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Monday Money Myth: I Think My Business Might Be Set Up Incorrectly and It's Too Late to Fix It · Sell Well: Helping Agencies Close More Deals and Grow Revenue

• 0:00
  SPEAKER_00: Happy Monday.
• 0:00
  SPEAKER_00: You are listening to the Sell Well podcast.
• 0:02
  SPEAKER_00: Today I'm here with Jason for another Monday money myth.
• 0:05
  SPEAKER_00: I'm really excited about this one.
• 0:07
  SPEAKER_00: This is one that kept me up at night as a business owner and just has caused so many headaches and doesn't need to.
• 0:14
  SPEAKER_00: So today's money myth is I think my business might be set up incorrectly.
• 0:19
  SPEAKER_00: And if it is, there's nothing I can do about it.
• 0:22
  SPEAKER_00: Jason, I'd love for you to dive into this with us and get into a little bit around LLCs and legal structures and tax structures and just give us the high level on how business owners should think about that.
• 0:33
  SPEAKER_01: Yeah, I think it's uh I think it's great.
• 0:36
  SPEAKER_01: And um, you know, always know that it's never too late to make a change.
• 0:41
  SPEAKER_01: It can be burdensome to make make that change, but ultimately you want to set up your business for success.
• 0:48
  SPEAKER_01: And so if you didn't get great advice on the on the front end, just know that these things can be undone.
• 0:55
  SPEAKER_01: Um and so um, but but you know, as you're going into sort of business structure, you know, understanding your options is really important, right?
• 1:06
  SPEAKER_01: And this is where you can uh, I mean, you can you can research through AI tools, you know, your state and and really kind of understand what's available to you, right?
• 1:17
  SPEAKER_01: Right.
• 1:18
  SPEAKER_01: Um, you know, I would say in 90% of the cases of the clients I work with, they're set up as some form of a limited liability company, which essentially means the the company, the personal side is sort of shielded from the company side, right?
• 1:35
  SPEAKER_01: So if there is significant liabilities that occur, uh then you've essentially kind of created this umbrella, if you will, this layer of protection around your business.
• 1:45
  SPEAKER_01: And that typically uh is the is the right move to make.
• 1:50
  SPEAKER_01: Um you can also incorporate uh at the state level, although I typically do not recommend incorporating uh for most small businesses, usually establishing that LLC is really all they need to do.
• 2:04
  SPEAKER_01: I'd say probably the most important element is it's not a set it and forget it exercise, right?
• 2:10
  SPEAKER_01: You you know, every year there's compliance-related uh tasks that you have to complete depending on the state you're in, to ensure that that LLC stays intact, essentially.
• 2:22
  SPEAKER_01: And so, you know, you want to make sure that you're well versed in that or that you have someone in your corner that's well versed in that that can kind of uh that can kind of keep your options open and ensure that you stay compliant.
• 2:36
  SPEAKER_00: I think something that was so eye-opening to me, and I wish I could tell you that this happened six weeks into my business instead of much further in, was that I didn't realize that as a business owner, the way you're set up, you have options between state and federal.
• 2:51
  SPEAKER_00: And then you also have options between the legal and accounting side.
• 2:55
  SPEAKER_00: And so there's a lot of decisions to make for how you're set up, and if you have partners, and like you said, there's all of these kind of tasks that come with whatever options you decide.
• 3:05
  SPEAKER_00: Um, and if you're listening to this and you are not an accountant or a lawyer, my recommendation is to not waste your time trying to learn all of this because even once I have my arms around it a tiny bit, we moved.
• 3:17
  SPEAKER_00: And so I wasn't in Tennessee anymore, and then I was in Atlanta, and I kind of thought it's taxes, it's the government.
• 3:23
  SPEAKER_00: I live in America, it's all the same.
• 3:25
  SPEAKER_00: And I came to find out that's not true.
• 3:28
  SPEAKER_00: And so there's all these different decisions.
• 3:30
  SPEAKER_00: If somebody is sitting here and they're like, I don't even know if I'm set up, I don't know what this is like, what's a really good first step for them?
• 3:39
  SPEAKER_01: Yeah, I mean, a really, really good first step would be if you obviously if you have someone in your corner, right?
