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How to Pay Yourself as a Business Owner S-Corp vs LLC · Productive and Paid with Jamila Payne

• 0:01
  Jamila Payne: Welcome to another episode of the Productive and Paid podcast. And I am so excited because we have a special guest today, Chika Obie, who is a CPA for over 16 years and a coach for high achieving women entrepreneurs who figured out success, but finally want to figure out how to enjoy it. And Chika helps them to do just that. So you are going to get your money together with our special guest. So welcome to the show, Chica.
• 0:33
  Chika: Hey, Jamila, I'm so happy to be here. Thank you for having me.
• 0:35
  Jamila Payne: I'm so happy to. my pleasure. So let's just start off with, can you tell us about a moment when you decided to fully get paid for the value of your work?
• 0:53
  Chika: Oh wow, yeah, so funny. I've been in this entrepreneurship space for like you said, 16, 17 years at this point. And so when I first started, I was like 24, 25 and I just came from. feeling so burnt out and overwhelmed from public accounting, specifically I was at one of the big four accounting firms working in corporate tax and working like 70, 80 hours a week. So I was so burnt out, I was so young and I was just so ready to just do something different, whatever that looked like. And so funny enough, I was already a CPA at that point. And so I remember, Having my savings right I was really good at saving money. So I had my savings and I just wanted to kind of like travel more and just enjoy life more and But at the same time it's like, okay. Well, let me make some money also and so I started putting my business out there on like Craigslist and telling people that I filed taxes so I can help you out. And at that time, again, I wasn't thinking like a business owner. I was just like done with the exhaustion, done with the micromanagement, done with the overwhelm. And I was just doing my own thing in a way that just felt fun as any, you know, 20 something year old would. And so in the beginning, I definitely Was not charging my worth my value. I looked at it like I'm new in this business owner space. Am I even a business? I'm just doing people's during tax time so I didn't have that mindset of business owner of entrepreneur and so it took me about five to seven years of Again, I was living life. So I was going to Thailand. I was I was
• 2:54
  Chika: becoming certified in Bikram Yoga, becoming certified in holistic nutrition. So I was doing all the things within these five to seven years. And so, but it took that long for me to recognize, girl, you're a CPA. Act like it, charge like it. And so maybe those seven years or so, I went from charging like H &R block type prices to finally realizing like Chica, I don't care how quick you are with doing the work. It's not about the time. It's about the value, the transformation. It's about the way that I interact with my clients. They love me. They can go anywhere else, but why do they keep coming back to me? There's something there. there, charge your worth. And so I finally realized that because I then started feeling burnt out, overwhelmed in that space of entrepreneur. And so by raising my prices and charging my worth, which took time, but yeah, although it took time, it was worth it. And I didn't know what I was doing, but I I felt into it and yeah, that's what happened.
• 4:06
  Jamila Payne: I love it. We've all been in that place where we kind of started off early in our careers or entrepreneurial journeys where we were under charging. Do you remember like what you initially were charging to what you went to in your first big price increase?
• 4:19
  Chika: gosh. Yeah, gosh. So perhaps at that time, like if it was just a regular 1040, right, a personal tax return, one state. I might've charged that person like $200. And then if it was like a S-corp return, like one owner, I probably charged like $500, $600. And so again, yes, it was 16, 17 years ago, but still at that time, what would have felt right at that time. would have been closer to basically double the prices. So 500 for that 1040 and at least a thousand if not 1500 for the corporation at that time.
• 5:07
  Jamila Payne: That totally makes sense. So let's share that knowledge that you gained about, you know, paying yourselves, right? And talk about how other women can start paying themselves consistently, especially if their revenue is fluctuating. So I talked to so many women entrepreneurs who are in a business and they're making good money, Chica, like, you know, 200K, 250K, 300K. and they're not actually paying themselves even at six figures right they're not paying themselves consistently here and there they're doing draws and stuff like that but there's no consistency in how they're starting to pay themselves so how should women start doing that if they're worried about the idea of their revenue be fluctuating, you you have a 30K month, then you have a 15K month, then you have a 50K month, then you have a, you know, like it's just, it's the nature of business. But how can we start thinking about and preparing ourselves to consisting our, pay ourselves with fluctuating revenue?
