The Importance of Knowing Your Weekly Income – A Look Under the Hood

Show Notes

If you are trying to hit your financial goals then this episode of A Look Under the Hood with Paul Hood (CPA) is a perfect for you. Paul Hood sits down with Dr Zoellner and Clay Clark to discuss the importance of knowing your weekly income.

  1. NOTABLE QUOTABLE – “Stay focused, work hard, know your numbers, and be disciplined. If you do those things and take care of your people, the likelihood of being successful is very, very high.” (Marcus Anthony Lemonis is a Lebanese-born American businessman, investor, television personality, philanthropist, politician and CEO of Camping World)
  2. AMPLE EXAMPLE – Elephant in the Room
    1. Currently we have 4,000 members
    2. Clay pays himself $2.00 per member on purpose and puts the remaining money back into the warchest instead of being greedy and taking all of the money now.
  3. Your accountant must provide you with a cash flow statement. If not then get ahold of Paul Hood today.
  4. What does the first meeting experience with Hood CPAs looks like the following:
    1. Listening to what the clients goals are. We want to help the save 10% of current spending
    2. We want to look over expenses and reduce them
    3. We want to take that money and put it towards their future.
  5. The 4 areas people are exposed to risk:
    1. Personal life insurance
    2. Automobile
    3. Business mistakes
    4. Personal liability
  6. DEFINITION MAGICIAN – S-Corporation – Corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income at the entity level.
    1. To qualify for S corporation status, the corporation must meet the following requirements:
      1. Be a domestic corporation
      2. Have only allowable shareholders
        1. May be individuals, certain trusts, and estates and
        2. May not be partnerships, corporations or non-resident alien shareholders
      3. Have no more than 100 shareholders
      4. Have only one class of stock
      5. Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations).
Business Coach | Ask Clay & Z Anything

Audio Transcription

Broadcasting from the drivetime show studios in business coach beatbox that rocks it is tulsa’s number one cpa and every way he’s a gentleman. It’s time to take a look under your financialmy name is chloe clark on the former united states small business administration entrepreneur of the year. The co-host of the thrive time show and I’m joined here today with the host of the look under the hood, show mr. Paul hood, the cp tustin everyone cpa in every way. We also have two special guests on the show today and I say:special I don’t mean special as there is kids marshall has a massive dysfunction that he’s coping with I mean marshall morris as an easy amazon best-selling author of the co-op in the book called start here, and we have dr. Robert zoellner on the show is not there he’s recovering optometrist he’s, always an entreprenuer we’ve been trapped in an optometrist body for too long, so weird have a fun show today and if you turn with us mr. Listener, 2 page 47 of a look under the hood call hood’s book we’re talking about the importance of knowing your weekly incomenow there’s a guy named marcus lemonis he’s the guy, who is the chairman of the gander mountain enterprise the good sam enterprises in the star of that show called the profit, and what are the things that he says it gets powerfully is simple.

He says, stay focused, work, hard, know your numbers and be disciplined. If you do those things and take care of your people, the likelihood of being successful is very, very hot. So short with you, dr. Z, you have an optometry clinic, yes, I do and probably serving the tulsa market now for 26 years. Yes, sir and I’m not going to ask you for the specific numbers on the show, but do you know the number of patients you need to see every day to break? Even yes and how? How do you react when you have one day where you miss the Marki’m crazy i, just read, we just recalculated the other day on my auto auction. How many cars I need to sell every week what the break-even point on the auto auction. So you know that we have our business coach celebration. We have a celebration. Mark cuz I asked my general manager. That was like a bad structures changed. We haven’t done that in a while, so we just redid that it’s going to cool, we live in a culture of paul hood, where people will celebrate just showing up where a kid you know:mike’s kidron, cheerleading right now, and all the kids leave with a metal or a trophy or a a verbal okay.