• 3:45
  SPEAKER_01: If you have, you know, uh an accountant in your corner, if you've used someone to kind of guide you legally, then checking in with them, they they you know, they're gonna understand state entity structures and are gonna be able to look up information on your behalf to determine kind of where where your entity stands, right?
• 4:06
  SPEAKER_01: So that would, you know, that would probably be step number one.
• 4:11
  SPEAKER_01: Uh honestly, you know, I find that picking up the phone and calling the relevant state departments actually produces fruit.
• 4:19
  SPEAKER_01: Uh I've seen it uh, you know, on in on many occasions where uh you know you can either drop the drop them an email or uh or place a phone call, and you know, within a few minutes they'll they'll answer any questions you have about your entity and its structure and if it's in good standing.
• 4:37
  SPEAKER_00: If it's not in good standing, which can feel especially if you don't know a lot about this, you're like, oh my gosh, I'm am I going to jail?
• 4:45
  SPEAKER_00: Like, what is this?
• 4:46
  SPEAKER_00: What talk to me about how things are retroactive and how you can fix things.
• 4:51
  SPEAKER_00: Are you doomed?
• 4:52
  SPEAKER_00: What's kind of uh if you get bad news, what do you do from there?
• 4:56
  SPEAKER_01: Yeah, I mean, you know, and it it it varies by by state, um, but you know, typically in in most states, you know, if for whatever reason um your LLC has dissolved, as an example, right?
• 5:10
  SPEAKER_01: And it's what's called an administrative dissolution um because you know, you may have failed to file an annual report.
• 5:18
  SPEAKER_01: You may have not known that you needed to file an annual report with the state.
• 5:22
  SPEAKER_01: And so, you know, the after a certain period of time, states will typically just dissolve uh the uh the LLC, but essentially, you know, all it takes is uh is paying, you know, getting those annual reports caught up, paying whatever necessary dues need to be paid in order to get those caught up, and you're sort of immediately back in good standing again, right?
• 5:47
  SPEAKER_01: So that that's that's really all the state wants, is they want to uh ensure that you're keeping up with the with the filings.
• 5:55
  SPEAKER_01: And they're not overly burdensome, really, uh, you know, in most states, as long as you understand what they are on the front end.
• 6:02
  SPEAKER_01: I think a lot of folks go in and they say, I'm gonna I'm gonna form an LLC and it's a one and done exercise, and I never have to revisit it again.
• 6:11
  SPEAKER_01: And then they get this dissolution letter in the mail and they're they're shocked, right?
• 6:16
  SPEAKER_01: Because they didn't understand all the all the steps associated with it.
• 6:20
  SPEAKER_01: But um, it's really not complicated to get it back reinstated.
• 6:24
  SPEAKER_01: It is not the end of the world.
• 6:26
  SPEAKER_01: I have reinstated a lot of uh LLCs that have been delinquent for many, many years.
• 6:32
  SPEAKER_01: Uh, and so it's not it's not a lost cause by any stretch.
• 6:36
  SPEAKER_00: I think it's so important to all of those letters look so scary, right?
• 6:40
  SPEAKER_00: You get the letter in the mail that's like, I think I did something wrong.
• 6:43
  SPEAKER_00: I don't even know how to read this.
• 6:45
  SPEAKER_00: Um, and having somebody in your corner that you can send this to and be like, what is this and kind of calm you down?
• 6:52
  SPEAKER_00: And they say, Hey, these are the steps we're going to take.
• 6:54
  SPEAKER_00: Because with all of this, um, there are steps and there are things to do, and there's ways most of the time to remedy um kind of what's happened.
• 7:04
  SPEAKER_00: I think that having somebody in your corner when you've had a busy day, you're in in between calls, and you get this crazy letter to call and say, What is this?
• 7:13
  SPEAKER_00: What what do I do?
• 7:14
  SPEAKER_00: That is such a benefit to having that peace of mind.
• 7:18
  SPEAKER_01: Yeah, I mean, it's it's completely intimidating the way the system works, right?
• 7:22
  SPEAKER_01: I mean, they send you send you these letters and you think you're really in like a significant amount of trouble, right?
• 7:29
  SPEAKER_01: Um, when in essence, all you know, all the state wants you to do is is maintain compliance, essentially, and it's a relatively small fee.
• 7:38
  SPEAKER_01: And so, you know really having folks in your corner, and I tell business owners this all the time: surround yourself with people uh who are knowledgeable in areas that you aren't.
