Maverick ZINE — Tattoo Culture, Art & Artist Stories

Over the years, we have actually learned a lot from great business owners and operators. There's no better way to learn how to run a company than from other people that are truly living it and doing it every day. Anybody going out in pursuit of income that's going to spend money to try and earn money as a business, I think should have an LLC. But it's not even for a tax reason. It's mainly for the liability purpose. Like, let's be honest here. If you get sued cuz you're 4 months into a venture and something goes wrong, you just ideally want to have some wall between your personal assets and the business that's actually operating. You are the only person that can control the outcome of what it's going to look like when you're 70.

[music] All right. What's happening? This is Austin from Maverick Supply Co. Today we're here in the warehouse hanging out with two highly intelligent some peoples. Some my peoples. One happens to be my wife. She's a finance. Can [laughter] I call you an expert?

Megan Comfort. Yeah. Semi and Matt von Treger the tax man. Do they call you that in the streets or what? No. Yeah. Yeah. I don't know.

No [laughter] good nicknames. No good names. They might not. I never got a cool touch. You said you got noticed at UNLV. They're like you're the tax guy. I have. Yes.

Yeah. Yeah. The tax guy usually is is something like that. Yeah. The guy online that talks taxes. Yeah. So [ __ ] we're going to get down to it today. We're going to just kind of basically break down some structures for you as a tattooer to help you out understand business structures, taxes, all sorts of all the fun stuff that we as artists most likely and generally don't like.

Um, so let's try to make it fun and have a good time. Megan, my beautiful wife, do you want to tell us a little bit about yourself? Uh, I like being on your podcast. You say nice things in front of me. [laughter] Like this is cool. Um, no. So, um I'm married to Austin Spencer, of course. Um but I've been in banking actually for 22 years, specifically in the small business realm.

So, I love it because I get to help so many different small businesses and I get to see great operators and I get to see people that aren't so great um and really kind of use that information with my finance background to kind of help and guide them. So over the years we have actually learned a lot from great business owners and operators. I myself have a podcast called Through the Door, the insiders perspective on running a business and it's specifically about that. It's about learning from other entrepreneurs. There's no better way to learn how to run a company than from other people that are truly living it and doing it every day. Um so that's kind of a little bit about my background. I specialize in small business finance. So that's the government guaranteed style lending.

It's called SBA financing and then really just any small business type financing which is one of the reasons why I've met Matt and we share the same mission which is trying to get clean books for every small business. Um hopefully you know you guys will help champion that our endeavor. Uh but yeah, Matt, go ahead. My name is Matt Matt Bontriger. I'm a CPA. [snorts] Um let me see. I'm 33 and I've been in practice now in tax and accounting for I graduated school in 2014. I feel like I'm one of the 10 that was born and raised in Vegas and I'm still here.

I feel like everybody's leaving the heat, but which I would say I'm probably ready to too. These summers have been brutal. [laughter] Um, but I tried to play college baseball. Thought I'd be a pro baseball player and that obviously did not work. And then I stuck in school, stayed with accounting, and now I really love the profession because it is I think it's the language of business. And you start to realize that even though I'm new to running a business, I've ran my firm for 5 years, is you start to learn some of these basic principles that are so easy to understand, but when you meet a business owner that's been running a business for 10 to 20 years, they just never took the time to understand that stuff. And so once once they do, they obviously take off and are at a different level.

So, I like Megan share this um goal of helping small business owners more so from a tax perspective now, helping them save money on their taxes. But I started off before tax in accounting. And you know, when you're a a grad student or, you know, an accounting student, they make you pick between audit and tax. I started in audit, realized that you're kind of the bad guy in audit. " So now I'm in tax. But but I do love that you have an audit background and I think it's made me a better tax person for yourself. It teaches you a lot about things you see that people maybe do wrong or like problems that it's like oh well that's what happened and that's kind of how it started them down this path. Yeah.

You understand how to look at stuff from more of like a you know less than a surface level really dive deep and see see what's going on in a business. So I like it from that perspective that it's really helped me become a better accountant. But yeah, tax is where everybody you're you're everybody's boy when you do tax cuz you're you're there to save a money. So yeah, I run a firm called True Books and we've been doing this for 5 years. Uh quit my job in 2019. I like I you know my son was 6 months old at the time so I was pretty scared but the longest position I've ever had is my own firm. If you look at my LinkedIn every year and a half Matt's bouncing, Matt's going somewhere else. But now for the last 5 years I've ran my own thing.

I think like one of the key important things you said you just mentioned was that you're a CPA which is certified public accountant and growing up in tattooing I always had everybody always just telling me that their friends doing their taxes are these random people and like the CPA is a very important part right of what you do and that's different than an accountant. It's different than your aunt who does books. Yes. Is there any important thing that you want to like share with us of like why we should specifically go to a CPA versus anybody under or Yeah, I really think it's it's the licensing. So, specifically, right, it's a license that I hold means I had to go to school for so long. It means I had to take certain tests. There's another designation called an EA, which is an enrolled agent that's issued by the IRS.

And I think the importance of working with somebody that has credentials, it just shows that they're sort of married to the profession, right? like I'm here and I've tried to earn the degree or the status at the highest level. So, it shows that I'm there as a professional to help you. What I will say though, where I love to hear, oh, my aunt does this or my sister does this, is bookkeeping. Cuz I think that I want to solve bad bookkeeping, like it's world hunger. That's what me and Megan really share is these business owners just have no clue how bad things are until they get somebody in there that does a good job. And so, but it's very common though to have your stay-at-home mom or someone's sister, someone's cousin, brother to run the books from home.

And I think that that can be done. But when it comes to doing your taxes uh and tax planning, I think you need somebody licensed so that you know you're getting a good job done and your license basically hold sorry. Yeah. Holds you, you know, reli you're liable for doing it legally. I'm under a governing body. Well, and you have to represent them typically in the form [clears throat] of an audit. But it's the continuing education that I think is important with CPA. Like every year you're getting hours because you're learning cuz tax change quite frequently sometimes and there's benefits and advantages and things that you want to be able to take advantage of.

A CPA is required to make sure that they're actually fulfilling those educational hours so that they continue to be up to speed on the latest and greatest things that are obviously going to help their clients. So if you aren't working with someone like that or you are just kind of dumping like prepared books by someone who doesn't understand finance on the desk of a CPA or an accountant and saying like [snorts] file you will be very upset over sometimes the outcome or things that might come out of it right just because of the sheer fact that they haven't helped you do the bookkeeping properly. They can't do it quickly. They have to actually ask you a lot of questions. So, it's a lot more work on your end. You don't necessarily have time to do it.

That's typically what I see is that people are like, "I don't have time to file my taxes or do this. " And then they're in the same boat come September because they haven't actually like made it part of their business practice, if you will, to make sure that you're doing it. They're about 6 months behind in that scenario that you said where, hey, I'm just going to extend my taxes. So that means come, okay, you bought yourself six months. Come September, October, you should already be talking about the upcoming year, but they're already dealing with or still dealing with the prior year. So it is that shift of, you know, hey, I need to get off of the extension, make sure that come November, December, I'm working on my business, getting the numbers together.

Um, and that's one of the things that we, you know, we've chatted a lot about is it's going to cost the business much more money and time and headache if they wait. " But I'm like, I get it. It's, you know, let's call it 5 6 7 8 grand a year. " You're going to be in a panic and it's going to cost you more money. Yeah. Well, and not only that, if you're not doing like we always set aside time, I try to talk to him about it and he just kind of glazes over a little bit. You're the operator. He cares.

