5 Ways to Move Your Business from Stuck to Growing Again

The ultimate guide to getting your small business to consistent $10,000 months

 

I started my business the same way as many others: while working a job and balancing a very busy family life.

Initially, I made some progress and quickly earned my first $10,000 in revenue. That’s when I hit my first brick wall. I couldn’t get to the next level. All I wanted was to move to the 4-figure per month club.

Be careful what you ask for, because I figured out the next steps and I hit that mark. I soon discovered that there was another brick wall in my future. Once again I was stuck, this time at about $60,000 in annual revenue.

At that point I was wondering why some people seemed to have it all figured out, making it look so easy.

What was I doing wrong?

I started to question if I had what it took to make it with my business. It is a recipe for disaster when you start doubting your own abilities.

I set out to find what I was doing wrong. In this process of self reflection, testing and learning from others, I discovered 5 key ingredients causing novice entrepreneurs to struggle. The sooner that you and I can get past them, the faster our businesses can grow into one with routine 5-figure months.  Move Your Business from Stuck to Growing Again in 5 Days!The 5 key ingredients? Here they are:

  1. Expound On Your Why, Your Ideal Client, and The Problem to Solve

    The truth is, this is a lot and can really be three separate steps – heck, probably three separate posts. As a matter of fact, there are books written on each one of these.
    What are they, you ask? Let’s start with your “Why”. The “why” is the innate purpose of the business you are building. It is the vision that you have that goes beyond money. It is ingrained in the fabric of the business, employees, and customers.

    In his book Start With Why, Simon Sinek gives the example of the well known company Apple, who decided that their purpose was to “challenge the status quo,” their whole existence was suddenly different. Customers know that their Apple product will be different and unique and challenge the boundaries of where technology has gone before. Your business needs a core reason for its’ existence, the purpose it was started in the first place.

    The ideal client, sometimes referred to as your target avatar or buyer persona, is the person or people you most want to target with your marketing campaigns based on your current business situation. Your current clients aren’t always necessarily your ideal clients.Most likely, you reading this blog post, are a small business owner who has yet to reach 6 figures in revenue. I can make this assumption because I targeted my ideal clients by starting the post talking about my experiences at that stage in my business. The intention was for people who related to those feelings to identify with the material and keep reading. That was me putting targeting my ideal client into practice.

    Finally, the question that you must ask: What is the problem that your ideal client has that you are trying to solve? What are their frustrations? What does their perfect future look like? Ryan Deiss, the CEO of Digital Marketer, calls this knowing your client’s “Before and After State”. Since I love that terminology, I’ll be using it here.

    These 3 key pieces of information – Why, Ideal Client and their Before and After State – are the pillars or foundation of all the marketing you do for your business. This will drive the conversations that you have and the products you create.

    I found that that I had these all wrong. I had approached the problem by asking myself, “What do I want to sell,” instead of figuring out what my ideal client would need, to have the straightest path from their Before State to their After State.

    This brings us to our second point:

  2. Choose ONE product or service

    When we start our business and release our first product or service, we begin to attract buyers. However, sometimes the buyers want something different than what we have to offer, so we expand that offer to include what they want. What also happens is that we don’t see fast enough growth and in our minds we blame the offer (the positioning of the product/service i.e., price, scarcity, features, etc.) for not being attractive enough. So we add more products and services in the hopes that more offers will bring in more business.This is a huge misstep that I made and I see others frequently making as well. It makes sense that we would react this way, however, it is just as easy to see why it is a mistake.You only need one product to get to 5 figures per month. If it is a high ticket product, say a $2,000 per month offer, then you only need to sell five of your product and you’ve reached your goal. Conversely, a lower priced offering would need a greater volume of sales (for example a $100 product would have to be sold to 100 customers to achieve the same $10,000 of revenue). Assuming that there are enough potential customers seeking your solution, this also seems very doable.

    Now that we established that this is easily doable with one offer, let’s analyze what the problem is with multiple offers. Every offer you create requires a sales message to close the deal. It then requires fulfillment and support on the back-end. James Wedmore, one of the great online marketers and business acceleration coaches said that you should be spending 80% of your time selling. To be able to make that happen with a small team or no team at all, you need to be able to replicate the efforts to service one client so that less time is spent servicing future clients.

    With one offer, you can standardize the sales conversation, formalize the proposal and then create a standardized process for delivering the product or service and supporting the customer. The key at this stage is doing as little work as possible on the fulfillment side of the business so that you can focus on selling.So how do you choose the right one?Choosing the right service or product becomes a lot easier when you have properly identified and gotten to know your ideal client. Remember that the goal is to provide a straight path from their current, “before” state to their desired, “after” state. You can understand this by mapping out the journey your client needs to take, and, after understanding their needs, you create a product or service that takes them past those first few steps of their journey.

    For example, the natural first step for my ideal client, the struggling or stuck new business owner, is to go through the steps on this page and then implement the changes. I do this with a free, live five-day challenge that guides them, people like you, through these 5 steps in a basic form. I then offer my Six Figures in a Year membership program designed to provide step-by-step direction and support through their journey.

    Okay, you’ve narrowed down your offering to one single solution. Now how do you sell it?

    Click Here to take our 5-Day Business Growth Challenge

  3. Choose ONE Marketing and Sales Plan

    Similar to number 2 above, the focus should be on finding a marketing and sales plan that works and then sticking with it. You’ll have plenty of time to get fancy later. The key to understand here is that when it comes to the marketing and sales strategy there is a difference from the exercise we just did regarding the product or service.

    With selecting a product or service, YOU are the expert, so you are the one who knows exactly what they need, no guessing involved. When it comes to marketing and sales, you have to keep testing until you find something that works. One mistake I see very often is that the metrics (or data) are not interpreted properly, and, as a result, the wrong analysis is made.Let’s say that you decide to sell a product or service through a challenge, as I described earlier. For the purpose of this example let’s assume that a good rate of conversion is 3%, which means that for every 100 people signed up for the challenge, there are 3 sales made.

