Mike Minutes Mastermind 12/22/2022

Hey everyone, hope you're doing super well. Let's go get started.

All right, There you go. And let me drop this link in on Facebook.

Facebook.

All right, A couple announces, then we'll jump into questions. Drop this link in here.

All right. Sorry for being late today. As I had mentioned on the Facebook group.

Our landlord decided that we are not going to renew our lease. We are overusing the building.

Which I kind of can't say I expected it.

We do use the building a lot. They're, they're used to having like one or two people in an office. We had up to 22 in one room. So we need more space and we're going to be hiring at least 15, 20 more people here in that couple months. So, yeah, looking for another space. Spending 7, 8, $9,000 a month is not fun. So I'm trying to figure out how to be most efficient with what we got. And looking at spaces, we just need a one year lease, which is tough to find. Landlords don't like that, especially the larger the building is. So we need more, more space though. Like right now they're doing one on ones in the hallway and then the stairwell. It's just not great. So we do need to improve it. So we're working on it. So yeah, sorry for being a little bit later today. A couple other announcements.

For those of you who joined in 2022, talk to your CPA when it comes to taxes about amortization of your franchise fee. If you pay say $20,000, you can talk to your CPA if you want to, you can amortize it, which means take it over the course of the next 10 years. Now that's how you're supposed to be doing it. Some people will take it in their first year, but for the vast majority of us, your, your first year, you don't need a Section 1. You don't need that expense because you're spending money on ramping up and buying trucks and equipment and everything else. So you should amortize it over the next 10 years. You're getting $2,000 as an expense every single year. So this is going to be considered a intangible asset. So underneath your asset, tangible assets like your trucks, equipment, et cetera, you can amortize something like a franchise license over the course of that time. And what's cool is the ideal scenario is at the end of 10 years, it's worth say 30 or 35,000 and you now have amortized it down to zero. Then you basically own an asset tax free for 35,000. Same thing like real estate. You pay down real estate over a course of time. The goal is like if you pay it off, you essentially have this asset that you accumulated all this equity in without any sort of tax whatsoever, because equity isn't taxed. So that's cool. Only I'm thinking about that is because I am this whole week just every single part of the business thinking about where we can optimize for taxation stuff. So I'm literally paying for next year's conferences. I am pre paying software stuff. I am. I had a long meeting with my accountant firm the other day. Like, I recommend everyone be looking at your taxes. You only have a week to make changes to them. Don't wake up in in February, March, or worse yet, April. Like, oh, time to run my taxes. And then have this unexpected bill. Highly recommend you get it done if you. And furthermore, if you haven't made prepayments for this whole entire year, get it done before the end of the year. So that way you'll reduce your fees that you'll have for end of year. So I know most of you already had your calls with Brad. That's awesome. I overhear them all the time. We're trying to improve even the form that he'd be able to send you, like that Excel document, making it even look nicer and format a little bit nicer for everyone to see what your expected tax liability is. But if you do not know your expected tax liability for 2022, you got one week because it's too late once you figure this out in 2023, you can't change anything for 2022. You can move numbers around a little bit like amateurized versus none. But you can't make purchases. So is Brad the tax guy for us? I don't know who this is. Sorry, I can't see your name. But yes, Brad is the one. And if you own the Facebook group, there's a form to fill out in that regard. I will post. I just realized I have not made a post in a long time about the tax thing. I'll put a post in the Facebook group this evening specifically with the link again, just in case because.

You will barely have time next week to book a call with him. But you would need to get your expected like on the call with him, you need to get your expected liabilities and you make if you need to make charges to this year, you literally have one week. So I don't know his call schedule is. I don't know if today he's packed.

But I would be getting on that.

So this, it took me one year where all of a sudden a tactical sprang up on me in spring. And since then I have been religious about having the last couple weeks of December.

So ask him this question, what's two plus two? If he says it's what, whatever you want it to be, that.

