month. And that's like my, my goal is to pay myself $10,000 until next year when we ramp, like, like we hit another milestone as far as our revenue and expenses.
And then I'm gonna ramp that up, hopefully to 15,000 and then to 20 and then to, like, my goal is to continue paying myself until I get to a point that feels. Good for what I think I
[00:40:46] Kimberley: have and is acceptable by the
[00:40:47] Jordan: irs. Of course, of course, of course. But I will, I will grow it until we get to the point that it feels good for me,
You know
[00:40:55] Kimberley: what I mean? Yeah. But can I tell you a secret, Jordan? Yes. No one is telling you what they're making because I'm not sure that they know what they're
[00:41:04] Jordan: making. Okay. What is that about? How do people not know what they're making?
[00:41:09] Kimberley: People think that taxes, finances, money is scary and it just falls to the bottom of the priority list.
They'll just figure it out. I can't tell you how many people that I've asked along the way in my business and they don't. I'm like, Hey, send me your, your number so that we can assist you in calculating your estimated quarterly tax payment. And they're like, I don't have anything to send to you. And I'm like, It's August.
How, what? What? so people aren't paying attention. To their numbers and then so, so I see it two ways. They don't have anyone that they've hired to do them. Right. And we see this a lot in new businesses because it is a big expense. I personally think that it's an expense you can't afford not to have, right?
Because, the money minded people, the CPAs like we can really help you and understand it. So they think that they can't afford it. So they're, they're DIYing it themselves and there's nothing wrong with that in the beginning. But, so they don't know what they're doing. They don't understand all the numbers.
Then you get to this level of revenue and they're not. They're just assuming that their accountant, cpa, tax professional, whatever you wanna call them, they are assuming that they're doing it all and that they're looking out for their best interest. And I think that a lot of us are, I know that I'm looking out for my client's best interest and I'm always communicating with them.
And I, and I really believe that my client success is my success, right? But unfortunately, there are a lot of people out there doing this work who don't care about your success, who aren't going to take the time to educate you. And so I do think that it's one of our jobs as business owners, as CEOs, to understand.
How, how much to pay yourself, how much your quarterly estimated taxes are the difference between your gross revenue and your net income. We need to understand all of these things. And I, I think people just, It's scary, it's complicated, it's overwhelming and they don't wanna learn it. They say, Ah, I don't need to know.
Just tell me what to pay myself. You know, you're different, You're a numbers person, you're analytical, so you do wanna understand how, how are you getting to that 55,000 is, is that right? But unfortunately, most business owners, they're like, If you tell them 5,000, they're like, okay. You know, instead of really understanding what goes into it.
And I, I think it's really just, it's scary, it's overwhelming and, yeah, they don't wanna talk
[00:43:31] Jordan: about it. It is, it is, it's definitely overwhelming. I, I will agree there. And I am a numbers person and it's still kind of like, I don't know. And, and I will tell you, I don't actually like to look at my, like reports.
Like, why not?
[00:43:49] Kimberley: Can we dive, can we dive into, Why?
[00:43:52] Jordan: Yes. I don't know. I think I don't like the way that they look. Okay here. Okay, explain this because this doesn't make sense. I don't look at my credit card bill cuz I use a credit card for everything. Cause I like to get
[00:44:06] Kimberley: awards. Points. Points. Oh wait. But let's say only if you only use a credit card, if you know you can pay it off every month, do not use a credit card if you do not pay it off every month.
Okay. Go on. Yeah.
[00:44:14] Jordan: Or if you have a 0% interest card, which is what I have. Yes. Yes. but I will pay it off before I have to, pay interest on it. Yes. So, I don't like to, I don't, I don't like to look at my statements. I don't like to look at my bank account, like the actual transactions. I don't like to look at any of that.
But what I will do is I will map out like a full, projection of, okay, what is it gonna look like in. January and then in June or July, if we have X amount of clients, they're each paying this amount. This is how many people I have on the payroll, this is the contractors, this is what I'm estimating for, like their hours.
And I fully map it out because you have to make, you have to make sure that that's gonna wash out too. Yes. Because, that's been a little bit of a new slash scary thing is committing to other people's livelihoods.
scary that, See, to me that really scary .
[00:45:09] Jordan: It is, but it's also really cool and exciting.
But I've kind of just been wing a little bit and so I've had to pause a couple times and be like, Okay, wait, let me make sure that this all comes out on paper, that we can actually pay people. And how much are they actually working? Cuz most of what we do for our team is billable hours to clients. So that has to make sense too.
and then that we can back to then do our prices make sense and all kinds of other things. Like I could do that stuff for days. That's fine. I'm working in spreadsheets like that. That's the time's, but, but please do not make me look at my balance sheet. ,
[00:45:45] Kimberley: what about your profit and loss? I don't wanna look at that either.
Okay. Well, okay. You have to look at your profit and loss. but see, and that's, that's why I, that's why I enjoy specifically working with female business owners because I want to educate them. Like I want to say, Why is this scary to you? How do I break it down for you? How do I help you? How do I help you?
At least wanna have a conversation with me? I'm not asking you. And I do that for a lot of my clients, right? They don't look at their profit and loss statement for the. Until we're meeting and we talk about it together and we're sort of looking at it together and I can say, Okay, this is good, this is bad.
Can, you know? And then we dive in like, why is this number bad? Why is this number so high and bad is relative, right? But we, we dive into it. So I think that it's okay to say, I don't wanna look at my profit and loss statement by myself, but you need to partner with someone who you trust who is going to have your best interest at heart and say, But let's look at it together.
I understand it. I love them. Let's look at them together so that I can make sure you understand and we can talk about anything that looks off so that we can catch it before it becomes a problem down the road.
