Unf*ck Your Biz With Braden Braden Drake

On today's episode of the podcast we're talking about the most common bookkeeping mistakes we see and how to avoid them. 

 

1. Going to Quickbooks too early

Unless your hiring a bookkeeper who knows what they're doing, this is not recommended and the reason why is because we see a lot of error. From the outside the bookkeeping looks good, but when we get in there we find that it can be a bit of a mess. A big one we see is accounts never getting reconciled and then we have to go back to the beginning of their Quickbooks to start reconciling. We spend so much time having to reconcile clients' Quickbooks that a lot of time it doesn't end up being worthwhile because that can cost you a few thousand dollars. In the beginning it can sound like DIYing your Quickbooks can save you money, but it can catch up to you in the long run so you should hire a professional from the beginning. 

What I recommend people do is just use a spreadsheet. Log your income, log your expenses. If you need help with this, you can have us set it up for you through our Unf*ck Your Biz service or you can get all our bookkeeping, tax and cash flow systems inside the Profit Rx course https://notavglaw.com/profit-rx

2. Not having separate bank accounts

When you start your business, open a separate bank account. Bring all business income and expenses through this bank account and it will make bookkeeping exponentially easier, especially if you hire someone to do your bookkeeping. If you comingle your expenses, we have no way of knowing what's business and what's personal. The same goes for credit cards, PayPal accounts, etc. 

If you spend something from personal, note it right away so you don't have to comb through your personal statements. Technically you should run a reimbursement through your business account and go through a more formal process if you have an S Corp.

3. Waiting too long to do your bookkeeping

Half the benefit of doing your books is to gain financial insights for your business. We do it because we have to for our taxes, but looking at our bookkeeping helps us better understand our numbers. 

For example, to can learn if you're charging enough for your services or products. By looking at the numbers in my business, I learned that I wasn't even really breaking even on some Unf*ck Your Biz clients because I was paying our bookkeepers so much to reconcile years' worth of Quickbook accounts for clients. This helped me know I needed to raise the price, create custom pricing to add on extra services based on what a client needs, and create podcast episodes like this to help prevent these issues for you in the first place. 

Bookkeeping also allows you to search by client and offer to see what is most profitable for you and when it might be time to raise your pricing. This also helps you determine what offers and programs do best during what time of year so you can better promote. If you aren't keeping your books regularly, you won't be able to make tweaks and changes as needed throughout the year. 

4. Overcomplicating things

One of my mottos is: complicated systems are only as good as our ability to manage those systems. So before you setup some complicated fancy system, ask if you'll take the time to maintain it (speaking from person experience). The same applies to our bookkeeping. Start simple with a spreadsheet, divide your income and expenses into a few broad categories and once you start tracking it you can make it a little bit more complicated after you've proven you can stick with it. 

5. Not using an actual bookkeeping system

A bookkeeping system is going to track everything you need to track. For example, CRMs (Honeybook, Dubsado, etc) are not bookkeeping systems, they have bookkeeping elements to them. I haven't looked at them in a while, but to my knowledge, they only really track your income.  

6. Not knowing what you can actually deduct

We've been seeing this a lot recently with clients spending money from

On today's episode of the podcast we're taking about the Corporate Transparency Act and why it comes with a Beneficial Ownership Information report. Spoiler alert: you'll need to fill out the BOI form this year if you haven't already.

When Congress makes new laws, they set a day when the law becomes effective. It’s a heads up that they’re changing the rules and that starting on that day-you’ll be expected to obey. 

That delay gives everyone time to

• read the new law, • ask questions about what the new law means, and • organize resources in preparation for the new law. 

In 2021 Congress passed a bundle of laws as part of the annual defense budget which came into effect on January 1st of this year called the Corporate Transparency Act.

The Corporate Transparency Act requires most businesses to disclose certain information to the federal government.

We’ll cover: 

• whether or not your business is exempt from reporting,• whose information gets reported, and • how to report that information if you’re required to do so. 

