Latest / The SmallBizChat with Melinda Emerson / Tightening Up Your Business Finances with Susanne Mariga

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Tightening Up Your Business Finances with Susanne Mariga · The SmallBizChat with Melinda Emerson

• 0:01
  Hi.
• 0:02
  This is Melinda Emerson, the small biz lady host of the small Bizchett podcast.
• 0:06
  I want to serve you.
• 0:07
  This pandemic has been so hard on America's small businesses and on just America in
• 0:12
  general.
• 0:13
  If you're ready to start your dream business, boy, do I have a great offer for you?
• 0:17
  I am giving away 1000 copies of my best selling book, become your own boss in 12 months.
• 0:23
  Over a hundred thousand people have this book It has been printed in multiple languages
• 0:28
  around the world, and I wanted to find a way to serve America small businesses in this
• 0:33
  pandemic.
• 0:33
  And so I am giving away a 1000 copies of my book.
• 0:37
  All you have to do to get your copy is head over to begin my biz dotcom slash free offer
• 0:44
  to, you know, sign up for your copy.
• 0:46
  All you have to do is pay shipping, and we will mail one out to you.
• 0:49
  I am so excited about this.
• 0:51
  I wanna serve you, grab your copy today.
• 0:56
  Ending small business failure.
• 0:58
  Welcome to the small biz chat podcast with a number one small business expert, Melinda
• 1:04
  Emerson.
• 1:05
  Melinda's goal is to end small business failure, and she'll give you the information
• 1:09
  you need succeed and live the life you dream of.
• 1:13
  Now here's the small biz lady herself.
• 1:16
  Melinda Emerson.
• 1:19
  Hi, everybody.
• 1:19
  I'm Melinda Emerson, the small biz lady.
• 1:21
  America's number one small business expert And I wanna welcome you to small biz chat.
• 1:28
  Now the small biz chat podcast is a peer to peer interview show that give small business
• 1:32
  owners a way to get invaluable business insights.
• 1:36
  Now the goal of small business chat is to end small business failure.
• 1:40
  And we want to give our small business audience an opportunity to hear sage advice from
• 1:45
  multiple angles.
• 1:46
  With that, let me introduce my guests Suzanne Maraga.
• 1:51
  She is a CPA and certified profit first professional, and she's the author of the new
• 1:56
  book profit first for minority business enterprises.
• 1:58
  She has 20 plus years experience helping clients achieve long term financial stability
• 2:05
  by leveraging tax strategies for more information on her you can go to moragacpa.com.
• 2:11
  She's gonna be talking to me tonight about profit first and just strategies in general to
• 2:16
  tighten up the finances in your business.
• 2:18
  Suzanne, welcome.
• 2:19
  Hi, Melinda.
• 2:20
  Thanks for having me.
• 2:21
  I'm excited to be here today.
• 2:22
  Oh, I'm so excited to have you.
• 2:25
  So now let's jump into it.
• 2:27
  Tell me, as a CPA, what are the biggest mistakes that entrepreneurs tend to make with
• 2:32
  their finances?
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  They say statistically only 4% of companies ever reach a $1,000,000.
• 2:37
  Right?
• 2:38
  So there's a lot of mistakes that happens in the small business world.
• 2:41
  And I think one of the biggest mistakes happens in small business is we start these businesses
• 2:46
  and we do what we love.
• 2:47
  Right?
• 2:48
  We do what we love and we do it well, but we never figure out never sit down and think, what
• 2:52
  do what do I want?
• 2:53
  What I want my business for days?
• 2:54
  What kind of life do I wanna live?
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  And what is my end goal of my business?
• 2:58
  And so what happens is literally what happens is our business just produces random results.
• 3:03
  Right?
• 3:03
  You know, we're we're doing what we love, but we never ever figure out exactly how to get
• 3:07
  there.
• 3:07
  But strategically, if you think about where you wanna end up, where you want how much do you
• 3:12
  wanna actually make with your exit strategy, right, you can start to really design what your
• 3:17
  end goal is.
• 3:18
  So that's, like, one of the biggest mistakes that I that I see is just people just not
• 3:21
  thinking about what what is what it really look like at the end of the day.