    Now you run your very first challenge and you get 30 people signed up for the challenge and you make 2 sales. Many people would say at that point, “I put in all this time and effort and only got 2 sales, this doesn’t work.” They then scrap the efforts and try the next plan.

    What they don’t see is that they converted at a rate of 6.7% (2/30 = .067), more than twice the average conversion rate!

    The right next move is to figure out how to get even more people to participate in the challenge and run it again. Instead, most of us will pivot and try something else instead.

    There is another common error that is made when the data is not yet statistically relevant. Now before your eyes glaze over, bear with me for a moment. Using the challenge example from above, let’s say nobody purchased. This looks like a 0% conversion rate, which nobody wants. The problem is that the average rate is exactly that, an average. Sometimes you get 0/100 and 6/100 on two separate attempts.

    The second lesson here is that you may need to try enough times that you went through a large enough sample set (statistical jargon for the total number of people). For our example, you probably want to run enough challenges to have between 500 and 1,000 total participants before making a decision about whether or not it is successful.

    In order to do this right, it is imperative to have the right numbers and then understand your metrics, bringing us to numbers 4 and 5.

  4. Run the Numbers

    Picking the price point of your offer is not arbitrary. You need to run your business like a business and make sure you’re bringing in the money that you should be. When discussing the size of your business, I’ve focused on the top-line revenue, but what good is earning $10,000 in a month if it cost you $11,000 to get it?

    Figuring out the numbers means identifying the price point of your product and testing the profitability based on a series of assumptions. Being a Profit First Professional, we will use the author of Profit First, Mike Michalowicz’s, formula. Profit First guidelines for a business with less than $250k in revenue dictates the following breakdown of every revenue dollar:

    Profit – 5% (.05)
    Owner’s Compensation – 50% (0.5)
    Tax – 15% (.15)
    Operating Expenses – 30% (0.3)

    As long as we know one of the 5 variables, we can determine the remainder. The simplest one to determine is the Operating Expenses. For example, let’s assume, for simplicity, that advertising expenses are 50% of total operating expenses. We can further assume that a lead will cost $4 (this is an example, the cost for a lead or referral can be far less or greater and varies tremendously from one business and industry to the next).

    If we anticipate a 3% conversion (3 out of every 100 leads will purchase), then each sale will cost $133.33 ($4/.3), in advertising dollars, and, therefore, $266.66 ($133.33 x 2) in total operating expenses. Now we can easily fill in the rest of our numbers:

    Revenue (Price) – $888.87 (266.66 / 0.3)
    Profit – $44.44 (5% of Revenue)
    Owner’s Compensation – $444.43 (50% of Revenue)
    Tax – $133.33 (15% of Revenue)
    Operating Expenses – $266.66 (already calculated)

    Given our cost assumptions, we have determined that the product must be sold for $889 which could be rounded to a nice marketing figure of $897. Here’s the test: does your product provide at least $897 of value? If your product is a simple baby pacifier then probably not. However, if the pacifier miraculously does sleep training for an infant, it may very well be able to command that price.

    Another way to look at this is to think of your ideal client and ask yourself, is this product or service worth this price to them if it delivers the promised result, taking them further on their journey to their After State.

    Many entrepreneurs skip the simple mathematical calculation above and arbitrarily choose a price for their product or service. Thousands of dollars later, they wonder why they can’t make money no matter how many units, hours or packages they sell. Worse, they are making money but not enough that they cannot get the benefit from their business that they desire.

    Move Your Business from Stuck to Growing Again in 5 Days!

  5. Reverse Engineer the Metrics

    You’ve come this far and this is the final piece of the puzzle. The metrics – assuming you focus on the right ones – dictate to you exactly where to focus your efforts. Many entrepreneurs spend a lot of time on things that will not directly drive the results of selling their one product or service. Although it is possible that much of what they are doing will be necessary, at this stage, getting the business to 5 figure months is far more important.

    1. Yearly Financial Goal:
      The first thing you need is a financial goal for the year. Let’s assume that the business is brand new and wants to be at $10,000/month by the end of the year. So we have a clearly defined year-end goal.
    2. Quarterly Financial Goal:
      Now we need a quarterly goal. Quarterly goals are critical because you should not focus your day to day efforts on a result that can only be measured more than 90 days in the future. We are all human and you have a very high likelihood of giving up before then.The simple method to calculate the quarterly goal would be to divide the yearly goal in 4 and arrive at a quarterly goal. However, at the beginning of the process there is a lot of testing and failing before succeeding. Therefore we want to be realistic and assume that growth will snowball over time. Instead, as a rule, I assume percentages to completion as follows:

      Q1: 5%
      Q2: 15%
      Q3: 30%
      Q4: 50%

      Translated into dollars for our $10,000 per month goal, here is what our monthly revenue should look like at the end of each quarter:

      Q1: $500 ($10,000 x 5%)
      Q2: $2,000 ($10,000 x 15% + Q1)
      Q3: $5,000 ($10,000 x 30% + Q1 + Q2)
      Q4: $10,000 ($10,000 x 50% + Q1 + Q2 + Q3)

    3. Determine the Number of Units to be Sold:
      Once you have a financial goal, it is time to work backwards using the selling price we arrived at in the previous step. For our example, our selling price is $897. Using the numbers above we need to sell the following number of units per Quarter:

      Q1: 1-2 units ($500 x 3 months = $1,500 / $897 = 1.67)
      Q2: 6-7 units ($2,000 x 3 months = $6,000 / $897 = 6.69)
      Q3: 16-17 units ($5,000 x 3 months = $15,000 / $897 = 16.72)
      Q4: 33-34 units ($10,000 x 3 months = $30,000 / $897 = 33.44)

      Note: The above calculations were done this way to avoid confusing you, however, the quarterly dollar amounts were the end of quarter targets, therefore, you may not see the unit numbers listed until the following month.