• 6:21
  Chika: Yeah, no, this is a very, very good question. And the answer really varies depending on the business owner situation. And so let's just be specific as to what you just described. So the woman making, let's just say her revenue is 250K and after expenses, her profit number is 100K, right? So we're dealing with that 100K profit number. And even in the midst of of every month revenue fluctuates, right? But we know that by the end of the year, it would be about 250 in revenue and about 100K in profit. So just knowing that big picture, it's important to also know the basics of... an owner paying themselves based on the type of structure their business is, right? So if that same business is a corporation, they've elected to be taxed as an S corporation. In that sense, that business owner needs to be on salary. They need to draw wages from their business and pay themselves with W-2. So at that point, just taking draws from the business, no, no, no, the IRS will not allow that if you are a corporation. Now, pause on that real quick. Let's say this is the same situation, right? The same numbers. However, this woman business owner is an LLC. see they're not a corporation. So in that case, then yes, they're taking draws essentially. But then again, as a CPA, I would also say, wait, if your profit number is 100k, anything over, I would say 70k or more, and you're not an S corp.
• 8:17
  Chika: You could be leaving money on the on the table. And so that's a whole nother situation there. So let me just put a pin in that as a woman who profits more than 70 K annually consistently and they're not an S Corp or corporation. There could be potential savings there. Right. So put a pin in that now back to the example of the woman who is an S Corp and needs to figure out how much how can she pay herself if she hasn't been doing that. Well in this sense before we just pay any kind of amount we need to figure out okay what is a reasonable salary for this specific business owner, we need to look at, what industry is she in and how much does someone generally get paid within that industry, within that geographic location? And so again, let's just say this person is a website designer. That's the business. So as a website designer, profit number is 100K and she lives in Texas, know, basically somewhere where it's a big city. So Houston. Houston, it's Houston, LA, New York, right? Big city. And so again, I don't know what a reasonable salary is in Houston for a web designer, but that's something that we can easily Google. We can look at one of those hiring websites, Indeed, you know.
• 9:28
  Jamila Payne: Yeah.
• 9:44
  Jamila Payne: Yeah, yeah, with the calculator or whatever the salary calculators. Yeah.
• 9:50
  Chika: Exactly, and then we'll figure out the range. So let's say the range for that is generally 40K to 80K a year in salary. Cool, the IRS deems that as reasonable. That is the standard based on these national, international websites, salary websites. Cool. So now I'm back to this woman. Again, so if we're looking at 40K to 80K being reasonable, her profit number is 100K, then again, there's technicalities as to, well, do we pay her 40K in salary or 80K in salary and why? What is the benefit to choose one versus the other? Now, tax-wise, of course, remember, She could pay herself salary. Yes, she has to pay herself salary and she can still take draws from the business. She can do both. What is the sweet spot? And again, as long as it's reasonable, the IRS will allow it. So if 40K is reasonable, knowing that with salary, we're also looking at payroll tax, right? You gotta take out the social security tax, the Medicare tax, all those things, which is about 15%. So cool, well, let me keep the salary at the lower end. because there's that 15 % tax on top of it, payroll tax, and then the rest, cool, I can take that as a draw from my business. So in doing such a thing, you're adhering to IRS requirements as a corporate owner, and you're able to still take draws where it's not being taxed, the self-employment tax, the 15%, and so there's savings of about 15 % on that
• 11:43
  Chika: Again, if 40k is salary and the remaining 50-60k is distributions from your business, that 50-60k is not being taxed. self-employment tax, which is again, 15 % that you're saving. So if you do the math real quick, that's about $10,000 that you're saving. Now, imagine someone just looked at a TikTok and the TikTok says, oh, you own an S-corp, you need to pay yourself salary. And you're thinking, well, I'm going to pay myself the most money in salary. And you go ahead and you pay all of your 100K profit as salary. No, don't do that because now you're also paying 15 % self-employment tax on that 100K, right? So $15,000 you're paying which was reasonable, it's only 40K. So that 40K, 15 % is 8,000 versus 15,000.
• 12:33
  Jamila Payne: you
• 12:48
  Chika: Right, if you paid the full 100K in salary. So again, that savings of 7000 and again, that's only related to salary. So we if we think of all these other types of ways to save money in the business and on top of that, the fact that it's year after year after year, it really, really adds up. And so I know that this is a long answer. However.
• 13:11
  Jamila Payne: No, it's perfect. It's perfect. Yeah.
• 13:13
  Chika: Okay, but I want you to see just how nuanced this is. It really is the answer of, it depends. Let's break it down based on your business.
• 13:18
  Jamila Payne: Yeah.
• 13:24
  Jamila Payne: Is there a certain like mandatory variance between what you can pay yourself in salary versus a draw? Like does the draw, because let's just say you pay yourself that 40K salary and you're all good with that. but you have a couple of big unplanned months that you didn't plan to be as big as they were. And so you wanna pull from those profits out of the business and be able to take that off the table. Like how do you, like is the IRS like, wait, you only paid yourself $40 in salary, but you took a, you know, 50K draw. Is that allowed, not allowed? Are there any rules around that?
