Episode Transcript
[00:00:00] Speaker A: Sam Foreign and welcome to Pivotal Change. I'm your host, Ryan Khan of CS Business Consulting. In Pivotal Change is a show all about leadership, entrepreneurship, anybody that has or wants to grow their influence and making those steps and those changes to your path of success to help you achieve your dreams and your goals. Today's guest is a really fun guest. He is a cpa, Joseph Reyes of JL Reyes Accounting and Tax cpa. Now, he has a lot of specialties. This is a man of many talents, and in our industry, we call him an expert. He has been around since the 1970s in this business, leading and helping people. He specializes in multiple areas, holds multiple degrees, multiple certifications, even in finance. And he is a man that can really help people and have a lot of wisdom. So, Joe, welcome to the show, sir.
[00:01:21] Speaker B: Well, thank you. Thanks for having me. Good to be here.
[00:01:24] Speaker A: You know, we're excited to have you. And, you know, we sometimes have to talk things that aren't exciting all the time. Most people don't consider taxes exciting, but taxes do affect all people. So it's something that must be talked about. And we can make it pretty exciting when we realize that you can change certain things. So I'd like to jump kind of right into the questions here. We're always hard up against the commercial breaks, but we want to specifically hone in on sales tax. This is something that is a little different for everyone in the country, but it's there.
So tell me a little bit about what makes sales tax so tricky, especially for, like, small businesses when they're selling in different places.
[00:01:59] Speaker B: Good question. If you think that income taxes are complicated, try sales taxes.
Back in 2018, the Supreme Court, you know, made a decision on the Wayfair decision, and it solidified what the states can and cannot do regarding sales taxes.
It is really crazy town when you talk about sales taxes. Every state has a different sales tax rule. And even within the states, some states have multiple townships and counties that also have their own sales tax requirements.
And to go further, even some localities, some cities will then also have sales taxes.
So you can report to, let's say, Colorado, and you made a lot of sales to Colorado. Then the question becomes, okay, where in Colorado did you make that sale to? And, you know, and you may go drill down two or three levels to report what the sales taxes were.
It is cumbersome. It is complicated. And every state is different. And then each state has a. Whenever you report to a state, you can create a requirement to file an income tax return to that state, whereas another state may Say, well, we don't require that. And then to make it even more complicated, every state has a threshold that if you sell more than X dollars or X units, you have to report sales taxes. If you're under that, you don't have to report sales taxes. So just imagine 50 states with multiple localities. I mean, it just gets nuts. So it is crazy town in my opinion, when it comes to sales taxes.
[00:03:38] Speaker A: And just to hone in on that, what you're saying is exactly true. So I'm from Kentucky, living and doing primarily the business. In Kentucky, we have 120 counties.
120 counties have 100 and different sales tax income tax reporting thresholds. Some of them say no. Some of them allow for things called occasional sales. So if you only have, like you said, a certain number, a certain dollar amount of sales, then they require tax returns. So we have, for example, one of our big clients has a 47 counties that they touch in their sales. We have to report 42 of them on local tax returns because of the sales, plus the sales reporting. So this is really can become a nightmare type of scenario. You know, somebody goes out there and they have a hot business that's up and growing and they start making sales everywhere. How quickly could this come back to kind of bite somebody if they didn't realize they were supposed to be reporting and registering and doing these things?
[00:04:35] Speaker B: It can come at you real fast. And even though sales taxes, taxes are not exciting, it's exciting enough to cause people to sweat. So you think dancing makes you sweat? Try dealing with sales taxes. So, so yeah, sure. It's.
It's when you start looking at the rules and the requirements that each state has in their counties, it's very easy for a small business owner to fall through a trapdoor and not even know it. You know, and I'm in Pennsylvania and it's a 6% sales tax straight, straight across, depending on what you're selling and buy.
And then there's a Philadelphia sales tax and then there's another county. So Pennsylvania is an easy state, right? But there was a few years ago, there was a local Amazon seller that it was a small company that got a $1.6 million sales tax bill from the state of California because they shipped to California and California had made assumptions because they didn't get sales tax returns filed. And the guy on the owner, just like he was all over the news, it was freaking him out. I think they finally settled on some reasonable number. But imagine being a small business owner and going to bed that night. And you wake up at two o' clock in the morning and cold sweats thinking I got a 1.6 million dollar bill and I didn't even sell 1.6 million dollars worth of stuff. And then having to deal with that. So it's, it's crazy talent and it's dangerous because the penalties and interest that can easily rack up on you.
[00:06:03] Speaker A: Yes, that, that is, that's another great point. So let me, let me have you give us some steering and some direction here. So is there any simple tools, Are there any type of like systems in place where business, especially if they're starting off and don't know exactly where to look, can stay on top of their sales tax?
[00:06:21] Speaker B: Yeah, so I deal with a lot of small businesses, have been doing it here in this CPA practice that I founded back in 2008.
The big trap is doing it yourself.