Thank you to the third grade squad for get your trophy and some ice cream and remember. The important thing is it’s fun, but he came up and I had a headset mic on talking about the importance of fun, andnot, really caring, who wins or loses cuz the the winners are the people having fun. He literally said I do winners and losers, not about who scored the most points, and if you had fun that you were of the real winner and it’s just like:okay, cool, okay, maybe haven’t seen a sports work. Maybe the watch, the ncaa playoffs before units in the hell, march madness work. Typically, don’t cheer for the team that had the most fun while losing I mean these are your thoughts. I’ve had thoughts just thoughts, so the average in business owner out there you’re surrounded by a team of people that they’re excited about the number of days in a row they’ve been employed at the same job. That’s right. They want to celebrate their one year anniversary at a job. I got two people I’ve had so many employees coming today is this. Is my 13th month of having worked in this area and I’ll go and it’s my birthday because I got hired on the same okay, but then you can be losing business coach money in that department. You literally could be losing money and i. Remember this I had to fire somebody almost to a 2 3 years ago and i. Remember that the idea was to take him out to the bar and celebrate his last day of drinks. I have team members of my team. Taking people who were fired out for drinks to celebrate their teamwork between the employer and employee is vast, so prince the good news of knowing your weekly income in the importance of knowing how much money is actually coming in with your self employed or you’re an employee talk to me paul help us neck play. It’s real simple.

You know you sit long-term goals, you know. Where do you want to be in 5 years, 10 years you break those back down into one year? How do you know? Where do you need to be in 1 year to get to that goal? What do you need to be? What do you need to complish monthly to get to that goal, and then you break it down weekly, because you can steer the ship and you can get there. You can accelerate your success that the shorter you break up those goals. So if you want to, if you want to double your income in in 36, so we have to quantify as a business coach that I didn’t see where on it on a path to get there. How much do we have to do weekly to get their marshall is a very good job. As a business coach I mean listen, silly marshall, you do a great job, helping figure out what the clients distant goal is your you do a very good job of doing that 1320 assessment finding out. What’s the mountain you’re trying to get to in a lot of times, they don’t know until you ask nicole white of the 5th power, but it’s you ask somebody wife or five times they usually like I want to be successful.

What does that mean to you a lot of money? How much is the money? How much money is? It is enough money for you in the morning, I have now to the weekly goal. That’s when you can get real, and you pointed out too many clients I’ve seen you do it take weed to get 26 customers this week to hit your goal:that’s doable, but you’re, currently at 10 or hey, you need to get 25 hit your goal and you’re at 25. So you shouldn’t hire another staff member because you’d have to manage them and it would you should actually stay. Small I mean I’ve seen you I’ve seen you do this talk to me about. How do you magically help somebody break down the big goal and of those small actions have to walk us? What most people do is they set the yearly goal? Okay, how much money they want to bring in that year and then they don’t revisit how close they are to that go until the following year. Is everybody was planning 3 months about 4 months out, but at the end of the day it doesn’t matter we’re not going to get to three or four months unless we bring in money this week and I’d like it doesn’t matter. Unless we go bankrupt, that’s that’s called not having a goal. That’s called having a hope, I mean i, hope, yeah. You got a hope that I’m going to get there instead of when you have a goal, you actually designed the plan to get there the step by step. Business coach Small steps-just like you know, doctors that you’ve heard this before you know. How do you need to know an elephant one bite at a time by anytime talk to the guys, guys, elephant the elephant mascot elephant, the room play I’m, sorry, I’m grumpy, because I’m dangered species are there any danger? I, don’t know why I say that is way to protect our mascot i, wonder if it would be on your diet but seriously because you you’re doing his physical fitness that you look fantastic by the way you too and so would be on. Your a diet, approved item.

Give me a steak, knife and fork it right up. I just would encourage all the listeners out there if you feel, like you, don’t know where you need to be I’m going to try to use my life as an example, and hopefully this is very helpful to somebody out there. One of our companies is called elephant in the room. It’s a men’s, grooming lounge and that company I pay myself with roughly 4000 embers to make sure we’re getting this okay and the trouble is on the show, not okay. So we have roughly four thousand members and I pay myself $8,000 the metric I came up with, for that particular business was i, wanted to pay myself $2 per member. Once we broke up with 8,000 members or 4000 members of payments of $8,000 and yours, money, extra I can pay myself extra, but I’m I’m, not i, don’t need any more than that to live on it all you know, so the rest of it is going back to the war chest to franchise, but I’m, very intentional about my business coach long-term goals and i. Think a lot of people want to raid the worcester. First, sign of profitability want to take all of it. Maximize i, just run that thing on empty i, just marched, I think it’s a natural desire that people have and I want to go. Look at these take on the stupid, marshall, wouldn’t mind just reading the war chest immediately, there’s some people who go to raid, the war chess and there’s nothing there in it and I’mma. Tell you why the super move here is know your weekly income, which is how much money has come into the bank account.