[00:46:50] Jordan: Yeah. You know, I think, I think the thing that makes it not appealing to talk about or to look at or to think about myself is that I feel like it's hard to have a simple conversation in this space.
You know what I mean? It's not like, Okay, here's what I want. I want someone to tell me if your revenue is this, your expenses should be within this range each month. Your owner's pay should be within this range. Like what are some benchmarks? And that is like apparently not a thing, which means you have to have.
A really in depth conversation every time you want to talk about these numbers is how it feels. I'm not saying I feel like I
[00:47:30] Kimberley: disagree life, I can see my face and I'm like, I kind of disagree with that. But once you get established, so I will say like, in your first year of business, that is really hard because you don't have a benchmark.
There's no, there's nothing for us to go back and look at and say, Okay, well what did last year look like? Or what is typical of this industry? Because there are some industry standards, but let's be honest, as we move more into this online space, there aren't, there aren't standards anymore. Everybody's just kind of like figuring it out as they go when it's different.
so yeah, you probably really can't do that this year, but I definitely think that you can, if you're smartly reading the financials year over year and you have a good understanding of what the business is, I definitely think that that can be, conveyed. Now, you can't take it as writing and, and you know, kind of cemented into place.
[00:48:18] Kimberley: But I do think that there are some things that you can sort of have an idea month over month.
[00:48:23] Jordan: Yeah. Okay. Well, , this is actually why I just paid someone immediately. and I
[00:48:30] Kimberley: wish more people would ,
[00:48:32] Jordan: you know, And it, I think there's a little bit of a misconception about how expensive it is, because at the very least, I think everyone should have a bookkeeper.
I
[00:48:40] Kimberley: 100% agree.
[00:48:42] Jordan: Bare minimum. Bare minimum. When you start a business, you should immediately hire a bookkeeper. Like, I will die on that hill. Like, I agree. Non-negotiable. And I think, I think that's actually been a pretty big game changer for me in this business, in being able to keep the financial side of things front of mind.
Yes. And kind of under control, because I feel like I'm actually pretty organized. I don't like go, you know, buy stuff on my personal cards and then like, ha, like I just, I'm pretty like simple. I have two credit cards. Two, one, like one checking account and one savings account, and everything's set up on auto pay.
And it's like all just like mm-hmm. running in the background, which hopefully makes it easy for my account Yeah. To do things. But, I hired her before I made any money. Yeah. Because I was like, I, I'm not gonna touch this. I'm not gonna touch it. I don't wanna have to calculate anything at the end of the year.
now granted I had technically three LLCs when I hired her, so she had a little bit of a mess to clean up, from closing out a couple of other businesses that I knew I didn't wanna deal with. But, that's been a game changer.
[00:49:53] Kimberley: Yes. And, and, and the thing is, is that, as a rule, bookkeeping isn't quite as expensive as some of your other financial services, Right.
it's gonna be typically cheaper than tax preparation. It's gonna be a lot cheaper than tax planning, right? Because we're moving into the strategy. So, so bookkeeping tends to be more of that transactional day to day operations. It, it's not so much the strategy, but you have to record your income and expenses for anyone to be able to look at it and give you the strategy.
[00:50:23] Kimberley: Yeah. I mean, otherwise you're just kind of guessing, Oh, well I think I made this much. Oh, I think it, well, like how do you want me to help you with the strategy component if I don't have anything to actually look at?
[00:50:36] Jordan: Yeah, it, I will say that was nice when I sent over my financials to you is you were like, Okay, here are the things I need.
I was like, Great. Got 'em. I've got those. I don't even have to think about it. Here you go, . Because
[00:50:46] Kimberley: most business owners don't want, I say this with love in my heart, but most business owners aren't good at the bookkeeping and the accounting side of things. They didn't go to school for that. They, and then they don't want to, like, who wants to come home at nine o'clock at night after you've done a full day of work?
You know, and I'm talking like more, when you're in the beginning of business, you've done a full day of work. You've been the, you've been the marketing executive, you've been the operations person, you've been the doer. The last thing you wanna do at nine o'clock at night is start entering accounting transactions and reconciling your bank statements.
Right? And so, not only are you not as good at it, not as knowledgeable at it, not as efficient with it, it also falls to the bottom of your list because you don't like it, you don't wanna do it. It's the last thing you wanna do. Yeah. So I do think that making the investment in a bookkeeper is, is a really wise choice.
[00:51:32] Jordan: Totally. What other things do you wanna use me and my financials as a Guinea pig for that we think would be helpful for folks listening? Hmm. Now that I've put it all out
[00:51:42] Kimberley: there, . Yeah. Right. so I, there was something you said, that I was thinking, Oh, you were talking about how you love to do, like, the projections and how much income you're gonna bring in.
And I will say that I love, I do this too, like how many people, instead of like focusing on the do, like backing into how many people you need for something, Right? If you wanna make this much money. Okay. Well what does that mean in terms of people or product sold or clients onboard it? I love that approach and I think it's, I think it just makes it like, More manageable for business owners, right?
It doesn't make it seem as scary. Like, Ooh, I wanna make, I wanna make seven figures. I wanna make a million dollars. Okay, well, what does that look like? Because you know, you can throw that number around all day, but how do you actually get there? The other thing that I was gonna say was, you were talking about how in order to make that much money, okay, well, what's your contractor cost going to be?
What's your employee cost going to be? So those are your. The, those aren't your fixed house, those are your direct costs with bringing in that money. And so remember we were talking about how you think that your income is going to increase over the next three or four months, but you don't think that your, your expenses are going to increase at the same rate.