You gotta love it. See what a good tax person does, they say, hey, here's the law. That's what I'm supposed to tell you. And they gave you a link. But that's, that, that's, that's something that's sometimes helpful. But honestly, like I've just learned, like follow the tax code to the T. Because you get audited, you don't lose any sleep. The first time I got audited was very, very stressful because I, I didn't know if I had done everything correctly. And you now like, if I got audited tomorrow, like, it would be a bit of a pain in the butt, but I would have no fear. Like we're doing stuff wrong or anything like that. So just recommend listening to your accountants on some, some of these things. Okay. Jump into questions. No, one more thing. Training from last week, the new franchisee training, all the recordings will be up this evening. I have day one and day two up and a little bit of day three. But day four is being uploaded right now. So by this evening. So starting this weekend, if you want to be opening up Christmas presents and watching franchisee training, great move, you know, can listen at 2x speed on YouTube. So I have them all up there and I also have the slides. So on the. I'll show this tomorrow probably on the Mastermind. Day one, day two, day three, day four. The last module of every single day has the slide deck for that day. So what you can do is download the slides and watch the videos. If you want to go through the slides, take notes, whatever you want to do. And if you want to listen to certain sections or pieces and parts of it, it's good. I haven't listened to the entire thing, but we did have mics on. We try to get as good audio as possible. It's extremely hard to do video when someone's standing in front of a projector. So don't expect beautiful video because you just can't with that bright of a projector behind us in that room. It's very hard to get a nice looking person. So it's a little bit dark, etc. But you'll hear it very well. And so if you're just listening in the background. You can put on YouTube, put in the background and you know, they're in chunks of hour, two hour segments. So it's pretty cool. All right, let's jump in.

Questions here. All right, Share my screen.

Not my reminders tab. There you go. I think that was all for my announcements. Give me one second.

That's it. Okay. Number one, Vlad, do you recommend sending two different one estimate emails each month for one new leads and two recurring customers? For example, in March I want to send mowing one click estimate emails to new leads and maybe butchering, yes, 100%. I would say at least two to three months out of the year you're gonna have new leads versus new recurring customers because you're not going to try to pitch mowing to recurring customers that are already on mowing. So you're going to do, you know, leaf cleanup or a spring cleanup for example to recurring and then your non recurring is probably mowing. Right. So there's at conference, we're going to be rolling out this new thing. It's very, very cool. Jaden and Rachel have been working on. It's going to really automate your one click estimate emails so you don't have to think about them. You don't have to schedule like in your mind. It's going to be great. So I know they're working on that right now on the design side of things and the media team and then Rachel and Jane and the masterminds behind it all. And it'll be much more automated, but you'll be able to do this having version one and version two for each month. And so they'll go over this at conference and I think it'll be really, really helpful. We will not automate, I think I said this the other day, we will not ever automate the sending of the, of the one click estimate email because we just don't want that to send out when you're way behind. All of a sudden a one click estimate email drops and you have 30 estimates on your schedule. Like we don't want that. But the actual creation of them all and being, having them all ready to go inside of your email templates, we have, we've created a whole database of them. We'll show you at a conference. They're really cool. Your name is More money, more questions. I gotta guess who that is. More money, more questions. Okay, everyone has to comment. Guess who this is. Since they're, they're, they're posting this, this question anonymously. But more money, more questions. Okay, so Here we go. Mr. More money, more questions. I currently take a regular salary from the business which covers personal expenses. I rarely take any draws outside of my salary. Our upcoming winter and spring expenses are now accounted for.

Car. I've picked up the habit of leaving unused profits in the business which are beginning to add up. Can you begin? Can you explain any negatives from leaving the money the company may not need in the business year after year behaving as a savings account until it is ready to be deployed on other location or investment? Should it be better to transfer this additional money elsewhere? Reasons why so two things. Number one, this regular salary I'm assuming is a W2 income which you are paying taxes on as an employee. If you're just doing a transfer across to you just realize you're going to be oh yeah. Oh yes. I'm not sure, I'm not 100% sure that his regular salary is W2 income. If it is, you wouldn't really have to be paying taxes on this money. However, keep in mind if you are a sole, a single member LLC or an S Corp, whatever profits come into the business you're going to be taxed on regardless if it is in your account or if you take owner's distributions and it moves into your account does not matter. Okay, so the only reason, the only way you do this like everyone talks about like keep the money in the corporation. The only reason that the way that that becomes.

The wisest thing to do is is you have a C corporation which typically C corporations are reserved for much larger companies.