This is what I see a lot of times paul in the doctor that you get your take on this, but a lot of business owners don’t record a ton of sales they’re like oh, my gosh, weird crazy, profitable. We made so much money this week. Look at the bank account! No money is in there until there’s a lot of a big bear between spell victims bill today, I don’t want to get caught up in the middle and said:there’s a difference between sales in the income coming in to the bank account and so paul. Is this something that you see you with? With your clients, or maybe other clients, are other business owners that haven’t taken a proactive approach, I do especially even the ones that have some sort of a financial. The reality is, you have to have what’s called a cash flow statement about proactiv account for you to determine whether your account is proactive is one. Do you have now that you have a standing that you have a business coach meeting set up with him right now him and her right now, when is that meeting? Is it a week from now as a month, meals at 3 months? No point is:do you have another meeting, or is it just well we’ll get together when we get together when you get financial truths and I don’t care if you’re, an individual or or business, do you have a cash flow statement of cash flow statement is what we started with in the bank. How much came in how much went out what we have at the end of it at the end of this. And? If you have those two things and you got a proactive account, if you don’t, you need to give me a call or go to hood cph.Com I mean this and I want to help somebody out there. If you are out there and you’re listening to this show-and this irritates you it’s totally great-you can email info at thrive time, show.

Com and what I’ll do is I’ll hit delete right away, but you hear that interaction interactions you can send you feel better about what are the brands I’m helping grow is a tip top k-9 and I love those guys and I love that people, love dogs and I love the people that love the dogs. I love the dog, the people up, but I don’t want a dog. You know why I don’t want to talk. Tell you why cuz I know that I do not have the emotional capacity or the time capacity needed to even take a dog on a walk even one time. If I would ever even one time pick up dog poop, even one time, I would say who changed the org chart and put the dog in charge. Me seinfeld talked about this. An alien race, watches humans following around and anna, and picking up their poop who’s in charge who’s in charge. So I cannot have an animal like that. I can’t, but I ate it snowing. That is what sets me free, but the problem is lot of people that they want to start a business coach , but they don’t want to tend to the numbers. They want to start a garden, but they don’t want to weed the garden and I know that you the listener. You are going to person you’re one of the rare americans who understands what it takes to be successful. It so I’m giving you a once-in-a-lifetime or once every week opportunity. This isn’t larry 7-day once in a lifetime of seven days, is the epa’s. Com and you schedule your one-on-one consultation with paul hood. You get an hour of his time. Remember his team time to do what I would call a deep dive into your financials they’re, going to look at it figure out where you’re at versus, where you want to go and give you a free copy of warren buffett’s book snowball that I have half of red snow about marshall.

You know the audiobook of snowball rides ivan, warren, buffett 15 years old, and it occurs to him that men are waiting at hair salons in in barbershops, so he decides to buy using a savings using a paper out savings, a pin call machine and a soda machine or a pop machine vending machine and he’s going to take the money that he makes from that and bile and 86816 x, 1 acre of land 2 acres lane by lane. He leases it to farmers who are so far in debt. They need to lease the land as opposed to buying the land of a common practice in farming. Then he takes that money and he starts buying gift cards from the grocery store and the grocery says what he goes. I want to buy gift cards, I’ll buy them from you, I’ll buy them all of them right now, $0.80 on the dollar and they’re like okay sure, and he did the math, and he figured out the redemption rated read the book you can figure out. The actual number of it was like $0.70 on the dollar or $0.60 worth of never was the only a certain percentage of the people who ever buy gift cards ever redeem them. So it was like this altimate these buying money, and they would send the gift cards we sold in the store and he got to keep the money of off based off the unused gift cards and then idea he called it float and use that idea to then by geico. She found out when you buy car insurance certificate on file a claim every day, so you can keep that problem in a guy. Is just somebody come and set up a one-on-one consultation with you and put cpas. Com if they can determine that themselves, that’s just to make a little bit more coming week play what we do is we help people literally save more. Keep more and protect more of what they make and because in and then we go from from there and help that show them how to to actually increase the revenue, but really what we focus on is the money that’s already going out the door how it? How come we max more minimize that? How can we save them?