[laughter] He's the operator. Yeah. He truly cares. I'm like I still tell him I don't like to be late on [ __ ] [laughter] This is what is happening. What do you think? " Reverse. Yeah. Tell me.

Um but it is interesting when like for tax planning, people don't even think you need runway to really make a difference on what your tax obligation would be. " I always say like do it in like September, October time frame. At least then you kind of have an idea of how you're going to end the year. you know, it's only a couple months left. And then you can really have a good conversation and then figure out, you have a several months to figure out like, okay, do I need to save up some money and spend it before year end? Do I need to adjust how much I'm paying myself in compens compensation with W2 versus how much I've been taking in distributions? So that when you go to file, you already know before end of year how much you're expected to pay.

And now you have 3 months, you know, or however long to save up to be able to to make that payment to the IRS. You know, that kind of I brings up kind of a cool idea. Uh if you know, from a tattoo's perspective, we're busy. We're drawing, we're tattooing all day long, then we're drawing at night. Is there an idea of um like kind of like a schedule or something that we could maybe try to apply to a lot time once a week that we gather all our receipts or anything like that? I don't, you know, my thing is quarterly cuz like I we run our businesses, you know, together and I have a CPA that does everything. Obviously, you know who my CPA is, even though I forgot who you um but it's I like they do the bookkeeping and everything. They close out the books every month and they give them to me within the first two weeks of the month.

Yes, that is a mandatory requirement that we negotiated and agreed upon because that's another important thing. Like a CPA and other bookkeeping services are also busy if you don't actually set that expectation cuz sometimes there's some unexplained adjustments or things that they need your feedback on to close out, right? And so if you're not getting back to them, then they're not getting closed out and now it's however many month Yeah, exactly. However many months. So that is always so I know first week of the month I'm looking for an email from the bookkeeper because I'm like okay they're going to be asking me at least a handful of transactions and I already kind of know what they are right cuz I'm also looking at our bank accounts and everything we spend our money on like a fine tooth comb which and when you're saying transactions like where like this this charge on the credit card goes into what file stuff [clears throat] yeah I mean sometimes Austin does use the a wrong card and defense happens extremely frustrating is what we [laughter] call it on accident.

He's a co-mingler. He's like, "Look at these cards. " And I'm like, "You're [laughter] you're right. That is actually Yeah. " Like, I don't know. Literally, every single card in our [ __ ] I wish we could. I should. But that's a good point.

[laughter] Just I should tape them. No, we should. I can just put tape. Get a cricket and put a Yeah, put a label on. You gave me a great idea. I'm like, "Use the green one. " Yeah. Yeah.

All right. I'm going to do that now. But just as you said though, see, I don't even think it's a frequency of weekly because you're right. I wonder what quarter like, you know, specifically tattoo artists are more busy and things like that, but it is a monthly thing. We do the same thing with our clients by the 10th of every month, we want to give them the following month's financials. " And we, you know, they tell us and we categorize it. And then I think the action item is reviewing that set of financials that comes to them because the worst part is is if you don't get back to them on those items, like I always tell clients is like, hey, if we're if you didn't get your financials, it's your fault. We're we're likely waiting on you for something cuz my team has bugged you to get what we need.

But the worst part is is if you don't get them what they need, you're still going to get charged every month cuz they're still doing the rest of the work, but you're never going to get an actual close to where you can look at your financial statements. Soon you get to the end of the year, you've paid for bookkeeping, but it's kind of asked cuz then not hasn't been done. And then it comes like November, December, and you're like, "Where's my numbers? " So, it is this once you fall behind, you can quickly fall behind and kind of fall off the as an artist. You forget anything and everything. You can't find stressful. It's stressful cuz now you've dug a hole and you got to dig your way out of it. And that's why maintaining it regularly is so important.

Not only that, I like looking at the numbers because I like to see how are we performing, right? How are we performing to last year? It helps me understand, do we need to have a different conversation about strategy and moving forward? Do we have to have more preparation because this slow period is going to last a little bit longer and we need to really understand the game plan to ensure that we are going to be around when the rebound happens, right? when people start feeling better about their situation and consumer spending is is up cuz right now like it's down and a lot of times people don't look at any of the symptoms that are kind of happening. It's just like I'm sick now and now I just got to deal with it rather than being like oh I'm starting to not feel well.

What are the preventative things I can do so that I feel better so that I can keep moving forward with my life? And it's the same thing like we do it in different areas. But I do agree that I think finance and financials there's two things that come to mind like with a lot of business owners and even tattooers. Number the first one is like where do I start and how do I find a good one? Like what would be something that you would tell them to look for to say like oh I found a good one. Yes. because they I we've heard some horror stories from other tattooers that are like, "Yeah, I I got someone they were a CPA, but like they go they never talked to me. They they never reached out.

" That's one of Yeah, that is one of the two things I leave. And and I'm like, I know that that's hard, but that's why I'm like, not every professional is created equal. And you really do have to It's like a Tinder date. You know what I mean? Like you got to find the right person that is invested in your success and that actually cares about you as a client. Yeah. You're going to spend a lot of time talking to them about sensitive [ __ ] you know? So, like find somebody that you can bounce things back on and forth.

You're not intimidated to ask questions that will take the time to explain and walk you through things cuz these things are incredibly difficult for somebody that doesn't spend a lot of time in there. Even just responsibilities is also wildly important. talking about that I noticed that clients don't oh they're just like oh yeah you're my CPA therefore it's your job to reach out to me and tell me what I need to be doing and it's like no it actually isn't right it's like you we need to set those roles and responsibilities together so that you can understand this is actually what I do for you but this is what I need you to do in order for me to help you like help me help you situation you bring up a good example so the other today. Well, first, when you're trying to find a good professional, I would say ask your friends and family first cuz you want somebody in network and but two is I feel like prospects are scared to ask questions like it is a Tinder date because either it's a they're not licensed and you're talking to the person that's licensed and you're assuming that they know everything.

" Yeah. So now settling into a prospect or a scoping call cuz I'm like let's really get to know each other and what I'm going to do and what you're going to do because what it leads me to think is the other day I'm still very involved in my business. I mean we're we have about 30 employees. We did three and a half million last last year. So it's pretty goodized firm. But we had a client leave us a one-star review on Google and I'm on this morning walking. I'm [ __ ] pissed. So immediately asking rude to this guy, you just hammered me for a one-star review for something I don't even do for you.

But in your world of accounting and tax, I'm your guy. I do everything because I'm your accountant. But I'm like, this is for a payroll problem for bookkeeping. Dude, I'm not even engaged to do your bookkeeping. I'm not engaged to do your payroll. I would love to, but what's my incentive now when you just whack me with a one star for something I don't do? So, it really thinks you or it makes me think to go back is you could never overset an expectation with a client in helping them say, hey, this is what I'm going to do for you. This is what you have to do on your own cuz it also gives them the chance to tell you, I don't want to do that.

Can you do this for me? And then it's more money for you as the provider. So, well, and it just sets common ground. I that happens a lot even in my world in banking where they're like, well, I bank with you. just pull my bank statements up. You can see how much money I'm making. You can see how much money I run through your bank. And I'm like, I can't tell you how much that does.

