Latest / The SmallBizChat with Melinda Emerson / How to Grow a Business Right Now with Sharif J. Small

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How to Grow a Business Right Now with Sharif J. Small · The SmallBizChat with Melinda Emerson

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  Three, two, one, zero, ignition.
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  Lift off.
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  Ending small business failure.
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  Welcome to the Small Biz Chat podcast with the number one small business expert, Melinda
• 0:17
  Emerson.
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  Melinda's goal is to end small business failure, and she'll give you the information
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  you need to succeed and live the life you dream of.
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  Now here's your host, the small biz chat lady herself, Melinda Emerson.
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  Have you subscribed to the small biz chat podcast?
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  Well, it's time.
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  Every Wednesday, we offer listeners bite sized actionable tips to start and grow a successful
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  small business.
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  your business forward.
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  Be sure to subscribe to the Small Biz Chat podcast today.
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  Hi, everybody.
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  Welcome back to the Small Biz Chat podcast.
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  I'm Melinda Emerson, your host.
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  I'm so excited to introduce my guest, Sharif Small, and he's going to be talking to us about
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  how to grow a business right now.
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  Sharif is a tax wealth strategist, a fractional CFO, real estate developer, and investor.
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  He helps people with mergers and acquisitions and he has more than twenty years of experience
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  leading a tax accounting practice and he is passionate about helping minorities and women
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  really start businesses and grow successfully.
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  His specialty is helping people acquire businesses to scale.
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  His mission is to empower entrepreneurs to build generational wealth, to achieve financial
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  freedom, and leave a legacy of sound financial background for your families.
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  Sharif, welcome to the Small Biz Chat podcast.
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  Hey.
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  Good morning, Melinda.
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  Thank you for having me.
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  How are doing today?
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  Oh, I am fantastic.
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  Let me ask you this, let's just get started.
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  With everything happening in today's economy, right?
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  We got so much pressure on us today in the marketplace.
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  What do you believe is the smartest way for a small business owner to grow their business
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  right now?
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  Yeah, well, the first thing is you gotta get your financial house in order, right?
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  So you gotta make sure that you have, I always recommend you have, everybody has a business
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  plan.
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  You're in business for yourself more like you have a business plan.
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  But what does that financial plan looks like?
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  So you gotta have a business plan and you gotta have a financial plan because a lot of times in
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  the beginning, you are the business, you are the brand.
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  So you gotta make sure you have that stuff in order.
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  So you gotta make sure you have, know, just like you gotta make sure you have a good
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  bookkeeping system.
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  You also gotta have a budget, right?
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  You gotta live within your means.
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  You gotta save, right?
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  You gotta make good financial decisions because the economy is gonna be economy.
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  It's gonna be a good economy, it's gonna be a bad economy.
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  That's the external.
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  But internal, what can you do to live within your means?
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  So you gotta have a right structure and you gotta have a system in place.
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  So as a CFO, I'll go and inject that and make sure that you have the right leadership and
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  stewardship as you grow and scale your business.
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  So that comes in making sure that your financial house is in order.
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  So you got make sure you have QuickBooks, right?
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  Got to make sure you're tracking everything, right?
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  We know what we got going out, but what do we We know we got coming in, but what do we have
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  going out?
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  So you gotta make sure you're not just working in your business, you gotta work on your
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  business.
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  So I always tell business owners, you gotta take at least one day of the week to look
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  within your business, see how your business is doing, and also look at your business plans.
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  So in the next five to ten years, where do you want to be to grow and scale your business?
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  Because you got to look at your projections.
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  Like, are you hitting your target market?
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  Are you hitting your projections?
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  A lot of times you're going to have to pivot as well too.
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  And one of the biggest challenges I see with businesses that not even in the business don't
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  have their financials, don't have their books in order.
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  Also on top of that, you got to have good credit, right?
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  So I said a lot of businesses, they are using their personal finance and using their personal
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  account for business.
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  They don't separate.
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  You can't do that.
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  Gotta make sure they're just separated and that they work in parallel because I've seen a lot
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  of business owners mess up their personal credit and they don't have any help to be able
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  to build business credit because in the beginning, you gotta personally guarantee.
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  So that's the biggest thing.
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  Gotta make sure you have your financial house and your financial systems in order and staying
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  on top of it on a regular and daily basis.
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  Another thing you gotta make sure you have a team.