• 3:25
  And then algebraically, how do I get there?
• 3:27
  Boy, when you said that businesses produce random results, you you said a whole mouthful
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  right there.
• 3:34
  It's like, if you don't know where you're going, any road will take you there.
• 3:37
  Right?
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  I mean, it's the same same thing in a business.
• 3:40
  And I also think I think people's fear of math is the reason why they kinda, like, don't know.
• 3:45
  It was, like, they had that bad math teacher in middle school, and it's like, I don't wanna
• 3:49
  look at the numbers.
• 3:50
  It's like, but you gotta look at the numbers.
• 3:52
  Right?
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  Because if you're not making any money, that doesn't make much sense.
• 3:56
  Right?
• 3:56
  So I mean, now the thing that I wanted to ask you about, though, particularly given your
• 4:00
  book, so you decided to write profit first for the minority business enterprise.
• 4:06
  And so I wanna talk to you about whether or not you think people of color struggle differently
• 4:13
  in this area.
• 4:14
  Or if you think it's universal, there's a whole bunch of coolest people out here producing
• 4:18
  random results.
• 4:19
  Like, they help me understand why you wanted to address this audience in particular.
• 4:25
  You know, Melinda, that is an excellent question because, you know, just like you said,
• 4:28
  you know, there are universal issues that entrepreneurial run into in general.
• 4:31
  Right?
• 4:32
  We don't know what we don't know.
• 4:33
  Right?
• 4:34
  And, you know, whether that's how to market our business, how to do our accounting, we just
• 4:38
  don't know.
• 4:38
  Right?
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  And that's universal.
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  But I think what we have to peel it back, that layer is when you look at companies as a whole,
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  no matter what their race demographic is or background demographic, Minority businesses
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  tend to struggle more.
• 4:52
  Right?
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  They're they tend to be smaller.
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  They tend to to not make it to that larger size.
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  And there's there's a lot of reason that that happens with that.
• 5:01
  1 is a lot of us, we're gen 1, right, we're gen 1 to really start businesses.
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  We're not passed down that knowledge of the how tos.
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  And so we're figuring things out, right, as we go along, which sometimes is is something that
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  maybe a majority non minority business might not deal with, right, because, you know, maybe
• 5:17
  they've inherited a business before, and that's been passed out.
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  I think all also too, there's something called trauma DNA that happens.
• 5:24
  Right?
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  And what that means is, Melinda, you're a woman of color like myself, right, We are the stories
• 5:29
  that we are told.
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  You know, we're the stories that our mama told us, our stories that our grandfather told us.
• 5:34
  Right?
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  And I looked at my own generation.
• 5:36
  I was like, you know, I'm, like, 3 generations removed from slavery.
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  And literally, my grandfather was a sharecropper.
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  You know, my mother, her family moved up from the great migration.
• 5:45
  And literally, we grew up with those stereotypes.
• 5:47
  Right?
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  You know, my My grandfather worked the plantation that used to enslave our family at
• 5:52
  at one point.
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  And so literally just being able to navigate rooms, so see, as you grow in your career as
• 5:58
  you expand outside of your territory, right, outside of your the people that look like you,
• 6:02
  the neighborhood that happens there.
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  You know, we have to talk to people that don't look like us.
• 6:07
  Right?
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  And so there's stories that we've been told.
• 6:09
  You know, I I remember my mom telling us as I was growing up, you know, you can't trust white
• 6:12
  people.
• 6:13
  You gotta be careful.
• 6:13
  But, you know, things like that.
• 6:15
  And we have to, like, we have to overcome those stories that we're told.
• 6:19
  Another thing is what I find just even with my clients that I have seen is there's a guilt for
• 6:25
  having made it, right, in in our communities.
• 6:27
  And And so we want we feel like we've just been blessed.
• 6:30
  We've been lucky.
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  Right?
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  And so we want to give back to our communities.
• 6:34
  And sometimes We wanna give back, but sometimes it doesn't necessarily fit the best fit for the
• 6:39
  company if that makes sense.
• 6:40
  You know what I mean?