    4. Determine the Action to be Taken Today that can be Measured:
      Now that we know how many units need to be sold, we can back the math into the promotion we want to run. Say for example we are running a challenge. Let’s also assume, the same number as earlier, that 3% of challenge sign-ups will become buyers. If we need to sell 2 units, we need to get 67 (2/.03) people into our challenge. If we need to sell 16 units we need to get  533 (16/.03) people into our challenge.

      Now we know that our one and only job is to figure out how to get 67 people signed up for our challenge in Q1.

      To get people to buy we need to have them participate until the end. We could take these examples further by analyzing our advertising metrics, email open rates etc.

      At this point, you need to pat yourself on the back. The last 2 key points were very math heavy and you could have gotten lost. You’re still here, so you followed me through.

Now you know exactly how to get your business on the growth path again. You also do not have to go through this process alone. Simply join our 5-Day Business Growth Challenge and you’ll have a whole community of entrepreneurs traversing this journey with you!

Click Here to Take our 5-Day Business Growth Challenge

1008 – Profit First straight from Mike Michalowicz

Mike Michalowicz the author of Profit First along with Toilet Paper Entrepreneur, Pumpkin Plan and Surge; joins us today for an interview about his new book being released. If you had questions about Profit First, we probably got them answered here! Complete show notes can be accessed at http://dreambuilderfinancial.com/1008.

Join us for an exclusive webinar with Mike Michalowicz. Head on over to http://dreambuilderfinancial.com/mm for all the details.

1007 – How to Take Your Profit First and the Secret Ingredient to Savings

The key to determining savings amounts for savings goals is the length of time available for saving. Time value of money can be a very strong participant in meeting financial goals. Understanding Profit First is the first step but here you will learn exactly how to implement it. Show notes and links can be found at http://DreamBuilderFinancial.com/1007.

Intro:

In the personal finance section this week, we’re going to talk about how to look at goals, and how to look at the logic behind setting savings amounts for the goals. We won’t get into specific numbers or calculations for how to do this for yourself yet, but rather will look at the concepts behind the big picture.

The time value of money is what happens over the course of time if you put money to work for you, and its basis is compounding interest. Also, there are two factors that affect the growth of money: the rate of return, and the length of time available. I explain all of this in the podcast, but I’ll write out an example of how compounding interest works in case you’re more of a visual learner.

Compounding Interest Example:

Let’s say you start with $100, and you can earn 10% interest or return over the course of a year.

At the end of a year, you’ve earned $10 (10% of $100).

Without compounding interest, at the end of 10 years, you’ll have earned $100 ($10 per year times 10 years). Your account balance will be $200.

With compounding interest, you earn interest on the amount in your account at the beginning of each year. Since you started year 2 with $110 in the bank (the initial $100 plus the $10 interest you earned), you’ll earn $11 that year, bringing your balance to $121.

The next year, you’ll earn $12 dollars, bringing your balance to $133. In year three, you’ll earn $13 dollars, bringing your balance to $146.

By the end of the ten-year example, with compounding interest, you’ll have $259. After 40 years, it would turn into $4,526.

 

In the business section, we move onto part 2 of implementing profit-first in your business. We’ll cover the how-to in this episode, but for much more detail, get a copy of Profit First by Mike Michalowicz.

Implementing profit-first methodology is a five-step process, which I discuss in the podcast. For easy reference, here are the five steps:

  1. Get crystal clear on your motivation for implementing this system.
  2. Open a separate bank account and immediately deposit 1% of your business’ cash into this account. This is now your profit account.
  3. Open seven bank accounts, five of which should be at one bank, and two at another.
  4. Fill out a grid (Profit First Instant Assessment) using information from last year’s P&L, personal tax return for every owner, and your year-end balance sheet.
  5. Resolve the discrepancies on your Profit First Instant Assessment over the course of six quarters (a year and a half).

There’s no tax section this week or next week because of our focus on profit-first methodology.

 

Show Notes:

[01:46] – Moshe introduces what the show will cover this week.

[02:18] – The first thing to understand with saving for any goal is the time value of money. Moshe explains the importance of compounding interest with a clear example.

[05:16] – Moshe discusses the two factors that affect the growth of money: the rate and the time.

[07:03] – We learn how this relates to savings goals, which we’ve already broken into short-term goals, mid-term goals, and long-term goals.

[08:49] – Moshe offers a specific example to illustrate what he’s been talking about.

[14:36] – Most of the monthly savings amount in his example was for the short-term goal, Moshe points out.

[15:42] – Next week, we’ll cover strategies for how to save for these goals, and cover the logistics of how to calculate how much to save for each goal.

[17:17] – We kick off the business section of the episode.

[18:16] – Moshe dives into implementing profit-first in your business, which is a five-step process.

[18:24] – Step one is to get crystal clear on your motivation for implementing this system.

[19:23] – We move onto step two: opening a profit bank account.

[20:28] – Step three is to open seven bank accounts. Moshe explains in detail what each of the seven is for, and why they’re divided between two banks.

[25:25] – Moshe takes a moment to address the question of bank fees when you have so many accounts. There are several solutions to this, including CapitalOne’s Spark banking unit.

[26:32] – We learn about step four. To make this easier, text howtoprofitfirst to 44222, or get a copy of the Profit First Instant Assessment online.

[30:41] – Moshe offers an example using babysitting to explain the concepts he’s been talking about.

[31:55] – Moshe lays out some specific rules, and explains how to calculate your real revenue.

[32:57] – We learn the next steps of filling out the Profit First Instant Assessment, after having calculated the real revenue. He also discusses the difference between owner’s pay and profit.

[35:39] – Now that we’ve filled out the actual column, we move onto the TAP (Target Allocation Percentages) column.

[37:39] – The next column is just column A multiplied by column B. Moshe walks us through this as well as the final two columns.

[39:08] – You’re likely to be pretty sad when you look at the results, Moshe explains, because most businesses are way off on these numbers.

[39:43] – Step 5 involves resolving discrepancies gradually, because abrupt changes tend not to be sustainable.

[42:11] – Moshe introduces a new concept, the CAP (Current Allocation Percentage).

[44:32] – We discussed the 10-25 rule in the last episode, and Moshe now explains how you’re going to use that in your profit-first system.

