Transcription

• Speaker #0

  What's going on y'all? Welcome to another episode of Biz Growth Collective Spotlight, where we have the opportunity to spotlight businesses and share people's stories, see that they grow, talking to real business owners that deal with real solutions and real people on an everyday basis. So that way you can listen to it and get gems and get tips and tricks on how you can grow your business and hopefully one day be spotlighted by Biz Growth Collective as well. I'm your host TG3. And I'm here with Mr. Joseph with Squarebooks. And, you know, I've known Joseph for quite some time. He's a phenomenal human being, phenomenal father and a phenomenal business owner. But I could be here all day talking about how awesome Joseph is. But most people know him by Joe. And so first of all, like, I'll just let you, you know, introduce yourself, your name, your company, and kind of a little bit about like what you do for your clients.

• Speaker #1

  Sure. Thank you, Thelma. As I said, I go by Joe, Joe Schauber. I own Square Books, which is a professional bookkeeping service geared for small and medium-sized businesses. Ideally, our goal is to not only get your accounting information correct, but to lead you along the journey of understanding how your business is doing, what changes you're making, and how those are affecting your business, but also really telling the story of your business through numbers, whether you're a startup. learning what bookkeeping even means, or you're an established company looking for somebody who's willing to go along with you and make sure that your company is as successful as you want it to be. I've been doing this over nine years now, helping businesses all over, predominantly Northeast, but all over the country, get their books in order and tell their stories.

• Speaker #0

  I love that. And one of my mentors back when I was doing entrepreneurship at University of Houston used to always say, if you don't know your business, I mean, if you don't know your numbers, you don't know your business. So if you don't learn anything today, definitely take that quote and have it replay in your mind. And before you reach out to Joe, because it's so true, you know, it's so true. So let's dive right in a little bit to like your origin story, man. How did you get started in this in this field? And what made you start your company.

• Speaker #1

  Yeah, I listened to my wife. True story in that. At the time, I was working for a construction company doing roofing, framing, and what have you. I have a degree in business administration and got laid off during a slow winter for construction. And during that time, my wife could see that construction, I love doing it, but it wasn't a career path. It was long-term for us as a family. It was too demanding on my body, on the time constraints, and what have you. She found a course on bookkeeping, professional bookkeeping. and kind of did the intro look at it. What is this? And came to me and said, look, they said there are two criteria that will make a good bookkeeper. Number one, you're detail-oriented and you love numbers. Okay, easy enough. I mean, I was teaching accounting in college, tutoring people and helping classmates. Not a big deal. Number two, you're friendly and personable and people can get to know you. Well, you guys don't know me yet. Tillman does and that's something that I've been blessed with in spades. to be able to relate and connect with people based on my very background growing up in automotive and construction and what have you i can almost equate anything that you're dealing with in your business into terms that you understand not just numbers and dollars and cents which most of the time correct me if i'm wrong when people start talking about balance sheets and profit losses and profits and growth profits your eyes start to glaze over and you're just like why I don't need, I know this is important, but I don't know why. Well, guess what? That's not what I like to do. Let's take your numbers and say, all right, here are the three corners of your house cost of goods. That's what builds your house. Here's the payoff. That's your, your finished product. So we can connect and correlate what you do day in and day out, your profession, your expert field, if you will, to how your numbers relate. And it generally makes it a little bit more understandable for everybody.

• Speaker #0

  Wow. I love that. And you know, What's great about it is that... It kind of takes that day-to-day worry off your back, you know, because so many times you're focused on, you know, personnel, logistics, inventory, or whatever it is. A lot of times, by the time you get down and look at the numbers, you're too tired to look at them, or you're hungry and you're, you know, you're ready to go to bed. So having somebody else have a second set of eyes on something that important, I think is monumental to every business's growth. What's been some of the biggest changes that you've seen? Like what's some of the you know, success stories that, you know, you've seen like people actually grow from that just by having that awareness is what I'm hearing.

