Finance Planning - lead by Shane Pearlman & Kristina Kuprina
Questions
Getting Business Funding
Bookeeping - best practices
Tax write-offs, once make money, how do you keep it, what not to do with it
What do you do with it when successful - retirement planning, investments
Compensation for employees
Equity of shares within a company / profit sharing
Insurance - health, life
How do you run your business to reach your personal goals
Kristina Kuprina, Investment Advisor
-building on Shane's point to bring together team to help you reach your personal goals. Your personal and business goals are not separate, they are linked. She talks with your CPA, lawyer, sometimes realtor to figure out best plan for your personal goals. You first hire each of these people based on your personal goals.
Question
heard of lawyer that required $200 to get in the door to determine if could work with them. The consensus, is to stay away from them. You should be working with someone who wants to work with you as well, they shoul be interviewing you, should want to meet with you.
To go from where at to next step, need to get capitol. Don't want to work with VCs and lose half of company
Shane - go to small biz dev center (SBDC), help get SBCA loan.
If friend wants money, same questions, what is your concrete business plan that lays out all the details
How did Shane and Peter do it?
No outside funding. No overhead - just personal expenses, b/c working with contractors, no employees based on the biz plan set up.
Can ask contractor, are you willing to take the risk b/c don't quite trust client but I think you'll love this project. He did, and they still owe.
Have more of a partnership interaction with their contractors.
If relatively unknown:
Always making an investment, either time or money. Shane does more time based marketing, such as conferences.
Strategies for Book keeping:
Let a CPA come in and set it up so you have the same headings that they will use in order to have them be able to make sense of your data (Lindsey Chester).
If have a bookkeeper, it should be experienced in doing what your CPA will understand (Kristina)
Shane - his books are a lifeline to his business. He learned to notice his books the day he noticed something that would double his income. He realized what he needed to stop doing and do more of. Have everything laid out so you can talk to your bookkeeper. Know enough of what your bookkeeper is doing so can know if something is going wrong. He did his books until it was taking so much time it was taking away from his business. SBDC - book keeping for business owners course.
Kristina - where is your time best spent? A number of her clients used to do it themselves, then realized spending lots of time and would make more money with a professional.
Shane re-emphasized what Lindsey said - set up books with professional. Takes can take forever, or half day b/c spending whole year doing taxes.
Have a friend/relationship that is also your CPA, bookkeeper etc. Need communication with them, someone that returns your calls and that you can ask questions. You often need a quick answer.
Tax write-offs:
Meals further than 60 miles from your biz are 100% deductible, within 60 miles 50% deductible.
How know these things? Kristina: have a strategic CPA
your biz structure determines your tax write-offs. ie - when a corp, can't deduct miles
Kristina: Big mistake people make: start making more money and think, I can spend this money, or put it back into the business b/c it will be a write-off. But not necessarily, there will be a tax bill that you have to pay with money you may not have anymore.
Shane tells all his contractors: 25-40% of your check isn't yours, put it in an account, such as an ING account, earn 3-4% on the government's money.
Make sure you look at all income, if have a job also on the side of freelancing and your spouse's salary, to determine your tax bracket to determine what % from your freelance work will be taken.
Fresh Books. Brandon: went from Quick Books to big scary program, to Fresh Books. If just moving into freelancing, good to go on once a month to deal with your money. It's all online so can see anywhere, and can be paid through PayPal.
Shane is paranoid about Mint.com - of giving any piece of software all of your financial info
Theory of giving 100% Be 100% at whatever doing at the time, and don't do it or worry about it at other times when handling other things. ie - do books one day per month. Avoid stalling, stress or being obsessive.
Use local CPA, Jim Ridell. When making good money, what do you do?, if not what do you do?
Real estate lesson: the bank wants aged money. Want money that has been sitting in account for a long time. Had just moved money into account, but because hadn't been seasoned in account for 60-90 days, thought he was messing around, moving around money.
There isn't one solution that is right for everybody, need a catered solution for you.
for Kristina: What investment strategies are applicable to this group?
SEP IRA (self employed, tax deferred) can use the corp as sole proprietor. But if have employees, have to change because then have to put as much toward employees as yourself. first take care of yourself, then our employees. Need to build your nest egg b/c more risk when business owner - don't have the retirement suport
The numbers show, the earlier you put money away the better to get compounding.
dinkytown.net - financial calculator to show how money compounds
When young: ROTH IRA. You can take it out for first house purchase also.
Different types:
Pretax
Tax Deferred
Goal: save as much for yourself as possible and pay as little taxes as possible
Insurance:
Health - cheapest we found through
HSA account - high deductible plan and rest through HSA, invest in the account and it rolls over every year and can grow. It's not a use it or lose it.
Recommended - getting life insurance now b/c if already cleared with the company with a small plan, they can never deny you covereage in the future. There is indication insurance companies could use genetic testing information to determine coverage.