• 7:52
  SPEAKER_01: Um, and it it's absolutely critical, particularly in small businesses, as you're being pulled in multiple directions, uh, to find those people.
• 8:00
  SPEAKER_01: I think it's one of I think it separates good businesses from great businesses.
• 8:05
  SPEAKER_01: Uh the owners that can really identify uh where their talents lie and where they don't early in the process, and they surround themselves with experts in those areas tend to flourish.
• 8:18
  SPEAKER_00: I totally agree with that.
• 8:19
  SPEAKER_00: And I'll add to that too, that something, you know, a lot of my clients are like, where do I start with that?
• 8:24
  SPEAKER_00: Like clearly I'm not great at everything.
• 8:26
  SPEAKER_00: What do I start outsourcing first?
• 8:28
  SPEAKER_00: Um and they want to outsource tasks instead of kind of overall big problems.
• 8:34
  SPEAKER_00: Um, and so I like to just ask them, you know, what's the thing that causes you the most anxiety?
• 8:39
  SPEAKER_00: The thing that causes you the most fear.
• 8:41
  SPEAKER_00: If that is, I hate looking at my statements every month or I hate looking at my revenue, you need to bring somebody in who can hold you accountable to doing that and looking at the numbers, but also be in it with you.
• 8:52
  SPEAKER_00: And so you're not doing it by yourself and you have somebody guiding you.
• 8:56
  SPEAKER_00: If you're intimidated by contracts, finding a good lawyer, like just having something where that peace of mind, now you've got somebody to walk through it with you who can take the emotion out of it, um, I think is so valuable.
• 9:08
  SPEAKER_01: Yeah, I I agree.
• 9:10
  SPEAKER_01: I mean, and you know, the the thing about uh accounting in particular is it's really a language unto itself.
• 9:18
  SPEAKER_01: And it and it can be incredibly intimidating.
• 9:21
  SPEAKER_01: Uh and folks that I that recognize that early, uh, I think will end up uh obviously doing doing better, particularly if they find competence on that that side, right?
• 9:34
  SPEAKER_01: That's that's very important uh that you find someone who's who's competent and and capable because business owners didn't get into the business to do all this stuff, right?
• 9:45
  SPEAKER_01: They got into the business because they had a vision for a better life, essentially, right?
• 9:51
  SPEAKER_01: Uh and and that better life, you know, means they're pursuing typically what they're passionate about.
• 9:58
  SPEAKER_01: And uh, you know, filing annual reports with the with the state and producing income statements probably is not their passion.
• 10:06
  SPEAKER_01: And so again, finding finding that balance and finding folks in the in your corner who are experts in those areas will free you up to to focus on uh why you did it in the first place.
• 10:18
  SPEAKER_00: Jason, I love that.
• 10:20
  SPEAKER_00: Thank you so much for sharing um and debunking this myth with us.
• 10:23
  SPEAKER_00: If somebody is looking for uh somebody to walk through the money side of their business, the accounting side of their business, of course, I always recommend you.
• 10:32
  SPEAKER_00: Um and you can find a link to schedule a call with Jason in the show notes if you're listening.
• 10:37
  SPEAKER_00: Um and yeah, I would just love for all of our clients to meet with you and know that they don't have to do this by themselves.
• 10:44
  SPEAKER_00: If you were looking for somebody to kind of help you map out how to grow your revenue, I'd love to talk with you.
• 10:49
  SPEAKER_00: Jason and I actually work together a lot with a lot of different clients.
• 10:52
  SPEAKER_00: We'll both meet with you and kind of hash out, okay, here's what you need to do from a money side of things, and how are we actually going to put that into action and get that going and grow your revenue?
• 11:03
  SPEAKER_00: And that's where I'll kind of take over.
• 11:05
  SPEAKER_00: So we love that teamwork.
• 11:06
  SPEAKER_00: We'd love to meet with you.
• 11:07
  SPEAKER_00: Um, and you can book that call in the show notes.
• 11:11
  SPEAKER_00: Thank you so much for listening.
• 11:12
  SPEAKER_00: We're so excited to do another Monday Money Myth.
• 11:15
  SPEAKER_00: Um, and we'll be with you next Monday.
• 11:18
  SPEAKER_00: Until next time, sell well.