And so that's the great thing about scaling. And I mean, we can talk about scaling cause you love to talk about scaling, right? How do we increase the income but keep those expenses the same? So that is where you kind of get to those economies of scale. And you can have your fixed costs that are just like your operating expenses, maybe your marketing expenses, your office expenses.
All of those things really stay the same month over month. And you want that, You wanna find a way that as a business owner, you can estimate what those costs are gonna be and know what they're going to be month over month so that when you're doing work like you're doing Jordan with, how do I. How do I increase my income?
Okay, here's what, here's the expenses that I know are going to increase if I increase my income. that's a really critical component. And while you're very, very good at that because you like numbers and you're that analytical brain, a lot of people even that is still very scary. So those are the things that you should have somebody, any professional that is a financial person on hand with you to talk through those things to say, Is this doable?
Does this make sense? can we sustain this in the long run? Because all of those numbers, it kind of comes back to that, how much you pay yourself. All of those numbers need to be accurate so that the, the owner's compensation, the distributions, all of those figures are then accurate. It's, it's a trickle down effect, and you've gotta, you've gotta start with having accurate information, input accurate projections, so that everything else falls into.
[00:54:22] Jordan: Yeah, totally. And man, this stuff is like hard to wrap your head around. And again, so hard. You know, I'm like a super nerd and I love this stuff. And you're talking about people don't wanna sit down and reconcile their bank account at 9:00 PM I don't wanna do that. But what I will do is play around on a spreadsheet for two hours and drink wine and watch tv.
Like that is just my jam. Oh yeah. That's fun. and everyone listening's like, What the hell's wrong? Where are these people ? but even for me, it's hard to wrap my head around and, and it can be, I think this is where people can get into trouble, especially with service based businesses, with agencies where you do have a lot.
Set. Cause Not set, cuz I know you said fixed and now I'm kind of going down that it, it, it's a variable expense based on how many clients you have and how many hours people are putting in. Yes. And I don't know how other people approach this, but for me, when I started my agency and I was trying to figure out how much should I be charging for this and I do everything hourly and I can, I can go down a rabbit hole and, and get on a soapbox about that.
But I personally find that to be a much easier thing to, wrap my head around and keep an eye on as far as like expenses
[00:55:32] Kimberley: go, I think for what you're
[00:55:33] Jordan: doing available and that type of stuff. It's just, for me, it's been really helpful rather than doing like, packaged based stuff. Mm-hmm. , I just find that complicated.
So, I did that when I very, when I very first started, and I've got a spreadsheet and I've actually shared it with a couple of my clients where it's like, okay, here's, here's what's included. Here's the package price, here's how many hours, here's who we think is gonna need to work on the project and, and, or, or on the monthly retainer and what the breakdown is of like how many hours we are estimating on average they're gonna spend and their hourly rate.
Because all of my, all of my folks, employees or contractors have to have an hourly rate because we're doing hourly work. And so mapped that out at the very beginning when I started to try to say, Okay, here's a good price then for, for. What we offer and here's our profit margin on that. And I was totally making this shit up, like totally making it up cuz I had never done it before, right?
So I'm like, Okay, well this,
[00:56:31] Kimberley: this sounds good. You know how many pay business, this is how a lot of business owners, this sounds good. Like this sounds like a good number to pay myself. It's like, okay, well let's dig a little deeper. Yeah,
[00:56:41] Jordan: Yeah. But at some point you gotta, you've gotta start somewhere, right?
So like, haven't ever sold the package. Have to put a price on it. Yes. Gotta start somewhere. Let's start here. And then what's cool about that is that I was able to go back three, four months after we had had clients actually paying us and I'm paying out contractors for the work and plug in the real data on here's how much they actually worked, here's how much I paid them, did it actually shake out?
And it was. Very close. It was like within 5%. Doesn't that give you like, such
[00:57:14] Kimberley: a sense of satisfaction?
[00:57:16] Jordan: You were like, was so stoked? I was so stoked. But, things have drastically changed on like how we run our team, on how our offers work on all kinds of things. And I haven't gone back and done another analysis of all of that.
And I need to, and that's the type of stuff that, I mean, no one told me to do that again. I'm lucky to be a nerd. I don't, I don't think other people are doing that. They're not. Again, it's more just like we're flying by the seat of our pants here. Hopefully this is a right price. I'm not even gonna go back and check and see what the profit margin actually was.
Mm-hmm. , the profit margin on each client is probably different. Like all of these things. No one's helping people with that.
[00:57:54] Kimberley: No one that I can find. Yeah. No, because what's that about? Well, and I'll tell you, Jordan, a big part of it is because it, we can't get that information, right? Like you have to actually track that information and you have to know it for us to be able to look at it and to help you, right?
So like step one is being aware and we're like, I feel like I'm in this space to educate and bring more awareness to talking about this knowing this, understanding this as the bus business owner and not just saying, Oh, I hired somebody to do that. No, you, you need to know this as the business owner. You at least need to have a working knowledge to have those conversations around it.
but it's just, I think it comes back to it's scary. Numbers are scary. Spreadsheets are scary and nobody wants It can be easy, right? It, it can be easy, but it. We don't talk about money, we don't talk about finances. Numbers are scary. Like that's this whole mindset around this piece of business ownership.
[00:58:51] Kimberley: And I think like you said, even just knowing the minimum of what you need to charge for, for services, for products, at least backing into that and then putting your profit margins on top of it. But you, I see it unfortunately, so many people not even charging like enough to break even and to cover their costs.
And then, and then that's when they get in that cycle of like working too much because then they have to do the work because they can't afford to bring people on. Right. totally. And it just, yeah, it's a downward spiral.