• 14:12
  Chika: Yeah, so the rule, like the general rule that the IRS has around salary, the owner paying themselves is the question, is this amount considered reasonable?
• 14:27
  Jamila Payne: reasonable, okay.
• 14:29
  Chika: And there's literally CPAs out there who specialize in reasonable salary analysis because it could be a big deal. you know, we're we just did the one example, but imagine these corporate owners making millions and billions of dollars. And so these analysis really, really matter when you're when you're talking huge numbers. But in the sense of, you know, a single owned corporate corporation again, We just, you know, look at one of those websites indeed, or, you know, look at the salary range and generally you want to not necessarily go with the higher end of it because again, think about the self-employment taxes, the payroll tax. You know, part of why we elect S-Corp status is to save on the payroll tax. And so, but if you're paying all of your profit as payroll, It's like you're doing the opposite of why you incorporated in the first place. so that's, super high level. And I would also want to say that if someone is making 200K, 300K in revenue, right, they're making the multi six figures and higher. One of the things you want to invest in is working with a CPA, right? Someone who goes beyond just following your taxes, which I call, that's compliance, right? They're just taking care of what needs to be done. Hire a CPA or an enrolled agent, someone who is tax strategy minded, tax planning minded. They consider what your 12 month goal is, your three year goal, five year goal. as it relates to retirement, as it relates to personal, if you want to be a homeowner in the next year, if you are about to get married in the next year, like they consider all those things so they can implement and project the numbers for you so that you can again see, okay, what are ways that you can minimize your taxes, right? So that long-term planning piece is huge. And I would implore again, women that are doing the damn thing, making the money,
• 16:48
  Chika: to really look at investing into a tax strategist, CPA.
• 16:55
  Jamila Payne: I love that. Okay, so just to clarify, sounds like it doesn't matter how much draw you take as long as you're taking that reasonable salary to fit the IRS requirement.
• 17:08
  Chika: Exactly, right? let's look at it as three buckets, right? The reasonable salary bucket, you wanna make sure that you hit that number. And again, that's gonna kinda be based on the industry standard based on your location. The second bucket is, okay, owner's draw, right? Because imagine if your reasonable salary amount is 40,000, right? But 40,000 isn't enough for you to live off of. up the rest with owner's draw. So maybe you take out another, you know, 40K, whatever you want, you can. You don't have to take everything remaining out as a draw. which leaves the third bucket, which is just your profit, leaving that in the business. As you mentioned, rainy day or you have a big project coming up in six months, you wanna keep money in your account as well. So I know a lot of people, have our business checking accounts, but many people don't have a business savings account. And so I would implore women to have that
• 18:18
  Jamila Payne: us.
• 18:22
  Chika: And so based on again, what your profit number is, maybe you say, maybe you have a rule where 10 % of my profit number goes to this business savings account and I just keep it there. Just keep it there, right? Just grow that number. And again, it'll give you peace of mind. Cause sometimes you don't know what might come up, what new venture. And so it's really great to have that money set aside.
• 18:48
  Jamila Payne: Yeah, I love that. Okay, so one other salary question before we move on, which is let's go to the LLC example that you mentioned. So single member LLC, not in a sub as status. And they're thinking about, I wanna start paying myself, but I don't know how to do it. Should I take a percentage of revenue? Should I take a flat fee? How should I start to think about those draws from my business.
• 19:22
  Chika: Yeah, and I think the first thing a woman who is an LLC owner, her putting herself on salary on W2 salary is not needed, it's not a requirement. In fact, don't do it. You don't need to do that. Please don't as an LLC owner. But yes, you do want to find a way to budget paying yourself in your regular expenses, right? We always think of like, oh, shoot, I got to pay that person. I got to take care of this bill. But we forget to pay ourselves like officially. And so I would say, especially if month to month, what you bring in fluctuates, maybe you just set a percentage amount. and so that number, think, reasonable number to start off with might be 10%. And again, it is gonna depend on well, how much are we talking about each month? So let's just use a real number. Let's say you're used to bringing in on average $20,000 a month. So 10 % of that is what, 2000. So of course that may not, that's probably not enough, right? Even to cover rent or cover mortgage. And so if your revenue is fluctuating month to month, then again, what you wanna know first is, well, how much is it gonna, does it cost me to live? month to month, right? What are my personal expenses? My housing, my utilities, the car, the children, right? Household. Like figure out, first of all, you need to know, well, what is that number? What is that number? So that's important. Do you have help, right? You have your spouse and how much do they contribute so that whatever they're contributing, you can then kind of reduce or deduct.
• 21:15
  Jamila Payne: Yes.