• 6:41
  Like, I always tell the story of when I was when I was starting my company, you know, my
• 6:46
  brother, my younger brother, brilliant guy, but he graduated during the wrong time during a
• 6:51
  recession.
• 6:52
  And I remember every time my family would call me, it was to check up on the status of my
• 6:55
  brother's application.
• 6:57
  And it was challenging because, you know, maybe my brother didn't really wanna be in a county.
• 7:01
  But I ended up hiring him and it ended up being the worst thing because I ended up, like,
• 7:04
  prohibiting him from really expanding into what reach he wanted to reach into.
• 7:08
  So really just you know, being able to, like, balance that loyalty to family, to community,
• 7:14
  of also growing our business.
• 7:16
  So overcoming that survivor guilt.
• 7:18
  Mhmm.
• 7:19
  You know, it's really interesting because I think that from the very beginning of my brand
• 7:24
  as the small Visalady, I ability All of that is true.
• 7:30
  So one of the things that, you know, I just think sometimes we have to be careful because I
• 7:35
  definitely think there are people who where their minority status, if you will, as a
• 7:40
  crutch.
• 7:40
  And I think there are other people that wear their minority status as victimhood, and then
• 7:45
  there are some people that are getting paid based upon marketing while black be being a
• 7:50
  celebrity being black, you know, all this kind of stuff.
• 7:52
  So I just kinda, like, try to be excellent.
• 7:55
  Like, that's, like, my goal, like, be excellent, and it seems to be working
• 7:58
  universally.
• 7:59
  But now I'm very familiar with Mike Macau, with his book, Profit First, And so your book is an
• 8:06
  offshoot of his, right?
• 8:08
  Like, so you're one of his people and you decide, oh, I know what I'm gonna do.
• 8:12
  I've got a CPA I'm gonna write, you know, another version of this book.
• 8:16
  I mean, tell us how that all came about.
• 8:17
  Yeah.
• 8:18
  Provid First is an amazing book.
• 8:19
  I love Mike McAllett's book.
• 8:21
  I'm probably one of the biggest fans of his book.
• 8:24
  And and our book does cover the foundation part of profit first because when I sat down to
• 8:29
  write this book, a couple of years ago, I kept, like, stealing his nuggets and putting that in
• 8:34
  there in the book.
• 8:35
  You know?
• 8:35
  And so I was like, this needs to be honored a profit for his brand.
• 8:38
  But what it does differently is it expands on that more from a minority standpoint.
• 8:43
  So one of the things that we have to start with is defining what is a minority business
• 8:47
  enterprise.
• 8:48
  And and what minority business enterprise is is, 1st of all, it's a certification.
• 8:52
  Right?
• 8:52
  It's a certification of either the National Minority department.
• 8:56
  Development Councils was towing this upon you.
• 8:58
  Sometimes the cities must stow this upon you or your county.
• 9:01
  But what it means is that you're 51% owned by a person of color.
• 9:05
  There's certain ethnicities that qualify for that.
• 9:09
  And one of the things that when you're going through certification is, you know, there's
• 9:12
  government contracts, right, there there's There's RFPs.
• 9:15
  You know, if you get certified by a National Minor Development Development Council, there's
• 9:19
  opportunities to work in the corporate.
• 9:21
  Like your Coca Colas or your exons or your Chevron down here in the Houston area.
• 9:26
  And so we talk about government contracting.
• 9:28
  You know, a lot of times when people think about government contracting, like, oh my gosh.
• 9:31
  I want this.
• 9:32
  It's a $1,000,000 contract.
• 9:33
  There has to be something left over for me and a $1,000,000 contract.
• 9:36
  Right?
• 9:37
  And We're gonna talk about that a little later about about nomers about $1,000,000 contracts,
• 9:42
  but definitely.
• 9:44
  Exactly.
• 9:44
  And what we find is, you know, when there's an RFP process or request for proposal and you
• 9:49
  have a bidding, right, a bidding war.
• 9:51
  What happens is you have this force, this downward pressure to decrease prices.
• 9:55
  Right?
• 9:55
  So it ends up being this this race towards the bottom.
• 9:58
  Right?