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  Your banker, your accountant, your insurance, your little, I call it having a bail team.
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  So y'all make sure that you have these systems and these teams and partnerships in place.
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  So you wear a lot of hats.
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  You do tax strategy, you are a fractional CFO, you're an M and A advisor and you help people
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  with real estate deals.
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  From your perspective, where do you think most small business owners are leaving money on the
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  table?
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  Yeah, so I'm gonna be honest with you.
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  I think the biggest thing is they should think about buying a business.
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  I'm just being honest with you.
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  In the next five to ten years, a lot of businesses wanna be, yeah, baby boomers that
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  are retiring.
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  So there are businesses that are gonna be looking to sell, But you got to make sure that
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  you're in the financial position to be able to buy it.
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  So I think one of the best ways to grow and scale is acquisition.
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  So that's one of the things that I got into myself within the last five, ten years, just
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  internally myself, but then also helping other businesses to grow and to scale businesses as
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  well.
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  So there's a lot of businesses out there that you should be looking at buying.
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  I think that's one of the best ways.
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  Because I think when you're buying a business, the infrastructures are in place for the most
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  part, the same in place.
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  You do want to make some changes.
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  And again, you wanna get in a position to where not only are you buying an existing business
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  that's already cash flowing, got the structure, got the system, but also you're buying back
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  your time because we put a lot of time into our business.
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  And I think a lot of time we'll position ourselves to think about what we need to be
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  doing for our business, but it's not just also what you need to be doing for the business, but
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  what is the business supposed to do for you?
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  I think that's where we miss the part.
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  It's supposed to position itself for financial freedom, generational wealth, and leave a
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  legacy for your kids and grandkids.
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  And unfortunately, when it comes to business owners, we're not thinking it.
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  We're just thinking that the day to day, just trying to make a dollar, but it's not making
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  sense.
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  So again, you don't want us to be thinking working in your business, how are you going to
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  work on it in the next five to ten, fifteen years?
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  We can get your time back and you can enjoy the quality of life that we should be having.
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  So let's talk about generational wealth.
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  I mean, how should small business owners start thinking differently about their business as an
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  asset and not just as income?
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  Yeah, and that's the key thing.
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  Like your business is an investment.
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  So I would say you want look at what is your investment portfolio.
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  A lot of times we look at investment portfolio retirement, right?
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  Know, 401ks, IRAs.
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  We don't look at our business as a portfolio asset.
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  And I think that you I know that you should.
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  So how do I just give you an example with my business.
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  We've been in business for thirty five years, took over the company for my dad twenty years
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  ago.
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  Of One the things I want to do was leverage the business that I was in to create other streams
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  of income.
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  To do that, I bought a building for my company.
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  Not only did I buy the building, I bought something called a mixed use building, which is
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  an apartment above the office, which means it brings in cash flow, which means it pays the
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  mortgage.
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  And at the same time, I have equity in the building, which I've been able to refinance
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  twice.
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  I've been able to pull the cash out and buy other buildings on the same block.
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  So again, we got to think of it as a mindset management, multiplication.
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  I call it the three Ms.
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  So you got to change your mindset.
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  You got to have better management within your finances.
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  And then how do you multiply the position that you're in to be able to acquire other wealth
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  building assets?
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  A lot of businesses don't think about using their business to acquire their own building
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  and be able to bring in cash flow to bring in other streams of income and turning active
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  income into passive income.
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  Now, know you and I have had conversations before and you have said to me, don't buy a
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  business that doesn't have a building.
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  I have heard you say that.
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  Tell me where that comes from.
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  Because you're like, yes, it's great to buy a business, but you say buy a business with a And
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  this is a strategy that I take because I've been doing it myself.
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  Just to give you example, me and my partner, we just bought another CPA practice and we bought
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  it with the building.
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  I think the key thing is when you're doing acquisition, you gotta think of collateral.
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  It's credit, capacity, cash flow, but you gotta think of collateral as well too.
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  So it makes it easier and it makes, again, it's called leverage.
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  Make it easier and make it better in the acquisition space when you're buying it with
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  the builder, because that makes it a little bit easier to where you may not have to put your
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  own house up, you know, for the market or any other asset because you're already buying an
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  asset, number one, that appreciates in value.
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  That's why I love real estate.
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  But also you can depreciate it as well too.
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  You can write it over your taxes.