The Corporate Transparency Act is for helping law enforcement agencies find, prevent, and prosecute financial crimes. Financial crimes can look like a lot of different things. A popular example you see in movies is money laundering, when people get money from illegitimate sources but can't just go deposit it in a bank or use it to buy a car or a new house with it so they disguise it as other assets and run it through their business. People have been doing this for a very long time and proving it can be difficult.

Back in 1970 Congress gave us the Bank Secrecy Act, which said banks have to actually help law enforcement identify and prosecute financial crimes. The reason was because banks didn’t care where the money was coming from, they were getting paid and it wasn’t their job to ask whether money was coming from a legitimate or criminal enterprise. Congress said banks don’t get to turn a blind eye and have to report suspicious activity or really huge transfers. While this helped a lot, there was still plenty they couldn't catch.

In 1990, Congress gave us a sub-department of the United States Treasury called the Financial Crimes Enforcement Network, or FinCEN. FinCEN lets law enforcement agencies talk to each other about that information that banks have to report, like suspicious activity or huge transactions.

They compare notes, so even if a single blip on the radar didn’t raise any alarms at the FBI, they might talk to state law enforcement and compare notes and find out about criminal activity they couldn’t see before. FinCEN even gives awards every year to different agencies that successfully use FinCEN’s data to prevent or prosecute crimes. 

For example, in 2023-

• The Drug Enforcement Administration used FinCEN data to find and seize 4.5 metric tons of cocaine• The Secret Service and U.S. Postal Inspections Service used FinCEN data to shut down a scheme to compromise emails• And the Department of Justice’s Civil Rights Division used FinCEN data to protect hundreds of victims of a human trafficking ring. 

But there was a huge absence of information for FinCEN that still made it really hard to crack down on financial crimes. 

FinCEN knew what the banks were telling them about suspicious activity and big transactions and what other agencies noticed about that information but they didn’t know who was behind these semi-legitimate businesses. 

That’s what this new law, the Corporate Transparency Act is for. Businesses affected by the law will have to complete a Beneficial Ownership Information report to FinCEN.

While it's not a ton of information they require from you, it's information from a ton of people, and that tells them more than you might think and helps them discover a lot more criminal activity that they couldn’t know about just from the banks or by talking to each other. 

By collecting a small amount of information ab

On today's episode of the podcast I'm giving you some must-know legal updates about non-compete agreements.

Just a reminder, the Contract Club price is going up beginning June 1st (only to $50) but if you want to save $20, get access now for just $30 at notavglaw.com/club. And, if you want to get paid for sharing the Contract Club with your friends, we're paying out 100% affiliate commissions (regularly 50%) through the end of May. You can become an affiliate at notavglaw.com/affiliate

A couple weeks ago, the Federal Trade Commission (FTC) took a vote on Non-Compete Agreements and made a 570 page publication and we're going to take an aerial view on those key takeaways.

The FTC's job is to protect the public from deceptive or unfair business practices and from unfair methods of competition. It's a federal agency that's been around since Woodrow Wilson's presidency. The FTC is put together by Congress, consider Congress the parent and the FTC the babysitter that enforces the rules.

The FTC was asked "can businesses limit a worker's employment option after they leave the company?" 570 pages later, the answer is no, that's unfair competition.

Let's dive into why this is unfair and totally bullshit there are three broad reasons we'll touch on with examples.



The FTC says this is why non-competes restrict the freedoms of American workers and suppress wages. Example: Elle is an attorney for Louis Vuitton. LV has her sign a non-compete agreement saying she won't work for another luxury handbag company for two years after her employment with LV ends. She's not sure where to go from there when she's ready to leave because she can't go work for another luxury handbag company and she can't apply and use that offer to leverage benefits to stay at LV.



Non-competes stifle new businesses and new ideas. Example: Elle can't start her own fashion handbag company or team up with her friend to consult on her luxury handbag company.