That is not what I'm talking about. And it is not my responsibility to be looking through your bank statements and compiling a P&L for you. It is your responsibility. And not only that, you should because it does help you strategically plan. Like I can't remember which guest I had on my podcast, but they said something like don't just work on like for your business, work on your business. Yeah. " like you don't even know if you can do it because you haven't been paying attention to any of the financials or the aspects that are honestly most important to really move the needle for long-term like longevity and wealth generation because that's what to me the value the investment that you pay of that 450 or 900 a month you know whatever it is it's truly an investment in your long-term future as an individual that's going to age out and get old Yeah, we started going into this last night and is [clears throat] going to need something to fall back on and live on because you are the only person that can control the outcome of what it's going to look like when you're 70.

Like, I think about that. You don't want to be in the chair when you're 80 or 90, you know? Yeah. I've only been tattooing for 25 years, which is a long ass time in the in our world of tattooing. And not too many people really are in that like I don't know what do you call it? you know, the extent of time of I've tattooed, but so I don't know. One piece of advice I can ask everybody to do is to invest in this [ __ ] Make sure you're Well, we're going to start getting into finance stuff, too, and savings and all that and tax structure. But, um, just, dude, don't think that you're just always going to be able to tattoo forever and spend all your money on your new Lexus or whatever you got.

Well, you probably don't want to tattoo forever. And I find it so completely different in the sense of your dayto-day talking to vendors and clients and moving things around and she's checking you know the all the financials. I would like to see where it's probably interesting for you at some points to be 60 90 days throughout the business and then you look at financials and see like so I always call this the gut check test like if the financials mirror what you just felt for the last 90 days within the business and sometimes they don't sometimes they do and so it can be like well hey where's this cash? Oh, why was revenue so high here? And it's it's always interesting to see those two dynamics come together because the time is spent differently dayto-day.

It has to be. You can't run the business with one person doing both. And bottom line, I I just realized that after like 20 years of your back and your neck and everything is going here. And if you just did that on your own and you didn't build a another business on the side or uh an actual tattoo shop or something that has revenue coming in that can help you like if you do get into a car accident or you do have a newborn and you need to not be at work as much all these different Yeah, flexibility. That story you told me about the building. Yeah, with the girl yesterday. That was amazing. Yeah, that's actually a sponsored artist.

I was telling him like she does vlogs on her Instagram. Casey, I think it's Casey uh Oh, Kelsey Colors. Kelsey. Thank you. Kelsey Colors. Super cool story. Yes. And I love her vlog that she did about what what was possible and how lining up with a good banker, a good CPA, like all these professionals that really took the time to explain to her how she could achieve different things.

Like it just really opened her eyes up to possibility and like what she's creating outside of tattooing, which I think is so phenomenal. And that isn't a unique story to her. That's something that many people can do. But you do have to you have to be looking forward. That's why I love finance so much. So I tried to go into accounting, but accounting was not my world. I didn't like looking back, right? I like it's nice to look back and understand.

And I do agree it's completely the language of business. But me, I'm a fin forward thinker. I like looking at the future and doing proformas and projections and being like, can is this possible? Is this feasible? Is it achievable? like what tests and things do we need to do to understand the market and that's how we approach every business we start before we start it what's the initial investment in capital what is my overall return on that investment how quickly is it going to be ramped up and then what's my target break even point that I actually have to hit and then how much do I actually have to do to be like cash flowing like free rolling good money right that we can then take and multiply into something else and it's it's that for me it's that simple and I love doing those things.

I nerd out on that stuff. Right. Meanwhile, I'm over there in the other room about textures and colors and how this makes people feel and the experience of the whole entire thing and how to build community and bring people together, which is they're all incredibly important, but without the finance side, you're like, it's just going to be a But you don't have to marry a finance. You do have to marry, if you will, professionally, someone that can actually help you with those things. So that kind of brings me to the entity structure cuz we're totally kind of going off some tangent. Well, no, but they're fun. They're fun tangents. But so there's different types of operators in the tattoo world.

I'm just going to name like some of the simple ones or maybe you want to tell us like what entity types you think would be good for those people to set up. Yeah. What's your first scenario? I would say first scenario uh not an employee, you know. Uh so basically you a well what we have so what do we have commission you jump into the industry you're newer you're in a shop that you need to feed you uh not even rental just a split commission it's an independent contract you get Yeah. So the shop gets a piece of whatever. Yeah. Yeah.

Yeah. And then our responsibility as a shop owners to help feed you, nurture you, keep you all in hopefully grow and move on to maybe next position would be like booth rental where you come in and you collect all of your cash, but you just pay rent to the house. And then from there, you would jump into shop owner uh commission or rental and then hopefully move up to somebody that owns the building that the business is in. You know, those are kind of like our basic structures. Well, let's start with one. Go ahead. You just [laughter] need five. Well, I was just giving you all the levels there.

Yeah. The solo. So, if you're newer, you're on sort of a commission split, my advice there is anybody going out in pursuit of income that's going to spend money to try and earn money as a business, I think should have an LLC. Okay. Really, but it's not even for a tax reason. It's mainly for the liability purpose. Like, let's be honest here. If you get sued cuz you're 4 months into a venture and something goes wrong, you just ideally want to have some wall between your personal assets and the business that's act, you know, actually operating.

But, you know, if somebody wants to go at it without one, that's fine. You're just basically considered a sole proprietor. But if you ask me for the person that's sort of on a commission split, they're new to the industry. they just spent two grand on supplies and a class, whatever it is. I would have a simple LLC and you will file as a single member LLC, which we're getting a little nerdy here, but on your tax return is literally just a schedule C. It's another form. You don't file a separate tax return. And that that's how I would keep it very simple.

The sole proprietor would be just based on your acting as Exactly. you acting as your which opens you up to liability. Let's talk about that a little bit cuz I do see a lot of people do single member LLC's and they put it on their so it's basically almost looks like a sole proprietor but the top of the form literally says but it is actually an entity. How do you ensure that you actually create a protection of liability there? Like and I'm speaking about comingling because that's the common mistake that I see. That's where people go wrong and literally shoot that take a gun shoot yourself in the big toe. That's what people are doing when they do that because you're just setting yourself up for failure in the event that something goes wrong.

But comingling, which is Yeah. So, right, you're using business assets to pay for personal stuff. You're you're out and you're using your personal credit card to pay for business things. " And then bring it back to me. But also like you, let's say you get sued. Like this is how we go down the path of bad. Yeah. You get sued.

You know, someone catches on that you're comingling or you It's the first thing that they'll probably try to attack cuz you're a small unorganized business is, hey, if they can prove that you're really using your personal piggy bank to fund this business or the business's bank to really fund your personal life and there's no delineation, then you can potentially lose the protection of what that LLC was even there to do. Yeah. So then they are suing you sense of security. A lot of people do that. " But then they don't follow the rules of separating. Yeah. Which would mean two completely separate accounts. You pay out of one account.

Yeah. Or they pay everything out of their personal account and they just transfer said that. Yes. " Like because then that protection goes away. Here's exactly what I would do. You'd get an LLC in the state that you're in and then you'd get an EIN, which is an employer identification number. The joke is when like people come to me and they're like, "Hey, I just got my EIN. " Cuz that [ __ ] is free.

You don't have to pay anybody to get an EIN. You go straight to the IRS website. You get it. So, that's where you get your LLC, your EIN. Then, you go get a bank account. The bank is going to ask for those two documents, your EIN, and your LLC paperwork. Once you get your bank account, you're about done. The only other thing I would do further is get a credit card like a small business credit card.

