Every Business Owner Needs To Watch This! | Biz To Biz Podcast

Yo, what's up everybody? It's Justin live from B2BVault, the Biz to Biz podcast sponsored by Nationwide Payment Systems, hosted by this guy, the Bill Walsh of payment processing himself, Allen Kopelman. And we'll be providing you educational information about fintech, small business payment processing, and the technology businesses are using in the world today. And in today's podcast, we're in part 5 of the future Proof Your Business: Survive and Thrive in These Crazy Times, the last part of the series where we'll be talking about the money. Money. There you go. So before we hop into that, how are you doing, sir?

I'm doing well. It was a crazy week this week and looking forward to the weekend. So it's nice. Yeah. And, uh, how about you? How's your week going?

Um, very slow. Um, a lot of research and reading the past couple days. Did a lot of reading today. I'm trying to find topics for the podcast. Um, other than that, week has, uh, been up to, you know It's a week.

Yeah, it's a little crazy. All of a sudden Congress popped up out of nowhere and does a committee vote on, instead of the Safe Banking Act, the Safer Banking Act. But we'll see what happens if they can even get it to the floor for a vote.

I don't know what you're talking about. I thought we were saving that for a panel.

Oh, I'm just saying, but whatever, it's fine. Anyway, whatever. That's what—

yeah, we're talking about money today, man. So let's hop into it, uh, right away. You got financing number 1 on here, banking number 2, merchant services number 3, and bookkeeping number 4. Uh, I don't have it. I'll leave it up to you, sir.

He got 4—

just saying, you got 4 words up here.

Okay, I'm just saying, when you have financing, like when you're starting your business, you know, like last week, or was it this week, I don't even remember, I went to go visit, uh, Junior Achievement, where they talk to kids about being entrepreneurs. So, you know, when you're— when you want to start a business, you got to think about where's the money coming from? What's the budget? What are you going to do? How are you going to— how are you going to get the money to start your business? Can you bootstrap the business from your— the funds that you have on hand?

Right.

Can you tap into your credit cards? Some people, you know, maybe you own a house, you get a home equity loan, which is— can be dangerous. You could go to the SBA, get an SBA loan, which most people don't realize they make you sign over collateral to them. So they collateralize if you—

if you— if they need it from you, right?

If they need it from you, they collateralize.

Don't throw shade at the SBA.

I'm not throwing shade at them. They're good, the SBA.

But I'm just saying, a lot of times if you want $500,000, they're going to make you put up some collateral, right? But if you need $10,000 to bootstrap your business, you probably won't need collateral.

And there are— and there are programs where you could go out and talk to the local SCORE or the SBA or, you know, different groups. And there are grants that people can get, right, for $5,000, $10,000 sometimes, depending on what type of business you're trying to start. And you can get money that you don't even have to pay back. So there are a lot of local grants. I even see 'em on Facebook now, people promoting.

I don't trust anything I see on Facebook.

Well, I'm just saying it's coming from—

When it comes to money?

No, it's coming from organizations that I know.

Oh, well.

Like the city.

That's different.

A city is putting it out or the county is putting it out there and, you know, different. So sometimes there are—

Those things from the county are so laughable to me. Yeah, sometimes it's like, it's like, yo, yeah, man, make this pitch contest for $250 towards your business, right? That's not going to do anything. No.

Like, they just had one and I can't remember the town. I think it was either Lauderhill or something like that. And they had Damon John come out and they gave out $25,000 was the top prize.

That's a good incentive, right?

So there are things out there that you can take advantage of. I mean, we just attended that Space Day and people were giving their pitch. And you know, also people can do crowdfunding now. So you have a product, you can put it on a crowdfunding website. You don't have the money to get it manufactured, but you—

if you—

if the product is exciting enough and you have a prototype that you can show people, sometimes people will crowdfund that product. Right. And obviously the crowdfunding company doesn't give you the money until you reach the goal and you actually have to show them like the invoices and all that, that you can get this actual product produced. So there are ways to start a business. You know, otherwise you go to your friends and your family and you get a loan. You know, watch Shark Tank. I always tell people you'll find out a lot about you know, how people have started their business and funded it and things like that.