• 21:29
  Chika: from that total amount of your personal needs each month. And then from there, you can say, okay, let's just say that number is I need 5,000 a month, I'm bringing in 20,000 on average a month. If it's possible, then easy. Take that amount, take that 5,000 out each month. Easy peasy, right? It's easy when you're making more than what you actually need and it's able to cover the rest of your business expenses. But let's just say, as you mentioned, the months are... are varied and so the next month you only bring in 10,000 and that's not enough. Like you have 12,000 in regular business expenses before you even pay yourself. So in that month, okay, you don't have enough. And so we talked about earlier having that business savings account. In the case you do need money and so cool that can help. But I would always say that, having at least, I know minimum three months, but ideally six months of a cushion, a savings, you know, the same way the personal finance people will say have six months of an emergency fund for personal, I would say also have a six month cushion for your business because in those months where the numbers are maybe lower than what's ideal for you to pay yourself, cool, maybe that month you get it covered.
• 22:52
  Jamila Payne: Yeah.
• 23:07
  Chika: from your savings and then let's say the month after that, cool, now you brought in 30K. Now with that, now you can pay yourself the regular 5K and with the additional, you can replenish your savings again. So that's the way to go about it.
• 23:26
  Jamila Payne: Yeah, I love that. One thing that I would just ask you Chica is, is there anything that you would say to speak to the mindset of making that shift to getting yourself to pay yourself consistently? And I'll just share it personally for me. I remember earlier in my business, I realized that my business finances were thriving, but my personal finances felt wobbly. And it was because I wasn't consistently paying myself, which is why I talk about it so much now to women because, know, hey, you know, learned the lesson, got the receipts and now try to pass on, you know, what I learned in my coaching to other women entrepreneurs. But what I would say is, There was there was something that had to shift in me that started to realize like, like I need to have a, I need to be planning for future me. I need to have a retirement. I need to have these things in place in my life. And while my business is an asset and an investment, I still need to be accumulating those assets and investments on the personal side as well. So just any thing that you could share in terms of how do we make that mindset shift to kind of own our value on the personal side as a business owner because you'll hear women say, oh, my business is my baby. they're putting everything back into it. And oh, I don't need it. I don't have to take as much for myself.
• 25:18
  Jamila Payne: but not everybody has that luxury, right, to not take as much for themselves. So any mindset shift tip that you would give us there.
• 25:30
  Chika: yeah, this was big. It's the most interesting thing that us women, first of all, we're so badass. We literally run the world and we make everything so easy. We just know how to get things done. We're amazing. And then at the end of the day, it's like, No, let me, you know, it's like we discount ourselves so much. And so I would just say, first of all, remember that without you, there is no business. Like that's how valuable you are. So really remember that when you make these decisions, right? You're grinding, you're helping others in your business, your business is thriving, successful, beautiful. But remember, you did that, right? Without you, there's no business. so knowing that it's like, okay, well, today is today. What do I want a year from now, five years from now, 20 years from now, let's work that into our strategy, our day to day. And so with that, and also knowing that by investing into your future self, Your current self is also benefiting, right? Like with the savings, the tax savings, the peace of mind, all those things. And so that's one thing I would, I would first tell women like you matter, you need this, this is all about you. And then also with that said, I understand how it can feel daunting. It's like, okay, pay my future self, but what does that look like? And so we talked about earlier how month to month we can determine, well, first of all, how much are my personal spending needs each month, right? So first figuring out that number and figuring out, okay, based on that number, can I take that out the business? Can I automate that?
• 27:38
  Chika: I think a lot of times we're so caught up with having to make decisions, right? It's part of business decision making, but how can we automate this so that it's just done every first of the month or fifth of the month, whatever that date is each month, it's done, it's taken care of, you get paid first, right? And then all the other bills, they're gonna get paid. We always find a way, right? All that other stuff will be taken care of, but let's take care of ourselves first, right? So that's the current thing. And then in terms of retirement. That's another thing I think when you work with again whether it's a CPA whether you have a financial advisor on your team these are people where retirement savings and and taking care of the person Financially that that's their mindset, right? So we're so by having that person on your team. You're gonna get taken care of they're gonna Handle it for you. They're gonna ask you the questions that they need to know so that they can move forward so if it has been this daunting task on your plate and you haven't been working with a financial planner or CPA. And oftentimes when you work with one, they can help you find that other, you know, the person that you need. So again, have a financial team. If you're dragging your feet around it, every day you're losing out on compounding interest, right? So think about it like that. And so it's not about it being, damn, now I gotta pay this CPA, damn, now I gotta pay this financial advisor. No, it's like, freak, I'm losing out on easy money.