100 or more shareholders, publicly traded companies, et cetera. Usually when you start getting around 10, 15 million in revenue, that's when it starts becoming a real thing. I would recommend it. If someone got like you know, six to 10 locations they might want to think about doing a C Corp because the advantage of that is you can keep the money inside the C Corp and only get taxed on the on the corporate tax rate. And then you only get tax on personal income tax if you take money out of the corporation which can lead to double taxation. If you take money out of the company, however, you can leave it in the company and pay a much lower rate. So that's the advantage of a C Corp. But the disadvantage is if you take money out you're bank paying double tax. Right? So that's why a lot of people don't go to C Corp. Because you're going to get double tax there versus an S Corp is a path through entity, same thing as a single member llc. Whatever profits in the business come in, that's what your income is. Your personal income is going to be considered. So to answer your question, it doesn't matter. There's no positives or negatives to keeping the money in your company account versus you moving it into your personal account because you're going to get taxed on it either way. The exact same way. What should be thought more of is like, can you invest that money? If your cash reserves sound like you're building up quite a bit of cash, can that money be deployed in a more tax efficient way? Can you buy things the last couple weeks of the year that you can next spring, things like that? The challenging part, you're 100% right, is buying the bullet and paying taxes. When you're in profit mode and you're saving up for a year or two for something like a second location or whatever.

You are going to probably bite the bullet for one year and pay taxes. Right? So I did this in 2020. I really bet the bullet on taxes and paid more because I just, I just, I didn't, I tried not to depreciate or accelerate the depreciation or anything because I knew tax rates would go up on me the following year. Right. And so what you might want to do is like, look at your tax brackets. This is what the CPA is going to do with you is what Brad does. He looks at all your tax brackets. Okay? You, you are $30,000 into this next tax bracket. Okay, great. If I spend $30,000, I'll go down the. That, that 30,000 will not be taxed at that higher rate. Right. Remember that your first $12,000 if you're single, 20 something thousand or whatever, if you are, sorry, 20 something thousand if you are married is not taxed at 0%. All right? And then after that, say the next 15 or 20,000 is taxed at 12% and then it jumps up slowly. But what that means is if you are at $30,000 in income, you are not getting taxed on $30,000 at that rate. If you have $30,000 of profits, right, because the first 12,000 is zero, the next is a smaller rate. It's like. So you got to remember the only reason you would ever go into it, try to get into a different tax bracket, you're not saving 30, 30 percentage on the entire chunk of your income. It's only in the piece that goes into another band of, of percentage for taxes. I did a horrible job of explaining that I'll do a better job in this, but basically, when you are. Someone's like, oh, I'm going to save. See, I'm going to spend this because I'm basically going to save 30% on $100 tax, $100,000 tax bill.

When in reality they're going to save 30% on the last bit. But once you get below it's less percentage. So bad job explaining that. All that to say if you are not making a lot of money, sometimes you actually want to be paying more taxes because your percentage that you're paying per dollar is going to be less than on a year when you're making more and now your rates are higher.

Is there a way we can take the yard sign and flyer designs in the Pro ship and print them on our own? We have a sign coming that's pretty cheap on sign that like the use and said. Yep. So there is the Photoshop files on the dashboard underneath.

I think it's marketing or temp designs. I forget exactly. Sorry. I think templates and downloads. I think it was very. Towards the very bottom there's a Photoshop file of all of the Photo Pro shop files and you can just download the Photoshop file, make it your own, get them printed off your own. That's totally fine. Hey Mike, I just got an email for conference registration. Is there a way to find it if I already registered? I honestly cannot remember.

Email mediagustalongcareservices.com and ask them if you have questions about that. But I can confirm with you like in 10 seconds because I think I have it up here. Boom.

Abraham. Abraham. Abraham. Abraham. Looking.

Abraham. Abraham, Abraham. Abraham. Abraham. I do not see your name on the list.

But for anyone else that has questions about whether or not you applied and are on the list.

Please email mediagustalongassurance.com if you don't remember if you fill out the form. But Abraham, just triple checking here. I do not see your name. So yes, please fill that form out. Highly recommended because otherwise the next week or two we probably will have to close down registration. So.

Okay, and that's all for today.

All right, a couple of things I will have finished for you tonight. One, training videos from last week. They'll be up. Great. Stocking stuffer. Digital stocking stuffer. Let's go.

Make sure you look on the Facebook group. Command center will be closed Christmas Eve and on Christmas Day you'll see the exact hours on the Facebook group. And then also this evening.

I will post the link for the tax thing. Again, just for anyone that has questions but if you have not filled up the form, please. The taxes with Brad, please, Immediately, Tonight. Because the chance of you actually getting a call next week is probably pretty slim. Everyone's trying to do it, so. But please do it asap. You only have a week to make purchases, so if it falls on January 1, you can't write it off. So. All right, everyone, hope you have a fantastic rest of your week, and we'll see you tomorrow. Merry Christmas.