You don't know what you don't know. And so what we tell people is you have to talk to a CPA or, or a knowledgeable bookkeeper or somebody who's knowledgeable about sales taxes and running a small business in general, especially in the financial side.
So what we recommend is, number one, don't do it yourself. You know, seek the help of a professional. Even if it's just a small or quick consultation.
Talk to somebody who can at least give you the guidance that you need to go through. Now fortunately, today we have this wonderful thing called AI, right? So a relatively intelligent business owner can go into AI and just ask these types of questions and get the answers that they need. Now AI doesn't always get it right because not too long ago I asked AI a simple mathematical question. It got it wrong. And my response to the question was just one word, wrong, and then it calculated the right number because I knew what the number was supposed to be.
And now we have tools like QuickBooks. Avalara is a company that we think of TaxJar, Zamp, Numerol. So there are these companies popping out that will make sales tax reporting and tracking easier.
So the number one rule is if you're a small business owner and you're running a business, if you can do this on your own, great. But if you can't, if you're not familiar with any of this, absolutely don't do it on your own. At least get, spend a few bucks to talk to a professional to get you on your way. And then every, so every now and then, every two or three months, have somebody look at your reports that have to be done and, and confirm it or do it for you. Which we do a lot of that here.
[00:08:10] Speaker A: So got, you know, I think your advice is correct. I think, you know, there's a price sensitive point when people are starting off their endeavors, but once you start to have any traction at all, you start to make any money. I always tell people, get out of your own way.
You're not going to be able to learn comprehensive tax regulations on YouTube. Right. And even some of those softwares are extremely helpful, but they don't cover and drill down into all of the localities, the cities and the county government. So you're going to need help. So you need to rely on the professionals. I am not a mechanic. Can I change my oil and do a couple of tweaks? Sure. But if I go and I try to rebuild my engine, the mechanic is going to laugh at me and be like, you're wasting your time and your money. I'm just going to take it to a mechanic. You need to take your sales taxes and your income taxes and your strategies to a planner, to an accountant, somebody that can actually tell you that does this for a living, is an expert. And it may just be an assert an assurance like you said, a couple of bucks for a meeting and say, hey, you're good here, don't worry about it. But if you grow to this level, let me know. And that's just, man, talk about sleeping at night, not waking up in a cold sweat.
So let me. Can you give us any real quick warning or hazards of like, hey, here's a, here's a kind of a bad story. I saw somebody run off and do this, not pay attention or do something wrong. Whether it was like quarterly filings versus monthly filings, not knowing when to change or where to report, is there anything that you can just say, avoid this pitfall getting out the gate?
[00:09:41] Speaker B: Yeah. So what I would say is when you, when you start to sell outside of the state that you're in, then it's time to go and look at that, the particular states that you're selling to. And you can go on to their, their tax revenue or the revenue department websites and drill down into their sales tax department's regulations and try to figure and try to just read through it to see number one, is what you're selling taxable in that state?
Because you got to do the tax, you got to charge the tax up front. Because if you sell to somebody and you don't charge the tax and then two months later you decide that okay, I'm going to do the sales tax return and then you figure out, oh, this product that I sold through the Kentucky was taxable. I didn't know that. I didn't charge a tax. Are you going to go back to that customer and tell them, hey, we forgot to charge you sales tax? You're not going to do that. Right. So who's going to pay the tax?
You are. And we see that time and time again. So biggest recommendation is get somebody to help you with it. Don't do it on your own. And the DIY thing doesn't work when it comes to accounting and taxes, in my opinion. So it's not just mathematics, it was just math. It'd be easy. But when you're dealing with regulations, logic has nothing to do with it.
[00:10:58] Speaker A: That, that is a, that's actually a really powerful statement. When you're dealing with regulations, logic has nothing to do with it. I mean, I'm gonna have to steal that from you, Joe. So we're going to cut to a commercial break here in just second, but I like to share with the audience as well. So the most powerful AI technology has been asked to sit for all kinds of licensures and exams. It can pass the bar, it can be an attorney, it can pass insurance licensures, medical exams, everything.
So far, all of the AI technology we have today cannot pass the CPA exams. So you have to be careful when you're getting tax advice from AI, it can't pass the test. Go to the professional, go to the expert. So we're going to stick a pin in this conversation here for just a moment. We're going to cut to commercial break. We're going to be back with more or Joel Reyes, and he's going to keep telling you guys how to be successful and avoid these pitfalls. Sit tight. We'll be back with more pivotal Change right after this.
We are back with Joe Reyes on this continuing episode of Pivotal Change. And we're having quite the insightful conversation on sales tax.
All the regulations, places you need to look and do your research first, how important it is to rely on experts like Joe of JL Reyes Accounting and Tax cpa. So we have his expert opinion here and we're going to talk a little bit more about what he thinks and how he plans with his people. So, Joe, I want to ask you this question here. How does Ray's accounting specifically help businesses that stay compliant to avoid stress when it comes to sales tax?