• 9:59
  And so why everybody that may not be familiar with that and familiar with that, you have to
• 10:03
  really be careful, first of all, about what what contract you even bid for, right, because
• 10:07
  Not all money is good money.
• 10:08
  Right?
• 10:09
  If you're not making the margins, you're not making the profit.
• 10:12
  And so it's better to walk away for some of those contracts.
• 10:14
  And we talk about in the book about sole source contracts, and contracts that actually are
• 10:18
  better.
• 10:18
  We'd also talk about tax strategy.
• 10:20
  Right?
• 10:20
  We talk about the tax strategy to increase your wealth without increasing expenses.
• 10:24
  Like, any accountant can tell you go out and buy that that truck for $50,000.
• 10:28
  Get that section 179 deduction at $25,000.
• 10:31
  But at the end of the day, if you're buying a $50,000 truck to save 10,000 taxes, What kind
• 10:36
  of sense does that make?
• 10:37
  Right?
• 10:37
  And so what we're gonna talk about in the book is, like, maybe what we're gonna do is we're
• 10:41
  gonna look at your goals.
• 10:42
  Right?
• 10:42
  What are your overall goals?
• 10:43
  You wanna increase long.
• 10:44
  Do you have you increase longevity, you're gonna increase profits.
• 10:47
  Right?
• 10:47
  And so maybe we're gonna do this to a 401 k that has a very harsh vesting period.
• 10:52
  I mean, that Your employee has to be with you for 6 years, a fully vest.
• 10:56
  Right?
• 10:57
  And if they say so long, I'm out of here, you know, because somebody offered me a dollar
• 11:00
  more, they're not vested.
• 11:01
  That goes back into the owner's copper.
• 11:03
  Right?
• 11:04
  And so we're gonna talk about tax strategy of how to build your wealth and also get your your
• 11:09
  goals ultimately with that.
• 11:11
  It also talks about mindset, right, because we talked about, yeah, we deal with some of the
• 11:15
  same problems that other people deal with.
• 11:16
  Right?
• 11:17
  But at the same time, we have to overcome mindset.
• 11:20
  We have to overcome those stories that we've been told, those stories that are in our mind
• 11:24
  in order to make it to the next level.
• 11:26
  Definitely.
• 11:27
  Definitely.
• 11:27
  So let's talk a little bit about quickly about the profit first system.
• 11:31
  If I wanna implement, like, can you talk just a little bit about what it is and if someone
• 11:35
  wanted to get started with it and they're not using it now, how might they get started
• 11:40
  implementing it?
• 11:41
  I love profit first.
• 11:42
  It really works with your natural biological and psychological makeup, right, versus a
• 11:46
  traditional accounting where you have revenue, minus expenses equals profit.
• 11:50
  And I I always equate it to, like, dieting.
• 11:52
  Right?
• 11:53
  And when you go on a diet, the first thing they tell you is eat less food.
• 11:56
  Right?
• 11:56
  And you do this by eating using smaller plates, and that's exactly what profit first is gonna
• 12:01
  do.
• 12:01
  It's gonna create small plates for you.
• 12:03
  And it's gonna do that through the means of bank accounts.
• 12:05
  Right?
• 12:06
  And you're gonna have a bank account that really is almost like budgeting.
• 12:09
  Right?
• 12:09
  It's it's set up for a budget.
• 12:10
  It's set up, much am I gonna spend for my operating expenses?
• 12:13
  Right?
• 12:13
  How much am I gonna put away for profit immediately?
• 12:16
  How much am I gonna put away for my taxes?
• 12:18
  And, of course, you know, I gotta myself.
• 12:19
  So I gotta have owner's pay.
• 12:21
  Right?
• 12:21
  So I don't go home and my husband's like, hey.
• 12:23
  Why don't we work today?
• 12:25
  So, you know, we wanna set up those bank accounts for that.
• 12:27
  And so what's happening is the money that's put into this operating account, right, that's
• 12:31
  distributed to this operating account.
• 12:33
  That's all you have left.
• 12:34
  That's all you have left to spend on on your business.