• 29:22
  Chika: compounding interest, passive income. Think of it like that. Like you're working so hard actively and you're doing an amazing job. Love it. But like, how can it be easy? How can you also pay yourself in an easy way where you're taken care of for years and years and years? So hopefully that mindset shift helps. And again, like you don't have to do it by yourself, even if you're hiring that person just to kind of get started.
• 29:26
  Jamila Payne: Yeah.
• 29:52
  Chika: And then once you have that system in place, they've helped you with that, then maybe you can do it yourselves after, if that's something that you need. But you just gotta be honest with yourself. Don't bury your head about it. I think that's what a lot of women do. I'll handle it next time. I'll handle it when I get time. But as we all know, you never have time unless you make the time.
• 30:14
  Jamila Payne: Yeah, so well said. Can you talk about some ways that we can legally start incorporating our personal expenses into the business? Like I've heard of people that are, know, instead of like, you know, maybe... leasing a car under the company. But I mean, of course, they need to have some kind of delivery or driving component to what they do in their business. So legal ways that we can start thinking about how to incorporate some of our personal expenses into the business to reduce personal expenses and get more paid out on the business side.
• 31:01
  Chika: Yeah, for sure. Yeah, the car one can be tricky just because if you're putting a auto lease in the business name, first of all, it's like, well, how often are you really using that car for business purposes? Oftentimes it's not even 50%. And so in that case, you're not going to be able to deduct it. as much as you think you could because you're not using it at least 80 % for business reasons. So a lot of us in the type of businesses that we have, the car auto lease, put that in your business, like that doesn't even apply to us, right? Like honestly, but certain things, first of all, I wanna say that, A business expense is generally gonna be something that is ordinary to the business and necessary to run the business. So when we think of those two words, okay, it has to be ordinary and it has to be necessary for my business. Okay, cool. Knowing that what makes sense in my personal life that could potentially be business wise. So something that comes to mind is, you know, space where we're always wanting to better ourselves, professional development, business development, going to these conferences and things like that. So let's say you were already planning to take a family trip to Florida for five days and then you come to find out, shoot, there's a one day business event that is gonna be happening around that same time that you've been wanting to go to. So strategically, you can plan that family trip to where a portion of it now becomes business, right? You're gonna be able to write off the conference and because there's a business use to that trip, now part of your flight.
• 33:05
  Chika: is gonna be a business deduction, right? Because it's gonna be necessary and ordinary for the business. Part of your transportation, so like your Ubers, part of your hotel stay is going to be deductible to the business as well. So let's say again, it was a five day trip, family trip that at first 0 % would have been deductible. But now because you've found a business aspect to that same trip, now at least 20 % of that trip is going to be deductible because you found that one day business event. So that's one way, right? We can figure that out. Because there's times, look, for myself, like a friend might want to go grab something to eat. And I'm like, I'm busy, or you know. But then you say, oh, wait. but I could potentially make this a business expense. Like for instance, let's say that same friend is a business owner herself. We spend a part of our time talking about business. Maybe we do a collaboration together. We have that conversation during the lunch. Cool. Now this same lunch is now a business deduction. It's a business lunch because yes, it's with my friend, but she's a business owner. And we talked about business during that time. So. So things like that, think making personal things business expenses is very, I don't know, it can be very motivating. It can be very motivating to get us out the house, get us being social again. And speaking about the house, if you work from home, right, your home is a personal thing, but if you work from home,
• 34:46
  Jamila Payne: Yeah.
• 35:00
  Chika: part of that home can become a business expense, right? You have your home office. And so that's actually a business expense that I see a lot of people missing out on. I know that there's fears with the IRS because it is a heavily audited. category because of people abuse it. But if you're legitimately working from home, you're a business owner, you have the dedicated business space. and you're tracking the numbers, right? Like you're not making numbers up, which people are funny. People will make stuff up. Then it's legit. And you're able to substantiate the position you take on your tax return. But yeah, deduct your home office. So yeah, I hope that was helpful. Those are just some ideas.
• 35:49
  Jamila Payne: Yeah, yes, absolutely. One other thing that comes to mind that I'd love for you to kind of clear up for us is the clothing part. So now we're in an environment where, you know, everybody needs a brand shoe. You got to have your images for social media and all of that stuff. You know, what is allowable on... Clothes side because I've heard different things like if you're using a service like a rent-a-runway Then it's okay, but if you are just buying stuff from you know wherever Zara or Macy's no, it's not okay. So clear that up for us Chica like where are How can we and and another kind of internet thing I've heard I've heard the the guys on the internet saying I wear suits and I just get my company logo or something like engraved on the inside and now it's a uniform, you know? So clean this up here Chica, what should we really be doing?
