Episode Transcript
[00:00:00] Speaker A: Bienvenidos. Ha l ingrediente secreto. Soy Ol Gurtado. Yoi vamos adesubrir lo desa fillos y ha sierto reales que en frentan quienes emprende en con proposito. Est albiendo. Naomi Teledician.
Welcome to el inredientes secreto de los negocios. I am Ol Gurtado. This is the show where we reveal the strategies, habits and financial financial decisions that help startups and small businesses become profitable, scalable and sustainable companies.
Today we're talking about one of the most important ingredients in business transformation, financial clarity. My guest today is Joseph L. Reyes, a seasoned certified public accountant, business strategist, trusted advisor and founder of JL Reyes, Accounting and Tax CPAs.
Joseph Helps Entrepreneurs optimize their finances, reduce tax liabilities and build long term wealth through proactive tax planning and financial strategy. Joseph, welcome to el inrediente secreto de negocios.
[00:01:12] Speaker B: Thank you. Thank you. Glad to be here. It's good to see you.
[00:01:15] Speaker A: Thank you, Joseph. So let's start. Many entrepreneurs work hard, but still do not feel financial clear, financially clear.
¿What do business owners often misunderstand about their numbers, Joseph?
[00:01:32] Speaker B: That's a good question.
What I see, and I've been doing this for a long time, a lot of business owners think that good sales numbers is the important. Is the most important thing in their business.
And what I find a lot of people making a mistake stake with is that. Yes, Revenue is coming in the door, sales are coming in, people are buying my product. They like me, they like what we're doing.
They're enjoying the thing that we sell to them.
But what they, what the business owner oftentimes forgets about is that cash flow is money going in and also money going out, you know, And it's very easy for a business owner to be so focused on selling, selling, selling. And I've made that mistake myself and lose sight of the money we're spending to get that sale to come in the door.
And so, Yeah, you know, the one, one of the biggest expenses of of a product or service is, you know, the rec cost, you know, if it's a cup of coffee. Yeah, you know, the coffee beans, you know, and the cup, you know, these are direct expenses and so, you know, it may cost me, you know, fifteen cents, you know, to get the coffee, to get the cup, maybe provide some milk and things of that nature.
And as long as I price my coffee, so that it covers that and a little bit more for price profit, we're good to go. But it's not that simple.
There's always employees. There's rent, there's utilities. There's all kinds of things. And it's almost impossible to do that. Excuse me. In your head. So one of the biggest mistakes I find people making is not relying upon good reporting to assess what is the true cost of running this business. And. ¿And it's my stuff being is the product that I'm selling? ¿Is it properly priced?
And that can create a real cash flow problem.
So one of the biggest and most important reports that people have to look at is something called the cash flow report, that shows where the money's coming from and where the money's going.
That's right there. The huge mistake that a lot of people I see making.
[00:04:00] Speaker A: Wow. Interesting. Because I've learned something throughout my career. And is that most people feel profit rich but cash poor. So it's basically what you're saying.
¿So when you first begin working with an entrepreneur, what financial patterns tell you whether the business is healthy or is struggling?
[00:04:25] Speaker B: Yeah, so as an accountant, it's not a bad idea to visit an employee, a business owner's store, or visit their business, you know. And things can also be done, you know, nowadays through online visits, if you will.
But one of the things that I. ¿I always wonder about is, you know, what is the mood of the business owner?
¿Are they running around hurriedly? ¿Are they always struggling to make ends meet?
You know. Are they always like. And we worry any. ¿I don't know a business owner that doesn't worry, right? We all worry. But are they worried to a point where, you know, it's just so stressful that the. The hair is, you know, just falling out of their head, you know. They're not getting any sleep. They don't know if they're going to make payroll. They don't know if they have enough money to survive the week or the month, you know. So I. You know, I take stock in that. I like to. I like to think that I have a lot of empathy. And I like to get a sense of how people, you know, what's going on with this person. ¿And just talking to somebody you can get a sense of, you know, are they emotionally struggling and just always wondering, Am I going to get through the day?