• Speaker #1

  Yeah. I mean, I, two of them come off the top of my head real quick. I have a client, I've had them, gosh, over six years now. that when I started, their version of bookkeeping was dump it all into a bank account, and at the end of the year, we'll figure out if we made any money. That's where they started. Now it's a nonprofit. They operate, I think, a dozen different programs. Each one is mapped in class so that we know how each program is doing. I have a meeting with them tomorrow because we discovered some idiosyncrasies with where the program thought it was doing versus where the expenses said they were. That's one. They've been able to really understand why they charge what they charge for their membership. And then also to dig into each of these programs and say, hey, you're not charging enough for this. Or guess what? You're doing great. Here's how we can continue to grow this. The other one that comes to mind is a client of mine, again, a long term client, who we discovered that they were actually paying their vendor to sell the products. They hadn't kept up with their pricing. So the vendor kept raising its prices, but the client never did on their website. So over the years, we've been able to figure out how to track direct costs for the client. And the client was also doing things like not tracking shipping costs, which is if anybody that ships anything knows have tripled or quadrupled in the last couple of years. So things like that where they weren't properly capturing all these costs. We've come up with systems for them to properly capture those revenues and incomes. That client a year ago at this time was... In debt to their vendors, I want to say between $60,000 and $80,000 today, tomorrow when I run the bill pay, I think they're going to be down to about $80,000, 90 days behind. They're going to be less than 30 days and probably $5,000 to $8,000 behind to their vendors.

• Speaker #0

  Wow. By simply having a plan in place.

• Speaker #1

  Putting a plan in place.

• Speaker #0

  I love that. And then just for everybody out there, can you explain what idiosyncrasies are?

• Speaker #1

  Idiosyncrasies, sure. Sorry, I use big words. It's a flaw. Basically, the things that don't line up. A plus B should always equal C. If you use staggering, one plus one equals two. But in accounting, plan, action should equal result. Well, that's not always the case. Oftentimes, that action has hidden costs or hidden... elements to it that you don't capture in your initial planning. For example, if you're a company that ships products, but you don't track how much shipping costs, that's an idiosyncrasy because you're not tracking and keeping up with it. Even more down to home, you invoice and you accept electronic payment, but you don't record how much the merchant fee is from your electronic payment. You just dump in a net amount into your bank account. How are you going to know when the 0.02 percent you're not not unless you start tracking it to see oh okay it's over costing that you can really have an advantage and again that doesn't sound like much but take a business out you know four five six seven hundred thousand dollar business operates exclusively with electronic payments that 0.02 percent that you weren't paying attention to adds up in a hurry You want the transaction over transaction.

• Speaker #0

  Yeah, it's like taking the kids to Chick-fil-A adds up in a hurry. So that's that's a really good key point. Also, like what's been probably the biggest concern that you see that people have, like when they're trying to work with you?

• Speaker #1

  I think the biggest concern people have is trust. You know, you're I'm you are asking me to look at your financial information and to not judge you, not condemn you for stupid mistakes. There's a lot of guilt that comes along with your books, especially if they're not well kept, because you think somebody's going to look at them and just judge you for every dumb decision you've made or perceived dumb decision that you've made. And that's that's not my game. That's not what I like to do at all. I tend to come in and say more like a father. Hey, here's what I see that you did. You know, let's talk about it. Let's move forward and let's figure out how to get out of this problem that you're in. Or let's figure out how to grow and develop the business that you want to do. But more often than not, the biggest hurdle I have to overcome is kind of that trust factor of you're going to judge me for how bad my books are. And I have kind of a pet slogan. As long as I've been doing it, you can't screw it up any worse than I can fix it. I've seen every which way to someday it's screwed up.

• Speaker #0

  Yeah, I love that. And if those of y'all are listening to this podcast and you're thinking you want to go check out the website, it's the square books dot com. If you want to go take a look at that, see everything he has to offer. Let's talk about taxes. That seems to be a really hot topic right now, you know, with new administration or right wing, left wing. Everybody's talking about taxes right now. A lot of different states are changing the way that they do things, whether it's a. state franchise tax. I know specifically in Florida, their annual report was due on the 1st of May. So now they're having to report those kinds of things. What have you seen some of the changes been with some of your clients working with you in terms of taxation?