• 36:48
  Chika: That is so cool. Wow. See, that one, yeah. Yeah. So to me, so what you just, let me just. tackle the, wow, the suit uniform thing. So that one is actually really tricky because on one angle, I can see, wow, your logo is on it and that's what you wear when you're doing business. One angle I can see perhaps you have a case, but then on the other side, it's like, it's a suit. You wear this same suit. outside for personal reasons, for non-business reasons. And so that depends, that example is very touchy. Like if that was a client of mine, I would cite, would literally, let me sit with this IRS tax code and let me see, right? And then I would really want to hold on to the...
• 37:45
  Jamila Payne: No.
• 37:53
  Chika: to the research so that in the unlikely case of an audit, you know, we can substantiate that. But I wouldn't blindly say, yeah, yeah, take that deduction in that case. But in terms of you mentioned also brand shoots, for instance, because that's a big one. And that's something that I... I do myself, right? have brand shoots for my business. And so yes, the brand shoot itself, yes, that's a deduction, right? That's ordinary and necessary to my business as I am marketing my services, I need to do these brand shoots. Now with the brand shoots, I hire a makeup artist, I hire a stylist who gets my clothing together. And again, so for this, these two hires are necessary and they're ordinary in the sense of marketing in the space of me being my brand essentially. And so I can substantiate that. Now with clothing. Clothing is really touchy because the IRS says if you can wear these clothes out and about just normally, then no, it's not a business deduction. But in the case of, let's say, an actress or an actor, they're going on an audition and they need to be wearing these thousand dollar brands, these luxury brands just to go to the audition. The IRS could, you know, the law could substantiate that position for
• 39:30
  Jamila Payne: What did you feel?
• 39:34
  Chika: an actress and actor buying those clothes for those audition purposes where if they were not wearing those clothes, they would not get the audition. that's literally,
• 39:43
  Jamila Payne: No.
• 39:46
  Chika: a thing like it's you know, it's a thing and so so in that case, yes, they they need to do it. But honestly again, it depends on your business the rent the runway those those clothing subscription companies. I would say that it's easier to get away with that, especially if you're subscribing to that service just for like the the one month because that's when your brand shoot is so that might be a $200 subscription cost and once you're brand shoot is over, you don't even, you don't use it anymore. That's easier to substantiate than if I'm out buying a new wardrobe. Yes, it's for the brand shoot, but after the brand shoot, I'm keeping the clothes and I'm going to wear those clothes ongoing. So yeah, so it's a tricky topic and I, and My disclaimer is, it depends. Because I don't want anybody listening to this and saying, well, Chica said, no, no, no. Chica said, talk to your accountant.
• 40:45
  Jamila Payne: Okay, I love it. All right, let's do a couple rapid fires. So when it comes to income generating activities, what do you personally prioritize in your business? How do you make sure, you know, as a service-based business yourself that you're spending your, I mean, there's so much we have to do, right? They always say wearing all the hats in the business. How do you make sure that you are prioritizing your income generating activities and what are those things for you?
• 41:24
  Chika: Yeah, this is a good question. Well, through my years, right, 16, 17 years in the business, I have built a reputation, a good one. And so I noticed that a lot of times referrals are. a source of my income, right? People say my name to the right person. And literally once we talk, they're 90 % sure that they want to hire me. So with that reputation, I realized that for me, income generating activities is me keeping up my connection, my networks. So really pouring into my clients, really pouring into the people that I come into contact with who are business owners or if I'm part of networking groups. So really being present and showing all of me and my personality and yes, I'm a CPA, but yes, I'm also fun. And then like, cool, I have a client for you. So that's something for me, going to those networking events where someone else might say, it's a waste of time. Right, but for me, I gotta be... What's the word? gotta be, what's the word? At peace in Zen. I can't be stressed out, overwhelmed, tired, going to those events because they're not gonna get the best version of me. So yeah, so with that said, what's so interesting, what I consider also income generating for myself is getting my eight hours of sleep. Again, being rested, being Zen, being in a position to want to socialize is really,
• 43:07
  Chika: really big for me and my brand. Me taking my walks. Somebody else might say, damn, you go on an hour walk in the middle of your day. Shit, need to work. need to do this. And I'm like, for me, no, like nature resets me. And so for me, that's income generating. I'll literally come back to my desk after an hour long walk in the sun. And my gosh, I have this amazing idea. And that idea would not have come If I didn't get out, if I didn't take those breaks, so yeah, so nature and sleep and people. so really leaning on my people, my clients, my referrals, my networks, those are income generating for me.
