Jessica Tomac

In this must-listen episode of “The Mess In The Middle,” Audra engages in a riveting conversation with Jessica, a dynamic financial advisor with an intriguing backstory.  Jessica built her career on helping women and business owners pave their way to wealth creation. Tired of financial advisors who seemed more interested in taking money than giving valuable advice, she decided to be the change she wanted to see. Imagine her as the quarterback of your financial planning team!

jessica | zindo+co

About the Guest

I became a limited partner with Edward Jones in 2018. I believe in the spirit of giving back and have held numerous leadership roles with Edward Jones, including field trainer, diversity inclusion specialist and mentor, as well as having completed three asset-sharing programs. 

A special passion of mine is helping widows, divorced women and single women understand where they have their money, what it is doing for them now and what they can expect in the future.



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Audra Carpenter


Jessica Tomac


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Episode Transcript

*What follows is an AI-generated transcript may not be 100% accurate. 


[00:00:36] Audra: Welcome back to another episode of The Mess In the Middle. And today my guest is Jessica, and I’m gonna let Jessica get into her story a little bit. First, I wanna welcome you and thank you for taking the time to listen in, and I hope you get a lot of valuable nuggets from it. So let’s go ahead and get started.

[00:00:54] So welcome Jessica. Thank you for being part of the show today. I. Yeah. thank you so much for having

[00:00:59] Jessica: me. It’s super exciting. as a financial advisor who’s built my business on helping women and business owners know where they’re at and how to move forward, and what does that look like for wealth creation?

[00:01:13] when before I decided to get into this field, I fired five financial advisors. cause they didn’t think they were hearing me. They weren’t, I didn’t feel like I had a team member, a partner, that was really helping me get to where I wanted. they all wanted your money, but they didn’t wanna.

[00:01:31] Answer questions or do those things. So that’s really why I got into the business, and really wanted to make a difference in people’s lives, giving them [00:01:40] that support, being that member of their tribe. almost think of myself as like the quarterback on your football team, really helping you, get to where you wanna go, and sometimes just giving you that little nugget at a time so you can

[00:01:53] Audra: go attack it.

[00:01:54] Okay, great. it’s definitely needed and it, it goes across the board with all service businesses. I think we get so focused on hunting that we forget that once we actually hunt, we need to stick around and gather in nurture and take care of what we just brought in. And that is a huge challenge.

[00:02:13] So good for you for noticing that’s an issue and focusing on it. So let’s talk a little bit about your ideal customer. So who do you typically help? What does that look like?

[00:02:23] Jessica: Yeah. So my ideal client is, a female and or business owner. Okay. really someone who’s looking for some direction and guidance.

[00:02:33] They are typically career focused. They don’t have a lot of time, they don’t wanna be self-managing, and really want to take their selves to like that next level, right? Okay. and grow, whether it’s their business, finances, personal finances, a combination of both of those. that’s really what we,

[00:02:52] Audra: focus on working with.

[00:02:54] Okay. So I imagine addressing that segment of the market, you’ve seen it all right? I have, yeah. I’ve worked with those folks that are just

[00:03:03] Jessica: starting a business. Okay. And, scraping every penny, to those that have sold multimillion dollar businesses. So before I became a financial advisor, I did strategic planning and mergers and acquisition.

[00:03:16] So from the business side of things, I know enough to be dangerous,[00:03:20] and kind of things to look for and really helping business owners make sure that they’re not putting their sole,

[00:03:25] Audra: retirement

[00:03:26] Jessica: strategy on their business, but doing some diversification along the way. so that we have some plans and some

[00:03:33] Audra: options.

[00:03:34] That’s good. I know that. being an owner of multiple businesses throughout my career and then also working for them, we are so focused with head down, trying to grow, trying to develop products and serve our audience, that this becomes an afterthought. Oh, by the way, until you get ready to do your taxes right, we don’t think about it too much.

[00:03:55] And especially if you’re not big enough yet that you have a onsite C F O, that can be that, second set of eyes to focus on that independently. What would be your advice, or what are some of the situations that you’ve seen with smaller businesses? How do they start wrapping their head around this, where it becomes not so overwhelming?

[00:04:13] Like you said, I don’t wanna become a financial planner, but I do need to take responsibility and know enough to do what’s necessary to keep my business moving forward. Yeah, I think you

[00:04:25] Jessica: hit it right on the head when you said the word taxes, right? that is the first time that I find that the business owners Are thinking, oh, I am paying too much in taxes. and there are lots of strategies they can utilize, if they’re the only employee in their business. And or if they have other employees, different, vehicles that they can be using, but to tax, defer things, to use things as a business expense.

[00:04:52] And that’s really when I start to see that shift

[00:04:56] of, you

[00:04:57] know,business too. I have to do something, this [00:05:00] tax burden. I love to catch them before it gets there.