[00:12:57] Speaker B: Yeah, so we have a sales tax team, and so we have one or two people here who know how to drill deep down into a client's sales protocols and who they're selling to and all that stuff. So we do what's called the nexus analysis. So we look at their, their books, we look at the sales and, or if they want to do it in advance, which few people do, they'll tell us, hey, we're going to start selling to this state or to that state. Most people are reactive. So after the month ends or after a quarter ends or they're new, they come to us.
The first thing we say is we have to do an analysis. We got to figure out who you're selling to. So we got to run reports out of your accounting software.
QuickBooks Online is a very popular software, but there are many others. And you should be able to run a report that shows you know, who you sold to and how much you sold in that state and when and with that data, then we do an analysis to figure out, okay, what has to be done. We'll go to that state's website and we'll look and see is this product or service taxable, sales taxable.
So we'll do all that legwork for the clients and take that stress off their plates.
It can take hours. It's not a small thing. Right. So we have $100 million e commerce client. Right. They sell virtually every state. It's a massive endeavor and they've not been doing, doing a great job of it in the past. So we, we are still, and we've been at it for over a month now. We're still unpacking everything that regards in regards to Sal and unfortunately we have to go backwards.
So perhaps they overlooked a particular state that they thought they, they didn't have to do any work on. So they use a software company, sales tax company, a service that you know, did the work. But you know what, they also have to be watched. You have to watch the company or the, the vendor that watches your sales taxes. And, and it's so complicated that it's not uncommon for them to get it wrong. So we take the burden of looking at it, double checking, triple checking and then getting the sales taxes reported.
What often happens? Not, it's happened two major times. It happens often, but for us it was a big deal. Two clients that wound up, you know, waking up one day and realizing they had a million dollar sales tax.
[00:15:28] Speaker A: Oh yeah.
[00:15:29] Speaker B: To a particular state. It was a state they operated out of and they didn't realize. And then when they brought it to our attention, they came to us. We realized here, okay, yeah, you were supposed to be paying sales Collecting and paying sales taxes. And when you get to such a high number and you're a small business, you don't have the cash. Right. So what we know how to do is we know how to go to that particular state and strike a deal.
We bring in attorneys, we know attorneys who specialize in this area.
And we will go to these attorneys and we'll be the quarterback. And so we assess what the problem is, we assess what the solution needs to be and whether we need legal counsel who can then. And usually you want to get a lawyer that knows the people inside the sales tax division of the state that you're dealing with, because if they're on the first name basis, it greases the rails, so to speak. And we've been able to reduce like huge, huge sales tax payables to maybe a few hundred thousand dollars or less with low interest and low penalty, or the interest you can't do anything about usually, but the penalties. You could maybe negotiate a deal.
And we've done. We've done that at least a couple of times. And we used a lawyer in Utah, we use a lawyer in Pennsylvania. And we, you know, but we knew what to do, we knew where to go, and we have the connection. So we've been able to save the day and save them a ton of money because that's money right in their pocket. Right?
So, yeah, so. So that's what we do. You know, we're very thorough. And especially we have. We have a couple of people on my team that are just absolutely. They're brilliant. They're my crown jewels is what I like to call them. And they will. They. They can drill down to the minutest detail, and they won't let go. They'll just get the bite on that leg and they won't let go until, you know, the. They got the answers that they need. And, and sales taxes can be very daunting. And is. And because you're dealing with taxes, you know, if you're lying to the state, if you're filing false tax reports just because you're trying to get away from paying what you supposed to pay, you got serious trouble. So it's really not a joke. And it's. And it's not pennies that we're talking about. So that's what we do. We're good at it. And we're getting more and more E Commerce clients coming at us because the word's getting out, actually, so.
[00:17:50] Speaker A: Gotcha. So what I want to do is I want to follow up with a couple of questions because you mentioned some very important things. And I failed to mention this in the first segment, but I asked my audience to always watch with a pen and paper. So hopefully they're taking some notes. But starting off, one of the things that you're saying, you're taking a huge stress off their plate because they don't know what they don't know, you know, where to look, what the industry is, what's taxable, not taxable, what. And so you're taking that off them hours, maybe even days of research for them to try to get their act right, that you can do highly efficiently with your team of experts that specializes in that. So you mentioned a word kind of in passing about nexus. So if I'm a young business owner, okay, and I hear the word nexus for the first time from a sales tax professional, what does that mean? How do I even consider having nexus from one state or one location versus the other?