[00:59:20] Jordan: It's, it's, it's interesting. I actually feel kind of fortunate that one of my very first clients I had in this business, I lost money on.
and that was like major wake up call. Yeah. And it was because I had structured the offer in a very different way than how we do things now. And I remember when I finally like put pin to paper and was like, Okay, this is how much they're paying me. Here's how much I spent on contractors. And I was like, Whoa, that's in the negative.
[00:59:45] Jordan: And that doesn't even count my time. Yes. , yes. That's a problem. so I think sometimes it does take having an experience like that for you to be like, Oh, I probably need to have my eye on this a little bit more closely. It does. Yeah. It, it directly impacts how much you can pay yourself. So it does kind of important stuff.
[01:00:02] Kimberley: I mean, and I even have as a cpa, right? I like, I had moments like that in my first year, two of business, in the first year of business. Like you're, you're, you're saying yes to everyone. You're like, Money, money. I just need, like, what if I'm not successful? I just need money, cash in the door. And you, you, like, you need to take a step back at the year and say, Okay, is this making sense?
And in year two, I did have to. You, I raised a couple of rates for some clients and I had to let a couple of clients go because it just wasn't serving me. I had said yes in a time of like, what felt like desperation. It was not desperation, but it felt like desperation at the time. Yeah. And you know, that's okay.
Like, you know, if you're in your first year or two of business, you probably are a little more free with your yeses and you're, you're figuring it out. But like you said, the most important thing you can do is keep track of everything and give yourself, at least if monthly is too much, give yourself a quarterly check in to just look at the numbers.
And if you have no idea what you're looking at, find someone, find a professional. maybe look, even if you can't afford a professional, find a business mentor who's maybe a couple of years ahead of you, and if they have their finances together, just ask questions. Start asking questions, and you'll be amazed how much you can start like piecing together.
[01:01:16] Jordan: Yeah. Yeah. I, I. I have maybe two high hopes, but I, I hope at least that this conversation will get people thinking about it and asking more questions and being more, being more open to sharing the behind the scenes. Mm-hmm. and the numbers like, it, it is tough because even, even for me, I'm like, I feel like I'm doing pretty well, but this is like sketchy to say this stuff out loud of like, Well, here's how much I think I'm gonna make.
Here's what I think my expenses are gonna be. Is that too much? Is that not enough? Like I, I, I don't know. It's like, it's generally scary to even. Talk about it even for people who like, I think I'm doing okay, , you're
[01:01:56] Kimberley: doing, you trust me. You're doing great, you're doing great. I've seen a lot, but there's no
[01:02:01] Jordan: context.
There's no context for me to know. And I'm like, Well, everybody else is making like millions of dollars, right? Like ,
[01:02:07] Kimberley: see, but I disagree. Do we need context? Like, okay, here's how I come, here's how I approach it. Do we don't need to compare ourselves to others? Right. You need to do you, you need to do what is right for you, your business, your family, your clients.
Like you need to focus on you. You need to follow the rules. I will, I will say that like I, you know, we all need to follow the IRS rules and things like that, but I think there's almost too much comparison out there. I think that we should talk about it because I agree with you. I think that there should be openness and transparency, especially if you're in like a mastermind or something like, Part of like the Mastermind is sharing openly and finding best practices and learning from one another.
So I think that those conversations should be there, but I also think that it's okay to stop comparing to, to everyone else and do what works for you and make sure that the numbers make sense for you. And make sure that you're operating at a profit margin that feels right for you. And for some people that could be 30%, For some people that might be 50%, and it is going to vary by industry and, and by niche and things like that.
But, it's, it's okay not to compare to other
[01:03:14] Jordan: people. . Yeah. Okay. Thank you. I needed that permission. I appreciate it, . I mean, I say
[01:03:19] Kimberley: that as somebody who sees somebody else doing better and I'm like, Oh, well that's okay. So that's the next level that I need to hit. So, you know, you and I could just give each other the same advice back and forth all day long.
[01:03:30] Jordan: Yeah, yeah. Well, okay, I'll try not to compare, but I'm still gonna strive and, and compete against
[01:03:35] Kimberley: myself ab Absolutely. But that's what, That's what it is. You need to compete against yourself and say, Okay, if I made three 50 this year, I wanna make seven 50 next year's, a million next year. Right. And I don't think that there's anything wrong with making, going from three 50.
To 1 million next year. If you're doing it in a way that aligns with, with what you want out of your business and your life. Yeah. Don't do it. Totally. Because everyone else is doing it. Do it because Jordan wants to do it. Right. I do everything because, because Kimberly wants to do it. so, because probably most of those people who say they're making a million dollars, they're literally probably at best keeping 10% of it.
You're gonna make a million dollars and hopefully keep what, 40% of it, you know? Exactly. Yeah. Yeah, yeah. Like that's the goal. Yeah. That's the goal. , Right. Do it. You know, And so that's the thing is if you, you know, if, if you can scale to seven 50 next year and, and keep 50% of it versus scaling to a million next year, but only keeping 15% of it, well, what's the better number?
[01:04:38] Jordan: Yeah, for sure. It, I just talked, about this on the podcast with Julia and, we were talking about how there are so many paths in business and that's, Oh my gosh, the cool thing, right? Like you can, you can build the business that makes sense for you. For me, I'm not building a lifestyle business. I'm building something that's going to be, people are gonna get so sick and be talking about this, but like, I'm building an empire here, looking, still looking for a different word.
I like it. I'm here for. and, and this is going to be, so, I mean, I fully anticipate that I'll have hundreds of employees one day. Like th that's a very different path. And my expect, my expectation for what I'm gonna pay myself and how much money I'm gonna make from this empire that I'm building is pretty high.
[01:05:23] Jordan: Like, I have high expectations for what I wanna do. and I'm totally okay to admit that I am like materialistic in some ways, and that's okay because I'm striving for very specific things. . Yeah. And to each their own. Right. For sure. Like getting clear on what that is in making sure it's the stuff that you wanna do Yes.