So once you've done those four things, LLC, EIN, bank account, credit card, all income and all expenses go in and out of that credit card and bank account. And as you need money as the business owner, if you need five grand, just rip five grand from the business to your personal account, call it a day. That's totally fine. Where it goes bad is you're like out to dinner and you use your business card to pay for it when it wasn't business. or you're out and you buy some vans and you use your business card to pay for them. That's where [ __ ] starts to go wonky and then you're losing the organization and and and the like pulled five grand. I mean, so is that's then later considered a draw, right? Basically.

Yes. Cuz think about if your business made 50 grand and you add 10 grand of expenses and you net 40. Yep. If you rip yourself 10, some people think like that's a deduction and now your business only made 30, but it's not. When you're a sole proprietor, all of the net income is yours. You don't, unless you have employees, you start paying contractors and employees, pay them from the business 100%. Take it as a deduction. But all we care about is keeping track of your income and expenses in a separate account.

And I'm telling you, if you can do that, you are eight out of 10 steps done. Cuz then someone else can come in really easy, reconcile it, categorize it, make it a little bit prettier. But if you can get at least that, you're in a really good spot. Really good. And not only that, there are there are programs and stuff now even in banking. Like every bank has this where it's like we call it auto. Yeah. So it does actually take your bank statement and reconcile it into a P&L based on the transactions of the ins [clears throat] and outs that are happening which is honestly even if you are even just doing that that is 10 times better than what yes very helpful cuz at least it's in the format that it needs to be in and you could quickly kind of eyeball and gut check if you know you're [snorts] moving in the right way.

So that whole structure is based on and the ones that I mentioned are just like if I was doing everything myself as this tattooer. But bottom line that's pretty rare. Partnerships are crazy in tattooing and everybody seems to do everything with partnerships and whether they're a handshake or not. Like maybe we could talk a little bit about we, you know, we talked about the importance of that is like when you and your two buds all of a sudden decide to leave that shop and you guys are going to go open up your own shop and just put, you know, who's going to sign the lease or are we all going to be on the lease and who's going are we actually going to do a bank account or is it just going to be super casual and one guy puts his name on the lease and then everybody else just cuts them, you know, 400 bucks for their portion of the rent.

Yeah, dude. Like I watch so many not only do the partnerships just get messy and most all partnerships they will get messy at some point in time. I just I I just cringe when I watch everybody just so quickly do this. I've done it myself in so many different scenarios and I've lost friendships over it or whatever. But I don't know. So like say two or three people decide to go out. What's like the best way that they can approach opening a tattoo shop and whatever whatever structure it might be. So, this could get a little crazy, but at it at its most simplest form of if you're going to have partners involved, still you go LLC and then you'll have multiple members of that LLC.

So, let's just say you open up a tattoo shop, A, B, C, partners A, B, and C. There's three of them. The easiest way is obviously once you guys discuss what your splits are, cuz let's be honest, A's going to bring 50 grand cash. B is going to bring 100 grand cash. C's broke, but he's got up to he's the best tattooer of all three of them. Yeah. Yeah. I like this.

how [ __ ] works. Like one of them's really good, two of them got money, mom gave him some money to start a shop. And so thinking, that's what I do like about partnerships and tax is you can get so crazy with the allocations. And I was in a partnership when I started my firm in 2020, bought him out in 2023. " Yeah. This person. So really thinking through these partnerships when you get together and understand like being cool with one another the way that you are when you start it. You have to be able to have the candid conversation of like what happens when he's mad and wants his 50 grand back.

What happens when this guy starts to want more money? So thinking through and it's like cliche, but thinking through how you're going to break up is very important upfront in a partnership because if you get there you need to understand what the rules are that you guys are going to follow to break up and what you guys think is equitable. So um but again sort of core level is LLC you guys are all members of the LLC and then what happens in the tax world is you guys will file think of it as that that unit that business will file a tax return and you each will get a piece of the pie for your respective share. You can get a little quirky on once the business is making enough money that you each should have your own LLC's individually that own your interest in the tattoo shop.

So like the entity structure can get a little bit more complex and that's now we're getting into tax strategy. That's to save you some money. But up front though when it allocations you have to think about how you're going to wind it down. You have to and if you don't it's one of those things where like now I have kids and I watch my kids like you're just being silly and this is not going to happen in the next 20 minutes. But you have to almost treat adults like that and it's like you guys have to think about how this is going to go bad. I love how you thought about how it's going to go great. And that's good because you're going to operate on that for the first so much time, but at some point someone will want out. Someone will want more money.

And that's a that is a red flag if you are with a group of friends and they can't have that conversation. Huge. And the story that we all tell ourselves on, oh well, I'm not going to talk about it cuz we've known each other for a long time. I think they know where my place is. Like I think they understand. I think they know. and like I don't know, I trust them. I've known them for a long time.

And it's not it has nothing to do with that. That's what sometimes bothers me about conversations about those things cuz me I have no problem having a conversation about like let's go through let's walk through these scenarios. I find it so interesting when people get emotionally upset over just the hypotheticals. Honestly, it takes me back a little cuz I'm like this hasn't even happened. [laughter] We're just You're storytelling. We are literally It's like It's like when I get mad at you and you cheat on me in my dream, you know? It's Or when you have too much to keep. Yeah.

Yeah. Exactly. [laughter] It's very much like that. Yeah. Totally. Like this hasn't really happened. This isn't real. So why are we why are we getting upset over this conversation?

For me, that is like that's a signal. That's a signal that you really need to be thinking about. I'm going to raise my hands for all the artists out there that are all emotionally driven and connected with their art and that's all they do is act on emotion and inspiration. So doing this as an exercise would definitely be pretty interesting to do and it's just it saves your friendship totally and it and it secures the success that you all at the end of the day truly want. So in the your in the scenario that we have where one guy is just the best tattooer, right? and the other guys have different varying levels of money. That contribution is entirely different for every single person. All are important though, right?

And so it's very you couldn't do it with all three of you without all three of you. So it's like find out what is most important and what's the biggest fear of each person so that you can then address that. You can curate an operating agreement that actually accounts for that cuz that's a legal document that if [ __ ] hit the fan then yes, you can you'll dust that off because that's literally what an operating agreement does. You just put it somewhere safe and then you pull it out when you're like I don't know what did we decide or agree upon like I need to look at that and that's the governing document. So it's like it's in writing and it makes people feel it's honestly a sense of security for everyone for sure. you don't let resentment build up or these, you know, you thought through it.

Yeah. These made up thoughts and stuff beforehand, those things you'll always have that that ease in you in in the long run when you're going through tough times or Mhm. It makes me think too with like you said like they get so emotional. That's almost a good thing because what you have to think about is let's say hey A, B, and C, we're 3 and 1/2 years in the business has 400,000 in cash in it and you guys own a building. It's good because then at that point, hey, A, B, and C, if you guys were to split at that point, who wants what? Who thinks they're entitled to what? And that's really what you're trying to split up is the cash and the assets of what the business has generated. Everybody's going to leave with their own skill sets.

That's, you know, that that's easy, but it's, hey, if this thing grows to XYZ, what do you guys want to split? What do you think is equitable? And so sometimes, you know, it's easy like once you lay it out that way, it's easy. Well, hey, I want a third of the cash cuz I'm a third of a partner. Well, what about the guy that put in 100 grand and you put in zero? Yeah. Is he entitled to more? So, it's already good that you start to have those conversations now because you have to brace yourself for them to happen eventually.

