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Wealthy & Wise: So You Want to Become an Entrepreneur?

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May 19, 2023
Author: NCH

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About the Video: Wealthy & Wise: So You Want to Become an Entrepreneur?

Becoming an entrepreneur is a truly exhilarating and rewarding journey. Firstly, as an entrepreneur, you have the opportunity to turn your passions into a profitable venture, doing what you love and pursuing your vision. You become the captain of your own ship, with the freedom to make critical decisions and shape your destiny. Alongside the potential for financial independence, entrepreneurship also fosters personal growth, pushing you to step out of your comfort zone, develop new skills, and overcome challenges. At NCH we have a passion for entrepreneurship!

Prefer to read? A full transcript is provided below.

Adam:

So welcome to another edition of Wealthy and Wise. I’m your host, Adam Kintigh, executive corporate analyst here for NCH. And today we wanted to talk about starting a business and being an entrepreneur. So, if you think you want to start a business, you think you want to be an entrepreneur. I have brought in the best entrepreneur you could possibly learn from, which is Mr. Cort Christie, our founder. So Cort, great to have you here. Thanks for taking time out of your day for this. You have been an entrepreneur for how many years?

Cort:

Oh, just only 32 years now.

Adam:

32 years. And you just wake up one day and say, you know what? I want to start my own company. What really happened when you decided to start doing your own business?

Cort:

Well, when I was in high school, I did lawns and even before that in middle school, junior high school. And so that, you know, you might as well add another ten years to that. But it was really sort of a convergence of an opportunity where I was always looking for the right opportunity to start something that I could do for personal financial freedom and independence. But then it was the pressure at that same time. It’s like you need to find something to make more money. And that’s where everything kind of came together. And it was like, okay, I’ve got to figure this out and I want to do something on my own.

Adam:

So, my children, I got all these boys and I always talk to them about, if you want to go to college, that’s great. If you want to go to trade school, that’s great. But I really prefer that you find something that you love and not make someone else wealthy, but make yourself wealthy. So, what’s your advice as far as what type of business our clients should really look into if you’re looking to be an entrepreneur?

Cort:

Yeah, that’s a great question. And it’s a big question. You know, it’s kind of like, what are the trends or what are you going to make enough money that you’re not going to be disappointed in? And then there’s interest that people have. And I always say, you know, do something that you love, do something that you really can get into and enjoy. However, there’s a caveat. If you love to golf, it doesn’t mean you should get into the golfing business. Or, if you love to fish, it doesn’t that mean you should get in the fishing business. Because it’s the best way to hate your hobbies by turning them into a business. But if you love to paint, let’s say, be a painting contractor. You love to landscape and you like, you know, doing your own at your house, then start a landscape company. Things like that that you enjoy to do that you could say, I could do this as a business is a great way to go about it. If you love cooking, if you love, you know, decorating, there’s all these businesses that you can start around your passions are things that you enjoy to do, but just avoid the hobbies.

Adam:

Well, we find a lot now with YouTube and TikTok and all of the social media that’s out there today and you see a lot of people making a lot of money online, sharing their life experiences, sharing what they’re doing, what they’re eating, where they’re vacationing to. And these have turned into some amazing businesses. And what is the I guess the, when you decide on that business, when should you start an LLC or a corporation?

Cort:

Yeah, well, I think as an influencer online there’s a lot of money to be made in promoting yourself and advertising and marketing. So, you know, and that could be in many different areas. Everybody has an expertise and sometimes you don’t know what your expertise is, but everyone listening has an expertise. And if you could tap into that and turn that into a business as well, could be a lot of fun. But you’ve got to get the foundation poured for any house that you’re going to build and you want a solid foundation. And that’s where we say everyone who’s thinking about starting a business or everyone who knows what they want to go into business doing has to get the foundation formed before anything else. And that’s where you need your LLC. Get that LLC in position for the business to kind of blossom. So, I look at it like, as you’re thinking about a business, it’s just an idea, right? But if you can put it on paper, it starts to gain some traction. It can visualize, you can put graphs and charts and maybe you can get to the point of building a business plan, which we recommend also. But when you get the LLC set up, you’ve had to name it, had to give it life. You’ve had to register with your state, you’ve had to go to the IRS and get your tax identification number, and then you go through the steps that happened after that, like go to the bank. Now, I have my bank account. I’ve got a checking account. The name of your business is on it. I have a credit card. I can start making purchases. All this can be done before you’re even ready to launch. It can be done a year before you’re ready to launch. But just by doing that, it’s almost like you’re getting things moving. So, if you’ve thought about starting the business and have an idea of what you’re thinking about going into, file the LLC, get the foundation ready for whatever comes your way.