[00:05:03] Audra: Yeah.

dapibus leo.

[00:05:03] Jessica: But oftentimes, if they’re seeking me out, that’s the catalyst. If I don’t have that relationship already established with their C

[00:05:10] Audra: P A.

[00:05:11] Okay, so let’s do an example. So I’m in business. I’m doing okay. My first year I generate a hun say a hundred thousand. What would be the conversation that you would have with me where I say, okay, I’m getting ready to do my first year of taxes. I made a few bucks. How do I position myself to not, one, give it all away, but two, start making some necessary steps to make sure I stick around through year two.

[00:05:40] All right.

[00:05:41] Jessica: that’s a great question. So I think it’s a two-pronged approach, right? One, you have to have that cash set aside for next year’s business. You can’t be foolish and have it no, account there. But in the same breath, if you think about paying quarterly taxes, many people are paying quarterly taxes.

[00:05:58] they feel a lot better if they’re paying themselves versus paying the government. So if you are, C p a tax professional can say, oh, if you use this set, s e p set, and put money away, this lowers your tax burden by X. Right? especially if you’re just earning that hundred thousand if you’re a joint family, you’re really close to being on that lower tax bracket.

[00:06:21] So simply shifting some of your money into that reduces your tax. For that year, but also then allows that money to grow tax free until you pull it out in retirement. So it’s a win-win for you, you as the business owner, you as the person, to really help you start [00:06:40] saving outside of the business and defer your taxes.

[00:06:43] Audra: Okay, so now let’s move forward. So we’re in year two. We’re starting to make a little bit more money. Is there something that you suggest to your clients or that you’ve seen them do? I’ve got excess. Where am I putting it? But I need to have access to it in the event something comes up. What am I doing with that money?

[00:07:04] Jessica: Yeah, great question. So we open and operate a lot of business accounts, for our clients as well. So it’s still held in the business, so you’re not paying expenses or income on it as a person. We do a CD ladder so that they have access to it if they need it. But then we actually take it once we have a certain, operating, per, number of months set up.

[00:07:29] We then have an invested account and we do that as a tax efficient account. We then

[00:07:35] Audra: build that up to a certain dollar amount. And

[00:07:37] Jessica: then we go to individual stocks, all of that can be held within the business account. which is really helpful. And then you could draw income or get dividends from that as a business owner.

[00:07:47] Audra: Okay. so now I’m in year five. I beat the statistics, right? Yes. And I am making some decent money. I’m around the million mark. Little over that. How does my tax strategy change now? I know it’ll be different, and I know you’re not an accountant, but just some general rule of thumb to people like that.

[00:08:09] Now, will LL C be different than Inc, or is the strategy just similar for everybody and then it’ll branch out based on. Here’s business [00:08:20] structure. Yeah.

[00:08:21] Jessica: So business structure has a small part in it, okay. as far as how you’re taxed. So that’s the CPA figuring out, Nope, you should be an S corp, or you should be a C corp.

[00:08:31] And those things as you grow, right? however, that savings strategy, assuming that when you went from that hundred thousand dollars to a million. That you’re not just spending it all. I got a new car and a new

[00:08:42] Audra: house, and I got a boat,

[00:08:44] Jessica: I got a bigger house. I got everything I want. And I’m in debt up to my eyeballs.

[00:08:48] No, that is not what we want to do. but assuming that maybe at this point, year five plus you’ve got larger chunks of money that you’re able to save, right? And so then if. as a higher wage earner, you’re not eligible for things like a Roth that is tax free. But there is a thing if you have, bigger deposits, you can do, it’s called alert,

[00:09:13] Audra: okay?

[00:09:14] Okay. It’s

[00:09:14] Jessica: a life insurance retirement plan, okay? And what

[00:09:17] Audra: you do is

[00:09:18] Jessica: you are able to put money into this regardless of your earnings amount. I like to have it for people who have, 10 years

[00:09:26] Audra: or so before they want to pull out of it.

[00:09:28] Jessica: But we kind of stuff it, I call it stuff in the pig. We put a lot of money into it.

[00:09:33] And then when you retire, this is tax free income.

[00:09:37] You’re

[00:09:37] gonna pull from it. Nice. so that’s a really nice strategy. It does not reduce your taxes at the time you’re putting this money in, but it is growing tax free and all the money you pull out of it is tax free. So that is for my higher earners who have, maybe they’ve went from that set that we talked about, maybe they’re doing a, a [00:10:00] discretionary, A 401k, an owner only 401k, or a deferred comp plan.

[00:10:05] Maybe we’ve transitioned into these higher savings vehicles. But even those have a cap. there is no cap on the Alert.