Are you sure old is 10%, and now broadcasting from the thrive time show studios in beatbox that rocks it is tulsa’s number one cpa in every way. What is it to them? It’s time to take a look under your financial station. Welcome back to the conversation, does it look under the hood with paul hood we’re talking today about the importance of knowing the weekly income at your family needs and we’re at financially I think a lot of times. People have goals that we set goals, but we don’t break it down to what are we getting paid per week before i? Take the show to a really dark, negative terrible place on the other glorious saturday morning is such a great saturday morning. I want to take it out of the bottom. It will balance out we’re going to go back to end at the at the top talk to us about what that first consultation looks like if I’m daring enough to schedule a one-on-one free, first consultation with hood cps.Com, just because I want to get that warren buffett book, snowball and i, frankly, I’m not passionate about who’s, currently doing my taxes. What is that first consultation, look like for the first business coach consultation. Where is spend a lot just me listening to them. What do they want where they at you know where they want to go and making a few just generic recommendations as far as the direction we typically like to help take them. For instance, we like to help them try to target saving 10% of what they’re already spending and when they say buy minnows it’s a double-edged to first way is, is to save in an expensive one of their money, going where what what bills do they have? What business expenses to the have her purse supposed to have, and how can we carve those out to reduce them and then try to help them see how they can take that money and put it towards their future and get it working for them play so you’re going to take that first meeting of them trying to save some money? Correct and I can say this from first-hand experience with two clients that I know I can’t do it every climate of two that I know of it to it told me they said:hey, thank you for the recommendation and that we were able to save on our taxes this year about 3%.

We will do our taxes in for next year, as were filing. We made a strategy that will allow us to reduce our taxes at a lot of times. You could do that by just changing the way, your structured as an organization example if I own a business and I d like to get your take on that I own. A business and I am a sole proprietor. Dr. Robert zoellner does not an accountant if I just want to get some common sense take from a text from you at 3 from your career having run businesses that was sole proprietor I’m, not an llc I’m, not an s corporation I’m, just a soul. My biscuit dude, with your gratitude for the truck doing some remodeling, what the hammer hammer! Why is double taxation, or why is it? Why is not being an llc or not being an s corp bad for me from a legal perspective not being a corporation, and why is it bad for me from attacks perspective z from your perspective, not as a cpa but has an optometrist on hillside and I’ll? Let cpa work on the on the on the tax implications. Hide mistake. In case you drive your hair to the fallen light, hit something and blows up a house I mean real human and picture real humans. Carter says, and it was going to happen if you’re in business-and you do more than million dollars a business in your business for over 2 years. He does not think it’s possible to not get in some kind of lawsuit if you more than a million dollars a year revenue, so you have to protect your assets and that’s that’s the whole thing. It’s an entity by itself. It’s not just you as a sole proprietor. If it’s just you that everything you, touch business coach tone and having her needs a little tent is up for up for grabs. Your ass sets. Chicken was for the visual before we get into the tax ramifications of not having a corporation.

If you look at it is back in the day and the day of, what’s a knight’s chivalry medieval times, medieval times what happen? If you would have a king and a king made a lot of money a lot of cash. He typically would build a kingdom right to protect when he built all around it. I need to have those flaming arrow, guys chunks that are there shooting the flaming arrows. How are the feathers around people that thing up with snakes and crocodiles and is nasty? Please? Can you protect themselves of a wall? Will now in our our our current society? You have four areas where every business owner is exposed. My work at the farmers insurance agents for years we ran into these for all the time you have to have your personal life insurance like if you die right. What’s going to happen to your family’s assets, to your automobile you’re driving around a weapon I mean, if you think, you’re doing well right now, when do a school bus, regular, a minivan or a vehicle positive things, I can’t tell you how many times did farmers insurance. We met somebody after they hit somebody on a bike after they. What happens is they can garnish your business coach wages? If you lose the lawsuit, they can make sure they’re taking out money out of your personal that they can, they can take money. Out of your account is a way to pay for those medical bills. That’s expensive! If you even knew who hasn’t made a mistake, while driving my kids I’ve never sit in while driving. If you have it in your business, your business could make a mistake while doing all providing the service or the product.