• 12:37
  You know, you can invest in expensive office space, right, in the little downtown if you
• 12:41
  want, but that means you're gonna have less money to employ people.
• 12:44
  Right?
• 12:44
  And every decision that you make is gonna consequent.
• 12:47
  So we really work with your natural design in order to increase your profitability.
• 12:51
  And and really, because you're putting away profit, it's just physics.
• 12:54
  Right?
• 12:54
  You put away money for profit.
• 12:55
  You're gonna profitable.
• 12:57
  Right?
• 12:57
  And that's
• 12:57
  and I love that, and that's exactly how profit wars works.
• 13:01
  I love it.
• 13:01
  I love it.
• 13:02
  Alright.
• 13:02
  So let's switch gears just a little bit you talked about how important it is to pay
• 13:06
  yourself.
• 13:07
  Now this is something that I think a lot of business owners struggle with, you know, when
• 13:11
  times get tight, they skip a check, and you can only do that for so long before your spouse is
• 13:17
  up in your face.
• 13:18
  Like, hey.
• 13:19
  Like, what is going on?
• 13:20
  Right?
• 13:20
  So talk a little bit about not only about paying yourself, but what is the right
• 13:25
  mechanism to do so?
• 13:26
  Because I think a lot of people got caught in this PPP loan stuff Well, you know, people
• 13:32
  taking draws and stuff and not having paperwork, not having a 941 from a payroll
• 13:36
  company to prove what you had been paying yourself.
• 13:39
  And so I kinda wanted to just talk about the cases and how you can pay yourself in a
• 13:44
  business.
• 13:45
  You know, you're absolutely right.
• 13:46
  You know, it says, It worked if you were a sole proprietorship or or just an LLC, but if you
• 13:51
  were an s corp and didn't have payroll, you were out of luck when it came to get into
• 13:55
  pizza.
• 13:55
  You're absolutely right about that, Melinda.
• 13:57
  Really, as an owner, you owe it to yourself to pay yourself.
• 14:01
  Right?
• 14:01
  You you owe it to yourself.
• 14:03
  You get up every day.
• 14:03
  You owe it to your family.
• 14:04
  You owe your team to pay yourself.
• 14:06
  And personally, I look at it from my own personal situation, you know, when I first
• 14:10
  started profit first, actually, right before I started profits, what made me go to profit
• 14:13
  first was I wasn't paying myself.
• 14:15
  I was paying my employees first and whatever was left over.
• 14:17
  That's what I took for me, and that's what made me a die hard convert when it came to profit
• 14:22
  first.
• 14:22
  And it was interesting because I was working so hard because, you know, I was competing with
• 14:26
  those government contracts.
• 14:27
  I was lowball and the price was like, everybody else.
• 14:29
  Right?
• 14:30
  And what was happening was I couldn't hire anybody.
• 14:32
  Right?
• 14:32
  I couldn't hire anybody because nobody would work for free, but me.
• 14:35
  And I remember one day, you know, I was sitting at my It was a Saturday.
• 14:39
  It was it was, like, right before April 15th.
• 14:41
  And you know it was an accountant.
• 14:42
  You don't play around April 15th.
• 14:43
  And the back went out.
• 14:45
  It was, like, snap.
• 14:46
  It went out.
• 14:47
  And I ended up that week on bed, and I was a muffler relaxed.
• 14:51
  And I was like, man, I wish I had money to hire somebody.
• 14:53
  And if I had been paying myself, if I had been paying myself all along, I could have taken my
• 14:58
  pay and hired somebody to do the work.
• 15:00
  So that's, 1st of all, realizing it's important to pay yourself because not just for yourself
• 15:04
  and your family because they deserve be paid because they've they've sacrificed you.
• 15:08
  Right?
• 15:08
  They've lost time with you to do this business, but also to be able to pay somebody else in the
• 15:13
  case that you have to step out, it's So definitely putting that money aside from owners
• 15:19
  pay, you know, from your collections, that percentage is extremely important to do that.
• 15:24
  Awesome.
• 15:24
  Awesome.
• 15:24
  Well, listen.
• 15:25
  We're gonna go to break it.