They impact too many people. Example: Elle decides to focus on her philanthropy until her non-compete expires. Looking at jobs with other luxury handbag companies, she sees that they all have non-competes as well. They're widespread in the US economy and one in five workers is subject to a non-compete (~30 million people).



It's also wild how many people don't even know they've signed a non-compete until they get sued later on because a lot of times a non-compete can be a single term deep within a contract. It's often overlooked and commonly lumped together with a non-disclosure agreement.

On the flip side, if you are the issuer of a non-compete, you're going to need to take it out now and check any contract templates you use or previously drafted attorney contracts to make sure it is removed.

A large portion of effected non-compete workers are in healthcare, not great for public health when we had a global pandemic and they were prevented from working where the need was greatest.

Any time a federal agency has an idea for a new rule, they have to open it up to the public for comment and then they have to respond to those comments otherwise a court will smack down the rule for not being well thought out. This rule had 26,000 comments, of which 25,000 supported a total ban on non-competes.

There are some exceptions for senior executives, mainly that if you're a senior executive under a non-compete you still have to follow it, but there can't be any new non-competes.

To draw some attention to the legalese, it says "worker." It goes on to say "worker, including but not limited to an employee, independent contractor, extern, intern, volunteer, apprentice or sole proprietor who provides a service to a person." The only exception is the senior executive.

They include a part in this rule that allows it to stack with state laws so if your state has a rule against non-competes, you're in trouble with both the FTC and the state.

Are you fucked if you've had people sign non-competes for your business? No.

On today's episode of the podcast I'm sharing my April profit report.

If you enjoy the profit report episodes, send us a DM @notavglaw and let us know what you think!

As we kick off every episode, let's recap my 2024 goals.

• I set good, better, best goals of $300k, $400k and $500k in revenue. I was shooting for $400k, I think the $300k is still doable now despite the setbacks in the first quarter that I've talked about on previous episodes. I've now shifted them to $300k, $350k and $400k. What I'm not doing is any rushed promotions to try to hit these, I'm focusing on slow, steady growth to end the year strong.

• Hit 60% in profit

• Book 4 stage speaking gigs for next year

• Consistently hit $25k months. Did this in January and February, not in March, probably not in April

• Hit $15k in monthly recurring revenue (MRR) by the end of the year. This was the big goal to help us get to our revenue goals at the end of the year. We're a little bit less than halfway to this so far. My original goal was to get to 10k by the end of March but that hasn't happened yet.

 

Projections vs. Actual:

1. Unf*ck Your Biz- $4,000 → $2,500 (A caveat to this is we had two more $1,000 payments that went through on the 30th but won't hit my account until May meaning we didn't hit the goal). 2. Contract Club - $1,000 → $1,1403. Legally Launched - $500 → 04. Monthly Recurring Revenue - $7,000 → $7,5005. Tax - $4,000 → $2,2506. Trademark clients- $1,250 → $07. Other - $1,000 → $3,200Total revenue: $17,000 → $15,000

 

Expenses

Employee wages (this does not include myself): $4,000

Contractor expenses: $3,000

Owner wages (after my taxes):

Monthly tools: $400

Affiliate payouts: $370

Marketing: $400

Client fees: $500

Other: $1800

Total expenses: $16,000 (we were in the negative by $1,000)

A lot of this stems still from Unf*ck Your Biz clients because we are going back and doing several years of reconciliation for some clients.

 

Profit

(- $1,000)

If you’re wondering how I'm doing this the answer is I don't have great business savings which we wiped in the month of March (yikes) and the business credit card is maxed. I'm not too stressed about it, I'm expecting expenses to go down and revenue to go up in May and it should start to even out.