[45:16] – The last part of this step is sending estimated tax payments.

[46:28] – Mike Michalowicz has graciously offered a special gift for listeners, as you’ll learn here. To sign up, go to this link.

 

Links and Resources:

DreamBuilder Financial

Facebook.com/dreambuilderfinancial

Profit First by Mike Michalowicz

CapitalOne Spark Business Checking

Profit First Instant Assessment

DreamBuilder Financial Episode 1006

1006 – Financial Goal Setting is the key to Wealth Creation and Profit First is the key to Business Cash Flow Management

Last week in the personal finances section, we introduced the personal financial statement as the starting line you can later look back on. This week, we’re talking about goals — the finish line that you’re set on getting to.

With the release of his Freedom Journal last year, John Lee Dumas introduced the acronym S.M.A.R.T., which stands for specific, measurable, achievable, realistic, and timely. Your goal needs to meet these five criteria or it won’t be achievable.

Specific – you need to have a specific end in mind.
Measurable – you need to have a quantifiable way of measuring your goal.
Achievable – your goal needs to be something that is achievable from a general perspective.
Realistic – your goal also needs to be achievable for you.
Timely – there needs to be a finite end; a date by which your goal will come to fruition.

When you don’t have a goal, you’re in what Michael Hyatt and Daniel Harkavy call a “state of drift” in their book Living Forward.

To set your own financial goal, try this five-step exercise:
1. List all your wants, desires, and must-haves.
2. Estimate a dollar value for each item on your list.
3. Organize the items on your list by priority. For each item, list a length of time until you need to reach that goal.
4. Divide your list into three categories based on the time length for each:
a. Short-term goals (within 18 months)
b. Medium-term goals (18 months to 5 years)
c. Long-term goals (longer than 5 years)
5. Within each time frame, organize the goals by the priority you’ve already determined.

In this episode’s business segment, we’re going to talk about the concept of “profit first,” a concept from Mike Michalowicz’s book of the same name.

As Moshe explains, most entrepreneurs get into business to try to fulfill a specific dream or motivation (such as having more time with family, or more money). Often, a few years into the business, they and their business are still just making it by month-to-month. This is often due to Parkinson’s Law.

Moshe also talks us through owner’s pay. If all you bring home is the amount that you would pay someone else to run your business, you aren’t actually making any profit. The value of your business is what’s left after someone (you or someone else) is paid to do your job.

Profit-first methodology flips the formula around: instead of “sales – expenses = profit,” it’s “sales – profit = expenses.”

If you ask any health or fitness coach how to change the way you act, they’ll tell you to eat smaller portions — and to do that by using a smaller plate. Profit-first strategy works similarly, as Moshe illustrates. You’ll set aside profit first and make less money available for expenses, in effect eating from a smaller plate.

Moshe starts the taxes section by talking about income tax, which is the most complicated tax that most people need to face. The government uses this to control some of our behaviors, so it builds in things to give us credits based on certain actions. Other types of taxes include sales tax, property tax, VAT, FICA, and many more.

For most of this segment, Moshe focuses on health insurance and the Affordable Care Act. One of the problems, he reveals, is that the plans available through the ACA aren’t necessarily great. He also discusses the tax penalties involved in not having health insurance for the entire year.

Show Notes:

[01:31] – Goals are the destination, or finish line. We learn about the acronym S.M.A.R.T. and what it means in terms of goals.
[05:45] – Without a properly formatted goal, you’re at risk of falling into a “state of drift.” Moshe explains what this means in some depth.
[06:49] – Moshe clarifies the importance of various aspects of setting goals, using the example of a runner. He then offers another example: weight loss.
[09:40] – This works the same way from a personal financial perspective. This time, Moshe offers himself up as an example.
[11:15] – As the availability increases, our demand for that resource increases at the same degree, Moshe explains.
[12:14] – How do we go about setting financial goals for ourselves? Moshe gives a five-step exercise to help.
[18:48] – Moshe pulls up an exercise that he did a while ago, listing his short-, medium-, and long-term goals from around 2014.
[26:25] – Launching into the business section, Moshe talks about the book Profit First. He then shares his own relation to profit-first methodology.
[27:52] – There was a specific problem that profit-first methodology was created to solve. Here, Moshe explains what it is.
[29:18] – Parkinson’s Law indicates that as the availability increases, our demand for that resource increases at the same degree. This is the crux of the problem, Moshe explains.
[30:54] – Moshe discusses owner’s pay, which is the pay that you would pay someone else if you walked away from the business and had them run it. He also explores the difference between owning and running a business.
[33:42] – Profit-first attacks this system and allows the owner to escape this pattern, and Moshe talks about how this works.
[36:17] – Moshe talks us through the four principles involved in implementing profit-first. He uses the example of weight loss (and gain) to illustrate his point. The first concept is using a smaller plate.
[38:47] – The second principle, using the same example, is to eat your vegetables first.
[39:38] – The third concept is removing temptation.
[40:48] – Finally, the fourth principle is establishing a rhythm.
[43:04] – A frequent question that Moshe gets from business owners is this: “What do I need to know about business taxation?” Fortunately, he has the answer! To get a copy of his free guide with five tax tips every business owner needs to know, you can text “5taxtips” to 44222 or go to dreambuilderfinancial.com/5taxtips.
[43:52] – Moshe talks us through income tax, property tax, and sales tax.
[45:35] – We learn about VAT, or value-added tax, in a fair amount of detail in terms of how the tax functions and its impact on the final price of the item.
[46:47] – In the United States, we have a FICA tax, which Moshe explains fairly briefly here.
[47:25] – Moshe rattles off lots of other tax types that he hasn’t yet covered.
[47:55] – For the rest of this show, Moshe will focus on the Affordable Care Act. He starts off by explaining the basics of how the ACA functions, both for individuals and insurance companies.
[49:58] – The plans available through the healthcare marketplace aren’t typically that great, Moshe explains.
[50:33] – Going without health insurance results in penalties, which Moshe lays out in detail.
[51:45] – There are a few exceptions for people who would be exempt from the penalties
[52:03] – You need to use caution with the premium tax credit.