Is the important thing. Again, not that you're doing it just because you feel like you have to, because there's so many ways, so many, so many ways to build a business.
[01:05:50] Kimberley: I think so. Awesome. I agree. I mean, cuz I'm a little bit different probably in that I wanna build an empire, but I don't wanna have a ton of employees.
So I don't know if we, we have to think of a different name for mine, I don't want an empire cause I don't want, I don't want a bunch of of employees. But like you, I, I could be a little materialistic too. Right. But, it's kind of funny, I've always joked up like, my husband doesn't buy me those things.
Like I work. Because I want nice things because I want to give my kids certain opportunities because we want to travel and experience things. I enjoy the privilege of driving a nice vehicle. but my husband and I have also sacrificed up. We've, we've only really kind of switched over in, in recent years as we're coming in the home stretch of paying off our $200,000 in student loans.
Right. But, you know, so, it it's one of those things where we have sacrificed along the way and people don't see that part of life. Yeah. Business ownership. Right. People, people miss that. They only see when you, once you hit the million and you do have a few of the nice little goodies, they forget the years of sacrifice that you've made and the, the hard work that you've put into it.
So I totally, I, I have a certain revenue figure and it's because of me. It's not because my husband expects that of me. It's not because my kids expect that of me. It's because I expect that of me and I actually enjoy working and I enjoy what I do and I enjoy, talking to women about this and, and, and coaching.
Like not coaching cause I don't really coach, but like doing these things for female service providers so that they see the return on their, their business and their work. And, and I really get. By that, I mean, I actually probably sometimes get lit up more by that than by like being home with my kids all day.
I, I really love, I really no judgment. No judgment, no judgment. Really love my kids, but I love them so much more when they've gone to school for six or seven hours and then like, I've turned it off. Right? And that was something that I was really bad about in the beginning. I didn't turn it off when they came home.
Now I turn it off, right? Like, you know, yesterday we were, yeah, we were going back and forth and it was like, you hadn't heard from me until, you know, from 2:00 PM until 9:00 PM because I was with my kids for those seven hours. Right? And that's, that's important to me now and having those boundaries. but I do, like, I, I enjoy working and I'm, I'm at peace working so that I can have nice things, like I work hard so that I can have the things that.
[01:08:03] Jordan: Yeah, totally. That's okay. And don't have to feel bad about it. . No,
[01:08:07] Kimberley: girl. I don't, I don't feel bad. Like PE I think I used to feel bad about it. but I don't anymore because then I see, you know, other people and there's nothing wrong with this, but I see other people and like they just wanna watch TV or they.
Wanna, you know, hang around and do stuff, and I'm not hustling, but if I, like, I'm not watching tv, I'm, I'm reading a book, or I'm listening to an audible or a podcast, or I'm sitting at my spreadsheet. Like, you kind of, you know, tinkering around with the numbers. Well, what if I do this and what if I do that?
And what's like, okay, we've, we've made this amount of money, so where do I take that chunk of cash and, and what do I invest it in next? Like, what's the next step? Like, okay, we just got, let's call it $50,000. I've never just gotten $50,000. I wanna put that out there. But if I ever do just get $50,000, like, here's what I'm gonna do with that 50,000 next so that I can make that money work for me again.
Right. I'm always like, and I'm finding the balance of like, enjoying some of it now in the moment. Mm-hmm. and saying this is enough for right now. But I'm also like, my mind's kind of always swirling with what's next.
[01:09:11] Jordan: Yeah, I love that. I actually have gotten $50,000 at once. That's awesome. One time. cuz I sold a house and I just happened to have gotten in it at the right time and I think there are lots of things that you can do and maybe we talk about savings account here in a second year business.
Yeah. But, I decided to go live it up for six months in Austin, Texas and live my best life and be on vacation essentially for six months. . So
[01:09:36] Kimberley: how much of that 50,000 did you spend?
most of it. Okay. Most of it. I will say I u I met. It was a well worth the spend cuz I had the greatest time. I learned a lot about myself.
[01:09:51] Jordan: I feel like I fully stepped into. Who I am and gained a ton of confidence and had a lot of great experiences. And I met my husband mm-hmm. , and we got married. And then what was left, I was able to help him pay off his student loans. So we both, we don't have student loans. And then, subsidize a very cushy lifestyle while also quitting my nine to five.
And so it, there was all, I think it was well worth spending all of it. Yeah. which I did and has, it has panned out. And actually some of that money I used to start this business. Okay. and make that massive investment there at the beginning for my own personal money and, So, again, no right or wrong answer on what to do, that kind
[01:10:38] Kimberley: of thing.
Now that you say it, we actually, we probably profited about 80,000 on our first home that we sold together, but we, we were buying a new house, so it just rolled into our next house. So I guess like, if you wanna talk about that, like we did get that like, We had that amount of cash for like, what, three days before we rolled it into the new
[01:10:55] Jordan: house?
No, I went and rented a luxury apartment in Austin, Texas, near downtown and just like lift it up. Yeah.
[01:11:00] Kimberley: I've, I've actually splurge more in my older years. My, my ripe old age of 32. I've really been s splurging more as I've gotten older, than when I was younger. But I have some regrets around that too.
And that could probably be a whole different podcast episode. Like I didn't do the study abroad, because I was on loans and things like that, and I didn't go study abroad for a semester cuz it would've cost me an extra $10,000. And now that I'm like, well, a hundred thousand dollars loans for me and a hundred thousand dollars loans for my husband, Like what, what would've been 10 in the whole scheme of things to have that, that experience that I can't ever go back and get.