[00:10:14] So that’s another

[00:10:15] diversification strategy to provide tax free income

[00:10:19] Audra: throughout retirement. Okay. Alright guys, so recap. So when you’re at the beginning, it’s just about

[00:10:27] holding onto anything disposable. So if you don’t need to put it back in the business or cover your expenses, you gotta hang onto it, especially at the beginning here. If you can’t get through that first year, it’s gonna be super challenging to get through year number two. So remember that first year, we’re doing all the learning.

[00:10:44] We’re finding our audience, we’re perfecting our product, we’re getting our marketing to match our message. All of that kind of stuff is in that first year. So if you’re fortunate enough to generate revenue from that, you gotta be responsible with it. Once you move into year two, you are growing right now.

[00:11:02] I don’t suggest to my clients to develop a second product until that first product has generated at least a million dollars. Now, I know that seems like a lot, but I still wouldn’t do it. You’ve got a lot of work to do and the market, especially with all the evolution that’s happening right now with AI and everything else, it’s a little unstable,be really good at what you’re doing, expanding, getting on other platforms, finding other means of marketing, and continue to grow that one product that is doing well before you start diversifying the year two.

[00:11:36] Like Jessica said, now we’ve got a little bit more money. We, the [00:11:40] conversation starts changing a little bit. You still have to be a good. Fiduciary of that money, cuz year two does not mean it’s easy sailing from here. You’re probably in the growth stage, right? You’re starting to do more and more in your business.

[00:11:55] You’re starting to see, you’re probably starting to hire, you’re, things are moving along really nicely. You’re putting some systems in place. The more money you have, the easier the conversations and the decisions that you have to make in your business are. Once you lose the money because you were silly with it, or not silly, but not responsible with it.

[00:12:15] you don’t have as much leverage in the market to be able to make decisions and pivot in the event that you have to maybe the market you’re in is volatile and instead of spending that money saying, oh, I had an extra 50 K, so I did X with it, I bought a vacation house, or I bought a boat.

[00:12:32] It’s not the time, especially in the economy we’re in right now. And then, as Jessica said, that last stage, then the conversation changes. Then it’s looking for the best vehicle of what to do with that money and how to continue, leveraging it and getting it to growth with you. Maybe five years down the road.

[00:12:51] You want to sell the business or you wanna add in another product line, or buy other, acquire your competitors. Then you’re able to do that because you were responsible with those funds and you have a whole different leverage game that you can play.

[00:13:05] So is that about right? Yeah, a hundred percent. Okay. And I,

[00:13:09] Jessica: I think the key is as you’re building up that wellbeing, even if you leave it in the business, that is stuff that you can use as collateral. So you

[00:13:16] actually don’t have to sell those investments and

[00:13:18] do that, but [00:13:20] you can go get a loan through it.

[00:13:21] there’s lots of, advantages

[00:13:24] Audra: if you’ve got that cash. Okay. All right. So let’s pivot. Now I wanna hear some of the places where businesses get tripped up. I imagine you see patterns just like I do as a marketer where everybody continually makes that same mistake. What would be some things that you’ve seen with your clients?

[00:13:42] I think,

[00:13:42] Jessica: oh, the thing that you see most frequently is they went from working really hard and maybe only earning 30,000 or 50,000, and then all of a sudden, you know it, the product takes off or their offer takes off, and now it’s a hundred thousand, 200,000, and they take on a bunch

[00:14:04] of debt.

[00:14:05] Personal debt, right?

[00:14:06] they want to buy. It’s this entitlement. I’ve worked really hard, I deserve

[00:14:11] this, and,

[00:14:13] and then. Now they can still make the payments, but the second they hit a bump in the road, they’re in a financial

[00:14:21] situation

[00:14:22] that they shouldn’t have gotten themselves into. So I think that’s probably the most common with

[00:14:28] people

[00:14:29] who are starting out in business and after they get through that grind a little bit and see some success, they

[00:14:36] Audra: bite too much too fast.

[00:14:38] Okay. Okay. that’s good advice. I have to say, I probably felt. to that trap in my title company a few years ago. So I got in, real estate in 2002, so the real estate market was just starting to take off. I worked for somebody doing that, but I. I ended up spinning off and opening up my own title company in [00:15:00] 2005.

[00:15:00] And, during that time everybody was printing money. It was just stupid, fun, exciting, fast,it was just, you couldn’t take in enough business. And I wasn’t foolish with it, but I did buy a very expensive car. And, didn’t do the house, didn’t do any of that. I had three kids, so I wasn’t gonna be stupid with it, but I did buy a very nice car.

[00:15:21] And how I justified it was just one transaction because the payment was $1,200 for, I bought myself a nice Audi A, 8 fully loaded, top of the line, brand new, and the car payment was $1,200. And so for me it was one transaction. As long as I had one extra transaction a month. And that was how I mentally justified it.