[00:18:38] Speaker B: A good, A good alternative word for nexus is standing. You know, what kind of standing do you have in a particular state? So if you are. If you have a remote worker, let's say you're based in Pennsylvania like I am, you have an employee in Arizona, right. You pay them a W2 paycheck, right? You've got employee nexus, payroll nexus, right. Or let's say you don't have any employees there, but you're shipping to Arizona. And. But when you ship to Arizona, maybe you have a warehouse in Arizona. Well, that warehouse is your warehouse. That means you have nexus for that. And again, some states say this is nexus. This is not nexus, but basically it's standing. You know, so you have payroll, you have inventory, and you can have a shop, you know, if you have a store there or whatever. So those, those types of things are what creates standing. And then based upon that standing, the state will say, well, based upon the fact that you have a warehouse here, you have standing, therefore you have to file a corporate income tax return, maybe a sales tax return, payroll. You know, they tell you what you have to file. So. And what you. And sometimes you don't know what you're doing, you will create nexus and you'll follow sales tax return to a state in which they say, if you have to file a sales tax return, then you also have to file an income tax return. And if you're doing it on your own and you're looking to see, does that state require a sales tax return, you're thinking, oh, okay, I'll file a sales tax return. You don't know that that same state is going to tell you you have to file an income tax return.
So you're thinking this way as a business owner and, and not realizing that you just opened up a. It's not a Pandora's box, because the law is the law, right? So you just got to do what you have to do. But if you don't know they have to file an income tax return, then you file a sales tax return, you don't file an income tax return, and then you get a letter in the mail months later say, hey, oh, yes, we didn't get your income tax return. You're late. There may be penalties and interest involved, you know, and you can. You just wind up in a. In a matrix of confusion and frustration. So sales tax is the one thing we thoroughly recommend. Use somebody who knows what they're doing, you know. Absolutely.
[00:20:54] Speaker A: And I appreciate you doing that. And you mentioned just a second ago, and also the first question about people are in trouble. They find themselves in that hot spot, that whole matrix of complications, because you get late payment penalties, failure to pay penalties. You know, you get the interest you can get, you know, failure to file, all kinds of stuff, and they just rack it up. And sometimes you may owe $10,000 in sales tax and have $30,000 in pen fees and interest, and it's really quite insane, if you ask me. But you would also mention some success stories about what is taxpayer advocacy and how you're helping somebody unwind this mess and then reduce penalties. So really quickly, if somebody has themselves in a mess and they have these letters, these notices, maybe even lien notices, Levy notices already coming into them, what's the first thing they should do when contacting you or someone like you send.
[00:21:44] Speaker B: Us a copy of those letters.
So many people, they just sit on the letters. They're afraid to open the letters, or they just say, I'll take care of it later, not realizing that they're just digging a hole deeper for themselves. So I see it all the time. And we get these letters, and then we've got two days in which to respond. And like, we can't respond in two days. We got to do due diligence. So we tell clients, you get any letter from any taxing authority, send it to us, let us take a look at it. We'll tell you what the next step is, but don't ignore it, especially if it's a Levy letter. Because a Levy letter, it's like, we've tried reaching out to you.
[00:22:17] Speaker A: We've been right.
[00:22:19] Speaker B: We've been waiting to hear back. We haven't heard back. Guess what? Now we're going to take your money, we're going to go into your bank account. I've seen it happen. We're going to go into your bank account, we're going to take the money.
And that is seriously unpleasant, especially if you don't have enough to cover payroll for the next day.
And then it just can cascade into a mountain of trouble.
So that's what we just tell everybody. Let us do the worrying. Just get us this stuff as soon as you get it. If you wait and we get it late.
We're not miracle workers, you know, so we can help you.
[00:22:51] Speaker A: Yeah, we're not. Miracle work is a good statement too. And so one of the things that I always like to tell people as I say, you know, you can't bring it in here and your expectations are, like you said, you've held onto this for two weeks and then now I have two business days to respond. Like I said, due diligence. Just wrapping my head around maybe three years worth of tax issues. You know, you're gonna have to pay a pretty darn serious line cutter fee at that point. But whatever you end up paying the experts is gonna be less than you're gonna get an ROI on usually your tax savings, your stress release for sure. So, Joe, this has been a really insightful conversation. I hope people learn a lot from it. But I want to take a minute and just say people are probably scratching their head out there going, I've got a problem. Kind of like what he's talking about. How do I get a hold of this guy if I want use them? How would somebody get your advice or use your services?
[00:23:38] Speaker B: So my website is reyesaccounting.com that's R E Y-E S as in SAM accounting dot com. My phone number is 215-525-2976. All my contact information is on my website. And we're just outside Philadelphia. We have clients around the country, so we're very good technology wise and we can deal with any state or any problem when it comes to sales taxes, if it's high level, we have attorneys that we can refer you to.
If they don't do it themselves, they know other attorneys in other states that will. And we've been successful that way, too.
[00:24:15] Speaker A: That's perfect. Thank you so much for coming on the show. It's been a pleasure to have you here.
Certain we're probably going to tap you on the shoulder and hear from you again in the future.
[00:24:23] Speaker B: No, thank you. Thanks for having Me.
[00:24:24] Speaker A: You guys sit tight. We're only at the halfway point in the show. We'll be back for more Pivotal Change right after this.
Cool.
[00:24:38] Speaker B: That went well. Thank you.
You have a good day. I'll talk to you soon. All right. It's fun.