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  You can have a paper loss, right?
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  That's what you give to the IRS, but you may not have an operating loss, right?
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  That's what you give to your lenders, it to your investors because they have something
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  called add back.
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  And that's why I love as you are leveraging your business, you got to make sure you're
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  leveraging business to acquire other assets so you can add to your portfolio to bring other
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  streams of income.
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  You just don't have one stream of income just from your business, but you got other streams
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  of income that are coming in.
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  So when the market is going left and right, you have other options to be able to stay afloat.
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  Now let's talk about tax strategies.
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  Since you just went there, What do you think business owners should be doing right now to
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  protect and grow their profits?
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  Business taxes was due in March, personal taxes is due next week, So unless you did an
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  extension, then you can file it in October.
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  So talk to me about what folks need to be doing right now as they look at what their plans are
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  revenue wise for 2026.
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  So the first I would tell people the difference between tax planning and tax filing, like when
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  tax filing season to April.
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  So once you get out of this season, like going forward, you should be doing tax planning
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  throughout the year, which means you need to be talking to your tax professional or your tax
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  strategist or your CFO, at least from a monthly to a quarterly basis.
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  You should be looking at your financials, your profit loss statement, your balance sheets.
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  You see yourself about to have a net profit.
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  I think one of the challenges I see with business owners is thinking about, okay, when
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  do I become an escort so I can save on self employment taxes?
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  And I've seen people that have been in business for a couple of years, they're just writing a
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  check from taxes and they're not escort.
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  So that's why it involves tax planning and tax strategy and having a team.
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  So every three months you should be making a decision with your business as you grow and
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  scale because you're not thinking about going back in income, your income going to keep on
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  going forward.
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  You start making a million dollars and then you're writing a check.
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  You think it's gonna go backwards?
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  And so there's strategies and system in place you wanna put in to pay the least amount of
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  taxes.
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  Now I ain't talking about tax evasion or tax avoidance.
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  We're not doing it.
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  We're talking about paying the least amount But tax, so again, we do tax planning throughout
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  the year and make sure that you are every three to six months talking to your team, paying the
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  least amount of taxes.
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  And then think about restructuring your business to become an S Corp.
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  Eventually maybe think about forming a holding company.
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  Eventually, in a couple of years, maybe think about forming a trust.
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  Edge your business because there's something called tax planning.
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  But also, you got to do tax protection of your business as well, too.
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  Because your business start to grow and scale, employees can sue you as well as clients can
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  see you as well too.
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  So you wanna make sure that your structure of your business is protected as well.
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  Now, I've always have been told that you can't sell a business that's an S Corp, that you have
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  to be a C Corp to sell.
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  So, I mean, is that far as
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  you You can still sell it as a S Corp.
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  You just probably be paying a little bit more in taxes though.
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  That's the only thing, because they have that twelve oh two business stock where if you are a
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  C Corp and you started a business, and a lot of times with those C Corp businesses in Delaware,
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  which they mine, one on one being, they're more so in where they're gonna be selling it.
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  They're more like tech businesses.
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  You know, you're gonna go public in a couple of years, you're gonna sell within five or six
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  years of your business and you have investors.
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  That's where you kind of go more in the C Corp.
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  So you kind of start off as a small business, but you're thinking big business within five or
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  six years.
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  Now, businesses have not got to the point to where they're going to be taking on a lot of
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  investors.
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  They wanna form an S corp and they wanna be in more Wyoming.
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  So where you can still sell your business, you just may get hit with capital gain taxes.
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  Because with the 12 oh two stock, you sell it within five years of the C corp, Long as that
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  sale is under $75,000,000 you don't have to pay tax when they are.
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  On the S Corp, you do gotta pay capital gain tax, but there's some tax strategies that you
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  can take advantage of to pay the least amount of taxes, you know what you sell.
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  So we do a lot of succession tax strategies when you sell, so you pay the least amount of
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  taxes as well.
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  So let's talk about your fractional CFO services for a minute.
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  Tell me if I've got a bookkeeper, a CPA doing my taxes, what functionality does a CFO, a
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  fractional CFO bring to my business that these other sort of like financial professionals
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  Great are question.
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  Now this is where I was breaking out.
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  Your bookkeeper's gonna focus on previous transactions, that's history.
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  Your tax or CPA person is to focus on right now, getting your taxes done.