[00:15:44] I was doing, a hundred transactions a month,

[00:15:46] Jessica: so it was nothing, but we, I didn’t, you didn’t know 2008, 2009 was right around the corner.

[00:15:53] Audra: no. And I actually traded it in a few years later and bought a Tahoe, because it wasn’t, an Audi wasn’t practical for somebody like me. I wanna go to Home Depot.

[00:16:01] I wanna pick up plants and. And Audi just wasn’t gonna do it. I wanna go to the recycle center. So it was fine after that. But, yeah, that was challenging. But w I feel like I’m a good steward of stuff like that and I still, I. Got sucked into it.

[00:16:17] So you know, it’s not to beat yourself up about it, if this has been something that has tripped you, but just being conscious of it and say, okay, if it all went away tomorrow, would I still need these things? Or would they still be important or can I pay back this debt? So the business went away because the industry changed.

[00:16:36] how many businesses went out because of Covid? They [00:16:40] didn’t plan for that. None of us planned for that. What kind of debt did they take on? Or what kind of financial commitments? before that their business was plugging along fine. So it was easy to cover that covid changed that situation and then everybody was upside down.

[00:16:54] Yeah. and I think the other

[00:16:56] Jessica: big mistake I see is people believe because their heart, soul, and sweat is in their business, oftentimes they believe its value is significantly more than what they’re actually going to be able to sell it for or how that transaction will happen. and they don’t understand the tax implications of when they sell it, what they’re actually gonna retain.

[00:17:17] So then not having diversification of other investments or other income streams is the other big error. they put it all in the business. This is my retirement, is what you often hear. okay. and they don’t understand what does that actually mean for them? And then what happens

[00:17:31] Audra: if you don’t get that?

[00:17:33] Oh, that’s a great point. And which goes back to our beginning of this conversation of diversifying a little bit, to not have all your eggs in one basket. if it’s some kind of cd, if it’s some kind of real estate, if it’s some other industry, I find that diversifying it into other industries makes me feel a little bit safer.

[00:17:54] maybe some’s in stocks or some’s in real estate or some’s in, because I don’t know that all the markets will tank at once. But it could happen, but hopefully, you have a little better shot that when one’s down something else will carry it. Yeah,

[00:18:07] Jessica: which is typically the case, right?

[00:18:09] yeah, the oil is up and a bunch of things are down, tech is down, and then that switches and banks will be up and something else will be down. So if you

[00:18:17] have a good

[00:18:19] [00:18:20] diversification strategy, typically now everything is going down at the same time, which is why, we harp about

[00:18:25] Audra: diversification being so important, right?

[00:18:28] So if somebody’s just getting started down this path, what do you suggest? Where do they like? I have no idea about what to do. I’m making say a quarter million a year from my business. Now. I just saw my accountant. I owed some money, but it wasn’t so painful that it’s gonna change me. What would you suggest to

[00:18:47] Jessica: them?

[00:18:48] Yeah. So I think, to get started is really have a conversation with a financial professional. They can then, if you give permissions, talk to your CPA and between the two of them together, figure out, okay, what would be your next best strategy? Cuz it isn’t a one size shoe fits all right? Everybody needs a different strategy based on where they’re at, what their taxes look like, what they’re trying to do, when they think they’re gonna need the money.

[00:19:12] So really having that consult. To say, Hey, let’s chat for 15, 30 minutes. Let’s figure out where you are, and then let’s figure out what that next step is for you

[00:19:22] Audra: specifically. Okay? Okay. what are some other situations that you’ve ran into with clients over the years that could have been prevented?

[00:19:34] Yeah, that’s a great,

[00:19:36] Jessica: question. I think about prevention and I think about what catches people off guard, right? We never think we’re gonna get sick and we never think that we’re gonna have something happen to us that we can’t actually do our job. so I think probably the thing that, also the first two things we talked about, the third most common thing, Is maybe you’re in business by yourself and it’s only registered to you, and get killed or die [00:20:00] for whatever reason, and you didn’t have time to prepare.

[00:20:02] So you had no estate plan, you didn’t have documents. now your business is in probate. Your, if you’re married, your spouse can’t get to it if you’re not married. Family doesn’t, can’t get to it. so that’s just super messy and all could have been prevented had you have had a few legal documents in place.

[00:20:19] and if you’re in business with somebody, having that key owner, policies, I think are critical. because then, look at my, if something happens to me, my spouse is gonna get paid X for my portion of the business versus half of the business ending up in probate. It’s just super messy.

[00:20:37] and oftentimes can result in negative emotions and already a very stressful scenario. Yeah, that didn’t need to take place.