Do you?

I don't know.

I've never really watched Shark Tank.

Yeah, it's an interesting show. You know, sometimes you can get a takeaway.

Okay.

Sometimes you look at it and you go, wow, I can't believe that. Sometimes, you know, people just have money and they can make more money. But sometimes you hear a good story about how someone bootstrapped a business. Right. I mean, we bootstrapped it. We bootstrapped this company. We got, we got an office for very little money, was $800 a month. And, um, we went out and we were able to get, get a hold of some refer— you know, get some refurbished equipment so we didn't have to go spend tons of money on new equipment. Because back then the terminals were, uh, quite expensive, and back in the early 2000s And that's how we funded the business. And we used to rent terminals to people, let them pay monthly, and if it broke, we just replaced it. And you know, now the terminals are basically like a, they break, you can't really get them fixed, they have to be replaced, and you can't reprogram them. Before you could reprogram anybody's machine. Now you can't reprogram anything, it's all tied to serial numbers. And so you basically, if you buy something and, let's say you bought a Clover and then Clover shuts you down, you basically got an expensive paperweight sitting on your counter. So be careful what you're doing, you know, and financing. Another thing is, you know, banking. Now we've talked about on the podcast before how important it is to have a good bank relationship.

Right.

A lot of people don't know this, Probably, you know, I attended a conference.

I don't know.

That's almost over a year ago, the Financial Brand Conference. And one of the things I learned is one of the best-kept secrets in the United States is credit unions. And I feel like a lot of local businesses don't put credit— don't, don't consider credit unions when they go to set up their business. I mean, you use a credit union, right?

Yeah, I do.

Okay, so I mean, I don't have a business bank. I know, but I'm saying you feel like you get better service from the credit union than a regular bank?

Yes.

Okay, so there's advantages to that. And also, like when you name your business, we've talked about that, you know, not to— if you're selling something like CBD or hemp or maybe some other type of controversial type of item, you want to give your corporation a more generic name. Right, for what purpose though? So that— because the bank doesn't really— they're not going to care what business you're in, but they don't want it sitting on their balance sheet and see like, uh, Allen's Adult Store. They don't want to see that. They want to see whatever, Allen's Emporium. They don't want to see Justin's Hemp and Hemp, uh, Hemp Lollapalooza. They'd rather just see Justin's Lollapalooza.

Got it. Makes sense.

You know, so because, you know, they have a board of directors and they know people are in these businesses, but they don't want it sticking out like a sore thumb.

Right.

You know, or let's say you open a bar and it's got some crazy name. You want to make sure your corporation has a more generic type name. Like, call it Sunrise Bar and Grill. The name of the club could be something completely different. You just don't want to have any kind of connotation that's going to cause them to look deeper into your business. Oh, what are they really doing over there?

Right, right, right, right.

No matter what it is, you want to— those are ways to keep your business running and things like that. Then you got to think about what kind of needs do you have? Do you need to get change? Orders for your— you need to have change at your business. You need to go to the bank every week and do that, or you're going to call up Nationwide Payment Systems, get set up with a Smart Safe and Change Delivery, because not every bank offers that. It seems to be a growing trend where banks don't want to service businesses that need change, you know? Right. And so you got to take that into consideration. And then, you know, and then the next thing is, oh, it's time to get a merchant account.

Merchant accounts, right?