Links and Resources:

DreamBuilder Financial
Facebook.com/dreambuilderfinancial
Freedom Journal by John Lee Dumas
Living Forward by Michael Hyatt and Daniel Harkavy
Kiplinger’s Retirement Savings Calculator
Profit First by Mike Michalowicz
Parkinson’s Law
5 Tax Tips Every New Business Owner Needs to Know
The Affordable Care Act

1005 – Compelling Reasons Why Business Ownership Leads to Wealth

This week, the personal finance section of the show deals with the often-overlooked personal financial statement. Even though many people neglect to complete one, this statement is integral in knowing your net worth and assessing whether you’re making progress. It’s so important, in fact, that Moshe recommends making one every three to six months.

Basically, a personal financial statement is a snapshot of your total net worth, broken down into assets and liabilities. By subtracting your liabilities from your assets, you can determine your total net worth.

A personal financial statement offers several benefits. It can help with long-term goals by giving you a snapshot of your starting point. It also causes you to start paying attention to how much of an impact various things have on your net worth. Finally, it gives you a point of comparison when you make another one later, which allows you to track your progress over time.

The easiest way to create a personal financial statement is with a spreadsheet. You’ll have separate columns exploring your assets (including liquid assets, investments, property, and retirement accounts) and your liabilities (including credit card balances, student loans, medical bills, money owed to the IRS, mortgages, and so on). For a template and example, go to dreambuilderfinancial.com/pfs.

Of course, you’ll need to gather quite a bit of information to make your personal financial statement. You can do this manually, of course, or with software. Moshe mentions Mint as a free option, or YNAB (for “You Need a Budget”) as a paid option. For an old-school desktop application, Quicken is still around.

In the business section of the show, Moshe discusses why you should start your own business. He offers some pretty compelling reasons. For example, when you have your own business, you have unlimited income potential, meaning the sky’s the limit. Having your own business also encourages you to give the venture everything you’ve got, something you’ll never fully do when you’re working for someone else.

By starting your own business, you’ll also be creating an asset that can later be sold. In addition, your business can be a potential income source for other family members; you can hire a spouse, your parents or siblings, or even your children. It may even save you money, as expenses that you’re incurring anyway can become business expenses.

When you’re deciding whether to start your own business, one of the most important questions to consider is how to do it. Will you quit your job to focus on your business full-time? Will you continue working full-time while starting the business as a side hustle? Will you reduce your work hours and spend half your time on the business? There is no one right answer, so Moshe shares his own experiences. For him, working a full-time job and starting his own business on the side was the way to go. He then talks about Pat Flynn, whose book Let Go describes the very different path he took. Zach Spuckler took yet another path, as did Jon Acuff.

Finally, regarding taxes, Moshe provides a basic explanation of our tax system. Taxes are an earn-as-you-go system, he explains, which makes it easy to have too much or too little withheld over the course of the year.

If you’re employed, your employer withholds taxes and sends them to the government. If you’re self-employed, you need to send in estimated taxes every quarter. Either way, most people are going to overpay the IRS, and then have money sent back to them in the form of a refund.

Getting a large refund is basically giving the government an interest-free loan. Some people think this isn’t necessarily a bad thing, because it’s something like a savings plan, but Moshe explains why that’s a misconception. Whether you overpay or underpay, you should correct the situation to be as close to accurate as possible, and Moshe wraps up the episode by giving some information on how to do this.

In This Episode:
[01:17] – In the first segment of the show, Moshe will explore the personal financial statement. He begins here with an explanation of net worth.
[02:19] – Why is it important to have a personal financial statement?
[05:17] – Moshe lists several other instances, outside the realm of what he’ll be covering in depth, in which you might need a personal financial statement.
[06:35] – Now that you know what a personal financial statement is, how do you create it? Moshe gives listeners an overall view of how to create one. To download a template and see an example of how to create your personal financial statement, go to dreambuilderfinancial.com/pfs.
[09:43] – Moshe discusses how to gather all of the information you need.
[13:07] – What should you include in the asset and liability columns?
[20:59] – Moshe, who had been talking about assets, moves on to the liability section.
[23:14] – We move onto the business section of the podcast, with Moshe providing some great news: he’s offering a flowchart that walks you through the steps you need to take to get your business going the right way. To get the Entrepreneur Blueprint for free, text “entrepreneur” to 44222 or go to dreambuilderfinancial.com/entrepreneur.
[23:53] – Are you thinking of starting a business? Do you already have one? If so, and you have questions, head over to the show notes page at dreambuilderfinancial.com/1005 and let Moshe know!
[24:23] – This business section will cover why starting a business is a great wealth-building tool. Here, Moshe lists some reasons.
[27:55] – The next reason belongs in the tax section, but it’s important enough that Moshe can’t skip over it, so he talks about it briefly.
[32:02] – The biggest challenge when you’ve decided you want to start your business is deciding how to get started (whether you should keep your job full-time, for example, or quit and dive fully into the business).
[36:46:] – A frequent question that Moshe gets from business owners is this: “What do I need to know about business taxation?” Fortunately, he has the answer! To get a copy of his free guide with five tax tips every business owner needs to know, you can text “5taxtips” to 44222 or go to dreambuilderfinancial.com/5taxtips.
[37:30] – Moshe moves into the third section of the podcast — taxes — by beginning with the basics of tax-related topics (and misconceptions).
[40:36] – What is the tax return?
[42:03] – Getting a large refund is actually a bad thing, not a good thing, and Moshe explains why.
[44:36] – Moshe gives advice on how to prevent getting a large refund, now that we’ve established that this is a bad thing.
[45:48] – What should you do if you had too little money taken out, and want to fix that for next year?