[00:24:56] Speaker A: Foreign.
Welcome back from the break. We are halfway through this episode of pivotal Change. We had a great conversation with Joe and I'm going to keep that conversation going. I want to roll up my sleeves just a little bit, take the jacket off and dig deep a little bit about what he was saying. I really want to emphasize for everyone watching that finding expert help is one of the single best ways to launch yourself and make those major differences in your business.
If you're in a leadership position inside of your business, an executive, a team leader, a sergeant, a coach, whatever it is, there are things that you must trade off in order to lighten your load and get to the next level. If you try to control it all, do it all, be the one man band, you're going to be exactly that. You're going to be dancing around like one of the opening scenes to Mary Poppins where he's in the park trying to do it all. And he's not good at any of them. Now, he's a pretty talented man, but he's not really the ideal cymbal player, the trumpet player, the horn player, the dancer, because he's being held back by whatever string instrument lever he's trying to push is pulling and pushing against another one. It's the same way in your business.
So go back and reflect on yourself and say, what am I spending the bulk of my time on? How much am I committing to my primary purpose? And your primary purpose is yours. Best and highest use. If you were struggling to say you've got 40 hour work week, hopefully if you're an entrepreneur, especially in the starting phase, the 40 hour work week doesn't work. It should be 50, 60, 80, and there should be a work life harmony. I've talked about that before, where everywhere you go and think and do just somehow ebbs and flows with your family, with your business, with your growth.
So I really want you to concentrate on making a list. Get down, make a list of the things that you can delegate, get rid of, teach people to handle at least a 70% of effective rate and then grow their skill over time. But most importantly, if you are doing things like attempting to write your own contracts, if you're attempting to do your own tax returns and stay on top of all of your bookkeeping, if you are attempting to count all of your own inventory every week or month. If you're doing these gross time consuming tasks, you're really starting to get to a point where you're falling short. Rely on experts, rely on other people that have niche fields or niche services for you that you can then spend your time growing your business, increasing your bandwidth, mentoring the people that are underneath you and influencing them to be a better version of yourself, learning from your mistakes. So I want to tell you about a little bit about how we do that here. So at CS Business Consulting and Shelton Associates, we have a collaborative agreement to work together on both sides of the needs spectrum for our clients.
For example, in Shelton Associates we come in with people similar to Joe's clients who have a need. Now we specialize the conversation in the sales tax today, but we see people that have all kinds of needs. Generally they're five to seven years along their journey. Sometimes they're 20 or 30, sometimes they're second generation and sometimes they're on month two. And what we do is we address their pain points.
They have found something successful and they can drive the arrow up and to the right. That's where we want it to go. We want up into the right more revenue, more profit, but also what comes with that is an increase in pain and time consumption and stress and often expenses and taxes as well. So we specialize in that tax reduction, stress reduction, audit proofing, making you tax efficient and building best practices in so that you have your liabilities covered. Now, we don't practice law, we don't do insurances, we don't guide your investments. We tackle tax.
And so we are, for the example of what this segment is about, the experts in that area, we're going to come in here and we're going to tell you how to use the tax law to your advantage, how to qualify, quantify, analyze and reasonably take those deductions, those exemptions, those credits that are available to you.
We have a relationship mindset as well. So we're going to communicate with you, we're going to learn your goals, we're going to work with your goals and we're going to take you step by step in this following process. We're going to have an introductory meeting or phone call with you and we're not here to consume your time and just charge you a few bucks for a meeting or a phone call. We are going to interview you to make sure that you are a good fit for us. Just as much as you're trying to figure out if we can Solve problems and help you with some of your pain points. It's a two way street.
So when we do that, we learn your goals. We start off the conversation explaining how we're different. We are not what I call and what my partner Wayne calls a tax factory. We just don't take your numbers, crunch them and say here's how you came out and then maybe sprinkle some advice like, oh, by the way, you ought to change this or think about depreciating that. No, we hold your hand through all of the advisories that we give out for all of the consultation methods that we tried to do. We employ them with you in a strategic meeting.
So that first meeting is just meeting us, meeting you, gathering information about your goals, your processes and things that you have pain points on and areas that might be not so obvious to you, but very clear to us that you are hemorrhaging money to the government. So please let us help you stop the bleeding. Then we make you do homework before you've even become our client. Say, hey, give us a couple years of tax return, 2, 3 years tax return, current financial statements, year to date books, examples of the bookkeeping accounts, you know, some how many entries are in your credit card or your bank statement, things like that. We ask you about your employees, we ask you about your family situation, who's involved, where you're located. So we can determine if there's nexus like we talked about. And we look at all these things and what we do is if you'll take the mindset of similar to a mechanic, right, this is going to sound familiar. We're going to pop the hood of your machine, your business, your financial life, your goals, and you're driving it down the highway and you're getting some success. You're arriving from A to B on a regular basis, but you know, the vehicle could be tweaked out and be better. So we pop the hood and we say, oh, look at all these little changes we can make. Some of our major, some of them may not be major, but we're going to say, hey, here's the six or seven changes that are really going to impact your situation.
