Unf*ck Your Biz With Braden Braden Drake

On today's episode of the podcast I speak with Denise Duffield-Thomas about becoming a chillpreneur. 

To hear Denise's previous episode of my podcast, click here for episode 65 "Money Blocks."

Being a chillpreneur does not mean working beachside from a hammock. It's about creating a business that works for your and your personality. When you start a business, a lot of learning who you like to work with or what your boundaries are comes from trial and error. A chillpreneur business is one that is in line with your strengths, fits your lifestyle goals, fits your income goals and is personal to you. Creating an optimism that there is space for you is a tenet of the chillpreneur philosophy. Know thyself and prosper. 

Denise's third book titled Chill and Prosper comes out on July 19, 2022. It gives a fresh and funny roadmap to living a life of abundance without burnout. To pre-order the book and get access to Denise's free affirmations for business owners, click here. The book is a post-pandemic look at creating a business that works for you. 

Often Denise receives objections like, "this won't work for my industry," or "I can't do my business online," or "I can't create a passive income around this or write a book." An example is a pelvic floor therapist who said she couldn't do it online. She learned that when you charge win-win prices and don't feel the need to be affordable for every person and have time for every person, you have more time to create passive income in a way that works for you. 

Too often business owners are trying to build a critic-proof business with a critic-proof price and that's impossible. If you have no critics it probably means you're bending over backwards to please everyone, and that's not sustainable. When we go into an industry, we go in with a mindset that there's a certain way things are done and that's the way we need to do it too, but that's not the case 

For example, as an attorney that looks like carving out a specific niche and serving that audience through specific online services and products, as opposed to just 1:1 services in an office. When people niche down, so many people go through fear of "am I enough?" or "am I allowed to?" We focus on the bad thing that's going to happen if we set a boundary or if we have to live forever with the decisions we choose. 

A lot of times we over-deliver from a place of wanting to be generous. In a coaching space, Denise finds coaches frequently go over time when working 1:1 with clients or give more freebies along with their material. She found that her refund rate was going up on her own course and the feedback she was getting was people did not have enough time to complete it because there was too much material. Denise's generosity was causing other people overwhelm. 

"A confused mind says no," Denise shares. When things are not available at the time you're ready, for example calling someone to schedule an appointment versus doing it online, you will lose people when adding complications. Do your best to automate tasks so customers can act at the time they're ready.

Denise discovered that having a chill business and automating parts of her business has helped her with her ADHD diagnosis. Automate, delegate or batch the parts of your business that are your highest pain points. Denise acknowledges she can go down the rabbit hole of shiny objects, and talks about the importance of focusing on the products you do have and how, in her case, they all lead to the bootcamp program that she offers. For many entrepreneurs, it's easy to get excited about so many projects at once, which Denise finds is common, but not always helpful, especially when you want to be the best at everything you try and have an itch that needs to be scratched. 

It's important to be consistent in your business. Even if you're the person who comes up with ideas all the time, you can find where that fits into consistency. For example, some people may hire someone to

On today's episode of the podcast, I explain how my S Corp ended up costing me more in tax last year. 

To check out my podcast set-up or watch a video version of my podcast, check out my YouTube channel. 

Long story short, I should not have formed my S Corp last year because I didn't end up making as much money as I thought I was going to. Unfortunately, we can't always predict these things. 

I talk to a lot of business owners who have accountants that get them set up with an S Corp from day one. This is usually a bad idea, unless you're bringing a whole book of business with you from elsewhere and are starting your business at six figures. 

To exemplify this, I will use my own numbers, especially since 2021's revenue was less than I anticipated. I was about $50,000 under the minimum revenue I projected when I started my S Corp and I was $100,000 under my goal. I ended u making about $95,000 last year, and $140,000 the year before. I thought I would continue to double year over year, or at least hit $200,00. I formed my S Corp in January 2021 and immediately got on payroll so I had an S Corp for effectively the whole year. 

When you have an S Corp, you pay yourself a salary, through a payroll provider that holds your taxes for you and divides them out to the various government agencies. Only your salary in an S Corp is subject to self-employment taxes. As business owners, we are required to pay both income taxes and full self-employment taxes which is our share of Medicare and social security. When we're employed, we pay half and our employer pays half. When we're self-employed, we pay both halves. The S Corp allows you to split your payment into two types - salaries and distributions - where only one of those is subject to 15.3% self-employment tax. This allows you to save 15.3% tax on any profit you have above and beyond your salary but your salary must be reasonable under law. 