You're not going to be partners for life. If you are, great. But you have to think about the breakup. So, in that concept, I love that you talk about like eventually you would want to do an LLC. Each person do an LLC, right? That owns their interest. And I love that concept just because so many professionals actually do that. Like attorneys that get together, they do that.

doctors that get together, they do that. Yeah. Other professionals and tattooing is a profession. You guys are all professionals. That needs to be kind of translated into this industry and treated the same way because it does give ultimately not only the main company benefits, but also all of you guys independent benefits based on your own personal tax strategy on how you want to treat it. That's why all of these investments of spending the money to create entities and make sure that you have that separation and you invest in a CPA, I say investment and not just a cost, right? That means nothing because it truly is an investment into securing a future long-term for yourself and your family. So, when we talk about those scenarios, tell us the difference between because even with an LLC, there's different designations, right?

There isn't an LLC tax return. It's there's four of them. Yep. Can you go through those and what is the optimal for a partnership when you know that their contribution to the business is going to be different? Yep. Yeah. So, cuz it is very similar, right, as far as professionals. You guys are out, you're earning a fee for services being done.

We're all in the service based business. So, when you set up an LLC, the IRS knows nothing about it until you get an EIN. When you get an EIN, you're kind of telling the IRS, hey, this is how I want to treat this LLC for tax purposes. So, when you set up an LLC, you can be taxed as a single member LLC, which is very similar as a sole proprietor. You can be taxed as an S corporation, which is what most tattooers are going to want to do, even if they're commission, you've started to rent a booth. But the break even here for an escorp is once your business starts to net about 50 grand. You'd want to talk to somebody about like, hey, I've heard this term. I think this would apply to me, and that's an S corporation.

Then you can be taxed as a partnership or you can be taxed as a CC corp. So, this is where LLC is just the legal entity that you are setting up. You ultimately have to tell the IRS kind of what badge you want your LLC to use. And so, most of the time for service-based businesses, you're going to start as an LLC, single member. Really, you're just like a chameleon. It goes on your personal tax return. Once you start to make some money, no matter what your pay compensation is, like let's say your booth versus commission is once you hit that 50 grand threshold, you want to talk about being an escorp. That's when you would file a separate tax return.

You'd start to pay yourself payroll. That's when you're sort of leveling up in the sense of there's some logistical things that you have to sit down and talk to with your accountant because if you don't, you're just going to be ultimately mad at the accountant because you're going to be confused later. So, it's like know that you're going into class and you're going to spend 3 hours of a good conversation and you're probably going to forget it in 28 days and that's fine, but at least you got it out of your system to understand at that point what it is now you're moving into because as you know, business gets more complex. And so I think right again I point to you from your side of you're the creative, you're the operator. That's kind of what I was when I started this business.

Now I'm back to this sort of overlord of looking at the financials and how the pieces are moving because someone has to sit in that role. But it's it's good because hey, have the enthusiasm and go into the business and look at everything that you need to to run it, but you need to be able to step aside and take 5 10 hours to be like, okay, my business hats on now. What do I need to do and what do I need to do best to set myself up for the next 10, 20, 30 years? Yeah. So, [clears throat] but an escorp in my mind and you I would want you to correct me if this is wrong. ESCORPs are really good for like a 100% individual. Yeah. I wouldn't go into a deal with multiple people on an escort because And can you explain the important factor with that and why if you're going in with multiple people that really should be set up like a partnership?

Yep. The main reason. So, let's just take my business. My business was a 5149. And let's just say, so if you're a 5149, 60/40, if you are an SC corporation, which is technically a corporation, 5149, the ownership breakdown. Exactly. Was the ownership breakdown? I'm sorry.

Yes. Exactly. So, let's just say ownership breakdown is 5149 or 640. They think it's a tax form. What is the 5149? I knew what you were talking about, but I didn't want you guys You guys are so slick with your terminology. Sorry. [laughter] Technically, with an escorp, you have to follow those ownership percentages.

So, if we're 60/40 and we distribute 100 bucks, 40 has to come to the 40%, 60 has to come to the 60. Even though you guys probably talked about some deal where he's going to put in 50 and so, hey, when we take our first 10 grand, he's going to get his, you know, portion back. And so, you can't do that with an escorp. You have to follow what the ownership percentages are. Partnerships, like I said, are literally the wild west where we can have this thing owned 99% and 1%, but yet when we distribute the first 50 grand worth of cash, it can go 2525. So, you have a lot more flexibility and in your sense creativeness to make this deal work from a partnership perspective, which is an LLC taxed as a partnership. If I go LLC taxed as an escorp, we're technically a corporation.

We're not partners, we're shareholders. And it's just a little bit more formal versus a partnership is LLC. You have multiple members now, aka partners. And you can get very willy wacky with how you want to organize it because partnerships are when you start a business. Think about my business. This guy was an online media guy, had a ton of followers. I'm this nerdy ass accountant that knows how to do accounting. And I'm like, you'll drive the clients.

I'll do the work. Let's join. And it was a beautiful partnership when it started. Yeah. our revenue skyrocketed. He brought in the leads, I service the work. Where it started to go a little bit separate was he wanted to sell the business way earlier than I did. Sort of a pump and dump of get it to 510 million and sell it.

But I'm like, dude, I'm an accountant. What else am I going to do? I'm going to go out and start a new one or I want to [laughter] run this one. So, this is not working here for me. I need this business to feed my kids. And then also, it was I started to post content online and I'm I don't know, I'm not the average accountant and so people kind of gravitated that and I started to source my own leads. So, I didn't really need this partner that was holding on to a lot of points just to drive business. So, we just started to naturally work ourselves apart.

But again, beautiful when it started, but did not work over the long term. So, the partnership allowed us to keep that flexibility going. We had so much flexibility in the way that I was getting paid when we got started because he was already a self-employed individual. I was leaving a W2 job with a six-month-old thinking, "Oh my god, I need I need to buy groceries every week. " So, partnership allowed me to do that and draft a deal that made sense for me, which is where I think you guys in your world, you probably see the craziest [ __ ] because it is like that where you have multiple people, skill sets are different, money's different. Well, and I do also think that it's scary to do it alone because then it means the failure is 100% on you.

Magnified and so people are afraid to do that. they want to do it with, you know, other folks so that if it doesn't work out, it's almost like you're saving face to me. And I learned this actually from Austin is I would much rather like fail on my own, you know, because I know that I gave it my all and I had complete autonomy to try and figure that out. When I think partnerships are beautiful is when you really do see like some key amazing folks and you want to partner up and give them an opportunity to actually create equity and own something. That's one way. Like so you're finding key individuals that you have a good conversation with and they understand kind of the path forward on what you're looking at creating and you give them an opportunity to actually own a slice of the pie.

I think that's so cool. I love when business owners do that and get basically employees are just talent invested in their company because now it's their company too, right? It's the ultimate way to compensate somebody. Yeah. Um and then also when you have just really good friends, but everyone kind of has a different skill set, but your values all align that for me and I just always go back to values with everything when I meet people. Do they value the same things that I do on a personal level? Because if they do, there's a likelihood that we are going to be able to have really good discussions and actually work through things and we have an understanding and a commonality of like respect and what we truly care about in life to where like it it just makes it a little bit easier when values don't align.

m. or something along those lines. Like that is going to create some contention and like it's going to obviously have issues in and I think about this in the business sense. What that tells me is distributions come out, this one partner is going to want to take more money than the other one. Yeah. " So, I always think about it in the dollars. That's why I use it as like a scapegoat. When I meet somebody now, within the first 3 minutes, I'm asking you what you do and how much money you make.