• 43:55
  Jamila Payne: love that. Are there any money habits or rituals that you have that have helped you to stay grounded and feel in control of your money?
• 44:06
  Chika: Yeah, money rituals and routines. literally looking at my money, so looking at my money on a weekly basis and I literally have a checking guide, a monthly money checking guide where it will walk you through, okay, pull up your...
• 44:08
  Jamila Payne: Yeah. Yeah.
• 44:27
  Chika: bank statement for the past month, pull up your, if you're using a spreadsheet or QuickBooks or whatever, pull that up as well and go through your money for the week. You know, what came in, what went out and based on what you see, what you notice, even you can compare it to the prior week, compare it to the prior month and what do you notice? What are the patterns you see? What's favorable? What's something that it's like, I don't like that, right? Like literally look at, the numbers and so I do that weekly and what that does for me is it kind of like gets me excited to keep it gets me motivated like shit like okay I spent that much and I actually don't like that I spent that much or I made this much and I If I would have reached out to somebody else, maybe I could have doubled it, right? So it motivates me to take action, to be in action. And so that's what the weekly number check-in does for me. And then I also have a monthly, well, that's weekly, but my other monthly ritual is looking at my net worth. So that's where it takes a little bit longer, because I'm looking at all of my bank statements, personal and business, and I'm looking at investments. at credit cards, all that stuff, and I'm figuring out, okay, what went up in terms of assets, in terms of cash and the accounts, went, liability, right? What went down, what went up, investments. And then I'm seeing, okay, this is what my net worth is at the end of this month, right? My assets minus my...
• 46:11
  Jamila Payne: babies.
• 46:12
  Chika: Yeah, liabilities, equity. And so, and again, that's motivating too. Some things I can't really control. For instance, like my stock investments, it's gonna go up, it's gonna go down, but it's kind of cool to see, let's say like if revenue was like on the lower side of things for that month, but the economy was doing really well. And wow, my network still went up because,
• 46:14
  Jamila Payne: Hehehehe
• 46:40
  Chika: Because of the investments right so that's also something that again it motivates me in a subconscious way I think I just like knowing my numbers Because for me the motivation doesn't necessarily come from having a goal of like I'm gonna make a million dollars this year. Like that alone doesn't excite me, it doesn't get me into action. But what gets me into action is those shorter term, like this week I did that versus last week, this month versus last month. like knowing the details, when I can go in depth as to what happened. And now I'm even more motivated. Let me go to that networking event, right? Let me get out here and walk so I can get some more. So that's what motivates me. So that's why I keep doing it.
• 47:35
  Jamila Payne: okay cheek i just want to make sure you're okay okay all the time okay when i ask you like three more questions
• 47:40
  Chika: Yes, yes, it's fine.
• 47:41
  Jamila Payne: Okay, okay. So I wanted to first talk to you about team, because I know being supported in your business was a big shift that you made. So just give us a picture of who's on your team right now.
• 47:57
  Chika: Yeah, team is everything. Earlier I mentioned how the first seven years are so feeling so overwhelmed. At that point, I never had a team. I never hired anybody. And one of the big changes to reduce or remove that overwhelm was hiring an assistant at that point. And so today, in today's day, my team consists of a virtual assistant. She really takes care of a lot of like the social media stuff, the editing things, all of that is taken care of. I also have an online business manager and she functions as like my, almost like my brain. Like I have an idea, I share the idea with her, boom. All of a sudden we have a strategy as to how to execute. yeah, cause without the OBM, I would be afraid of my ideas, because it's like, well, how am I going to go from idea to actual, like it actually exists? And so the OBM, even though that, you know, that's not a cheap expense, right? But having an online business manager for someone like myself, who is, it's so interesting, because the details, I am a detail oriented person.
• 48:58
  Jamila Payne: Yeah.
• 49:23
  Chika: I also have ideas, but I think when it comes to the strategy in tech, that's really what it is. It's the tech that really overwhelms me and I go down rabbit holes. And so I know that this OBM is the biggest investment. Like it's not an expense. It's something that I need to free my brain because otherwise I'll get stuck. And then the third... And last person on my team is my accountant. And so she's the one who focuses on the accounting, the bookkeeping, the payroll. She does the initial tax filings for our clients as well. And then I come in with reviewing. I come in with having the meetings with the clients. and just making sure big picture, everything is is ready set. So that's that's my team.
• 50:24
  Jamila Payne: Okay, I love it. I think it's so important for us as women to be and feel supported in our businesses, right? And not always trying to be doing everything ourselves. So I love that you have that in place. Okay, so what, let's talk about your schedule real quick. How do you structure your week or your schedule in a way that allows you to support both your business and your life?