Then we're going to schedule out on average three, four, sometimes five meetings with us. We're going to work with you every couple of weeks to implement all these changes with you in the room. So you have not comprehensive understanding, but you have clarity. So in the understanding, I'm not trying to make you a junior client, but our staff is going to walk through, we're going to hold your hand, not in any insulting way, but this is what we do, not what you do every day to make sure everything's implemented and successful and comfortable and functioning and producing the freedom and the tax reduction, reliability, the audit, proofing, all those things. So when we have those meetings, that's just the advisory package. We're going to analyze you, we're going to make changes. And again, it's your business, you run the business.
If you like 9 out of 10 or 7 out of 10 of our suggestions, let's go with it. If you'd like only one out of ten of our suggestions, it's kind of like, well, what are you paying us for? To be the experts that are in your corner, helping you. But we try to work all that out on the front side. So after that, we have a second meeting where we have looked under the hood of the engine and we said, here is your specific plan to your specific business, industry and goals. And then, like I said, we execute that plan with a handful of meetings.
Well, after we've built that beast of a machine, we just have to maintain it. You don't just rebuild an engine and rebuild an engine and rebuild an engine. I suppose maybe there's a exclusion. If you're a race car driver, you're probably going to blow up engines every once in a while. But the general person driving a nice luxury vehicle is not going to be blowing up their engine. So we just want to maintain that luxury vehicle. We do that differently as well. See, we try to take some of your pain points away. Some pain points. We very well know where I got to get contracts with an attorney. I got to review this with an attorney, an insurance guy, a lawyer, or my current accountant. And they're billing me by the hour, billing me by the hour. So every time I call them or have a meeting, cha ching, cha ching, cha ching. Another. Another invoice shows up in the mail. We do a streamlined monthly subscription style of billing where we comprehensively understand everything that's going to go into the work, and then we take it down to a monthly payment level. So just like Netflix, just like your Internet bill, just like if you have rental or anything like that, your payment stays the same with us. And the nice part is we know the totality of your situation.
So we're not going to change that monthly invoice.
Only two things are going to change that invoice. You change something about your needs, demands, or you grow. And we have to now do more for you. So you change or one of the government Entities changes. There's a new tax law, there's a new code, there's a change to depreciation regulation. Whatever is going to make us have to make a change on your plan, on your stuff. So we're not going to just raise your bill. It's going to be somebody else, you or the government, that does it. And that's usually pretty rare. So maybe after a couple of years of growth and stuff like that, you say, hey, I've taken on 10 more employees. Yes, your payroll bill may increase, but the point is, you're going to have grown along the way with the savings that we make.
So if you go back to what I said earlier about we're going to help you grow up and to the right. But even though your problems and your taxes and your time consumption and your stress is all growing with you, we're going to try to knock those things down and create a gap between your financial growth and your stress and your expenses and your tax growth. Now, that gap that we create, we just nickname all of those things value. And you're going to take that chunk of value and you're going to plug that chunk of value back into your situation. More time, more money, more energy to drive the arrow truly up and to the right like a rocket ship. That's what we want for your business. Business. That is the value of doing what Joe said.
Going to an expert. So do you want an expert attorney to write a rock solid contract with this gigantic bid that you just accepted so it's airtight, nobody's getting hurt on the deal? Or do you want to pay 150 bucks for somebody to spend an hour on it that just graduated to law school and there's holes and gaps and they don't have a lot of experience?
Pay for the expert. You want to download something from one of those online programs and trust that they can comprehensively understand everything that you're doing with the state of Georgia or the medical center down the road.
I want something a lot more airtight. I want the best insurance. I want the experts in the field working for me. Yes, it costs more money. It cost more money up front. But stop looking at experts as an expense, as a transaction, as a line on your financial statements, and start looking at the experts as an investment.
How much will they save me in hardship? How much will they save me in lawsuits and liability and tax?
If you can start grasping that mindset earlier on and spend a few more bucks at the beginning of your career, again, that curve is going to skyrocket.
So reflecting back sales tax, the complexities that we discussed, yeah, that's a lot. You need somebody that has the software and the bandwidth of people and the bandwidth of technology to recognize efficiently plan it. Now, just because they have their art and science down to a efficient package and they don't spend a lot of time on it does not mean the expertise is not there. If they can turn around your sales tax reports in half a day or a day or two and you have a complex situation, high five to them because they just saved you weeks if not months of headache and all kinds of tax notices and levy notices, notices and lead notices. So really rely on your experts. The experts don't have to be limited to people like Joe and I. They could be in leadership and team building. If you're going to spend all your time learning how to be a coach and a mentor, let an expert come in and do a lot of that for you. So we're going to talk a little bit more specifically on some of these things right after this break. Stay tuned for the last segment. There'll be more pivotal change right after this.