" So funny. You do not ask those questions. " I feel like that's so I don't know, Southern Manners or some [ __ ] My parents raised me never ask anybody. Oh, hell yeah. My dad also raised me not to ask anybody like what they did as hell. But I don't care. That's my profession. So, I'm so used to talking about it.

Questionable characters roaming around the the house every once in a while that didn't have said normal jobs. So, I was always told not to ask what people do. Don't look him in the eye. Yeah. Yeah. Yeah. So, when when when her and I got together, I was always just kind of cringey when she was just like so black and white on like this is who do you do? What do you do?

You know, how much? Let's talk about it. It's nice though because you can almost see the people that are really comfortable in talking about it, I would say, are pro are a little bit um I want to say like better off in the sense of it's not so like taboo to talk about. So, they're used to it. They're they're facing it more because how often do you see a small business owner or let's just say a new tattooer that's like a little bit too scared to check their bank account and where the money's going cuz they're just like, "Yo, I'm just riding this high here. " And so they're kind of sometimes worried to look at it versus the person that's very open about it is comfortable because they feel like they they've assessed the situation versus other people are just flying by letting the receipts shoot out the back.

Well, see, and that's like I even think about that with retirement. Like my Oh, that's even worse. Yeah. My parents very open with what they're doing with retire and talk to me about it all the time. Like it's funny cuz I almost feel like we have this regular standing monthly meeting even though we really don't but they just kind of talk to me about hey what should I be doing or this cuz they're entering into a period of time where they are looking at retiring. I love that they're doing that because then we actually get to have a really good conversation cuz I am their daughter, right? I'm going to have to be a part of essentially their entire retirement life. and if money gets, you know, it it runs out or whatever the case may be.

And so it helps me understand what I need to prepare for if I do or where they're at. And also reassure them that like, hey, I get the Norton, but I don't care if you blow all your money. I just want that motorcycle. Joe is [laughter] not getting it. Like my brother is not getting that one. But I love how we can have like it's so important to have those conversations and people shy away from it because of the fear aspect and just the fact that it could be a difficult conversation and it people could get fired up but what's the worst that would come out of it? you get fired up and I remember my dad telling me this about like disputes like just you know fights if you will like he's like okay you fight but you fight to resolve and what's the worst that's going to come out of it you actually come to a resolution and understanding of each other and then it doesn't happen again later on when you've built all this yeah and now you have a better like way to move forward and through future arguments does that sound like a terrible outcome no you gain clarity through the whole thing Yeah, it does.

If someone runs and never talks to you again, then you learned real quick that that's not somebody that was genuinely loyal to you. For sure, dude. For sure. Yeah. We've we've all dodged probably some bullets. A lot of bullets. Yeah. Yeah.

Yeah. We're We're lucky to be right here right now. The So, the only other thing I do want to ask you, couple of things that I I call it like rumor has it, right? It's like just things that you see in the social media world on finance gurus [clears throat] and things. Yeah. that are just like talking cuz I do hear that a lot in this space too honestly kind of everywhere that oh if you you can uh employ your kids and pay them a W2 or you know pay them a paycheck and when you do that you can then use that money to then basically cover all of the expense of just taking care of your children. Can you give us a little bit of like more clarity and rundown on like how can you actually do that and not get in trouble? Yeah.

So, yes, you can do that. The problem and why it sounds so sus is the way that people talk about it and honestly give too much context on the back end when they're like you could pay your kids up to the standard deduction and then spend the money on their tuition which is what you would have spent money on anyways and all that kind of jazz. when the money it is ultimately paid to the kid and you're a custodian on the account. Yes, you can do whatever you want with the money. But let's back up a step further and talk about the logistics of how you'd actually make that happen successfully to where if you're flagged for audit, it actually passes. So, can you pay your kids? Yes. I've seen kids as little as three or four.

That's more on the modeling picture side of things. if you're a photography business and things like that. But if you have a kid that's 8 9 10 11 12 and they're doing mailers, they're licking envelopes, they're sweeping things, they're organizing the home office, they're whatever it is that you can put them to work for. If you've documented what you would pay someone else to do that job, if you've actually set up a bank account in their name and actually you're a custodian on it and you've actually paid them and kept track of the hours that they're working for you and paid them the amount of wage times hours to that kid in that bank account, then yes, it's a good strategy cuz let's think about what you can do here. First, you get a deduction as the business owner.

So, if I can find a way to pay my two kids, I have three kids. We'll just say three kids, five a piece. They're too young and they're lazy. They're not doing [ __ ] [laughter] Let's just say there's five a piece. That's 15 grand. If I can find a way to pay my kids 15 grand and let's just say I'm in the 30% tax bracket, that saves me five grand in cold hard cash taxes. So, that is a good strategy to do. But where that goes bad is my kids aren't really doing the work.

I didn't document it and actually document what their role was and how much I should pay them and show that it was, hey, a fair market value for someone else to do the job. I paid it to my own bank account. Even worse, I didn't, like we said, I didn't even pay it to them and it sat in my bank account, but I just like wrote it down on the organizer that the accountant gave me. Even worse. So, if I can actually prove that my kids are doing something, I've documented it. It is a good strategy to pay them because not only do you get the deduction, which is a, hey, that's great. You're going to get the tax savings, but let's talk about what if you start an IRA for that kid when they're that young. The problem is people think that you can take like right now if I walked into like a Charles Schwab, I could not put down 5,000 bucks for one of my kids into an IRA.

The rule is you have to have earned income to even contribute to an IRA. Meaning I can't just gift my kid money. My kid has to earn money. So [snorts] one of the sort of next layers to this strategy is if you have an 8-year-old that's truly earning 5,000 bucks from you and then you take that money and go put it into an IRA and you don't spend it on school tuition or diapers. I hope your 8-year-old's not still in diapers, but you know what I mean. There is that, hey, now I can start an IRA. And when's the last time I know adults that are in their 20s and 30s that don't have IAS yet, but this kid now is sitting with 5,000 bucks in an IRA. And if we talk about this whole Roth versus traditional, that 5,000 could grow to half a million over the next 40 years, 50 years, and they won't owe a dime of tax.

So your kid just got started 10, 15 years earlier than, you know, than their adult did or, you know, another adult did. So, yes, that is a strategy that makes sense. I think it's the way that people pitch it. It sounds sus when I'm like, yo, if your kid is really doing work in your business, pay them. It's a deduction for you. It's free cash for them. Yes, you can spend it on whatever you were going to spend it on anyways, but also there's another layer, too. Maybe you should do a retirement account and start building the nest egg.

So, yes, we'll we'll we'll say that that is it. But I love that you provide the clarity because there's a lot more detail involved than just like, oh, just put them on payroll and pay them and then that's it. The other thing, and I totally just thought of this, but I was like, I totally see this happening, kids actually suing their parents when they get older for unpaid compensation because they know, like, you said I got paid. You used it on my toothpaste and my meals and my school. I didn't ask for you to spend my money that way. I [laughter] need you to pay me now for all this back pain. Imagine that. Dude, they'd have it happen.

It totally they'd have grounds. That might be an entirely different new like contingency law firm. I feel like I just created [laughter] a lawyer standing with a bunch of kids around them. Yeah. [laughter] Yeah. Because you could trigger a tax filing requirement for the kid and like ultimately have them owe penalties and things like that if you're not watching how much you're paying them and thing and sort of stuff like that. So yeah, that could hurt the kid. Another like rumor or I wouldn't say rumor but this is the classic problem that I see with a lot of tattooers is they don't they want to avoid paying taxes.