• 50:52
  Chika: Yeah, I like this question. For the longest. I, it felt like I lived for my business. Like nothing else mattered if there was, and I regret this to this day. I remember my cousin was getting married at the time I lived in the Bay. He was in LA and it was during tax time, March or something. And I'm like, I didn't even contemplate. I didn't even imagine that I could make it to his wedding. I was an automatic, nope, tax season, nope. And literally this was like at least 10 years ago, he's still happily married. But I'm like, I still regret that I did not show up to my cousin's wedding. And so these days, the way I schedule my weeks. I put personal first. Okay, what are the personal things that people want me to do, people are inviting me to, that I wanna do, right? Including the walks, the weight, I got into the weightlifting again, so. let me center the business around the personal because for me, I'm such a responsible person. So if I know it's on my plate, it's gonna get done. And so with business, it's gonna get done. But with personal, usually it's like, oh, I'm tired, right?
• 52:20
  Chika: Again, we were talking earlier of how women, help everybody else and we put ourselves last. So I've learned through experience, no, do me first and then everything else gets handled. And it's kind of magical how that works. so, so yeah, so that's how I plan my schedule. it, again, it tends to work out.
• 52:42
  Jamila Payne: love that. All right, last one Chica which is what does it mean to you to be productive and paid?
• 52:51
  Chika: productive and paid. What does it mean to me? gosh. Productive and paid means everything is flowing for me. I'm not in my head, I'm not overthinking, I'm not stressed out. Like the automations are there, my team, everything is handled, they're doing their thing, they're in their flow. And... because of all of that, everything is good, I'm in a good place, I'm feeling embodied and not overwhelmed, then. getting paid just happens. In fact, it's almost like it happens effortlessly. The referral starts to come through, the yeses starts to come through, the invites come through. And literally it's because I'm productive. My team is productive. Everything is aligned. My personal life is productive, is getting watered. That's the thing. Like my personal life is dry. The bank account is dry.
• 53:59
  Jamila Payne: you
• 54:02
  Chika: So I gotta water the personal life and miraculously the business, the production and getting paid, just happens, it's automatic.
• 54:13
  Jamila Payne: I love it. love it. Thank you so much Chico. It's amazing having you on the show.
• 54:19
  Chika: Thank you, I've had a great time. This was so fun. Thank you so much, Shmila.
• 54:25
  Jamila Payne: wait before we go you have a amazing guide that you can give to the audience so let's let them know about that the monthly money check-in guide
• 54:41
  Chika: Yes, yes. So this is my free guide, my free offering. And so again, oftentimes we hear the advice. Look at your money. Stop avoiding your money. And as women, okay, we want to stop avoiding. But then the next question is, well, how, where do I start? What do I do? And so this monthly money checking guide gives you just that. It gives you the blueprint as to what you need to do each month. And literally it's sitting down with this guy 30 minutes, 30 minutes. It walks you through what you need to do. Open the spreadsheet, open the bank state. for that month and it walks you through questions, it walks you through what you need to do and let's say you might be the type of person where you're like, it's so intimidating, I don't know. Well, part of that guide includes a quick five minute exercise that helps you get grounded, helps you get settled so that you can like breathe and be present and be clear minded so that you can get started and go through that check-in. And once you go through it, that first month, that second month, soon it'll be so automatic. You'll love sitting down with yourself maybe first Fridays of every month in that morning with your cup of coffee and going through your numbers. And again, the way that my mind starts to just click with ideas because I'm going through my numbers, I get motivated. Like let's say there's a client who's been dragging their feet on paying.
• 56:22
  Chika: Now I'm like, let me get to that client. I got to get this revenue up. Let me send that email right or a lead that's been kind of like circling around, but they haven't said yes. Like knowing your numbers gives you that courage to take action. And when you're working from that point of like feeling empowered, it just seems like the universe just it gets, you know, everything is out of your way and just, you know, all the good just comes your way. So that's what this monthly money checking guide can do for you.
• 56:57
  Jamila Payne: Awesome. So we'll make sure we link to that in the show notes. So make sure you go ahead and download and check that out. And where can people find you online, Chica? They want to connect with you or work with you.
• 57:10
  Chika: Yes, so online, I'm on YouTube. I'm really getting going with YouTube. So please follow and subscribe to me on YouTube because we're just getting started. then also Instagram. So if people want to connect, can DM me, follow me on Instagram. If you found me through this podcast, this episode, I would love to know that. So yes, send me a DM, send me a hello and yeah, let's talk.
• 57:40
  Jamila Payne: Awesome. Thank you again, Chica. This has been amazing.
• 57:44
  Chika: Yes, thank you so much.