• Speaker #1

  Well, the biggest thing with taxes for me is preparedness, which goes back to having good, accurate information. There are over 180 ways to mitigate taxes. prior to the end of the year, December 31st or fiscal year, if that's the type of business you are. There are two after. So what most people don't realize is you can go to your tax preparer, strongly recommend that everybody have, if you have a business, have a tax preparer as part of your team. You can go to your tax preparer October, November, and they will do a projection as far as what they think you're going to owe in taxes at the end of the year. And you can make a game plan to mitigate that or to handle it. Another aspect of planning for it, preparedness. Start intentionally setting funds aside January 1. Every work order and invoice that comes in, build it into your company model to set a percentage of that revenue aside in preparation for taxes. If you don't have to use it, that's great. You have savings for your company. If you do have to use it, you're already prepared and it's not a big hurdle. What I see more often than not, I can't speak to what's going to happen in the next year. There's probably a lot of changes based on what I'm seeing with the current tax bill that they're talking about and what have you. Nothing set in stone, so I won't even speak to what that might be because I have no idea how that's going to shake out. But historically, what I can see is if you're not prepared, and preparedness could be anything from savings account, small business owners. Get a retirement account set up because that is probably the single biggest thing I see all business owner that has spent their whole life working in their business and never laid anything aside For when they can't work in their business any longer and those are the people that you see I'm gonna stereotype here that are working at Walmart as a greeter when you look at them And they're like wouldn't you rather be out relaxing somewhere? They can't they've never planned ahead for that and I don't begrudge them. That's you know most of them are fantastic people but as a small business owner do not waste the time now saying i'll save later it's it's hard you have to prioritize it but with interest and compound the way it compounds if you wait 10 years it's more like you're 15 to 18 years behind where you could be because you've got to catch up and then collect not just catch up in total that you would have contributed but also in the interest that you've missed out on Even something as simple as a SEP IRA, almost every small business owner can set that up, investigate it, set that up, do something. The wonderful thing about a retirement account, be it a simple 401k or a SEP IRA, you do not have to fund it until you pay your taxes or file your taxes. Meaning, you can set your IRA up before the end of the year. They have to be set up prior to the end of the year before you're able to use them. So if you set it up December 30th, perfect. You don't have to fund it until you go to fire taxes. So you've got a window there where you can set that money aside for your retirement account.

• Speaker #0

  Yeah. And I think one of the biggest things that stuck out to me, as you said, is that you got 180 ways to mitigate taxes prior to the end of the fiscal year and only two afterwards. That's a huge significant difference that lets you know it's all about timing. You know what I mean? What do you think is like the biggest myth or misconception that you get from clients?

• Speaker #1

  The best way to avoid taxes is buy something. Probably the single biggest thing that I hear is, should I buy a truck? Should I buy a trailer? Should I buy equipment? Maybe, but what don't you think about when you do that? It helps you this year, but you still have to make the payments on that. So you have... swapped a short-term benefit for a long-term burden because your cash flow is now impacted for the next four or five years until you get rid of that vehicle or longer, depending on the piece of equipment. So that... $60,000 piece of equipment that you bought or truck, they gave you, you know, let's say it benefited you $8,000 to $10,000 in tax benefits, potentially. Again, spitballing numbers here. Okay, that's a short term, but it has also hurt your opportunity and available cash $1,000 a month for the next four to five years.

• Speaker #0

  Yep. So it turns into like a liability, even if it's a short-term asset. So to those people, what do you say?

• Speaker #1

  Those are the people where I look at and say, I would rather see you put it into your retirement account. Now, I'm not against equipment if it makes sense, i.e., hey, I'm going to replace this truck sometime in the next 12 months. Okay, let's do the projection in November and see where your income is. you're already planning to replace it does it make sense to do it this year to help mitigate and offset taxes or based on other things that you've done are you able to Go through this year not have you know, you'll pay some taxes, but buy it first of the year next year You're still buying the same truck that you're planning to but now it's going to benefit the next tax year So there's a projection looking ahead at your numbers and saying am I growing am I static or am I starting to drop off? When do I buy this? Perfect case in point. I'll use myself as an example. Last year, sold a piece of property, had capital gains on the personal side, which I want to get into the personal taxes. Capital gains, if you're under a certain threshold of income, there's no capital gains tax. So do you think that I just went out and made as much money as I could throughout the rest of the year? No. I was strategic about who I took on as clients. And I was also able to do some training, which is a business expense that maybe I would have pushed a year to get myself under those numbers. Did it cost me anything in the long term? No, it saved me tax dollars and it was already benefits that I was planning to build into my business. So those are the types of things if you're planning and you have a strategy and a roadmap to follow, it's all in the timing when you do it. And, you know, I'm happy to say we got under the numbers that I wanted to get under. And mind you, had the best year from a gross income perspective, but one of the worst years from a net income because of how we strategize stuff in the business.

• Speaker #0

  That's powerful. And you know what? I think that when you say. Like just having that awareness, you know, I think is the biggest thing. I think that so many people like they have like this fear of looking at it, like their fear of facing themselves in the mirror, like they're going to look at their finances and see themselves in the mirror and not like the reflection of staring back at them. them. But the great thing about awareness is that you can't change a problem that you're not aware of. You know what I mean? So have you ever had somebody that became aware, like through working with you, like they're more aware of their processes and now they started opening themselves up to different avenues of cashflow that they had never thought about before because they never took time to look?