They just don't want to pay taxes at all any stuff. Yeah. So tell us a little bit about how you know that thought process and why you should probably try to avoid that and really kind of ensure that you are just showing a level of income and yes paying a certain level of tax and then that kind of mirrors into why I feel it's so important which is it can actually afford you the ability to then acquire borrowing real assets. Yeah. We called this the yolo yesterday, didn't we? Yeah. Yes. Yeah.

Uh yeah. So my brain tells me this. If you're somebody that's just completely trying to fly under the radar, you one have to watch out for a 1099K, which is let's say you that you use Stripe to collect payments. If you ultimately collect cash through that, which let's be honest is going to go to your bank account, you can go to an ATM, you can go write checks from it, you can still spend the cash and not report it on your taxes. " So, if you know, John now doesn't go off and file his tax return, he can easily get selected for audit because the documentation trail screwed him. But let's take it a step further of John doesn't want to pay taxes and he's mainly all cash and he keeps a shoe box full of receipts and a wad in his pocket. What's going to happen is, hey, you're on the honor system, so the IRS may not figure it out.

But that's where you get into these legalities of like, hey, John, are you a real adult here? Because you want to go buy a home, good luck, pal. You want to go buy a car, good luck. you're going to have to go to the used lot and hopefully get one for five or six grand cash kind of thing. So, it's going to cost you in other areas and bring you a lot of headache because of banking purposes mainly. Like if you try to stay off the grid like that, you're going to run into other issues is, you know, sort of my advice there. So, the trade-off is yeah, you may be paying less in taxes, but the headache it's going to cost you in other areas of your life is going to be 10fold. Well, and not only that, I think the level of what I see is people now looking to amend 2 3 years worth of tax returns and going through the headache of trying to prove out that they actually made more income because it is a second thought.

Like it's a random act for them to actually like go and try to secure a house or, you know, acquire an asset. " Yeah. And I'm going to now pay to amend. And it's like for me I'm like it's so much easier if you just actually look at planning those things. It I know that planning can sometimes be a challenge. And this is the ultimate differentiator that I see with extremely successful people. They have the discipline and the consistency to endure and actually like move forward on long-term like goals and ultimately have this discipline regularly. Even if they don't have an investment that they want to make immediately, they know that they're always prepared and securing funds for a potential investment to be deployed should one come up.

M. So, at the very least, if you don't have a long-term goal, like think about that and have that in mind when you are actually working on your business or setting aside money. You're setting aside money for a potential future outcome and you are actually accounting for that in your financials, right? To show that if you do need to borrow funds cuz there's so many things that come out of it that is a positive. You get cheaper interest rates. you are a more viable like borrowing person. So you get better structures, you get lower fees, like you get to actually negotiate better terms because you know that you're a viable candidate and you can go to the potentially best possible offer for you. There's so many positives.

Like I can't think of one like negative aspect of it other than in the meantime until that day comes where you actually need to leverage, right? borrow money for something that you really want, you do have to pay a little bit of taxes to show that you are making the money. That is to me the really only downside to it. But is that really a downside? It's kind of the cost of being able to secure ultimately a financial future for yourself and like a foundation. Like I think about the cost of living here in Las Vegas and how much it's risen since 2019 and how many more people are migrating here. People are being priced out of being able to purchase homes and they're waiting for this fallout, right? They're waiting for that ' 09 recession to happen to where houses were like 80 grand and I'm just going to pick up that that isn't coming.

Like that's not likely to occur again. And so you have to be working towards something and actually if you are going to be here like secure that otherwise you're just falling prey to whatever your landlord needs to charge you. Yep. And now all of a sudden like your costs are going up and you have zero control over it. Yeah. I personally paid rent on a tattoo shop for over what 20 22 years now. Yeah. How many more people do you think if they took more time planning and just organizing their finances probably would be in the position to buy the building that they've just been working in versus they're like I can't find a way around it and it's like well you just need to focus a little bit more like you said finance-wise on the future and with buying assets there are tax deductions there are other pay tax potentially for two or three years if you buy a building just because of the way that the tax savings would fall out but that's a big misconception too is that you know people are paying zero in taxes through their 20s and 30s when in reality that's someone's earning period.

That's when you're starting your business and you should be paying the most amount of taxes, but yeah, you want to mitigate them, but people thinking that they're going to pay zero really just sets them up for failure because what we like to say in the tax world is too the goal is to bring it down to zero, but sometimes the tax bill that you pay is your bargaining power and your borrowing power. So, um yeah, there is sort of a medium there. Well, and just being able to spit it out quickly. Just even organizing where your financials are. Like that's number one. Yeah, we do that. But again, I am a finance person, so I do have a leg up on understanding that. But it is nice to know like, oh, we want to buy this house.

We want to do this. Okay, like here's everything in 30 minutes. Like I don't have to worry about chasing down all these ancillary random documents cuz I don't have them anywhere or being like, "Oh my god, I need to get an interim done because we're in, you know, June and I need one through May 31st. Oh my god, what is going on with the business? how do I put that together and now I'm going to be paying someone if I don't have the time to do it and be like how and just name your price essentially right and that's what I'm saying too is it will cost you in the long run for not doing it at some sort of frequency because I tell people if you come to me and your tax returns 800 bucks hey Jim 800 bucks great 2 months later you come back to me with messy financials hey Jim it's 1 1300 because I don't want to you I I was going to charge you to do your tax return I was not going to charge you to do your bookkeeping if I'd be glad to, but oh, you know, now he wants Yeah, I want to charge you more because you you didn't you don't have your, you know, your information prepared.

So, that's where I try to tell people is like it's more of an investment to pay a professional because you're going to ultimately pay it at some point in time. Uh, and you're going to get it cheaper for getting it upfront as far as an engagement goes. But if you come to somebody late, if you're like, "Well, hey, great. No worries. It was 800. " Okay, it's 1,700. Yeah. Yeah.

It just keeps racking because you're just you're pushing the right the pressure to other sources other than yourself because you weren't doing the planning and taking the two hours a month it took for the last year. I've had so many just so many co-workers and peers like avoid taxes at all costs and then just start watching them when the IRS finally does catch on and they start coming after their ass. Dude, that is not someone you want after you you do that. Do you think it's Yeah. What do you think the main reason is that they operate like that? Is it a type of person like it is truly the creative or is it a money thing that they don't want to pay for the service? I think it was an industry standard just back in the day. It was a very cashbased business and a very like underground kind of business that it wasn't on TV.

It wasn't people people weren't Yeah, that's true. It wasn't in the limelight, you know? So, it was this kind of fun little small business that you could run and make a [ __ ] ton of cash under the table and everybody was paying cash. But then, you know, as time goes on, more people pay less cash. Um, you know, and then more people are providing the service. It's just getting a lot more professionalized and certain. How long How long do you [clears throat] guys got today to hang out? A little bit longer.

Uh, yeah, about like 15. We're about 15 out, but [clears throat] I guess so. I mean, I don't know if you want to close out with this, but what would be the starting point for any individual? Let's say they're like, you know what, I do like this. I do need to work on these things. like I do need to actually set myself up, stop avoiding it, stop ignoring it and having it on a to-do and just actually start focusing on this and getting it more into my routine. What are some of the things that they can do? Like cuz I know True Books, that's what I love about your firm is that you have so many different varying levels for people based on what they're actually looking for and what they need.