Adam:

And it’s a really good point. Getting the LLC started immediately. And not only do we get the name, we get something down, and even if you’re not sure what you’re going to do exactly, a general ABC Ventures Enterprises, something to get started because so many good things happen from the date of incorporation, your company can start building credit. From the date of incorporation, you start getting tax benefits. Our government gives us a ton of tax incentives to contribute to our economy, a ton of tax incentives to start and operate a business. So, those are the little things that start from the date of incorporation moving forward. And I remind people, the IRS only allows you to go back so, $5,000 in startup costs that you’re allowed to write off or anything prior to the date of incorporation. So that starts, the age of the company becomes valuable in terms of credit and financing and all those things. So, I think it’s a great start. Get the LLC formed.

Cort:

Very, very important. And I’ll give you an example too. There was a former employee of ours in Reno, Nevada, that came from the tire industry. They actually worked for a big national brand, was a regional representative for them, but they had a child. He and his wife and his wife said no more traveling. So, he ended up working with us for a couple of years and he was great. But then he wanted to get back into doing something else and he loved the tire industry. So, he came to me and said, Cort, I’m moving on. I said, what do you mean you’re moving on? He said, I’m going back to what I know, but I’m going to start my own business. And he laid the foundation of it and he formed the LLC because obviously he had done that thousands of times for people while working with us, and he got everything put together. But once he had that in place and he had the framework of a website put together, he could start his outreach. Now this business is already generating a couple of million dollars a year in revenue and he’s selling tires direct to consumers. So literally it’s going to show up on your doorstep, the tires, the wheels, whatever you’re looking for, for your car. But I think it’s so interesting as he got the foundation laid, had the website built, he still had $0 of revenue, but that’s how he went out to all the wholesalers around the country and all the installer networks that are out there and could have a conversation with them because he had things organized ready to get out and now he was taken seriously.

Adam:

Well, the formation of the website, people often, we don’t know where to go, how to do it. So, we actually have a team of professional web developers that design these custom websites and it’s really inexpensive, which I think is amazing. There’s a lot of technology here. People say, oh well, build your own website. And I’ll tell you something, I was just going to visit a website last week and they did not keep their software up to date, so I could not view the website.

Cort:

It happens and people are not paying attention to what’s out there. They’re off running their business and all the sudden they forgot that they didn’t know that the website’s down all the sudden. And that is one of the nice things over the years at NCH, you know, that we started with business registration services, but then people came to us for more and then they wanted more and then they wanted more. But there are these foundational services, the services that you need to get your business launched and started. So, we obviously added web services. We can get your URL registered, your domain for your business. We can get your branded emails in place for your business and obviously we can build your website. We’ve actually got a couple different options. There’s a do-it-yourself version. So, if you want to do it yourself and you want to save some money, that’s one of the ways. But our custom team, they actually do some incredible work of building custom websites and it could be just a basically a beautiful business card online for people to look at and see some of the services that you offer or a fully functional e-commerce website where you can sell products, take transactions right online, have you know, anything you want to put on a website that you see anywhere else. That’s what we can do for you.

Adam:

That’s awesome. And I’ve got a chance to work with our web development team on some personal things for my wife and having the ability people go on their phone, they do that near me now. I see some people looking for a local service. They’re able to find those quickly through that. Now, you mentioned one other thing with the business plan and is the business plan a critical piece in starting a business? How important is that in my line up of things to do?