So I think that I, I am trying to find a little more of a balance with that too. And same thing with, like in the last. 18 months, I've probably invested a lot more in my business, in my professional development, in my business' development and growth. and, and I think that that has been a worthwhile investment as well.
so I think it's about, again, you need to know your numbers. Like I know what my development budget is every single year, and then I'm tracking as I invest in things to say, Okay, well if I do this, then I might not be able to do this, which is coming up. And so, but you have to have those numbers and those figures to be able to make those decisions to know what you're gonna do and what you're not gonna do.
[01:12:07] Jordan: Yeah, that's interesting. I don't have anything like that, like tracked or like budgeted out. I do kind of wing it a little bit, on business expenses. And as we think about what you might need to do at the end of the year mm-hmm.
You know, you've got some good data for the, for the rest of the year, now's the time where maybe you do wanna ramp up expenses to lower your taxable income, assuming you're paying yourself a number that you feel good about that, that or that is reasonable and
[01:12:36] Kimberley: don't, don't go out and just feel good.
Buy, don't go out and just buy stuff to buy stuff. Like make sure you actually still, it's a worthwhile investment.
[01:12:44] Jordan: Right, right, right. How do you approach. Figuring that out. Like what, like what percent or what amount makes sense to go ahead and invest this year versus waiting Yeah,
[01:12:57] Kimberley: until next year. so I'll, I'll just say my budget has been 20,000 for this year.
but I have been, so my business has been around the upper hundreds, like I haven't crossed over the 200 mark yet. it's been pretty stagnant around like that 1 75 gross revenue mark for the last like four years. But again, I've been more focused on my family than my, like you've been busy. I've been more focused on growing my family than growing my business.
[01:13:26] Kimberley: Right. And. Now that we're done, I'm like, Okay, I'm, I'm really ready for more. And so what happened is, is a couple years ago, I was able to keep my revenue at the same level while decreasing the amount of time that I was in the business because I was burnt out working 60 hours a week. And it was that moment of like, I didn't leave corporate of 75 hours a week to come do 60 hours a week in my own business.
so that was the first iteration for me was keeping my revenue where it was, but decreasing how much time I spent in the business. So now that that's under control, now I'm like, okay, what's like, what's the next step? Like where, like, where am I going? So I have been in a big growth phase, learning, deciding, refining, A lot of masterminds and things like that because I am ready to take it to the next level.
[01:14:14] Kimberley: Now that we're like done with that pregnancy, almost done with the infant phase. I mean, we have like, I don't know, nine more months. but you know, we're, we're, we're closing that chapter and so I can put some focus back onto my business. So I would say that that 20,000. Is pretty high like that, like you think about that percentage wise to my gross revenues.
I mean that's, that's a pretty high percentage. and I don't recommend that people tackle that lightly. But I have a really good, I have really good control over my finances, and so I know what that number means for the rest of the business. and of course my, my net income is down because I'm making those investments, but that's, that's how I choose to look at it is not an expense, but an investment in the future of my business.
so, you know, if you use my number that's about 10%, a little over 10% of gross revenue, I think for most people, probably somewhere in the two to 5% range of gross, You know, if I just had to kind of think of a percentage off at the top of my head, I think that you should have a minimum of 2% because you should always be learning, growing, adapting, even if it's just industry specific, you know, a conference or a training for your specific industry.
but I think about five percent's probably a good number. ,
[01:15:20] Jordan: what are the types of things that fit into that category for you? so,
[01:15:24] Kimberley: or generally? Yeah. So I have quite a few tax memberships, tax courses, things like that. we were joking, remember I told you like the minimum, continuing professional education requirement is 20 hours a year and I average about 60, 65.
I love to learn, but two, it's what allows me to deliver those premium strategies and knowledge to my clients. So that's really important to me and the clients that I serve. So there's a big investment, into that and that training and education and then things like the advisory Mastermind, right? So, that's a big component of it.
[01:15:55] Kimberley: I put if I have like any monthly me. With, maybe if any capacity of learning from that membership, that number goes into there as well. And that's any kind of coaching, having a bus. I've had a business coach. I've had one business coach so far, now I'm in the, in the advisory. So I don't have like, I don't wanna have competing, opinions, if you will.
Like, you kind of gotta stay the Yeah. Don't want too many cooks in the kitchen. Yeah, no. So, my business coach was fantastic when I had her. We did what we needed to do and then it was time to kind of move on to something else. so that's what I'm in now, and I just kind of look at it and say, you know, if you buy an online course, I've bought a couple of like online courses to learn more about the online space because Woo, that's a world in and of itself.
so those are the kinds of things that are in my development budget every. Yeah, a conference would be in there, a retreat would be in there. I did not have a retreat and that was one thing that allowed me to do more purchasing this year is because I'm not doing, I'm not attending any conference.
[01:16:50] Kimberley: Actually I take that back. I'm attending a conference this year. but I'm not attending any retreats or anything. And so, because we have little children, but that will certainly be on the agenda, is to get back to more in-person events
[01:17:00] Jordan: as well. Yeah, totally. Fun fact. For everyone listening and for you, we're gonna do a retreat in 2023, which should be pretty, Where are we going Off the hook?
Nothing's been decided. Okay. Well I'll be there. Gonna be very secretive until we decide, but it's gonna be okay. Epic. I'm I'll, I'm looking for a retreat and I have very high expectations for how a retreat should go. Same, same. I was like, Okay, I can't find what I want, so I guess I'm just gonna have to like do my own
[01:17:30] Kimberley: Yeah. Can I speak at your retreat? Sure. I'm assuming it's gonna be female service providers.