[00:20:46] Audra: it could have been prevented. Oh, that’s a great point. last year I fell and broke my ankle. Just a freak thing. Not even a good story to go along with it. And it took me a minute and I was like, I hadn’t thought about this cuz it stopped me working for a minute.

[00:21:03] I could not sit at my desk. I couldn’t, well of course I couldn’t stand. I have a standing desk, but I couldn’t even sit at my desk. you just, I hadn’t planned for that. I had so much work that I had to do. I had clients depending on me. I had projects that I needed to deliver, and I was trying to sit, I did try to sit at my desk.

[00:21:22] Here’s how far it went. Sat at my desk with my leg propped up because I had my leg down. Which note to self, when you break something, you still can’t have it down. I was like, I had it propped on a pillow, but it was still down. I got a blood infection in my foot. From [00:21:40] having it down. My doctor’s are you not propping it up?

[00:21:43] And I’m like, no, I’m sitting at my desk, but I got it up on something. They’re like, you can’t do that. I’m like, on the laptop. I’m like, I can’t do this work on my laptop. And they’re like, you have a broken ankle. Go sit down. So yeah, sometimes life just says it’s time to stop that. Yeah. And you gotta just concede and just say, okay.

[00:22:09] You got me this time, I’m gonna go sit down. And it does. you guys, I’m no different than you. We all try to work through it, right? We’re tough. We run businesses, we’re strong, but sometimes the universe just says you’re not doing it. So if I would’ve had better plans or if I would’ve, you can’t foresee something like that happening.

[00:22:29] But, I did have a lot of cleanup to do afterwards cuz I just, I was down and it’s hard and.

[00:22:36] Jessica: And death is one aspect of that, but disability insurance, I find a lot of business owners don’t carry that disability insurance either. so being able to know, hey, it’s okay, I can, money’s still coming in.

[00:22:49] even if I can’t do my work, it can be extremely comforting. but if you don’t have disability insurance and you can’t do your job, then potentially that spigot is immediately turned off. and then you’re like, oh no. Now what? Which is why you also have to keep some of that money in the bank and not

[00:23:04] Audra: burn through it all.

[00:23:06] Not burn through it. Yeah. Good lessons. So I’m getting started. I’m getting some advice. How does working with somebody like you help me grow? What would be the other side of that? So [00:23:20] you’ve covered what to avoid and then how to, how people typically get in, but does this kind of thing benefit me going forward?

[00:23:28] Jessica: Absolutely. And how I would liken it is,I live in Michigan, so if I wanna get to Florida, I know it’s south. can I use GPS and maps? Sure. But if I just decide I’m not gonna do any of that, I’m gonna head south. I will get there. I might end up in Texas first. I might not take the straightest path.

[00:23:46] I find that if you partner with a financial advisor who that is their job, they’re focusing on this, they understand the financial facets and they’re savvy with different, items you can get there and reach your goals, more concisely. There’s a lot less trial and error. sometimes just having that financial person to bounce an idea off.

[00:24:07] I have. My clients call me all the time and they say, Hey, should I take a loan for this? Or do we pay cash? Do we do this or do we do that? And we talk through it and sometimes it’s neither of the answers, but something else that they hadn’t thought of, and they just didn’t know. You don’t know.

[00:24:20] You can’t be an expert in everything. So having that partnership, I believe, Exponentially makes your success better.

[00:24:30] Audra: Okay. Do you find that you need a different kind of person depending on the business that you’re in? So I’m

[00:24:37] Jessica: an internet only. No. No, I don’t think it’s, inter, I don’t think it’s business specific.

[00:24:45] I think it is. I do believe that, a person, there are folks that call themselves financial advisors that don’t actually have any securities licenses. Okay. there are advisors that don’t actually do any [00:25:00] financial planning. They only do transactions, I do believe like finding someone who is a C F P A Certified financial Planner, okay, to me, is a minimum that you should have with someone that you’re a business owner and doing personal, because those folks are trained to do more complicated cases.

[00:25:21] Audra: Okay. Okay. So the widget doesn’t necessarily run in, you don’t run into it. I did have issues with, I’ve had the same accountant for many years, but when I first started with him, I had my title company. When I moved into internet marketing, I had challenges on teaching them how a strictly online business worked.

[00:25:44] And so I have run into that over the years where attorneys don’t understand the language of what’s important online. today we’re more savvy. This was probably five years ago, seven years ago. it was a little bit more challenging, where if I can’t explain to you and you understand what my business is, this relationship’s not gonna work cuz I need you to understand at least the overall premise of what I’m trying to achieve and how that revenue is generated.

[00:26:12] Otherwise, I didn’t find a lot of benefit in it. Yeah, and I do

[00:26:16] Jessica: find that folks can sometimes outgrow their tax professionals because sometimes when you’re starting it’s like really a bookkeeper slash tax person, but they’re not really a tax expert. And sometimes there are,CPAs out there, but they don’t understand investing, or what those investments can actually do for you and how they just do your, they just do your taxes.