Cort:

Well, if you’re an incredibly detailed and organized human being that has a great memory and can structure things really well in your brain. You don’t need a business plan. However, that’s probably about 1% of the population. The rest of us, it’s much easier if you have a game plan. You lay things out, you have some structure to the business. And what a business plan is, it’s a game plan. It’s basically a marketing plan, a development plan for your business, a financial plan for your business, an operational plan. It’s research around, you know, the demographics of the business that you’re getting into. It might be national. If you have a national business might be global if you have a global business. But all this information is put together in a very definitive plan. So, you have a road map for where you should go next with your business. And the other thing that’s so important is not only is it an incredible tool to help you kind of have direction on what’s next for your business, but then when you want to go to a bank for financing, or if you want to go to investors to actually raise some money for the idea that you have, you have something to share that’s laid out and written. They don’t have to just hear you talk about it. They can see that there’s actually a solid document that’s been put together with financial data and with an entire marketing plan for how you’re going to build and grow your business. It is very important.

Adam:

Well, and you mentioned to the bank side of things so, early 2000s, I have a client that put together a business plan. He said, Adam, can you take a look at this and see what you think? And I looked through everything and I found in there his weaknesses. So, the SWOT strengths and weaknesses, as he does this analysis, he puts his weaknesses in there. I said, you know, if I’m the banker, I don’t want to see your weaknesses, or I’m thinking in my head, I had no idea that, yes, the bank wants to know that you know what your strengths and weaknesses are. And putting that business plan together, I think also can help you to make sure you have the right team in place. So, you’re not good with accounting? You better think about hiring someone to make sure that you’re on the straight and narrow from an accounting standpoint. Or, if you’re not good at the creativity side of things, hiring a website developer or those type of things can be really important. So, I think having that business plan as you go through that exercise of putting it together can be a huge eye opener and maybe make you rethink the business that you thought you were going to start before your thousands and thousands of dollars in. You get that business plan done first and realize, is this going to make me the money I want to make based on my financial projections? And over the next three years, here’s what it’s going to take to do it. I think having that done is really important.

Cort:

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Absolutely.

Adam:

We talked about form the LLC, getting a business plan, work on the marketing, now on the accounting side of things, can I just use my own credit card and my own checking account, and just go run the business?

Cort:

Well, you could, however, if you want to get audited by the IRS, probably have to pay a bunch of back taxes for things that you should probably made mistakes on. Yeah, it’s a bad idea. So, what we recommend is, get your checking account set up, get a credit card, and don’t use your personal business checking account or personal checking account. Don’t use a credit card that you have personally. Separate it out 100%. So, it’s very clear what’s a business expense and what is a personal expense. That is vital. Then we start talking about accounting and, you know, you might decide to want to do the accounting yourself. You could use QuickBooks or other software programs that are out there. Or, as I always recommend, knowing most entrepreneurs aren’t great at maintaining records and documents and not necessarily good at all at accounting, hire somebody to do that work for you, somebody that can keep your books straight. When I say books, I mean all of your accounting straight and accurate. So you get a financial statement once a month that basically shows you, you know, if you made money or if you lost money and if so, how much and then have somebody that could actually help you understand and it and interpret that. That’s very important, Adam.

Adam:

Well, and the IRS is always going to be there with their hand out looking for a portion of your profit. That is the country that we live in. And I think having that organization to start with, if you get a spiral notebook or an Excel spreadsheet and just start doing a simple monthly expense report, date, dollar amount, who you paid, what it was for, keep your itemized receipts, track your mileage. I just talked to one of our CPAs last week and he said, Adam, I would rather that people keep track of too much than not enough. My job as a CPA is to let them know if we’re being too aggressive, we can always back it out. But such an important detail that so many people miss. And again, from that date of incorporation forward, we get all these great tax benefits and as long as we’re wise, the government gives us all these tax incentives to start the business, things that we used to not be able to write off. We make the money they take the taxes out as we make it. We use what’s left to pay the bills. Now, as a business owner, you’re making the money, spending the money first and using what’s left to pay the bills. So, it puts you in a position where you can build a lot faster, keep a lot more of your money, because we’re using pretax dollars to pay for a lot of expenses that otherwise regular old W-2 employees just can’t write those things off.