Links and Resources:
DreamBuilder Financial
Facebook.com/dreambuilderfinancial
dreambuilderfinancial.com/pfs
The Entrepreneur Blueprint
Mint
YNAB
Quicken
Pat Flynn
Let Go
Zach Spuckler
Jon Acuff

1004 – A Look at the Past and the Future, What to Expect in the Year Ahead

In this episode, Moshe invites you to visit the past and future. You’ll remember that last week, he explained that the podcast will take a new, three-section format covering personal finances, business, and taxes. In this episode, he goes through each section in turn, offering some backstory for why he focuses on these topics and how he got interested in them, and then offering a look at the year ahead with lists of the specific topics he plans to address.

We kick things off with the personal finance section. Moshe explains that as a teenager, he used to read Money Magazine, which opened his eyes to the possibilities of what money can do for you. As soon as he started earning money, though, he noticed the lack of financial information available for people just starting out. As he recounts his history, he explains some of the personal experiences that helped him learn about finances.

Upcoming broad topics in the personal finance section include the following (for more details, listen to the episode to hear specifics within each category):

  • Budgeting
  • Personal financial statements
  • Saving
  • Debt
  • Investing
  • Insurance

In the business section, Moshe tells us that he went straight to work after finishing high school, and discusses how his personal life forced him to become a breadwinner very young. He walks us through his early career choices, and discusses how each one contributed to his overall knowledge and skillset.
Moshe then went back to school as an adult while working two full-time jobs. He explores how distance learning differs from the traditional college experience, then gives us some insight into his credentials. Finally, he explains why he created Dream Bulder Financial: to provide information to enhance the financial situation of anyone interested.
Broad categories Moshe will cover in this section in the next year include:

  • Market research
  • Business plans
  • Legally forming your entity
  • Separating your funds
  • Accountants
  • Profit-first methodology
  • Tracking expenses
  • Getting started
  • Building an audience

Taxes became a subject of interest to Moshe during a college class. He talks about the surprising way in which his childhood Jewish education trained his brain to work in the ways necessary for a great tax consultant. He then talks about why taxation was a clear choice when he decided to open his own firm.
In the upcoming year, you can expect to hear about subjects within the following categories in the taxes section of the show:

  • Understanding the tax system in general
  • Form 1040
  • Children and dependents
  • Itemization
  • Alternative minimum tax
  • Residency
  • Investments
  • Real estate
  • Business tax topics
  • Sales tax
  • Payroll tax
  • Retirement options

In This Episode:
[01:19] – Moshe starts things off by explaining what he’ll cover in this episode and touching on what he’ll cover in future episodes.
[02:40] – We hear the backstory of how Moshe got interested in personal finance. He touches on the life experiences that shaped his knowledge of finances.
[07:14] – In future episodes, Moshe will go into more depth about these personal experiences and stories.
[07:53] – What can you expect to learn about in the personal finance section of the podcast in the upcoming year? Moshe rattles off an impressive list of topics within the categories of budgeting, saving, debt, investing, and insurance.
[13:32] – Moshe has great news for you if you’ve recently started a business or feel stuck and want more information about setting up your business properly. He’s offering a free flowchart called The Entrepreneur Blueprint. To get your copy, text the word “entrepreneur” to 44222 or go to dreambuilderfinancial.com/blueprint.
[14:12] – We hear about how Moshe got interested in business. He shares his educational and work history, explaining briefly how each experience contributed to his knowledge and skillset.
[17:56] – Moshe lists some topics that he plans to address in the business section of the podcast. The impressive array includes topics relating to market research, defining your client, preselling, business plans, legally forming your entity, profit-first methodology, budgeting, and getting started with a new business.
[22:58] – A frequent question that Moshe gets from business owners is this: “What do I need to know about business taxation?” Fortunately, he has the answer! To get a copy of his free guide with five tax tips every business owner needs to know, you can text “5taxtips” to 44222 or go to dreambuilderfinancial.com/5taxtips.
[23:43] – Kicking off the third section of the show, Moshe talks about what got him interested in the topic of taxation, and what drew him to become a tax consultant.
[25:33] – Moshe lists what we can expect from the tax portion of the show in the upcoming year.

Links and Resources:
Facebook.com/dreambuilderfinancial
The Entrepreneur Blueprint
Profit First
5 Tax Tips Every New Business Owner Needs to Know

1003 – Avoiding Common Mistakes at Tax Time

A New Show Format; Basics of Financial Goal Setting; Tax Tips; and an Apology

Starting with this episode, these podcasts will have a new format consisting of three sections. Each show will begin with a personal finance topic, move on to a business topic, and conclude with a tax topic.

The personal finance topic in this episode revolves around prioritizing savings goals. Moshe discusses the importance of defining your goals so you know what you’re aiming for and can prepare adequately. He then explains that having too many goals can be overwhelming, so it’s important to prioritize and segment savings.

Coming up with a time horizon for each savings goal lets us differentiate between long-term and short-term goals, which is important because there’s a difference between growing money growing and saving money. Moshe discusses how to apply this concept to goals of different lengths.

In the business topic, Moshe takes a moment to offer Cliff Ravenscraft an apology for saying, “Cliff, you suck at marketing” in the last podcast. He then goes on to make suggestions in answer to Cliff’s question about how to compensate a key employee, which involves a combination of a fair base salary and performance-based bonuses.

Concluding with a tax topic, Moshe offers some specific tax tips and insights. He starts things off by reminding listeners about charitable deductions of cash or non-cash asset donations. For a value over $500, these deductions require a separate form.

Next, we hear about home office deductions, with Moshe explaining the important differences between deductions for employees and businesses. He also sheds light on the two ways of calculating the deduction.

Under the Affordable Care Act laws, there are penalties for each month any member of the family didn’t have adequate health coverage, so Moshe advises being careful to fill out the relevant section of the tax return fully and accurately.

Moshe wraps up the episode with advice for two specific groups: teachers and new homeowners. Teachers can take adjustments of up to $250 for out-of-pocket expenses and claim the remainder of these expenses elsewhere. Homeowners who have purchased a home in the last year should remember to claim the real estate taxes paid to the previous owners on their tax returns.