[00:26:38] and so really finding [00:26:40] those right people, same thing as I mentioned about the financial advisors. You have those that just wanna take your money, invest it, but they’re not necessarily looking at that holistic approach. So sometimes you do have to switch. the folks you’re using cuz you’ve outgrown them or they’re not able to keep up with you, on what you need them to do.

[00:26:58] The same thing with your attorneys, right? If they don’t know your language and they don’t understand, you have to have someone who understands what it is you’re trying to achieve to be able to protect you and help you the best

[00:27:08] Audra: possible. Okay. Which is a great point. I think one note to take away when it comes to an accountant and your attorney like, like Jessica was just saying, they need to be like two steps ahead of you.

[00:27:21] I find that if the person that I’m working with doesn’t know more than me, that just wants to do the basics, they’re not the right one for me. I need somebody out there scouting out the hacks and the shortcuts and the ways to save money and the ways to optimize what I’m working so hard to make.

[00:27:39] I need them to be in front of me to guide me. Otherwise, I don’t find that’s a lot of value. So if you’re working with an accountant, maybe they were your mom and dad’s accountant, and they help your sister and your cousins. If they’re not helping you grow along with you, maybe it’s time to assess that and see if there’s somebody else out there that is more compatible.

[00:28:00] we work hard to make the money that we make in a business. We need to make sure that somebody else has got our back to make sure we keep as much of that as we can. Absolutely. Yeah. All right, so what would be some other things that you’ve seen when businesses, I’m too busy [00:28:20] to work with you right now.

[00:28:21] Business is just making money. I am so torn all over the place. I don’t have the time.

[00:28:28] Jessica: Yeah. so what I tell folks is that’s why you need to work with me, right? Okay. Cause you don’t have the time. And so what we do for some of my business owners, as we get them started, we say, okay, you’re gonna deposit the money into this account.

[00:28:41] then whether you’re paying the bills out of it, then we’re watching the cash balance grow. And then we are saying, we’re calling you and saying, okay, we’ve reached our first milestone. Here’s what we need to do with the next. Okay, we’ve reached our second milestone. Here’s what we’re doing with it, because you are too busy and you won’t do it on your own, right?

[00:28:59] And so then meanwhile, your money sat there making nothing. To your point, you work really hard for it, and you’re losing purchasing power by the moment because you were too busy. To have that, meeting and you can’t manage it yourself cuz you, you’re busy, you’re got your head down. You’re trying to get that business where you want it to be.

[00:29:18] So that is the biggest reason,

[00:29:20] Audra: of why you need help. Okay. Which makes perfect sense. So what if I have a C F O? can’t they do this for me?

[00:29:29] Jessica: Depends on your cfo. I can’t, some CFOs could absolutely do it. Other CFOs, it’s out of the realm and Okay. Just depends on who you’re using and does

[00:29:41] Audra: it make sense?

[00:29:42] So something I guess you would, how you would make that decision is when you hire the C F O, sit down, what are the responsibilities? And then if they don’t have that skillset, then they, the C F O would work with you or you would still work with the owner?

[00:29:58] Jessica: both. So typically [00:30:00] the business owner is gonna be the owner of the, the business is the owner of account, but then they give, the ability to do transactions or have conversations with the cfo.

[00:30:09] So there’s two parties listed on that. In some cases I have up to five parties listed so that different people can call in, and get information. and in some cases with that C F O, they’re doing step one and step two on their own. And then when they get to step three, that’s when they’re calling us and saying, okay, here’s where we’re at.

[00:30:27] How do we do, how do we do this next step?

[00:30:30] Audra: Okay. Which makes perfect sense. So if you’re listening to this and you’re just getting started, you may say, this doesn’t pertain to me, but it does because what you do at the beginning here is building the foundation of what these more advanced steps look like.

[00:30:45] If we’re fortunate enough to get your business that far, that you need to talk about, is my C F O gonna handle that? Or if I’m gonna handle that’s great, welcome. But if you can’t, if you don’t set up this stuff at the beginning, you’ll never get there. So y yes, we wanna have fun with money. That’s the whole point of being a business, is the freedom and the ability to provide for our families and do fun things.

[00:31:08] But at the same time, we wanna be able to get to year two and year five in year 10 and exit if we want to with a really nice paycheck. it’s being conscious of this, it’s saying, when you’re starting out, is there a percentage that you recommend? I know there’s so many. Money people out there that say different kinds of things, but do you have a rule of thumb saying, okay, let’s start here.