My biggest piece of advice is, and this is where I say I love talking tax, and tax is the sexy tax strategy and how you'll save money, but I can't get over the fact of you're not going to be able to save any money or hit that euphoric like planning session with your accountant without having your numbers of what the business has already done, sort of the path. So, my biggest piece of advice is getting the structure set up. So, it was the four things: LLC, EIN, bank account, credit card. Once you have those things in order, which I mean like asking you, at least 80% of the people got to be operating with a business bank account, you'd say, or they still maybe Well, now like when we started, we started insisting that everybody has their own license, their own insurance, and is paying their taxes or you can't work here.

So, cuz we have too much to invest in. Oh, you're shot, right? But I just mean overall like let's just say in the industry do you think the majority of people are doing I would say that's the standard now at least 70 80% of people like a business yeah they have at least a bank account but they might be doing the co-mingling then the only thing I would say for that person is once you have just that initial structure stop comingling so like I know that's hard but carry the cards that you need to if you need to do it one off like once a quarter maybe cuz you got caught with maybe the wrong card that's fine but my next honest step is go into your bank account. And if your bank is already not doing some form of bookkeeping for you, I have a template I'll send to you.

You can give it to whoever's listening or watching. And it would be to dump the transactions into this template and start categorizing because for me it's so I call it the gut check test is we work with a lot of real estate investors, service- based businesses. " And nine out of 10 it's like no way. You know the the P&L shows that they've made 20 grand and they're like no I've probably made like 80 to 100. So we already know something is way off between the accounting and what's actually happened cuz the operators have such a good sense of what's going on in their business that the numbers aren't matching. So I'd say that they need some form of template. Get all the transactions out of their bank and get some layer of organization which this template will help them do.

Because if you're not going to go the template route I always tell people hire a bookkeeper. Go get QuickBooks. try QuickBooks yourself. But for me, it's they just need to get to this point where they're looking at a profit and loss for their business over, you know, we're in June, so at least for the year or maybe for last year. That is the first step to really setting yourself up for doing things better in the future is is honestly the first thing to do is what I'd tell people. Yeah, I love that. I'm excited about all this information. [laughter] It's fun.

It's really cool. Yeah. And it's that is very simple. I even me it's very elementary, but it's like that's what you got to do. I love QuickBooks, but I don't do my own books. I don't have time to do them, but I do look at them and I always run it to where I get to see every single month like as Yeah. And the reason that I love to look at it that way is because it helps me understand which months were better than others both on the revenue and the expense side. And then I line that up with my knowledge of like what did we do in these months and why?

And like is that is that normal? And then I'll even go a step further and compare it to prior period. This is obviously like not expecting everybody to do this in the beginning, but these are the capabilities of what you could do. And doing that really helps you understand how am I performing to last year. And you already know this as a business owner. It's slow, right? If it's slow, you already know that. You don't need the numbers to tell you that.

But what you do need the numbers to help you with is what can I get skinny on or slim down or what is truly my break even every day so that I know if I have $1,100 coming in the door I'm able to pay everything and everyone right if I don't have $1,100 a day coming in just you know throwing out an arbitrary number then I know that there's something else going on I need to recalibrate and rethink about how I'm running this business and how I'm getting people through the door because that's not sustainable. And you don't if you don't have a lot of cash on the side to be able to float that. And even if you do, if you keep just throwing that money at it and you don't start trying to figure out how to recalibrate it, you're just dwindling down something that inevitably is going to run to zero, right?

And you get to see your seasonality. Like in the tax world, we're very seasonal. You look at our graph of revenue for the last 5 years. Very big in March and April dies in the summer. Very big September, October. So looking at it month over month, you can easily see what the seasonality is of your business when you're probably buying the most supplies. Like does you know do do they usually bulk up and buy supplies like once a quarter or do you find it where it's just like a rotating every month? It's kind of an emotional [laughter] it's like it's spontaneous as hell.

It should be. I think you definitely should be looking at everything you're using. There's varying different some people do stock up, others buy as they go. Um, so it really is kind of and I mean shops are also different. Some shops offer a certain level of base supplies that are offered to you'll have like a manager ordering in bulk and then and some or everybody's kind of just trying to yeah figure it out by Friday. You [laughter] know, it's interesting, too, because the business owner always enjoys, from what I've seen, the first time they see financials, they like looking at their business in that light because they're so used to running it dayto-day via text message and phone call and email because that's what they're doing in the ops.

But when they get to see the finances of their business, they like it because it's something new for them. Yeah. It's a whole new perspective. It is a it is a game when you start to I it's someone told me this a long time ago when I was a teller and I never truly understood it until I actually got to the point where I wasn't like broke and was making money but they said there is nothing more fun than seeing your savings grow. Like there is nothing more addictive and more fun than actually seeing cash grow in your bank account. And I never understood it ever for years. I was like okay that's cool. Loretta.

" It's like, "Oh, could I get to this number? " Now, with actually savings accounts and money markets, paying a good decent interest rate, you're like, "What? I'm making a couple hundred a month as well with my money just sitting there doing nothing. " It's just it's really cool to see something just continuously grow over time and that becomes the addiction rather than you know nice things and a car and being able to just like show on Instagram all the cool things you're buying and all the trips you're taking. Um and that stuff is still fun too. Like there's always a fine line and a balance of making sure that you're still enjoying your life and that you're also saving for the future. " Now you have options. You have possibility, right?

That's so cool to be able to actually have that rather than coming from a place where it's like you're just reacting to whatever life is throwing at you because you have no options available to yourself. You've set nothing up. And so now you're just reacting to all of these things. The down economy, not having enough money, rent going up, cost of food going up, you know, all these things. And it's just happening to you and you have no control over it. That sound that feels like a helpless situation to be in. Yeah. Sounds scary, but you have control over it.

That's what I find so fascinating. You actually have control over fixing that for yourself. It just takes some work. I think it takes really just a couple hours on a late night, but I think that a lot of people are probably really intimidated with the process. That's why like my answer was go to your bank account, get all the transactions out of it, put them in a spreadsheet, categorize them. You will be so happy you did. " So, um, and that's where I feel like the cuz now I'm trying to think like, how do you motivate the person? cuz that's where we're at is like for for the people that we see in our business like it kills me to see somebody come to me wanting our service, but I'm like I got to charge you way too much money or honestly you're not even in a spot to work together because you haven't done these things.

So it's like how do you motivate them to do it? And it's like you just have to trust that you're going to love what you see after 30 60 days. Yeah. And I I do I'm like I'm s I am a total helpful person. I want to try to help everyone and then I realize like you're not at a point where I can help you because you're not even helping yourself. You're just coming to me trying to get me to fix your problem. And I I can't fix your problem. I can tell you what you can do once you get yourself out of this, but I can't actually make you get yourself out of this.

Like, you have to do it on your own. Yeah. Grow some legs. Yeah. Okay. So, any information? How How do we find you? Instagram is probably the best.

Just first name, last name, Matt Bontrager, and then our firm's name is True Books. Yeah. All right. You mentioned that um form. That's awesome. I want to Yes, I will send you the template. Yeah. Anyway, we can share that be awesome.

And then Megan Comfort, my lovely wife. Thank you. My spicy meal. Yeah. [laughter] Yeah. Uh dude, thank you guys so much for tuning in. Uh I think we are definitely going to work on this doing some more stuff like this and we're excited to share more hopefully extremely helpful information to tattooers and service providers all alike. So, um anyway, thanks so much.

I appreciate it you guys. I appreciate you guys taking the time to do this with me today. And let's have a good one. All right, we'll see you around. Peace.