• 15:26
  When we come back, we are gonna talk more about how to get your finances straight in your small
• 15:31
  business.
• 15:32
  I'm Belinda Emerson, the small biz lady, and we will be right back.
• 15:38
  People always ask me, how can I become my own boss?
• 15:42
  With multiple features in the New York Times Forbes on ABC News, as America's number one
• 15:47
  small business expert, I know a thing or 2 about how to do it.
• 15:51
  Hi.
• 15:52
  I'm Melinda Emerson's small biz lady.
• 15:54
  And I've been coaching small business owners since 2008.
• 15:58
  That's right.
• 15:58
  I've been helping small business owners plan for success since the last recession.
• 16:03
  And I'm still here reaching over 3,000,000 small business owners a week online.
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  I've spent the last 12 years compiling exactly what I did to become my own boss.
• 16:13
  I even broke it down into a 6 step system, and my best selling book become your own boss in 12
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  months.
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  Over a hundred thousand people in multiple languages around the world have this book.
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  And due to the pandemic, I know people need help.
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• 17:02
  Welcome back to Small Busch Chat Live.
• 17:04
  I'm back with my guest, CPA, Suzanne Muraga.
• 17:07
  She is talking to us about how to boost your financial management in your small business.
• 17:13
  Alright, Suzanne.
• 17:14
  Let's talk about it.
• 17:15
  How important is it to have a good billing strategy in your business?
• 17:21
  It is extremely important to have a good billing strategy.
• 17:24
  And to the point
• 17:24
  that you can actually collect
• 17:25
  up front or put automated payment plans and place, you know, and and there's some great
• 17:32
  ones now.
• 17:32
  You know, Stripe will do that.
• 17:34
  QuickBooks will do that where you can put your your customers on autopay.
• 17:37
  So you will have to chase them and collect them.
• 17:39
  Those are great, you know, for the you guys that are in construction.
• 17:41
  You know, make sure you're doing your progress billings too.
• 17:44
  You know, don't wait until the end to collect, you know, have those time points where you're
• 17:48
  collecting.
• 17:48
  Is also very important, but definitely you wanna have a strong billing strategy where
• 17:53
  you're not chasing up front.
• 17:55
  You know, make sure you're getting those retainers up front so that that you're at the
• 17:58
  end of the day, you're you're at least covering your costs.
• 18:00
  And then by the time you hit that final point where you're you're ready to close that bill,
• 18:05
  you know, it's all profit at that point.
• 18:08
  Right.
• 18:08
  Right.
• 18:08
  Now one of the things I've experienced with some of the businesses that I coach is as the
• 18:13
  EIDL loans or the emergency industry disaster loans came around, people qualified for loans,
• 18:19
  and they were scared to sign to take the loans.
• 18:23
  Now can you talk about this?
• 18:25
  You don't have any clients that it came to you like, well, I qualify for the $60,000 loan.
• 18:29
  I just I don't know if I and I'm like, you'll never, in your life, get money cheaper, then
• 18:35
  you can get it right now.
• 18:36
  Please side side quickly.
• 18:37
  I can't get the paperwork back, but I but I was wondering if you experienced that with any of
• 18:43
  your clients, like, being concerned about the EIDL loans.
• 18:47
  Right.
• 18:47
  And it really depends on what you could handle personally, right, too, because some people
• 18:51
  don't handle debt very well, personally.
• 18:53
  And then something else just came out with the EIDL, Melinda, that you're you're probably know
• 18:57
  about.
• 18:58
  They just allow you now a half a $1,000,000.
• 19:00
  Oh, yeah.
• 19:00
  Personally guarantee that, but you can get a $500,000 EIDL loan potentially if you go
• 19:05
  through underwriting, which can be scary for some people too.
• 19:08
  So so you're personally guaranteeing that.
• 19:11
  You're right.
• 19:11
  The interest rates were extremely low on EIDL.
• 19:14
  And, plus, there was the grant portion too that you got a grant portion of the EIDL that you
• 19:18
  never have to pay back.
• 19:19
  It ended up being a $1000 employees.
• 19:20
  I think it started out as $10,000 with it, and it was great to have that as a cushion.