So, you know, you have to consider, you know, always I tell her, make sure wherever you're going to deal with your merchant account that they can deal with your type of business. Like today I got a phone call from a guy and they have an art class and they take people. They did about 10 or 12 people and they're starting the business and they're going to go to like picturesque places where you can make a reservation, go there. One of them was Sedona, Hawaii, that all types of destinations. So they wanted to get set up. So I asked them, I said, well, you know, are you going to also include the airfare? And I said, that's going to be a major problem because with when travel, when when, if you're not a travel agent, right, and you're booking airfare for people, let's just say I, Justin's gonna go to Sedona for this painting thing, but the ticket is purchased through my company and I use the travel agent to get Justin the ticket because it's a package deal. But now Justin goes to the airport, there's some massive storm in New York, the plane that's supposed to take Justin to Sedona is not coming and he's got to get on another plane because he didn't buy— he's— he didn't— wasn't the one that bought the ticket from the airline. It's going to be a complete nightmare to change the ticket. So the credit card companies don't want travel companies or non-travel companies to sell packages that include airfare. So, you know, things like that, or somebody made a nutritional website and then they did it on Wix. And because— and then Wix does not support the— support any kind of— any nutraceutical products. They didn't know that. And then they had to get an outside merchant account and pay another 0.6% on their merchant services for using an outside processor. Personally think Wix should waive that fee if they don't support it, but their argument is, hey, you should have read the terms and conditions.

I was just about to say, that's your—

their fault.

That's not Wix's fault. You— we should not— no, come on. No, I know you wouldn't waive your fee.

No, I wouldn't do that either. Like, same thing, we've had CBD merchants come to us and they build out on Shopify, and Shopify doesn't support it, and Shopify is going to charge you their 2%. Upcharge unless you really go to them and complain hard. But some people have had it reduced, but it's, it's difficult. They're going to say the same thing. You didn't read the terms and conditions.

Exactly.

We don't support these type of products. So, you know, those are the kind of things that happens frequently when we get on the phone with people like, well, we're having a problem. We process that Stripe and Stripe won't tell us what's wrong with our website, but they say we need to change our website because they don't support our business type. And then they just say, we're not processing your cards, but they don't, 'cause they don't really, you know, they don't care. They don't care. Right, they don't care. So I happen to have a meeting with this guy and I said, you gotta fix A, B, C, D, E, F, G on your site. Those are things that gonna prevent you from getting credit card processing, right? So they're fixing it, we're going to get them a merchant account. And, uh, you know, so those are things that you got to consider when you're getting your merchant account. And, you know, do you need— do you need a point-of-sale system? You know, you're going to have inventory, people need to track their inventory. I think I told the story on the podcast before about somebody that almost 20,000 items in a store and never did inventory, right? I mean, that's just crazy. I mean, because you're not keeping track of like what you lost, you know what I mean? Your losses.

Yeah.

I mean, you're going to have some loss either from maybe, uh, you know, theft, you know, miscount, somebody, you know, maybe the roof leaked and a bunch of stuff got damaged with water. And then, you know, did you report that to your accountant?

Well, I'm sure there's got to be some sort of keeping track somehow.

No, they said they really haven't tracked their inventory, which I thought was kind of crazy.

That's ridiculous.

But it's 20,000 items. So we're actually sending a Regis in there to do an inventory on the place, you know. And then the last, you know, so those are the things, you know, those are, those are 3 important factors of your business: financing, banking, merchant services. And then the last one, we did a whole podcast about bookkeeping. Justin was like, that's like the worst thing ever, right? Bookkeeping. I mean, it's not the most glamorous part of business.

I mean, shooting a podcast and talk about bookkeeping for 30 minutes was tough.

Okay.

I didn't say much. I know that bookkeeping, I mean, is necessary. Not for every business, I guess, you know what I mean? Like, if you're not processing thousands of dollars a month, it's, I mean, it's pretty simple to do, but I would say that it's beneficial to keep track of your money for sure.

Yeah, you gotta keep track of what's coming in, what's going out, how much money you're spending on cost of goods that you're selling, and knowing, you know, what the profit margin is.

Right.

You know, how much are you spending on payroll? How much is going going to rent, how much is going to utilities, what's getting, you know, I mean, you have all types of bills when it comes to your business. Electric bill, phone bills, cell phone bills, employees, payroll, payroll taxes, the payroll company, you know, and things like that. So it's, you know, it's important to make sure you set up your business. You know, there's tools like QuickBooks, even has like a free limited version. You know, you have FreshBooks, Xero. I think there's a few other programs out there I probably don't know the name of. And then make sure, like, you talk to your accountant or get— if you don't have an accountant, get an accountant so that you have— and then get a bookkeeper unless you're going to do it all yourself so that somebody goes and checks your, you know, your QuickBooks because you can link in. It's amazing. Like before, when I first got QuickBooks 2001, You didn't really have a way to link in your bank account and your credit cards into the QuickBooks automatically.