Finally, consider using a tax professional for any type of non-simple situation. Taxes often aren’t the place to use a DIY strategy to try to save money.

 

In This Episode:

[01:03] – We hear a clarification; even though this episode was recorded last year, the tax due date mentioned (of April 18th rather than April 15th) is still accurate.

[02:03] – Moshe introduces himself and then tells listeners about a new tool he’s found: Periscope. He then explains how his thrice-daily use of Periscope has inspired the new three-part format for his podcasts.

[04:34] – Launching into the personal finance section of the show, Moshe reveals that today’s topic is how to prioritize savings goals.

[06:54] – Moshe talks about establishing an order of priority for savings by defining two facts: a time horizon and the dollar amount needed for each goal. He goes on to clarify why it’s important to differentiate between long-term and short-term goals.

[11:12] – Moshe explains how he defines long-term and short-term goals, and gives advice on how to save (or grow) your money differently depending on the time horizon of each goal. He also talks about the differences in calculating how much you need to save for long-term and short-term goals.

[14:50] – We transition into the second part of the show, with an emphasis on business topics. Moshe reveals a new resource for people in the early stages of setting up a business: a flowchart called The Entrepreneur Blueprint. To get your copy, text the word “entrepreneur” to 44222 or go to dreambuilderfinancial.com/entrepreneur.

[15:32] – In the last podcast episode – Episode 1002, Moshe responded to Cliff Ravenscraft. We hear what Moshe wrote to Cliff, as well as how Cliff responded after having listened to the podcast.

[21:50] – Moshe offers an open and heartfelt apology, taking ownership of his mistakes in assuming Cliff’s lack of growth was unintentional.

[22:26] – Cliff had asked a question about compensating a key employee; here, Moshe answers that question.

[25:15] – Moshe kicks off the third and final part of the show, which addresses taxes, by revealing one of the most common questions DreamBuilder Financial receives from business owners: “What do I need to know about business taxation?” To get a copy of a free guide with five tax tips every business owner needs to know, you can text “5taxtips” to 44222 or go to dreambuilderfinancial.com/5taxtips.

[26:00] – Personal income tax returns are due April 18th this year. Moshe offers some tips to remember when doing your taxes. Specific tips are about charitable deductions, home offices, the Affordable Care Act, deductions for teachers, and taxes on a new home purchase.

Links and Resources:

DreamBuilder Financial

Facebook.com/dreambuilderfinancial

Periscope

Michael Hyatt

Daniel Harkavy

Living Forward

The Entrepreneur Blueprint

Cliff Ravenscraft

Five tax tips from DreamBuilder Financial

Lessons for the Online Entrepreneur when Moving to a New Home

5 Lessons I Learned During the the Renovations and Move to our New House

This Friday my family will be moving to a new home. The months leading up to this move have been a big, crazy, wild and hairy ride. Moving should be up there on the top ten list of things people should never have to do. With 3 teenage girls and a little baby boy, there is nothing more frustrating than everything being placed exactly where I can’t find it or get to it.

I could write 10 blog posts just on the selling, renting and buying experience and then another 10 on the basic construction that we chose to do before moving in. However, in this article I wanted to focus on what happened to my productivity and business while this was all transpiring and what you the energetic entrepreneur can learn from my experience.

In the last couple of months, I made a decision to focus our business on one specific targeted industry subset, namely online coaches and digital product creators. This change in focus has initiated the need for new advertising, changes in back-end processes and taking actions that are far outside the norm for a typical accountant. I have been live broadcasting on Periscope and Facebook Live. Writing guest blog posts for other industry websites and other actions typical for the online entrepreneur.

Engaging in these actions are needed not just to get the name of my firm out there into the masses of online entrepreneurs but also to put me into my clients’ shoes. I want to know exactly what you are struggling with so that when I service you, I understand what your pain points are and where you might be getting stuck.

I know, for example, what it feels like to play around with WordPress, LeadPages and ConvertKit until 3 in the morning only to go to bed frustrated that I still haven’t gotten my sequence to be just right. I also know that after a long hard day, sometimes, I just want to grab a cold beer and put my feet up instead of turning my laptop on. I know when you first start running Facebook ads, you will check your dashboard every few hours to see if you had any conversions. Trust me, I am living your experience every step of the way as I go through the Grind and the Hustle (stages as termed by Screw the 9 to 5 in their Momentum Marketing plan).

After closing on the new house, my evenings have been taken up with ripping down sheetrock, running to Home Depot, spackling, painting, running to Home Depot, pulling wires, crawling in super-hot attic spaces, running to Home Depot, etc. This has left me in a real tight spot – when do I work on my business?

What I did, was analyze all the actions that I have been regularly taking and started prioritizing. Will it hurt my business if I stop broadcasting on Periscope for a few weeks? Will it hurt my business if I don’t take on new clients until I have a desk again in my new home office space? As I answered these questions honestly I began to give myself permission to step back and slow down my business acceleration just temporarily.

Here are some things that this process has taught me:

  • It is okay to step back and let your business run without growing for a defined period of time and for good reason, as long as it is done very intentionally and with a defined date to resume the growth efforts.
  • Everything you plan for will always present itself in an option that is more expensive. We saw this with our home as we selected hardwood floors, paint colors and brands, etc. Make a detailed budget before any project so that you can make decisions based on that amount and avoid cost overruns. For example, we budgeted $6,000 for a fence for the backyard. When my wife decided that she wanted white fencing in the front and it would add $1,000 to the cost, we could not find anywhere else in the project to shave $1,000 so she had to forgo the white fence in the front.
  • If you setup your online business marketing and sales funnels effectively, you will continue to earn revenue even when taking a step back. Last night while my daughters and I were dragging wardrobes up the stairs of the new house, someone was clicking the link on my Facebook ad and ended up purchasing our introductory offer that is displayed on the Thank You page.
  • It is easy to allow our health to go by the wayside during times of stress and transition. My refrigerator and pantry are bare and we are always on the go. I am involved in lots of physical activity so I fool myself into thinking that I could eat more calories or carbs. It can be more challenging to eat healthy when always in a rush. This is exactly the time to use extra caution and make sure that you take the extra time to eat a salad instead of wolfing down a double cheeseburger.
  • Relationships are fragile and always need tending to. Whether family, friends or co-workers. During times of stress and pressure, it is easy to ignore those around you or even to be short, impatient or downright nasty to them. First, determine which relationships can be put on the backburner until after the time period of stress has passed and allow yourself to concentrate on the more frequent and important ones. In my case, my friends are not going to hear from me for a few weeks and I am going to focus any energy I have on my immediate family to endure that we make it through this process as easily and happily as possible. How you act to others directly affects how they act to you and it only takes one small nasty moment to create a week long back and forth miserable mood fest.