• 19:25
  If you, you know, needed it and worse than the chef, you don't use it.
• 19:29
  Right?
• 19:29
  You don't use it.
• 19:30
  You don't need it for those operating expenses, then you just take it and pay it back.
• 19:33
  Right?
• 19:33
  So so it's, again, it's personally, you know, making sure you can manage that debt, I think,
• 19:38
  is the key with it and it's a lower
• 19:40
  Well, I I think it's 15 to 30 years to pay back a loan.
• 19:43
  Do it.
• 19:44
  Do it.
• 19:44
  Do it.
• 19:45
  But also make sure you know how you return every dollar you borrow and $3.
• 19:48
  That that's the other thing I would say.
• 19:50
  Now talk to me about I know that because of the pandemic and some of the legislation and things
• 19:55
  that have come out, that there are some tax advantages that everybody might not be aware
• 20:00
  of.
• 20:01
  So maybe even for the people that didn't necessarily qualify for PPP or didn't get any,
• 20:06
  they kind of been taking care of people on the back end with some of the the tax stuff.
• 20:10
  And I was wondering if you could just quickly explain to us some of the payroll tax that
• 20:14
  people are are really benefiting from right now.
• 20:16
  Yeah.
• 20:17
  Let's talk about some of my favorite tax things that are happening with the PPP loan.
• 20:20
  First of all, it's changing every single day.
• 20:22
  When I say today, it might be different completely tomorrow, so you could be aware of
• 20:25
  that.
• 20:26
  That's one of the things that we found.
• 20:27
  One of the things that we're super excited about, and you guys may have heard about it,
• 20:30
  with the PPP loan, when it has forgiven, right, and this is loan 1 and loan 2.
• 20:36
  It is a nontaxable event.
• 20:37
  And I'm telling you, this has been one of the biggest wealth transfers in America.
• 20:41
  Like, I've seen people get $300,000 PPP loans completely forgiven and being a tax free.
• 20:46
  So that that PPP loan is a tax free loan once it's forgiven.
• 20:50
  Also, the grant portion of the EidlO when that is not taxable income too.
• 20:55
  So that's a tax free transaction for you, which is really good.
• 20:58
  One of the other things that's really great about it too is if 2020 was a hard year, right,
• 21:03
  let's say you had the pivot online, you were previously brick and mortar, you had you suffer
• 21:08
  a loss in your business.
• 21:09
  And and and you guys know if you had a 25% decrease in revenue in any particular quarter,
• 21:13
  you got 2nd PPP low.
• 21:15
  But if you also experience a loss What happened was after tax cuts and job acts that that went
• 21:20
  came through a few years ago, you had to carry those losses forward.
• 21:23
  Right?
• 21:23
  But now you could actually carry them backward.
• 21:26
  When you carry them backwards, you can actually get a refund for the last 5 years.
• 21:30
  So if anybody has had a loss, definitely take a look at getting those returns amended.
• 21:35
  In order to get a a refund to get you some extra cash in your pocket because of those
• 21:39
  losses that she may have incurred.
• 21:41
  The other thing that that happened to in December.
• 21:44
  We had a a few good tax tax things that happened as meal meals are normally 50%
• 21:49
  deductible.
• 21:49
  They're a 100% deductible because they wanna give restaurants money.
• 21:53
  Right?
• 21:53
  So now your meals are a 100% deductible.
• 21:56
  So if you're, you know, taking your office team out to launch, or you're interning a client,
• 22:01
  you know, those meals are a 100% deductible.
• 22:04
  So definitely take advantage of that.
• 22:06
  And then also for those that are that give to charity, right, whether you high, or or you
• 22:10
  just give the charity just period.
• 22:11
  Right?
• 22:12
  You know, you used to have to just itemize in order to get those charitable deductions.
• 22:16
  Well, now for 2020.
• 22:18
  If you don't itemize, you can still take a 300 deduction on your 1040 for charitable
• 22:22
  deduction.
• 22:22
  And it's and if you're married, filing Julie in 2021, you can get $600.
• 22:26
  So those are some of my favorite tax things that are happening because of the PPP loan.