[00:31:30] Jessica: Yeah. So I think if you are literally just starting out and you are making your first dollar right, don’t make it a huge percentage, cuz you’ll never do it [00:31:40] right? Okay. Maybe it’s 3%, of your net right, that you make. So if you can save 3%, that will not get you to your retirement goals. However, it is a starting point and what I would tell you is if you could institute some discipline and do that in the beginning, consistently that will pay dividends.

[00:31:59] And then, some, you do a project, you get paid a big chunk of money. You could always do more in lump sums, but if you could consistently at least start with that 3%, that’s a good place to start.

[00:32:10] Audra: Okay. And it also built a good habit, so you get used to not seeing that. And I know employees do that quite often.

[00:32:17] But when we’re starting businesses, we’re scrapping together. Every penny we can get our hands on, we actually don’t think about paying ourselves. we take out enough to pay the electric bill or the software we’re using, or, the freelancer that we hired some for some projects.

[00:32:33] But, like Jessica said, if you could take 3% and just set that aside as, consider it a tech expense, we can justify those. At least I can. but it’s a great place to start where you feel like something is going towards all the effort that you’re putting in. Now what? What’s the line that you draw?

[00:32:52] I’ve been putting away a few bucks. How do I decide when I can spend some of it, or what does that look like? Yeah, so I, I

[00:33:01] Jessica: think there’s always, in every budget, there’s always a spend, right? So maybe that’s a percentage of sales as well. if your business is, volatile and it’s not the same, a lot of when we’re starting up, our paychecks aren’t the same every month, right?

[00:33:14] So if we think about. The necessary versus the discretionary spending. You have [00:33:20] to make sure, in my opinion, before you can just be spending it on fun stuff, you have to make sure you can cover three months of your necessary bills, okay? Once you have that three months of necessary bills, then you can start taking a percentage.

[00:33:33] Of your income coming in and using that for this discretionary spending on whatever it is you want to do. Or you set a goal when I hit this, I’m gonna do this big trip to wherever, or I’m gonna buy myself, whatever. But have those goals so that you can see progress and you don’t have that mentality coming in saying, I’m working really hard, I deserve it even though I can’t afford it.

[00:33:57] Audra: Okay. Which makes perfect sense. What would be some other tips that you would share for these guys to keep them going? Now let me just preface this with, we typically talk about marketing and sales, but even though this could be seen as a cost, It’s actually a kind of a spend management type project because yes, it’s a cost upfront, but what it’s gonna save you on the back end is still actually generating you revenue.

[00:34:29] And I think a lot of people don’t see it that way. They just see, operations as an expense, financial stuff, that’s all cost money. I need to focus over here on the revenue side, but. Your stuff is actually going to make money and going to save money, which in turn makes more money. So I think changing the perspective on how we view this as more of an investment, long-term investment versus an expense.

[00:34:57] And I think

[00:34:57] Jessica: there’s two facets to that, part as [00:35:00] well. The first is if you have employees in your business, it takes a lot of work to train employees. You spend a lot of time and effort. So having a retirement plan in place is a retention strategy. They like that. And I would tell you for small businesses, there is a new, or new work.

[00:35:19] incentive out there that the, that cost that you just talked about for having your retirement plan is actually a hundred percent

[00:35:26] reimbursed

[00:35:27] through the government right now for the first, I believe it’s four years. wow. It isn’t, a true cost. You’ll get that back at on your taxes. So that’s a even a bigger reason to do this is because it is.

[00:35:41] Helpful and you can get that money back. the other part of it is, if

[00:35:46] you think about saving for retirement,

[00:35:48] you think about, a lot of times folks are like, oh, I don’t wanna put any money in right now. It’s doom and gloom. But if I said to you, would you rather buy a pair of shoes at full price or half price?

[00:35:59] Everybody would tell me half price. So think about your money and your investments, that are related to the stock market, being on sale, buying them. That is where wealth is created. That’s where it exponentially grows. When the market comes back, it’s cyclical like everything else, it will return. It

[00:36:18] Audra: always does.

[00:36:19] Okay, all, I’m gonna pivot topics here. Why we got a few minutes left. When does a business owner, when is the right time for a business owner to decide? I’m growing a little bit. I’ve got some revenue. I’ve been working with freelancers. When do I make that pivot, if at all, to higher employees? [00:36:40] That is a great

[00:36:41] Jessica: question.

[00:36:42] I think as long as they understand their workload and the person that they want to

[00:36:47] hire their capabilities.

[00:36:49] to me, sometimes in some businesses that I coach and partner with, I don’t know them, they’ll ever have their own full-time employees. Okay. They’ve been able to find 10 99, Folks that work really well, everybody gets to, they’re all happy in their existing roles.

[00:37:06] and I don’t see that changing. In some cases, you can get better work or consistent work and grow the person when they actually work for you. Okay. and so at that point you wanna look at, okay, does this make sense? for me to continue to outsource it or does it make sense for me to bring it in?