• Speaker #1

  I would say most do because part of what I do is connect people. As Tillman can tell you I like to be in the position where I know somebody who can help you if I can't do it myself. So I have friends in the marketing space. I have friends in the financial sectors, both in lending and in retirement. I have a few in the payroll sector. I have some in HR sector. So I find people that have a similar mentality that I do towards helping their clients. And from there... We build out, you know, I refer work to somebody else. They refer work to me because we all have the same goal, which is to help our clients become to the best version of their business or their level of success.

• Speaker #0

  Wow. I love that. What do you, what do you think it is that, that drives your love for just seeing clients win?

• Speaker #1

  Here's my, I basically, I'm the kind of guy who says, if. I'm the only one winning in this scenario. It's a very short-term relationship. If everybody's winning in this scenario, it will last until the business shuts down more often than not. So I always tell people I'm selfish and lazy, and nobody believes me because I tend to work 60 to 80 hours a week and give unconditionally. But those two, the giving is in a way benefiting to everybody because I don't have to go look for more work. It's already there. It's somebody that I know. You asked me earlier, one of the things that people struggle with. and i'll circle back to that it's having somebody to talk to so for me to build that relationship with people to say hey i don't care how dumb you think that decision was let's talk about it you know we can't cry over spilt milk let's figure out how to get out of it so i think by creating that environment that says i'll do the work don't worry about that that'll get bigger but let's take it one step further what are you wrestling with um i have a client right now that we're trying to help him got himself in a financial jam because he panicked It happens. How do we get out of it? I'm not going to beat you up because you're in a financial jam. What's done is done. Let's get out of it. I think that's much more where I land is. Let's build going forward. And then when they're winning and succeeding, it's easy for me because they're winning and succeeding and they're happy.

• Speaker #0

  And then also too, I want to address some of the entrepreneurs out there. I talked to a lot of business owners that, you know, they, uh, They feel like they're already underwater, you know, so they're like, oh man, like I can never talk to somebody like Joe because I'm already underwater. I'm already struggling. I got this going on. I got that going on. Like, what do you have to say to those business owners?

• Speaker #1

  You got underwater by not asking anybody. Why don't you ask somebody? I mean, I understand the concern. I talked to a lot of business owners that are in the same boat of, oh, it's too late. I just, I'm so overwhelmed. Okay, if you're overwhelmed, why wouldn't you ask somebody to take some of the shoulder, take it off? If you're sick, you go to a doctor. Why wouldn't you go to help? I firmly believe that one of the most, as you're building out a business and a team, you've got to have your accounting, you've got to have your marketing, and you've got to have your sales and your ability to complete the work. Well, generally, the ability to complete the work is the business owner. It starts out that way. You do everything. You may not be versed in sales and marketing or bookkeeping, but they are necessary things that have to be done. And where most business owners struggle is when to make that transition. Why? Because I'll pick on marketing. Why not? Because Tillman's here. Yeah. There are so many marketing campaigns and there's so much noise in the marketing space, it's hard to pick one. How do you know you don't have the time because you're overwhelmed? And you don't really realize that you're actually shopping for somebody that shares your values, not that can make your business successful. If you're looking for a marketer, don't just find the flashiest one and go with that one. Make sure there's somebody that can get behind your product and what you're doing, not just creating a campaign. So that's marketing. Most people wait too long for that. I'm guilty of that as well. Sales, I think that goes hand in hand with being able to do the job. You've got some ability to sell yourself. But it's not a bad thing to think about when do I hire a salesman or market sales team. Bookkeeping is required. This is the piece that most people most often miss. You are required by law to file a tax return every year. Therefore, you are required to keep records. Wouldn't it be better to build your team with somebody who wants to be with you long term for helping you grow and develop your business than with somebody that you just find. It's the cheapest one or QuickBooks service or what have you. So I tend to look at that and go, you can't do it all yourself as a business owner. It took me far too long to realize that. And you need to figure out who you need to put in place that can augment what you're not good at or what you don't want to do. So business owners, I'd say write down on a piece of paper everything you do. Circle what you don't want to do and find somebody to do it. Don't thank yourself because your fear of... Spending money is causing you to miss out on how much you're making because you're spending your time doing that. Simple question is how much do you bill your time out at if you're an hourly contractor or anything that you do an hourly rate? What do you bill your time out at? And look at it. Say if I had if I bill my time out at $75 an hour and it's taking me six hours a month to do my bookkeeping, how much money have you Spent doing your bookkeeping. It's not free you spent the money You just in the form of your time as opposed to saying I could hire a bookkeeper or and in that scenario It's four hundred twenty dollars just to roll keep a track or Or so versus saying I was able to spend six hours on a job that paid me a thousand bucks and I could hire a Bookkeeper for five hundred bucks a month. I've made five hundred dollars by doing See, people don't equate that hiring somebody is actually a way to save. help them earn more money just by bringing in that opportunity potential. Opportunity and opportunity costs are something that most business owners, I don't know if they've ever been discussed, and they definitely aren't taught, at least in the spheres that I work. If you're always using your time, how are you using it, and is it of the most benefit for your business?