• 22:30
  Awesome.
• 22:31
  Awesome.
• 22:31
  One of the other ones I know though is that if you are paid payroll tax in 2020 and payroll
• 22:37
  tax in 2021.
• 22:40
  I believe for 2020, 50% of the employer payroll taxes you paid is 50% deductible.
• 22:46
  And in 2021, I believe it's 70 percent deductible.
• 22:50
  So if those of you that have employees been paying payroll taxes, there is some more money
• 22:55
  out here for you.
• 22:56
  So make sure you talk to your accountant all this stuff before you file so you can get
• 23:01
  everything back.
• 23:02
  And last word, if you're trouble if you're having trouble saving for your quarterly tax is
• 23:08
  is it better to just pay them monthly so that you don't get behind?
• 23:12
  You know what?
• 23:12
  This is why I love profit first.
• 23:15
  One of the things in profit first is that you have to have a tax account.
• 23:18
  Right?
• 23:18
  We put 15 percent of your revenue into a tax account.
• 23:21
  So nobody has a reason to not pay taxes or have enough for taxes unless you're in California.
• 23:25
  Now California, say that's communist.
• 23:27
  Totally different situation there.
• 23:29
  But, you know, if you're winning, like, the 10% of your top line revenue into taxes, you're
• 23:33
  gonna have enough money to go out.
• 23:34
  If you if you don't, then we need to have a different conversation.
• 23:37
  We really need to read the book to get that implemented.
• 23:39
  Another thing is if you're an S corporation, which a lot of businesses are corporations.
• 23:43
  Right?
• 23:43
  You're gonna pay taxes as you go.
• 23:44
  Right?
• 23:44
  So as you have officer payroll, just like, as Melinda said, right, you're gonna be paying
• 23:48
  those taxes as you go.
• 23:49
  So you're gonna be better that way.
• 23:51
  And so you're not gonna owe as much at the end of the quarter.
• 23:53
  And plus you're gonna be implementing profit first, so you're gonna have a reserve set aside
• 23:56
  for it.
• 23:57
  Good stuff.
• 23:58
  Good stuff.
• 23:58
  Well, Suzanne, thank you so much.
• 24:00
  Don't go away.
• 24:01
  We're gonna bring you back, but we really appreciate this great insight.
• 24:05
  Suzanne, what is your favorite podcast?
• 24:07
  You know, lately, it's been small busy chat.
• 24:10
  I've been vegging out on that one.
• 24:12
  Well, I appreciate that teacher pet.
• 24:17
  Okay.
• 24:17
  Alright.
• 24:18
  And, Suzanne, what's your favorite business app?
• 24:20
  QuickBooks.
• 24:22
  I should've known that.
• 24:23
  Right?
• 24:24
  What would a CPA say, but quickbooks?
• 24:27
  Alright.
• 24:27
  Fair enough.
• 24:28
  Alright.
• 24:29
  Suzanne, what's your favorite old school marketing tip?
• 24:32
  Network.
• 24:32
  Get to know people.
• 24:34
  Alright.
• 24:34
  Networking definitely still works online and offline still works.
• 24:38
  And last question, best business book you've ever read.
• 24:42
  Suzanne, what is it?
• 24:43
  He's on profit first.
• 24:45
  I somehow
• 24:46
  somehow I'm clairvoyant.
• 24:48
  I knew you were gonna say that.
• 24:49
  You guys are awesome.
• 24:50
  Thank you so much for being here.
• 24:53
  If you want more information about how to start and grow a successful small business, head on
• 24:57
  over to my blog.
• 24:58
  Succeed as your own boss.com to get more information.
• 25:02
  And we always say here, at smallbizchat.
• 25:05
  Our mission is to end small business failure, but I leave you with this.
• 25:09
  You never lose in business, either you win or you learn.
• 25:13
  God bless everybody.
• 25:14
  Good night.
• 25:16
  Thank you for listening to the Small Biz Chat podcast with Melinda Emerson.
• 25:22
  For more resources and small business success strategies, visit succeed as your own boss.com.
• 25:28
  Subscribe to this podcast wherever you listen to podcasts and join us next Wednesday.