[01:17:37] Jordan: Yeah, of course. Yeah. Service providers, coaches, agency owners, you know. Cool. I'm excited. I'm here for it. My jam. My jam
[01:17:42] Kimberley: and your jam. Okay. I'll budge. I'll budget it in for 2023 cuz. Right. So like that's the thing, Jordan, I'm already looking at my 2023 development budget.
Yeah, that's awesome. Because people are starting to, That's not normal. It's not normal, but it's, but it's important, right? Because sometimes we have to say no to one thing. I might have to say no, knowing that, okay, Jordan's gonna have a retreat. I'm really gonna wanna try and make it, as long as it aligns with my personal schedule, I'm gonna be there.
What's the cost? I need to build that in, because that might mean that I need to say no to something else that's not as important or not as critical for the year of 2023 and say, I have to table that until 2024. So you have to know, you have to know these things ahead of time. that's the planning, that's the strategy that comes into it, so that you can make those decisions instead of saying, Oh, man, I can't do Jordan's retreat because I al I just bought this thing.
And, Oh man, I wish I wouldn't have bought that.
[01:18:38] Jordan: Totally. That happens all the time when I talk to people about, you know, either the mastermind or working with us and they're like, Oh man, I just did X, Y, Z. Or I just, I'm like, Well, shouldn't have done that. should not have done that. I'm sorry. alright. I've got one more specific question and then we'll see if there's anything else you, you think we need to touch on.
Okay. Before we end, but let's talk savings accounts. Cuz I know like in past businesses, and it's funny cuz one of my old coaches just posted on I think Facebook or something about this, about like having a, an emergency fund or a rainy day fund or a savings account or whatever. And I had a ton of resistance around that in my other businesses probably cuz I was just wasn't making enough money, period Okay.
To even consider that as a priority. But now what I do is I keep about one or two months of my personal salary. A savings account. Okay. And that, I don't know why, that was just like the random thing that I decided to do. Are there good suggestions around around how to do that and like numbers that
[01:19:38] Kimberley: make sense?
Yeah. So I would really suggest having about three months of expenses in a savings account and across the board, not just, I think you should start with that payroll figure and include your payroll number in there. Right? But all of your employees. And I think that three months is sort of a minimum and.
It's hard to say because every business is different. Right. So, you know, we have to, we have to generalize this, but start small. I think a lot of people either have this resistance you're talking about, or, this, this overwhelm that comes from, Ooh, I need a savings accountant. Ooh, it has to have, she said, Has to have three months of expenses.
Start small. Let's get you to one. Okay, then let's get to two. Right? We, we take it a bite at a time. And this is one thing that I do like about the profit first, right? It's just like he does encourage you to start small and not make it seem overwhelming. Because again, if you, if you start with this, Okay, I've gotta have three months and I'm not doing anything until I have those three months of savings.
Well, one, you are gonna feel resistance to that because you're not in alignment with it. And two, it's, it's just too overwhelming financially. Like you are gonna have other things that you need to pay for. And so again, my word, I love balance. Balance is my word. Every year I come up with a word for the year and it's been balanced the last couple of years.
I need to really pick a new one. but I think that that balance is so important. to say, I'm gonna start small. Pick one thing to focus on. And so I do. I think that the payroll number is typically what gets business owners into the most trouble the fastest. If things are going to go south, it's typically when they hire.
Maybe they hire too soon, maybe they hire for too many hours. Maybe the rates are too high, right? There could be a variety of reasons, but typically that payroll figure is where I see a lot of businesses come into trouble with cash flow issues. So that is the number. I would say. Let's start with one month of salaries and wages and make sure if you're a business owner, include your salary and wage in there too, right?
And then get that number to two months, get that number to three months, and then let's go back to total monthly expenses and start with one month, two months, three months, and just slowly work your way up to a good three months of all expenses for the business. .
[01:21:56] Jordan: Yeah. I love this. Okay. This is super helpful.
I see you with
[01:21:59] Kimberley: your pen and paper .
[01:22:00] Jordan: Yeah. Oh yeah. Take a notes, girl of. Um,alright, what else do you think we need to know before we wrap? Well, a lot,
[01:22:08] Kimberley: but, , but, but, but in this, in this one hour podcast episode, I feel like we've probably hit on a good amount. the last thing that I really wanna lead with is it's never too early to start tax planning.
I know that taxes are like the conversation that no one wants to have. Business owner, non-business owners. I, I know that taxes suck. You feel like you are forced to file a tax return. This is obviously in the US for, cuz I'm sure you have listeners internationally. so this is all for the us but you know, tax planning gives you the opportunity to.
Your, your income taxes. So look at it and say, How do I, how do I do tax planning? That's fun. That can be fun, right? That's better than just having to file a tax return. So I just wanna leave. I wanna leave you with don't be afraid of the taxes. Don't be afraid of the finances, Don't be afraid of the money.
This is an integral part of being a business owner and having a really successful business means having a really good control over your finances and the money. Like they just go hand in hand. So I think that's kind of what I wanna leave everybody
[01:23:13] Jordan: with, Jordan. Yeah, I love that. And we'll of course have all your info in the show now.
Oh yeah. You can learn more about you on the tax side and then also on, on the messy, wonderful side, which I think is great. And I wanna tack onto that and say that it, in my opinion, it will present itself as a priority when you for sure need to think about it. Yeah. So again, I think we both agree. If you don't have a bookkeeper and you have a business, like that's your first step, yes, you should have someone helping you with your books like yesterday.
And then once you're paying yourself a, an amount that makes you start thinking about oof those quarterly taxes hurt, Uhhuh, that's when you for sure need to be doing tax planning. Like if you're feeling like, I just don't have the bandwidth to think about tax planning right now, or maybe I'm not making enough to be thinking about that.