 

KPIs

I want to start talking more about the KPI we track each month in Enji. We track:

Sales (revenue): Tracked in our profit report

Audience growth (Facebook group members and Instagram, TikTok and Threads followers): A lot of people call these vanity metrics and I don't get too into these numbers, it's just helpful to see trends in respect to how active and engaging we're being. Are we continuing to see growth even if it's steady.

PR touchpoints: We track the number of podcast guest spots, summits, in-person speaking, bundles, etc. we do each month. This impacts our follower count and number of email subscribers and shows how our KPIs are all connected.

Contract Club and Contract Bot Sales: I track this separately in Enji so I can have a line graph to see growth. December through April each month we had: 37, 38, 36, 32, 38 and it's interesting to watch it stay so consistent without promotion. For the Bot upsell we had 4 sales in February, 1 in March, and 7 in April (an 18% conversion rate is pretty good for a $70 upsell). 

 

May Projections

1. Unf*ck Your Biz- $6,000 We had 5 new clients sign up in April who are all on payment plans. Our goal is to bring in 4 new UYB clients every month to guarantee that revenue and then if half those clients continue to sign up for our monthly services we'll continue to increase our baseline revenue. 2. Contract Club - $5,000  I'm expecting a big increase because of our current affiliate promotion. May is the last chance to get the Contract Club at $30 before it increases to $50. If you aren't already an affiliate, you can sign up here to become one. We are paying out 100% affiliate commissions on Contract Club

On today's episode of the podcast we're chatting trademarks and what we've learned about the trademark filing process over the last year. In the past year we've filled 22 trademark registration applications and we've gotten back eight of those thus far. The way we kick off our trademark application process is through what we call Trademark Quickie Searches (notavglaw.com/tmquickie). A traditional law firm would charge you their trademark fee up front (typically $1k - $3k for smaller business, up to like $10k for big businesses like Procter&Gamble because there's a lot more that goes into it). Once you retain them they'll do a trademark search and chat with you about the likelihood of approval of your application and if you have over like 50% odds they'll file the application. Sometimes they'll also look into alternative trademarks for you. We do Trademark Quickie Searches first (these started at $10, then became $25, $50 and are now $100).We raised our price point to help with conversions because at $10 we were getting more people who were just curious about trademarks, not because they were interested in getting one. These searches are time intensive for us, it's not something you can just click a button to search. We are currently accepting five new TM Quickies. You can get started at notavglaw.com/tmquickie Registering a trademark at the federal level has several benefits including: • The right to exclusive nationwide ownership of the mark (except where it’s being used by prior users). • The right to put the ® symbol after the mark. This puts others on notice that you own the registered mark. • A legal presumption that the registrant owns the mark. Trademark rights are given to the person who first uses the mark in commerce, not the first person to file, although filing is still a great idea rather than relying on being first inuse. “Use in commerce” means you’re actually using the mark to sell a thing. If you rebrand, your new mark isn’t being used in commerce until you release it to the world. What we've learned from filing trademarks: 1. Likelihood of confusion is maybe not as big of a deal as we thought it would be, at least it hasn't come up in the eight marks we've had processed by the US Patent and Trademark Office (PTO). Likelihood of confusion means they can get approved of they're likely not to be confused with someone else's mark. This tells me we can be a little bit more aggressive with the terms we file. 2. People really need to stop filing their own trademark applications. This is because trademarks are more of an art and a science and the way you craft your application impacts approval odds and your ability to enforce the application. Even if it gets approved, you may find your application doesn't have many teeth to it when you try to enforce it. And if it's not approved and you get something back from the PTO asking you to fix it, hiring a law firm to fix it is going to cost a lot more than just hiring them from the get-go. 3. Nearly descriptive marks are a big deal and something most folks wouldn't inherently think about. Some marks actually are much easier to protect than others. Some can’t even be registered. Trademark law has invented a system based on the “strength” of a mark. Astrong mark is easy to protect, while a weak mark may be difficult or impossible to protect. There are five levels of strength with varying rules: Generic: No protection (ex: coffee) Descriptive: No protection unless you can prove secondary meaning. (ex: Coldstone Creamery) Suggestive: Protection (ex: Netflix) Arbitrary: High protection (ex: Apple) Fanciful: Highest protection (ex: Xerox) At a minimum we want it to be suggestive. I experienced this personally when I went to file a TM for the Contract Club. It was at first denied because it was merely descriptive of a club that you can join that provides contract templates. I worked with another attorney on this and we submitted a brief to argue against t