Sam, we are back for the final push of the night. We're going to wrap up this episode of pivotal Change with me continuing to roll up my sleeves and get back into the weeds with you. I want to get a little more specific again. I want you to rely on that pen and paper that you have and I want you to take notes not just in the whole episode, but definitely in this final section. I'm going to give you 15 things to write down. So, so get your, get your wrist ready. Hopefully we don't get a crap. What I want to talk about is in relying on the experts and finding people that can do things like what Joe does in sales tax and be more specific is doing a self analysis. See at this point you have to follow a plan, stick to the plan and analyze yourself in the beginning, in the middle and towards the end, right before the big succession plan, right before you make your exit. It's a constant thing, not a one time thing. So let's talk about the very beginning. If you haven't done this before in a concentrated written down way, go ahead and do it now. Whether you're one year, 10 years, 20 years into your endeavor, identify exactly what it is you're going to sell or you are selling. Like you really need to know, hey customer, you are getting this from me. That can be something tangible or intangible, right? It could be anything from software to a pair of sneakers to a service.
But you got to write it down exactly what it is. And hopefully there's some type, you know, some mission statements, some value statements, vision statements, things like that that back up exactly what you're selling. The other thing that you need to do is, if you haven't already, you need to pick a cool business name. That's, that's a second step for people especially starting out. If you're already starting out, the picking a cool business name already exists. Now a lot of people just do their initials, their family name, something that reflects their product.
But the pick a cool name also goes with the branding. You need to make sure that you have an image or service, whether it's a highly professional service or something highly comforting and casual, the brand is part of that, that name as well. So if you already got established name like a Johnson and Johnson, you know, accounting firm, that's okay, you can brand yourself as well. And you see a lot of that come through in marketing. But you got to make sure that you've got that impact factor with your company. You've got to be able to disrupt the industry not just with product and what you're capable of, but with imagery and attention capturing and things like that. Especially in the social media age, that's really important.
Know or analyze exactly what it takes to execute the service and make the product. Now this can break down in multiple categories and you've heard things discussed like this in my five hemps. So out of the 15 things I'm going to tell you, they're going to plug in at various stages of your five M's. So I want you to really go back and reconcile the two of them. But know exactly what it takes. That's like what materials, what tools? With software, everything from brick and mortar businesses, to transportation, to fuel cost, how many employees to software, raw materials and tools, equipment, all that kind of stuff, you're going to get pretty big deal. And what it takes to execute, to actually deliver the final product or service into the hands of the customer and get that gold star of satisfactory job well done. So after that and you have, that's gonna be a comprehensive list and I want details on that one too. I want you to develop a method. So here you go. You're talking about materials and step three. Now step four, method delivery. This is echoing those five M's. How are you gonna deliver that promise? You know what it takes, how are you gonna put it all together to make it happen? And again, you're going to have to write down a workflow or an SOP or some type of operational design that says we can check the list, follow the steps, the people can do this process and it will get done and it will ultimately provide the product, the service, the happy customer, the happy review.
Then you need redundancy. You need to know how to repeat the service both effectively in a timely and resource minded capacity and efficiently.
So it gets. Excuse me, I said that backward. Efficiently, in a timely and resource reducing manner and effectively so that it actually gets the exact job done. You're not cutting corners and giving out a wonky product or you're missing out on one piece of it. If you're doing landscaping, you say, hey, we couldn't get the back corner of the yard done because we were running out of shrubs. Right? We ran out of hours in the day and now I have to pay my people overtime and so I'm going to trim your job down. No, I don't think so. That's not okay. Make yourself highly duplicatable. Number six, schedule your service or product delivery. Know what it takes to get it in the hands of customers. So that means, hey, we're going to have a sale. I need to have all of the blue jeans stacked up on the shelf and ready to go when we open the doors at 8am and everybody's going to come by the blue jeans. We announce a sale or somebody tells their buddy that there's this awesome product there and you don't have it on the shelf and you don't have it ready to deliver, you're failing yourself. Schedule your service delivery. If you're providing services like what we do, time it out so you can gather the information, do the prep work and deliver a professional product.
So you need to understand what is your pace. So that's pacing and spacing and that's a whole separate part of what we deal with in methodology and some of the business foundations, parts of that. Now you need to create your service menu. And there's all kinds of things on YouTube and Instagram that you can debate on how you want to do your menu. So our menu, we offer basically three things. An advisory service, a maintenance service, and then forensic services. Okay, that's pretty much it. But our service menu is not just a cheeseburger, right? We're going to build you a customized plan. So our service menu comes with a customized advisory plan and a customized maintenance plan because that's relatable to your goals. Your service menu also might be we're going to sell a chicken option, a beef option and a vegetarian option, right? And then here's the options. You can change out the fixings how you like it may have your service menu is I provide car washes, mobile detailing, car wash. Here's a basic clean, here's a basic exterior, basic interior, here's a full deep down detail getting you ready for a car show or anniversary date night that's really fantastic, whatever it may be. Then you got to get into some organization. Okay? This is all the steps before you actually launch your services. You have to have all of these known and ready and capable.