• Speaker #0

  Absolutely. I think even with me going to University of Houston, Shout out to the University of Houston. So don't take this the wrong way, but I don't think opportunity costs or risk tolerance were ever brought up, you know, and those are two very key components when it comes to scaling your business, especially if you're a contractor, you're a roofer, you do siding, fencing, whatever the case may be. The one thing that's not necessarily scalable is your time and energy. You know what I mean? I know a lot of people that search and they find like, you know, QuickBooks or Zendesk or all these other random softwares out there like what what sets you apart from like why they should reach out to you instead Of just signing up for this, you know random software that they could find

• Speaker #1

  And up fixing those random softwares Here's here's the thing for the random software any software is only as good as the input that goes into it Mmm, who's doing the input go back to you? I use QuickBooks. It's good books with most of my clients, but it's only as good as the input and the knowledge that goes into it. So QuickBooks is billed as a very user-friendly, super easy, super reliable bookkeeping software. I take a little bit different spin. It's super easy to make it super big mess, super fast, because if you do not understand the accounting that anchors the software, You don't really know what you're just willy nilly creating, you know, information. And I go back to most people tend to look for a bookkeeper when one of two things happens. The tax accountant tells them to or they go to try to get a loan. The two biggest times that people try to find a bookkeeper. And it's already almost too late at that point. Not too late to get a bookkeeper, but what you needed a bookkeeper for is going to take a couple more months. to get the information caught up when you need that loan tomorrow for the truck so you're already behind the eight ball and a cleanup cost just for in arguable numbers generally speaking most bookkeepers if they have to do a cleanup which is basically go back and fix the books back to the beginning of the year or what have you they're going to charge you a per month rate for a lot of that in a lump sum in general so you're looking probably 50 to 70 of what it would have cost you each month over the course of that in one lump, excuse me, one lump chunk. So would you rather have reliable, actionable data every single month, or would you just rather wait to the end of the year for when you need it and hope they can scramble and get it out?

• Speaker #0

  Yeah, that's a big thing. So basically a lot of the people that's listening to this need to go reach out to Joe yesterday. You know what I'm saying? because this nobody likes really talking about the f word and f word is finances you know and the thing about it is that once you face it and you become aware and you get more comfortable with it you find that it gives you a sense of peace and control and serenity that you've never had before because now you are aware of what's going on and you know the game plan that you're on so with that being said. How can people find you? How can they reach out to you? I think you do free consultations too. Like just to kind of see, yeah, just reach out to them, have a free consultation, bro. I mean, it doesn't get any easier than that. I mean, you know, just to at least start to see where it goes, but yeah. How, how can people find you? How can they book a consultation with you and continue the conversation?

• Speaker #1

  Yeah, you can, you can get ahold of me through the website, thesquarebooks.com. Now you can book a call right there that links right into my office and we'll schedule a time there you can reach me at Joe at The Square Books or Office at The Square Books will get me as well. You can find me on LinkedIn, Facebook. I'm out there as well.

• Speaker #0

  Yeah. So y'all reach out to Joe. I know that there's a lot that you can do by what he has to offer. And at the end of the day, really too, it's like if you're really about building a business, a lot of business owners that I talk to, they're all about building a business. building a business that they could pass on to their children, that they could keep within their family. You know, some business owners have a goal of, you know, just not having to pay taxes. But the real thing is that you want to be able to maximize and optimize your business. And the only way that's going to happen is by having somebody like Joe that can look at your numbers and give you a second set of eyes on things and be able to guide you in a way that. You might not be seeing it because let's be honest, we all have blind spots.

• Speaker #1

  But that's all we got for today.

• Speaker #2

  Thank you for listening to Biz Growth Collective Spot Podcast, where we spotlight different business owners.

• Speaker #3

  It's always a pleasure talking to Joe and we'll see you all in the next episode.

• Speaker #4

  Peace out.