Cort:

Yeah, so there’s really not a lot of tax benefits or incentives out there anymore. There used to be many more. And, you know, aside from investing in real estate, which can have massive tax benefits, when you start a business, it’s really one of the best ways of minimizing your taxes and deciding how much tax you want to pay, when you want to pay the tax. Because you have a lot of control over that and you can leverage the income that you’re making by investing it back into the business and growing the business and building it. And that’s one way of minimizing your taxes. There’s several ways that you can minimize your taxes as an entrepreneur and grow and develop your business because it’s so important that cash flow is a resource. It’s there to help you in so many ways. And if you don’t know how to manage things properly, you’re just going to pay more in taxes. And why do it that way when you can actually hang on to it? Reinvest to build and grow your company. But take advantage of the fact, as you said, the dollars that you spend for expenses are things that you need to have is on a pretax basis versus what we do as individuals is on an after tax basis.

Adam:

Now, the starting of the company, if you have five ideas as an entrepreneur, can I have one corporation do everything?

Cort:

Good question.

Adam:

As we’re starting out.

Cort:

So yes, you could, and you could have five divisions doing small little items. However, we would always want to sit down and have a conversation with someone to say, Is that really the best way of doing it? You know, there’s liability in every type of business. And so if you’re going have five different types of businesses under one umbrella LLC that you’re operating, you’re adding five times the amount of risk of lawsuits, of litigation or problems into that one umbrella company. But if you had five separate companies and again, it might be a little more to manage, but if one of them goes down or one of them gets hit with a lawsuit or has a problem, they only get one business. And so you can have the other four businesses all operating independently. But if it’s under one umbrella, you basically expose everything you’re doing to just one problem that you might have.

Adam:

That’s a really good point. I just had this happened last week. A client came in the office and has a great business that he started, but his son got in an accident in the company truck and now he starts rethinking things of all his eggs were in one basket. And now he’s thinking, okay, I really, as an entrepreneur, as a business owner, I really got to think about starting to separate things out in different divisions for the business equipment holding company, other things that he can do to minimize that risk, so that accidents happen. We want to make sure we’re not losing everything.

Cort:

Yeah. As your business starts to grow and evolve and you become successful, entrepreneurs have a tendency to just want to start another business or try something else. Or, you know, they find that the vision of what they’re doing may be to service a different market and they want to expand that. But I always recommend to people set up a separate entity for each new business idea that you have, insulating yourself from the car accident in a company vehicle, that if somebody got killed and you have $1,000,000 of coverage for that, for a horrible accident. What if it’s a 2 million, 3 million, $5 million judgment that comes because they find out that the driver was on their cell phone not paying attention? And that’s a whole other level of liability that most businesses could not survive.

Adam:

Yeah, so many things that happen that the insurance won’t pay or will ban up. This is the need for the corporation or LLC.

Cort:

Absolutely. And I think that’s one of the cool things of working with somebody like you at NCH or any of the other teammates that we have around the organization is, whether you’re thinking about starting something and you’re ready to get that LLC going before you launch your business. Or, you are a successful entrepreneur now, but are just thinking about the risks that you have in your business by having everything under one umbrella, that maybe it’s time to separate some things out just in case there’s a lawsuit that comes along. Now, you know, I hope that none of our clients or anyone listening ever has to deal with a horrible lawsuit. They’re incredibly expensive, incredibly time-consuming, very stressful. And if a judgment, you know, comes down, it could wipe you out. You might be filing bankruptcy. And in Nevada, I know that the legislature meets every couple of years. And always, and it’s just like every other state when the legislature meets, most meet more frequently. Most meet every year. There’s the trial attorneys and the trial attorneys are there trying to chip away at the laws to be able to go after a business owner for all kinds of reasons in order to get at a business owners’ assets. So, I always say insulate, separate your more valuable businesses from one another, whether it’s real estate holdings that you might have, anything. Just don’t put it all under the same umbrella. Protect yourself. We’ve got experts that could actually sit down and get on the phone and show you exactly how to do this. It’s not real complicated. And a little bit of preparing might just be the thing that gets you to the point of retirement and enjoying your life without having these issues of potentially dealing with litigation.

Adam:

Good advice. Well, Cort, thank you so much for taking time out of your day.

Cort:

Absolutely.

Adam:

Thank you for taking time out of your day and appreciate any questions you have. Make sure to like and subscribe. Share this with a friend or someone you know that might want to start a business, whether it’s in business and give NCH a call, let us help you turn those dreams into reality. So, thank you so much for your time. Have a great evening!

DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.

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