Then you're actually going to do the organizing of your corporation or your business. You're going to register the LLC and the ein and you're going to get these documents in place. Articles, organization, operating agreements, get the attorney to dry up, draw up any type of contracts like that and go live, go active, go legal and be ready to operate.
Working cash under the table is great if you have a lemonade stand as a kid. But if you're going to make any real money in life, you've got to organize, you've got to be ready. And then you need to plan that like, hey, I've got some profit, I'm starting to make things. Of course we've got expenses, we've got overheads, I got financial plans. So now with that I have my tax planning, I need my entity selection. Am I going to have partners, am I going to have employees, am I going to have contractors? What are my best practices and my tax planning needs? So that's again you go back to Shelton Associates. A lot of these other things are through cs, business consulting or other experts that are out there.
Go and make sure that you have these best practices in place so that you can finally, you know, report things and operate legally and save liability, save yourself and become tax efficient, things like that. And then you gotta make sure you learn and know how to sell, sell, sell. And you're marketing the best you can. Marketing can be extremely expensive, paying for advertisements and all kinds of other opportunities, but it can also be extremely inexpensive. You specifically ask for testimonials, ask for Google reviews, ask for referrals, go knock on doors. A lot of these things are free with the exception of a little bit of your time. So learn how to sell actual sales pitch scripts, proper techniques and make sure that you are over delivering anything that you sell so that you can always get that gold star review. And then you got to collect the money. Now you're selling, you're marketing, you're delivering, you're doing all the things from steps one through nine. And here we are on step 10 and 11, which is selling market and then collect money, get paid. When I say get paid, it's not you the owner, it's you the company gets paid. You collect that money and you are going to make sure that you can get a recurring. You're going to set up these vendor accounts. You're going to now pay the people that you owe already on some of these recurring things. Restock your inventory to restock your needs to make all the overhead costs get paid out. You got to pay your employees, pay your contractors. So set up those vendor accounts, those contractor accounts, and make sure everything's going back and forth smoothly and efficiently. If you get bogged down in that you might have vendors or suppliers cut you off because you're not paying ready or timely or enough. So when you get paid, and I say you as the company, not you the individual, then you do it now. Documentation, Record everything. Get some type of accounting software, get some type of point of sale software, get some type of inventory system, document and record everything.
It's easy to get fired up getting sales, making money, and then get it caught away. You could probably run your business on an Excel spreadsheet, especially with all the templates and assistance from maybe some AI softwares for a while. But eventually you're going to need to grow your software and grow your organization and your documentation just like you have to grow anything else. So you can't run it on Excel spreadsheet for very long. Be ready to step it up and be ready to make sure you're documenting your bank statements. Everything is stored for the right place, and you finally get to pay yourself. So if you're paying attention, setting up the vendor accounts and the contractor accounts, that's step 14, the documentation. Recording everything, making sure you're clean and organized and functional. That's step 13.
And finally, out of 15 steps, step 14, you get to pay yourself. You get to bring money home into your bank account and then you can live your life of reinvesting in yourself, of taking that vacation, of buying that nice car, hopefully it's into investments and other assets that are income producing assets, whether active or passive.
You get to pay yourself, you, the individual. And then the last thing, because it's on a timeline, is every March 15th and April 15th, guess what? You have compliance and you have reporting. Now, sales tax and other things based on the business that you might be in may require you to report throughout the year, even weekly, monthly or quarterly. You may have to do things like the sales tax and you're going to have your, you know, workers comp. And you're going to have all kinds of stuff. Make sure that when you're documented, you're recorded, you're compliant. All of that stuff must be done and you have to calculate in what the cost is going to be before you truly pay yourself. So hopefully you understand that out of these 15 steps, a lot of them are going to overlap. It doesn't have to literally be set up in dominoes, but if you work them in order, especially at a from scratch business, that's going to be your greatest method of success. And you can see a lot of the overlaps in the method methodology about, you know, making sure when you document pay yourself and you cover your expenses. That's measured growth. Right. And the client pacing and spacing. So I really wanted to, like I said, roll up the sleeves, get down on the weeds a little bit, provide you those 15 things that you can do. This is something that you're interested in learning more about. You can follow me at Ryan forges leaders on YouTube, TikTok Instagram. You can get a hold of CS Business Consulting or Shelton Associates. We share a phone number and send it the right way at 270-442-6688 or you can even contact me at info@w sheltoncpa.com would probably be the best one to start. That's info@W SheltonCPA and that's Shelton with a T dot com. Thank you so much for your time and attention on the show. Pivotal Change. It had a lot more meat to it than some other episodes and I hope you really grab a hold of it. I really hope you got to write it down and it finds you some way to grow and prosper. In the meantime, I want you to go out there and see the change and be the change. And we'll catch you right here next time on Pivotal Change.