[00:37:23] And then what could they do? And then really making sure you’re

[00:37:26] hiring. To the skillset,

[00:37:28] not only of what you want today, but what you see that role growing into in the next two

[00:37:34] Audra: to three years. Okay. Is there again, I know you’re not accountant, I’m saying that as a disclaimer, so nobody comes back saying, Jessica said.

[00:37:44] is there tax benefits one way or the other, like it’s more affordable for me to bring in employees versus just keeping it outta house? It’s actually cheaper for you to keep it outta house.

[00:37:57] Jessica: Is it? Okay? You don’t pay social security tax, you’re not responsible for any of their benefits. okay.

[00:38:02] It is more from a peer cost, like a dollar standpoint without looking at any benefit to it. the outsource 10 99 person is always cheaper.

[00:38:13] Audra: Okay. Which I think is why every, that’s where everybody starts.

[00:38:17] Jessica: Because you can also say, I want you for two [00:38:20] hours. A week versus I wanna hire somebody.

[00:38:22] If you try to hire somebody for two hours a week, your quality might be poor because they have to have more than two hours

[00:38:28] Audra: of work. Sure. Okay, so that’s a great point. So when you guys are trying to bring on that first employee, I guess it’s deciding on what task, what skills they need to have, how many hours a week you’re going to use them, and then does a freelancer make sense or do I have enough work and enough revenue to bring this person in and be their, possibly their only source of income?

[00:38:51] and again, it’ll cost them a little bit more, but if the work is there, you definitely don’t wanna run out and over-hire when you start to do stuff. Maybe it’s, freelancers at first. Then you bring on the one full-time person, continue with freelancers until the revenue is consistent enough that you can say, okay, like Jessica said, I’ve got three months of savings.

[00:39:12] would you extend it if you had employees at that point? Maybe you need six

[00:39:17] Jessica: months as long as you have, as long as you can cover the three

[00:39:19] months.

[00:39:20] no, I mean that, that’s still a good number. I think what I find with most business

[00:39:24] owners is they are very slow to

[00:39:27] hire. Okay. And sometimes that’s to their detriment because they could have grown faster if they would’ve had someone help.

[00:39:36] Part of that, I believe, is a control issue, right? As business owners. If we’re doing it all, it’s right and we don’t have to worry about it. versus bringing on someone, the example, one horse can pull X, but two

[00:39:47] horses can pull more than twice

[00:39:49] the amount of. so really understanding what does this person want to you, you want them to do and hire the right fit.

[00:39:58] because to me, [00:40:00] that would pay for its weight in gold. Even if that person’s 10 99, as a freelancer and outsourced person, that’s okay. You just have to make sure it’s the it’s doing everything

[00:40:10] Audra: you need it to do. Wow, that’s great advice. definitely some things even for me to consider as I start building out this marketplace.

[00:40:17] I’ve been there before. I’ve done both 10 99 and employees, depending on the situation. and where it makes sense for my marketing agency. It always made sense for me to do 10 99, and I’ll tell you why. Different clients have different projects. Being a service provider, I may want this guy that’s got this skill in web design versus this one that can write marketing copy for this specific industry.

[00:40:44] So having a really big Rolodex of service providers that have a different specialty. Has served me tremendously well now that won’t work in every industry. It works for something like what I do, but going into the zindo and company marketplace, it’s the same stuff. So I will need staff for that one.

[00:41:04] Yeah, cuz the work will be internally not externally.

[00:41:09] Jessica: Yes, exactly. and sometimes even, I tell folks we’re looking for the unicorn in some cases, right? So in your first example, you had people that have to have a specific talent in different areas, and that’s hard to find in one person. Is it impossible?

[00:41:24] No, but it’s way more difficult. So you have to use that Rolodex. Yeah. because otherwise you won’t provide the quality of work that you need to grow your business. So really understanding what that looks like. Is so important.

[00:41:37] Audra: Yeah. Okay. this has been great. [00:41:40] So as we start to wrap this up, what would be some words of advice for somebody getting started where, what would you tell them?

[00:41:48] Jessica: Your excuse of I’ll do it later is not good. Do it now. It will take you a little bit of time to have a conversation and get the ball moving. it doesn’t have to be hours and hours of your time. You can start with a 30 minute consultation and really know, okay, here’s my next step.

[00:42:07] But not taking that first step will actually negatively impact you and your business

[00:42:14] Audra: long term. All right. That was awesome. I learned a lot from that. There’s some things I hadn’t considered yet, so thank you for that. awesome. thank you so much for having me on the show

[00:42:24] Jessica: and,

[00:42:25] Audra: letting me share.

[00:42:26] All right, you guys, here’s another episode of The Mess In the Middle, and as always, keep going.


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