I hope that my experiences and the lessons that I have learned from this moving experience have encouraged you to never move. However, if you find yourself in a similar pickle, take my 5 lessons above and hopefully it will help you make it through as best as possible – relationships, wallet and business intact.

5 Reasons to File Your Taxes Early

Why You Should Run (not walk) to Your Accountant and File Your Taxes Today!

As the old saying goes, there are only two certainties, death and taxes. Like a birthday, taxes are due the same day every year (well, almost). Yet, people still wait until the due date to send in their tax return. Read on to find out why you should be different.

To most people February means snow, mid-winter vacations, fireplaces and skis. For tax professionals like myself, it means busy season. However, most clients procrastinate their tax return appointments to the last minute. According to the IRS, more than two thirds of tax returns are filed in the last 6 weeks of the filing season. Some of the reasons people state for delaying their tax return filing are:

  • I owe money so I want to delay paying it
  • It is a lot of work to gather all those pesky medical receipts and charitable donations
  • I am getting a refund, so there is no rush, I will get to it eventually
  • I am afraid of finding out I might owe money
  • I have no idea where to turn to get my taxes filed

If you relate to these or have another excuse of your own, you are not alone. According to the IRS, nearly half of the 2014 Federal Income Tax Returns filed in 2015 were filed in the final four weeks before the due date. However, you may be causing yourself a lot of pain by procrastinating. Here are 5 reasons why you should gather your papers and head straight to your accountant’s office:

Click Here to schedule a FREE no obligation call and discuss your individual situation.

  1. Tax return fraud has become a huge business for identity thieves. According to the IRS “In calendar year 2015, through November, the IRS rejected or suspended the processing of 4.8 million suspicious returns” and “that’s a total of $10.9 billion in confirmed fraudulent refunds protected”. Fraudsters will file batches of hundreds of returns electronically using stolen identity information and some of these will get accepted by the IRS allowing the fraudster to monetize on a refund. The taxpayer finds out about the fraud when their own return is rejected because a return was already filed for their social security number. It can take many hours to rectify the issue with the IRS and will delay a tax refund for a considerable amount of time, sometimes years.The best way to prevent this from happening to you is to file early. By doing so, you limit the window of time for a fraudulent return to be filed with your social security number. Once you file your return, other attempts to file with your social security number will be rejected automatically.
  2. When you meet with your tax professional, they may very likely find ways to help you save on taxes that may require additional information or documentation. It may take additional time to produce this documentation causing you to be unable to file as quickly as you had hoped. Beginning this process too close to the deadline may force you to file an extension, thereby, costing you more in fees to your accountant, delaying your refund (if you owe taxes, they still must be paid at the time of filing the extension) and dragging out the process even longer.
  3. Accountants are busy people from January 19th through April 15th (this year in 2016 the date is April 18th). Imagine if all of Walmart’s customers in a single day showed up 10 minutes before closing. You would have a stampede, massive lines and probably not get the attention of any staff members should you need it. Getting your tax bill to the lowest amount possible within the confines of the tax law is an art that takes time to run various calculations and scenarios and ask many questions. If you join the last minute mad rush, it is almost guaranteed that less effort will be made on your return and without knowing it, you could be paying more taxes than necessary. That is IF you are able to get an appointment at all.
  4. If you anticipate a refund, filing early will get that refund processed more quickly. Not every taxing authority processes refunds in the same manner. Last year, clients of mine waited until June to receive a refund from the State of New Jersey. The later you wait in the filing season the more likely it is for a problem to occur such as a backlog, computer glitch or simply errors on both ends. Additionally, don’t you have something you would like to do with this refund? You can’t do anything with it until you get it.
  5. If you anticipate owing money on your taxes, you should know that you can e-file today and schedule an electronic payment to process on the due date or if mailing a check, mail it on the due date. Filing and paying your taxes are two independent actions and you do not need to delay filing just because you are not ready to pay yet. Wouldn’t it be helpful to know two and half months before the due date that you owe a significant amount of tax? Most of my clients who did not anticipate owing money on their taxes, when filing within the last few weeks of the due date, end up requesting a payment plan. This causes increased fees and interest payments that may have been avoidable had they filed earlier.

The bottom line is file early, keep the thieves at bay, pay the least amount of taxes and get an early refund or leg up on your taxes owed.

Click Here to schedule a FREE no obligation call and discuss your individual situation.

1002 – Solopreneur to Entrepreneur – The Cliff Ravenscraft Next Step Solution

There are always many options to every dilemma, the key is finding the right solution for you.

In this episode, I address Cliff Ravenscraft’s dilemma outlined in Podcast Answer Man Episode 432 – Year of Identity – Part 1 and The Cliff Ravenscraft Show Episode 635 – Year of Identity Part 2. Cliff has found a calling to become a life and business coach and wants to stop his involvement in the Podcast Answer Man. His wife is encouraging him to take the plunge because she knows that this is the only way for him to be successful in a timely fashion. Whereas, his mastermind group is encouraging him not to walk away immediately from Podcast Answer Man.

My recommendation to Cliff is a mindset shift from being The Podcast Answer Man to owning The Podcast Answer Man. I outline how Cliff can transform this business into an enterprise that runs without him, without delaying the launch of his new brand and venture.

Please join the discussion below and let me know what you think Cliff can do as well as what struggles you may be facing today.