I never used QuickBooks.

Now you can do that. You log, it connects to your—

I was never a fan of QuickBooks. I never liked their payment structure. I didn't like it at all.

I'm not a big fan of QuickBooks either, but at the time when we started, that was the tool. You know, the other ones were like more expensive. There used to be like Peachtree. And Sage, and those were much more expensive options.

Right.

So, you know, QuickBooks was the thing. The price of QuickBooks has gone up significantly. I remember I bought my first copy of QuickBooks. It was $99. There was no monthly fee.

Right.

And then they changed to the online version, and that was $99 a year. I think now it's almost $900 a year. And that's, you know, over like a 10-year period. But that's like insane. It's— they have, they have people like locked in, you know?

Right.

Because the other options are also just as expensive as their option.

I mean, there's not much difference.

Yeah, but you gotta, you gotta do it. It's a, it's a necessary evil. Yeah, you need to do it because when you go file, you don't need QuickBooks to do that though. No, you don't. You could do it all on a spreadsheet.

You could do it all yourself on a spreadsheet. It takes more time. You don't have to pay for it. There is literally thousands of free ways for you to track your, your money. So you don't have to use these services, but it will make your life a lot easier if you do. But, you know, you don't have to pay for the premium stuff. You don't have to use the QuickBooks. There's, like I said, thousands of different money management accounting tools for you to use. Like, just Google accounting for small business, find the one that fits your business, and ta-da.

Yeah, there's other ones out there. Yeah, you just want to make sure, like, you're able— you have a, you know, you have— you, you think about bookkeeping and, and accounting so that, you know, you're fine.

I think when you're talking about bookkeeping, you're talking about a a business that is like, you know, $15,000, $20,000 a month. You know, most small businesses aren't really doing that. You know what I mean? A lot of small businesses aren't doing that.

No, I get it. But you can get the free version of QuickBooks. It's okay. Free versions of— there's free versions out there.

My point is this: if you're making $5,000 a month, you don't need to do that. And if you can't keep track of $5,000 in a month, then you probably shouldn't be running a business. But, you know, there's, there's, there's a lot of tools for you to use for bookkeeping. Don't just, you know, oh, I use QuickBooks. Oh, I use FreshBooks because that's what, you know, there's a lot of other stuff out there. I'm not plugging nothing because I'm trying to get paid. Ain't no free game coming from me no more from this show. I'm sorry. I'm not— dude, can't do it. Just little sprinkles. That's it. Otherwise, I'm keeping everything to myself.

Keep it all to yourself. Yeah.

Sorry.

That's all right. No, there's a lot of tools out there you can use for your business. You have to figure out what tools you're going to use and you have to put time aside for what you know, for bookkeeping and make sure you got your books. You balance your checkbook every month and you have to make sure that you do it. We were sitting at a table with a guy at a networking event and the guy goes, oh, when I run out of business, I know I got to go out and make some more. I run out of money. I need to go make some more sales.

It's a terrible way of running a business.

I was like, I was like, are you kidding me? Like, and, you know, and the guy, and, and I was surprised, like, he didn't take credit cards. He, he was taking cash, checks, Venmo, PayPal, everything, Zelle. You know, you got to get organized at some point. And, you know, when you're growing your business, you start doing, you know, $10,000, $15,000, $20,000 a month. You know, it's time, you know, it's time to step it up. You know, you know, you get to the point in your business where you go, oh, Oh, I have my business. I'm doing well. Now, when is it time for you to add an employee?

Right.

You know, and then how do you know that that's like the next step in your business? Like, okay, now I'm going to add my first employee. And how are you going to do that? Or are you going to hire like 1099? And then you got to look at that from 1099 standpoint is, okay, what are the rules? I think we did a podcast, we talked about the new rules that got put in place about 1099 workers.

Yeah.