You could make a mistake in life. Insurance ready got the automobile got. The third is this:this personal stuff, it’s like personal liability, like you, have a trampoline neighbor kid comes over, hurts himself whatever, so paul can help. You get your walls up to protect all four areas of your life with different insurances and products, but it be your business itself me I get the wall around the business and one of the first foundational walls you have to build is forming a corporation corporation agree to disagree with, typically what people don’t understand? If you don’t understand this, you definitely need to go on my website, hood cps.Com and come see me. The irs does not recognize an llc isn’t into an llc. Is a state-level legal entity that wall that you discuss. So we have to tell the irs at this entity is taxed as a sole proprietorship or partnership or corporation if it’s corporation with the town, where there’s an s, corp or c corp, and there are tax savings depending on a tax ramifications, depending on which type of it do. You have theirs. Timing and business cycle dependent that kind of dictates that there’s friends benefits that that apply to one type of it and it don’t apply to another in there are ways to mitigate or to manage social. The social security taxes that you pay depending on what type of into york. So the reality is, is the llc. We typically start with an llc across-the-board limited liability, corporation down across the board, and then then we decide is this llc going to be taxed as a sole proprietorship partnership or business coach corporation cuz? You can be a sole proprietor, operate from attack standpoint as a sole proprietor and have that wall around your business I’m going to read it, you I’m, going to be the definition of an s corp for the others, not familiar with that terminology and s corp. Is it a corporation that was been even form a basic for tax purposes? What it is it’s a closely-held corporation where you can elect to be a subchapter s which, under the internal revenue code, allows you to file your taxes a little bit differently.

You can make it so talk to me from attacks perspective would say that I’m an llc. What kind of person should actually file as an escort moving forward circles around? What’s fair and reasonable compensation. So what we talk to people about, as if you’re going to be set up an llc and will elect to be an s corp when your profit gets profit, that’s income, less expenses, it’s above 32 $40,000! Because then, when you get above that 50-60 $70,000, we can pay a reasonable quote:unquote:reasonable salary in and control the social security taxes, because, if you’re, not an s corp, if your partnership for an llc every penny profit, you make a subject:social security taxes, so the s corp allows you to pay yourself. What is fair and business coach reasonable this and it makes sense above how many thousands of dollars about 40 to 50 thousand at the bank for the average last year. I did not know that I know that, and so, if you or just single since I’m great at my job, the job I’m a great welder I’m, a great teacher I’m, a great dentist I’m, a great white. Don’t know about the tag I take it to a dark dark place here. Z. Have you thought about how big the tax code is recently? Have you thought of just the size of the text? I actually had a friend of mine, very good friend of mine who works for the irs, and he he we were just joking.

This way you have to have a beer, and you know somebody works there. As I said, buddy I can ask you this cuz. He hears all that, but when you guys are somebody do you guys ever actually agree on how much taxes the person I was under two people auditing us know, honestly, it’s so hard to interpret man. It really comes down to how the person interprets it. You just kind of like the legal system. The judges will say based upon presidents, and so it becomes like to irs agents can’t even agree on how the tax code should work. Let me do not see this all the time, oh absolutely, and then-and you know what clay that’s a positive thing for us, because because because they can’t agree, that means there’s room for us. If there’s the great you know, I tell my clients are black, there’s white and I’m too pretty to go to prison for anybody, so I’m not going to those areas will get all up in the gray, and someone told me one time play that the that the tax code is 10, * z, you may have said this I can’t remember. The tax code is 10 times the size of the bible, but didn’t have any of the good news. I wish I would have said that, but I wish I I I just heard that are great areas. That’s that’s where we get off get all the panda, because I tell my clients are typically it’s just like I used to coach my boys about every sport and one of those basketball and I used to tell him if you come off the court at the end of the game, and you don’t have at least two fouls, you weren’t playing hard and so I believe the same way as far as the tax code is is there are legitimate deductions that people do not take that. We need to look at that if, as long as we can arguing and basement on in the tax code, even though they don’t agree, we can take them. If you want to have an business coach accountant who was going to aggressively help, you mitigate your taxes and be very proactive about your accounting in your taxes. You owe it to yourself to schedule a free consultation at hood cps.Com, it’s at that’s, hood, cpas., he’ll, give you a free copy of warren buffett’s book snowball schedule, your free consultation today with hood, cpas., com and I promise you. You will not regret that decision with a hood cpas. Com today

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