On today's episode of the podcast I'm sharing my March profit report

If you listened to last month's profit report you may have heard me sounding a little bit defeated with my numbers due to some personal stuff going on. If you missed it, go back and listen to episode 330. 

Diving into the March profit report, let's revisit the 2024 goals I share at the top of every episode. 

• I set good, better, best goals of $300k, $400k and $500k in revenue. I was shooting for $400k, I think the $300k is still doable now. Last year we hit $270k so I'd really like to get that to $300k this year. 

• Hit 60% in profit. Probably going to be changing 

• Book 4 state speaking gigs for next year

• Consistently hit $25k months. Did this in January and February, not in March, probably not in April

• Hit $15k in monthly recurring revenue (MRR) by the end of the year. This was the big goal to help us get to our revenue goals at the end of the year. We're a little bit less than halfway to this so far. My original goal was to get to 10k by the end of March but that hasn't happened yet. 

 

Let's recap what happened in March: 

• I've previously shared that if all things went to plan, March was going to be a $40k month. That's what I was hoping for because of launches we had planned. Those didn't end up happening, 

• We had planned a couple of launches and they didn't really end up happening

• We promoted our tax challenge and at the end of that I was planning to promote our services but I ended up doing the challenge while I was out of town, we didn't have many people sign up and I didn't get around to doing too much in terms of promotional emails. 

 

Projections vs. Actual

1. Unf*ck Your Biz - $4,000 → $1,000

2. Contract Club - $1,000 → $1,100

3. Legally Launched - $500 → $250 

4. Monthly services - $5,00 → $7,145 

5. Tax - $4,000 → $3,000 

6. Trademarks - $1,250 → $1,250 

7. Other - $1,000 → $1,010 

Total revenue - $17,750 → $15,265

 

Expenses

Employee wages: $5,200 (this does not include myself)

Contractor expenses: $4,700

Owner wages: $2,900 (after my taxes. I paid $2,500 into taxes)

Monthly tools: $500

Affiliate payouts: $650

Total expenses: $17,600

 

Profit 

(- $2,400) While I know a revenue of $15,265 sounds great, when expenses are $17,600, it makes it a lot less exciting. 

I then paid myself my salary of $5,300 so the total business profit was about (-$8,000). This is why it's good to have a little bit of cushion in our bank accounts. 

In April, I'm hoping to make a little bit more money. We're not really doing any promotions this month to make a lot more, but a lot of the team expenses were for Unf*ck Your Biz clients we were wrapping up and our bookkeepers were working on some clients' books that were several years behind and it's a project to really get them caught up. 

I'm probably going to need to readjust my profit goals because it's dawned on me that I've essentially built an agency. It's a law firm, but it's an agency and I may need to hire more bookkeepers to keep up with demand. 

Higher profit means more money in my pocket as the business owner, but I also am not looking to work 40-60 hours a week, for me ~30 is the sweet spot so if I can make less profit in order to bring on more people to do more of the client work, then that's okay with me. 

Because we weren't able to do our launches in March, my biggest issue right now is MRR (monthly recurring revenue). This is not recurring payments for courses, MRR is something you pay every month for until you cancel, think things like Netflix. My big goal is to hit $15,000 in MRR by the end of the year. If our goal was to get five people at $500/month that's $2,500/month times nine months would be close to $25,000 in revenue that we're now missing out on. If we can bring these clients on in May during our launch, that's two less months compared to if we had gotten in during a March launch. I thought