Or you don't have the finances to be paying someone to think about that. You just wait until you get a couple of like gut wrenching reactions to your quarterly taxes that are due, which I've experienced this, this year, every single quarter. And that's when it starts to kick in and be like, Okay, yeah, this is probably worth my, my time and money and, energy to think about.
So
[01:24:28] Kimberley: yes, cuz it's a catch 22, right? You wanna make more money, but in making more money, that typically means more taxes. So, it's, and it's keeping that awareness, right, Because if you aren't tracking. Your finances and your money month in and month out. You're gonna get to February. Your tax professional's gonna request all of your documents and be like, Oh, let me put it all together.
And then you're gonna be like, Wait a minute, I made $250,000. Where, Where did that money all go? Right. That you laugh. I've, I've had that quite a few times. You're laughing, but I would say if you start making over the a hundred K mark annually, the tax planning won't be as advanced and you may not have as many opportunities out there.
But if you're making over a hundred K, there are gonna be some tax planning opportunities. Revenue, Yes. Revenue,
[01:25:16] Jordan: yes. Yeah. Yeah. I think it was like, and this is definitely not tax advice cuz I have no idea how I'm talking about, but I think my accountant had told me at some point that like, once you. once you're paying yourself.
For me, it was like over 40 or something. 40 or 45,000. She's like, We need to be thinking about some of these tax strategies and like changing you to an S corp. Yeah. And like, because then the, the savings just on like the payroll tax side of things. Yep. Pays for itself. so yeah, once you're. As Kimberly said, if you're making over a hundred K in revenue, you're paying yourself over 50 k.
Probably it makes sense to start really well. Yeah. Either one of those benchmarks, whichever one happens first, makes sense to start really diving deep into the tax
[01:26:02] Kimberley: stuff. Yep. And it's not scary, It's not as scary as it sounds, promise. And I think if you find the right person, Jordan, Right, and I think we were talking about this too.
It's, there are a lot of qualified professionals out there. There are a lot of unqualified professionals, but there are a lot of qualified professionals out there. It's about finding the person that's the right fit for you. Right. Because it's a relationship, it's a close relationship. We're talking money, we're getting deep.
Like, you know, So it needs to be, you need to have a good like just rapport. And I don't wanna say it needs to be a friendship cuz it is still like a client relationship, but it really does need to have like a level of, of trust and commitment and just like comfortability around each other because Yeah.
Of the con the nature of the conversations. Like, I need you to be honest with me so that I can give you. Proper advice. Right? And so it's, it's finding a qualified professional, but also a professional that like you resonate with and you click with.
[01:26:54] Jordan: Yeah. You totally gotta be, you, you have to be comfortable.
And I would argue that's the case in essentially every service based or relationship based, anything in business. Mm-hmm. . So like your coaches, whether life or business or whatever, service providers, like I've been doing a bunch of discovery calls this week for social media folks and people to help me with my marketing.
You bet that if I don't vibe with them on the call, we're gonna have a problem. Yeah. Because I need them to like really understand me and vibe with me in, in a pretty like, personal way for them to be able to do a good job with my marketing. Right. And like of course the, the same would be true for. For someone who's got their hands in your Yep.
Not your hands in your money, but kind of, but kind of pretty deep
[01:27:43] Kimberley: into Yeah. If you're having the right conversations, they kind of should be. Right. Like I know, and that's why we have fewer clients than probably your average CPA practices, because I do wanna really know deeply about my clients, about their lives, about their businesses, so that I really can, that that's when I feel, the most aligned in the, and, and we can get them, like we really make strides, right?
Because I know what's going on, they know what's going on, I can give them the right direction. And, you know, not everybody has to take the advice, but I can give them the best advice so that they can really run with it. And then they make strides and then we really just like start seeing action and, and movement.
And that's just, it's.
[01:28:21] Jordan: Yeah. Well, and when it comes to your taxes, your business can't live in like a silo. Like it's gonna touch your personal stuff too. It will. And you know, I, I sent you my stuff. I'm like, I don't know, Kimberly, if you're gonna wanna touch this, cause you're doing some crazy things over here on the personal side, but I'll send it to you.
[01:28:34] Kimberley: It's really not that you said that. I get clients like, I'm sorry, it's such a mess. And I'm like, Who, if you think this is a mess, you have no idea what messy is. well
[01:28:43] Jordan: you're, you're working with a math nerd and my husband's also an engineer. Yeah. So we, we keep things
[01:28:48] Kimberley: pretty tight on spreadsheets, so Love me.
Some good spreadsheets. Fortunate. Yeah. Let me some good spreadsheets.
[01:28:53] Jordan: Well, on that note, spreadsheet love. this has been, this has been really fun. I hope that this will be helpful for people because even just again, like getting, flexing the muscle of like the transparency and the talking about the finances and the asking questions, like, I hope people feel confident and comfortable enough inside of the advisory to be asking these questions.
And like I've asked questions in other groups that I'm in and people just like don't answer. I know when it comes to the financial stuff, , where am I supposed to get this, this information and this feedback, if not in here, in like this supposed safe space. So I hope people feel that in the containers that, that I facilitate.
but maybe we should reiterate that to everybody. Yeah. So we can start some kind of like open dialogue about finances. Definitely. I like that. Yeah. Let's, let's all, everyone listening start talking about the money
[01:29:44] Kimberley: and understanding it, cuz I think it's, it's a scary to talk about it and it's understanding it.
So let's start. Let's start. Yeah. The more you talk about it, the more you're going to understand it. We gotta, we gotta get that cycle started.
[01:29:55] Jordan: Yep. I love it. All right. Well thank you again.
[01:29:58] Kimberley: Thank you for having me. That's fantastic. I
[01:29:59] Jordan: loved it. Love it. Awesome.