For example, assume you have $100,000 in gross revenue and you operate at 80% gross profit meaning you only have $20,000 in business expenses. That would make your profit $80,000. You do research and determine your reasonable salary should be $60,000. In an S Corp, you pay this salary through payroll and it is technically an expense, but doesn't mean you don't pay taxes on it. This leaves you with $20,000, I call this profit after reasonable salary which is the amount of money you have after all your business expenses and your owner's salary. This is also your distribution amount. You save a 15.3% self-employment tax on the remainder, which leaves you with $3,060 in tax savings.

As this relates to my S Corp last year, I had $95,000 in revenue, but a slightly negative profit on my tax return. How does this happen? Previously I've talked about profit on your books versus profit on your taxes. This is correct, and totally normal. A big example is home office. We should not pay our rent or mortgage out of our business bank account because it is a mix-use expense so it comes out of our personal account and then have our business reimburse us for the use of our home office if you have an S Corp. Mine was about $5 or 6,000 which combined with a few other examples like this, took me to a slight negative profit on my tax return. It's important to note this doesn't mean you didn't make any money from your business, we're just talking about business profit. 

A S Corp saves you money by having profit after reasonable salary, which I did not have. It cost me about $600, which is the cost of my payroll. The biggest issue for me was the QBI (Qualified Business Income) deduction. This allows business owners to deduct 20% of their QBI (see line 13 of the 1040 tax form). We can simply this to say it's basically net business income with some exceptions. This only identifies to passthroughs. Income phaseouts and the rules for phaseouts differ based on the kind of business. 

To see the Qualified Business Income decision tree to see the rules and br

On today's episode of the podcast I sit down with online marketing educator, Amy Porterfield, to discuss her business - how it started, how it's going, her team, her finances, and more. 

Before starting her business, Amy was in corporate and thought she would always be a corporate girl. She loved moving up the ladder, the accolades, bonuses and promotions. Working with Tony Robbins gave Amy the entrepreneurial bug and inspired her to give it a shot. Six and a half years into that job, Amy took the leap. 

Her plan was to create online courses and teach people about digital marketing, however she hadn't saved up a lot of money to start her business and didn't know how to start an online course so she started by doing social media for clients and working one on one with people and hated the business she created. 

Her first year in business on her own in 2010 she made a little over what she had made in corporate and thought it was all going well. In 2011, she made about $30,000 less than the year before after taking on too many clients and was maxed out and struggling to manage it all. She created a business she hated and let go of all her clients to create a course.

The first course was a "huge failure." Amy went into debt early on in her business and did not get her first bookkeeper until the end of 2011. One of the biggest mistakes she says she made was having the mindset about her finances that if I don't see it, it's going to be fine. She also found herself unprepared for tax season because she didn't know what estimated taxes were and hadn't put any money aside. Because of all this, Amy takes her finances very seriously now. 

Near the end of 2011, Amy had her first successful course launch on her own and made $30,000 in that launch. Her first two attempts on her own she made $267 and a little bit more the second time around. To celebrate, Amy and her husband went on a staycation to a nice hotel.

It's important to Amy to celebrate hard work to break up projects before jumping into the next thing. Braden likes to set launch rewards to celebrate when hitting certain milestones. 

Amy's first course was on Facebook ads. From there, she went on to become known for her education on creating courses after selling multiple successful courses on different topics.  Her free content has always been about email list building. 

As the business has grown, Amy's bookkeeping process has evolved to a process that is now dialed in, but that Amy says did not need to take as long as it did. Currently, Amy has a virtual CFO. The virtual CFO And his agency create a P&L that Amy reviews each month. Now that Amy is 13 years in she has a team made up of different departments and, beginning two years ago, each department develops their own budget for the year. 

At first pass, each department submits their budget with everything they want and need. From there, the CFO takes all the budgets and all the revenue projections and comes back with revenue and profit margin information. Profit margin is a key metric that Amy has focused on for years. Her company is typically between 45 and 50% profit margin. If the calculated profit margin is less than 45% then the departments go back to look for where they can cut expenses or make more money. 

In February 2023, Amy is launching a book, "Two Weeks Notice: How to Find the Courage to Quit Your Job and Start an Online Business," which she says may require a little wiggle room in going below the 45% profit margin as she promotes the book. 