And the, uh, the new rules about the non-compete. And I was in a meeting yesterday where I was meeting, doing an executive roundtable thing, and that subject came up. And I was like, well, you know, we're in Florida and non-competes were not really big in Florida. So we had stuff in our agreements that was non-circumvention, addressed non-circumvention, about stealing clients and stealing, uh, whatever, trade secrets.

Got it.

Which, you know, everybody's got their trade secrets, right?

I guess.

I mean, you got some secrets.

I just got ways of doing stuff that no one else does.

Okay, well, that's a trade secret. So, you know, if you have— if you had to hire employees and you had to teach them those trades, I wouldn't teach them my trade secrets. Okay.

I just wouldn't. Okay.

Because I mean, well, you'd have them doing other functions in the business so that you had time to still do your trade secrets. Okay. But it's the same thing. If you want to protect your business as your business grows, you got to think about how you're going to deal with all of that. And you know, then you're going to have to get— do payroll and get a payroll company and pay payroll taxes and all that. When I first started doing payroll, even when I— when it was just me and Dave in the beginning, you know, my brother's an accountant. He's like, no, you got to do payroll every month, even if you're taking just a small check, you know, for $1,000 apiece, and then you're taking the rest of the money as a distribution. You still got to get to payroll and do pay payroll tax so that down the road you're going to be able to collect your Social Security. Plus, you know, the government will go bananas if you take everything as a distribution. They'll pretty much go bananas on you. You'll get, you know, you're going to get shot up for maybe an audit, which nobody wants to deal with. No one wants to deal with the, with the IRS. No, it's like the 3 letters you don't want to deal with. That's one of them. So, you know, those are things to consider in your business. So we went over, you know, today we talked about, you know, the money. How do you— where are you going to get the money? Where are you going to put your money in the bank? How are you going to get paid? How are you going to keep track of your business expenses? Adding on an employee, you know, and then, you know, that's summing up like the 5 episodes that we talked about where we talked, we talked about, you know, future-proofing your business. We're in a tough economy right now. And we went over like, you know, how to, you know, what's going on at your business, price, quality, and service. We talked about in the first episode. Second episode, we talked about expenses, variable expenses versus fixed expenses. And we talked about reading your lease and understanding all of the, all the costs involved with running the business. And part 3, we talked about loyalty programs and how you can administer those and why, why they're important. I think they're more important today than they ever were because the big box stores are doing them. And I think every business needs to figure out how to do some kind of loyalty program. Or have a newsletter or have texting, have a way to communicate with your customers. And part 4, we covered technology. And, you know, technology is, is, is a, is a thing that years ago was super, super expensive, right? You know, a POS system would be like $20,000. Today you can get a POS for a couple hundred bucks. So there's no reason not to have the technology that you need in your business.

Agreed.

Think, think like technology is like having another employee almost. So, you know, where can you get an employee that's going to be, let's say, for the least expensive point of sale we offer, which is $199 plus $20 a month, where can you get an employee that works like that for that much money? You can't.

Nope.

But it is, it's another employee for your business. So those are things to consider. Hope everybody enjoyed enjoyed the, uh, the how to survive and thrive. Believe me, I've been through it.

We—

I survived in this business 9/11 where we couldn't— people couldn't get business licenses. Survived 2008, 2009, and now we're dealing with the economic up and downs of the last couple of years, and we'll continue to survive and thrive, you know, throughout. Because we've learned how to do it and we just keep pushing forward. That when, when in these times, now is the time to take chances and do things that you, that you, that you think about. It's time to do them and not think about them anymore. Just do them and push forward while everybody else is sitting around worrying. Now's the time to push forward and try to make more sales and make good decisions. And, uh, you know, and sell and make sales.

There you go. Hit the like, subscribe, and that's subscribe to the channel for us, man. Smash that like button for us over and over again. Pass this along to your family, friends, and colleagues. And if you got any, uh, interesting tips, tricks, or insider news that you want to share with us, feel free to do so in the comments. You can email us, check out the website, you know what to do. Thanks for listening. Check you next week.

Peace. Peace out. Carpe diem.