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  With CFOs, we're thinking about the future of your business within the next five to two
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  years.
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  It's how would you be able to grow and scale your business and making sure, number one,
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  yourself is in order.
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  Number two, that you're in the target of your biggest plan.
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  Number three, that you're focused on the financial exit of your business, whether you
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  want to sell it and or inherit it.
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  So a lot of unfortunately tax reports from those as well as CPAs, they're not thinking
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  about your business for the next five to ten years.
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  They just try and get you done, get you done for the last month, get you done for tax
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  season, and that's it.
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  So in addition to having your CPA and having your bookkeeper, highly recommend once you
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  maybe start making over 500,000 or more, you want to think about a CFO because now you got
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  to think about how you want to grow and scale your business and what it's going to look like
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  financially for you.
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  So I would say that, again, we provide a financial leadership and stewardship.
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  We're leading your business.
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  Just like you have a CEO that's going lead operations, you need a CFO to help you lead
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  your finances.
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  And unfortunately, a lot of CPAs that have a lot of clients that are just focused on the
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  main thing may not be, you know, but we love working with them because we just love being a
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  part of the team.
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  So tell me, if you could give three actionable steps to business owners right now to take in
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  the next ninety days to grow their business, what would they be?
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  First thing, look at your business plan, look at your projections and think about how you
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  build.
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  A lot of people say, yeah, I got a business plan, but when the last thing you looked at?
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  It's a historical document that they
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  It was doing just to do what maybe.
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  Yeah, he's given it.
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  So you gotta make sure that you're being intentional with your bill.
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  I think that's first and make sure that you are staying on top of your, I looked at my business
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  plan on a monthly basis.
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  And I have more than one because I have more than one business because I have targets that I
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  wanna hit.
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  So you got to use your business plan.
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  Those are not a checking.
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  That's the first thing.
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  Second thing, make sure you got the right team.
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  Your banker, your accounting, your insurance lawyer.
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  You may not be talking to them all at one time, but at least once a month you need to be
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  talking to each one of them so they are on the same objective of helping you grow and be able
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  to scale your business.
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  That's the second thing, make sure you have the right.
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  Third thing, I recommend partnerships.
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  The growing scale is you look into partner with other businesses.
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  Just like I partnered with a CPA practice and we started getting to acquisition space.
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  So don't look at people as competition.
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  Go from competition to collaboration.
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  Looking to partner with people as you're looking to grow your scale and your business.
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  Because again, it's not about just working in your business, but working on your business.
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  So look at partnerships and growing and scale.
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  And then looking at buying the business as well too.
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  But to do that, again, make sure you have your financial affairs in order to talk to your tax
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  accountant, your financial planner, do an assessment of your financials and of your
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  business.
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  And if you're not where you're at, make sure that you're working together, that with your
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  personal credit, your business credit, your accounting, your books, your sales, your bank
• 16:57
  of banks and things of that nature.
• 16:59
  Love it, love it.
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  All right, last question.
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  What is the best business advice that you've ever been given?
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  The buy business, to be honest with you.
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  And to be honest with somebody really didn't tell me, I read the Roger L.
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  Lewis book, Why Should White Guys Had a Fun.
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  I'm a Baltimore guy, you got two Barts, I'm a Baltimore guy.
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  You know, that's the best advice I ever got was just reading that book and start thinking
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  bigger.
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  Right?
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  He bought an international cup overseas.
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  Sometimes we think too small when it really comes down to it.
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  So it was more of an internal thing was that.
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  And then also just my faith connected with the man of certainty, don't do ups and downs,
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  things like that.
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  Make sure no matter what you do, that you connect to the man upstairs, that you connected
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  to your faith and that faith will take over fear on anything.
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  Love it, love it.
• 17:47
  Thank you so much, Sharif Small, fractional CFO, real estate investor, mergers and
• 17:53
  acquisition advisor.
• 17:55
  Thank you so much for being a guest on the Small Biz Chat podcast.
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  And we're gonna hear more from you soon in the coming days and weeks and years.
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  So thank you so much.
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  Hey.
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  Thank you for having
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  podcast wherever you listen to podcasts, and join us next Wednesday for more fantastic
• 18:23
  information and interviews.
• 18:25
  You can find more sources and small business success strategies by visiting Melinda's
• 18:30
  website, succeedasyourownboss.com.
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  Thanks again for listening, and we'll see you next week.