Get in Touch with Our Guest

Amy PorterfieldListen to Amy's Podcast, Online Marketing Made EasyFollow Amy on Instagram @amyporterfield

Stay tuned, coming in August, Amy will be doing her biggest annual promotion as she gears up for the launch of Digital Course Academy. Students of the Digital Course Academy who buy through Braden's affiliate link will receive special bonus resources. 

On today’s episode of the Unf*ck Your Biz with Braden podcast I share my May profit report, breaking down my revenue, expenses, and if I hit my monthly goals. If you haven't already, check out episode 225 where I give April's profit report and share my May goals.

 

My goal for the year was to hit $15,000 a month in revenue. I hit that goal in January and have not hit it since. Doing these profit reports not only, hopefully, provide you insight into the profit of a fellow business owner, they also help me review my own profit and also get me a better understanding of my baseline revenue. To me, baseline revenue is the number we can hit by doing whatever it is we do consistently every week. I encourage every business owner to learn and track their baseline number. For me, these consistent tasks are putting out a podcast episode each week, sending out a weekly email, posting a social post for the podcast, a mild average amount of Facebook interaction, one speaking engagement a week average, and typically Instagram stories daily. A lot of my base revenue comes from my monthly membership. Right now it's close to $7,000 and then I tend to make an extra $2,000 a month from the other things I sell. Trying to go over my baseline of $9,000 requires extra promotion like a launch of some kind or an email promotion which requires me to work more than my usual default.

 

Last week on the podcast I shared my interview from Claire Pelletreau's podcast where we talk about how I get paid and Claire posed the question of how special promotions impact or take away attention from the typical promotion of my usual products.

 

I decided to make May a chill month. I was traveling and it was Memorial Day and I decided I wasn't going to do any of the "extra" or "bonus" work that goes into getting above the baseline.

 

To recap my May goals:

-        $6,300 MRR (monthly recurring revenue)

-        $400 in Speaking fees

-        $2,000 in affiliate commissions from my sales of The Abundance Group

-        $900 in 30 Contract Vault sales. I contemplated a price increase promotion, but decided against it.

 

So now let's talk about what ACTUALLY happened.



MRR is now at $6,950. 🥳 with 9 new members. Yay!



$1,470 in Vault Sales (49)



Book: $110



Affiliate Income: $450



Other: $567

On today's episode of the podcast, we're switching it up! Hosting today's episode is my friend, and former podcast guest, Facebook and Instagram ad expert Claire Pelletreau. You'll hear an episode Claire recorded for her podcast where she interviews me about how I get paid. To hear me interview Claire on Unf*ck Your Biz, check out Episode 204 - Discussing a Multi-Six Figure P&L. 

To start the conversation, we dive into client gifting. What do we do with them tax-wise? For context, there is a difference between client gifts and expenses per client. For example, if you have swag bags at events, I wouldn't consider that a gift, but an expense. To get into technicalities, you'd need to look into the IRS instructions, and a lot of it has to do with the details - how and why you're giving these to your clients/students/friends, etc. If it's a standard gift/item that everyone gets, it's an expense. If you're sending a gift every holiday season or New Year's, I would consider that a gift. In the month of March, I received three different speaker thank you gifts for summits I was part of. 

I get paid mostly through online courses, speaking, and other general online things. I got started doing 1:1 work as an attorney and in 2019 I released my first course after investing in Amy Porterfield's course and pivoted my business into an online business. My first course was a spotlight called "Legally Launched" and taught you how to file an LLC or Sole Prop without using an attorney or LegalZoom. Around the time I had less than 400 people on my email list and got 14 students. My subscribers came organically, through efforts like speaking events for Tuesday's Together throughout Southern California. This course later became a module inside signature course. Through that launch I made $18,000 at a price point of $1,000. It's important to set up an EIN and business bank account so you can keep your business and personal expenses separate. 

When COVID hit in 2020,I had gone from $30k my first year to $70k to $140k in 2020, which made me think I would be doubling my revenue each year as the trajectory of my business. Instead, what had happened was during 2020 my primary audience was wedding professionals who were looking for help with their contracts, incorporating the force majeure clause, ad covering what to do to protect themselves when events were canceled due to COVID. 

In response, I launched a revamped membership that I tailored to the experience that people were having at the time, which was great until these wedding pros resolved the COVID-related issues they were having and then membership began to nosedive. Once 2021 rolled around, the people who needed the membership had already joined and were now back to doing so many events they didn't have time to join or do the work in my other programs which became my struggle. The price of the membership continued to go up about month after month from $39 to $69. 

My goal for 2021 was $250,000. I had a launch in April of 2021 and this was the launch of my $2,000 signature program. At this point in my business I'd had an $18k launch, a $35k launch and a $40k launch. My goal for this launch was 6-figures, however I only ended up making $10,000, which led a lot of self-reflection.

I knew several of the things I'd done wrong. Even though my email list had been growing I hadn't been doing a lot of public speaking so I wasn't reaching new audiences. I learned not to be complacent. Evergreen can work, but it doesn't mean that you're not working. On top of that, so much of my wedding planning audience was now doubly busy with making up 2020 weddings but not making more money on these rescheduled weddings. So I hired a VA and we started pitching new podcasts to reach out to new audience like interior designers. 

I don't think I have yet to have a webinar with low conversion, it just comes down to how many people I can get to sign up for the webinar. That webinar had lower numbers. Aft

On today's episode of the podcast I walk you through what to do if you're faced with back taxes (don't worry, you aren't alone). If you don't have back taxes, I recommend sticking around for this episode to learn what to do if this happens to you in the future. 

I used to sell an online course called Unf*ck Your Biz and we had a full module called Unf*ck It where we covered back taxes and business formation mistakes. I often hear about back taxes when I talk about them. I took this info and created Unf*ck Your Tax which is within Profit Rx. 

First, let's check on how you're doing on your taxes. Which category would you say you fall into? 

1. I'm absolutely crushing it

2. I'm doing pretty ok

3. I'm paying quarterly taxes and keeping my books up-to-date but my systems could likely be improved

4. I'm not paying quarterly taxes but I've paid on time each year and don't owe any back taxes

5. My tax filings are up-to-date and I'm on a payment plan for back taxes I already have

6. My tax filings are up-to-date, I owe back taxes, and I don't have a solid plan for them

7. I'm behind on my tax filings, meaning you haven't done your returns yet so you aren't sure if you owe

Unf*ck Your Tax is designed mainly for those who answered 5, 6, or 7. If you answered 1-4 you probably don't need to go through this bonus program. If you answered 5, you will need to skim through Unf*ck Your Tax to see if you're on the right path. If you answered 6, Unf*ck Your Tax will be your new best friend. If you're 7, skim through the course, then go through the Tax Season Playbook in Profit Rx to file your taxes. If you end up with a balance then come back to Unf*ck Your Tax. 

The IRS has a thorough Taxpayer Roadmap framework. It's a very complex flowchart but is quite handy. The steps on the flowchart look like a stop on a metro line and are all clickable with more information and details you can zoom in on. 

For example, if you got a letter from the IRS, let's say you get a CP501, you can type it into the search box on the Roadmap and it will tell you where you fall and how and if you need to respond to the letter. In my program, I made a simplified version of this flowchart which you can view here.

To briefly explain it: 

First, you prepare your tax return and it gets processed. If they process it and there's no issues then you get your refund. If you owe money and they process it and there's no issues, then you pay them and that's the end. If something pops up in processing you can either go straight to collections or to exam. Collection is where you will be sent if they have something that is very automated. An example of this would be someone issued you a 1099 and you did not report it, and the IRS says we estimate your additional tax to be $X and ti goes to collections to collect your money. If you did something on your return that looks fishy and they want to look into it, that's when you go to exam (another term for audit). 

There are three levels of audit: 

1. Correspondence audit - Back and forth letters you have to send. 

2. Office visit - You visit an IRS office.

3. Field audit - The most serious, they come to your office/home. This only tends to happen in more serious cases. 

If they determine on audit you took a deduction you weren't allowed to take, they'd say you owe us $X. If you agree with them but don't pay them right away they'd send you to collection. If you don't agree with them, you can appeal. They can accept it, or reject it in which case you can file an appeal in tax court if you choose. If you agree on the appeal but don't pay it you go to collection. A lot of are not going to end up being audited, but we might end up going through collections if we are not saving and paying quarterly taxes. 

To give you a brief overview on collection options:


Offer and compromise - This allows you to pay less than the total tax you owe in installments. There are income qualifications for this and future quali