So, if. If somebody is always challenged with money, that's usually a good pattern to be looking at to assess whether this person is gonna is making it.
And then, of course, you know, hopefully, getting a good financial report to assess, you know, what the numbers look like. But you can just tell if somebody's just starting to make payroll, you know, that tells you a lot of what you need to know about how they're.
[00:06:14] Speaker A: Yeah, definitely. Well, it happened in the pandemic, Joseph. Remember, people were struggling a lot because they didn't have any cushion in their businesses to survive.
So we had to, you know, we all accounted had to deal with that.
¿So, Joseph, how can financial clarity change the way a business owner makes decisions about growth and hiring, pricing or expansion?
[00:06:39] Speaker B: Yeah. ¿So, financial clarity, you know, it's almost self explanatory that term, right? Financial clarity. I can clearly see where I stand with my business if you have that financial clarity. And. And even though it's pretty obvious, you know, self explanatory doesn't mean it's easy to get there, you know, but knowing where you stand financially will help you make really good decisions. ¿Right? So if you don't know what your books are looking like and what your money situation truly looks like how can you plan for two months in advance, for three months in advance, for six months in advance, you make the wrong. You make the wrong decision.
And then six months later, you can't pay for the things that that decision requires for you to grow. It can be devastating. And people become businesses, become insolvent all the time, simply because it's not enough money to fuel the operations.
And you'd be surprised how many people are, how many businesses are technically insolvent.
So having that clarity, having good financial reports and a good financial professional to help you, it's a necessity. That's not a luxury, it's a necessity.
[00:08:01] Speaker A: ¿Right? I agree. One hundred percent.
¿Joseph, what is the difference between simply knowing revenue and truly understanding profitability?
[00:08:13] Speaker B: Yeah. So just imagine that, you know, you have a great product, you know, and everybody loves it, and the product is flying off the shelves and you're constantly just, you know, ordering more product or more stuff that you need in order to make the product product. And the. The sales number is great.
And of course, you know, you need sales in order for to fuel the. The business, to fuel the money, to use that money to fuel the business growth.
¿But just because you're selling a lot of product, doesn't mean that you're making money, because what if you're not pricing it correctly? What if you are, you let's say you. You know you. You're a great chef and you know how to make. Make the best, you know, lasagna, let's say, and. But you price it wrong. So every time you sell an order of lasagna, let's say, and it's not priced correctly, let's say you're selling it at a loss. And let's say, you know, things are going well for a while. But every time you sell that product just a little bit below, what you should be selling it for, eventually, that's going to catch up to you.
So just having the revenue is not enough. You have to know what it costs, the true cost. So that you can make sure that you're making a profit after all expenses, not just what it costs to make the product. It's all expenses. And by the way, if you're a business owner, you should be getting paid by the business.
So your salary and your income from the business should be a factor in pricing the product, so not properly pricing your, your goods and your services.
Kiss of death. Eventually it will catch up to you. And many businesses go out of business because they make that fundamental mistake.
Selling the sales number does not equal the profitable. Profitable number you have to make sure it's properly priced. Absolutely critical.
[00:10:09] Speaker A: Oh, wow.
And do you think that this is the financial foundation that must be in place first, the understanding the revenue and understanding the preferability.
[00:10:24] Speaker B: Yeah. ¿I mean, again, taking, Taking like a chef, right? Who, you know, doesn't like numbers, doesn't like financial reports and things of that. Nature just knows how to make the best food there is in town.
But not having, not spending the time on financial professionals to assist in pricing things out properly.
That is the case of death.
It's never going to work for you.
So, yes, financial professionals cost money, cpas cost money, Enrolled agents cost money, Financial advisors cost money. But.
But if you have the right advisors helping you make the right decisions, it's going to pay for itself.
The alternative is, you're going to make a lot of mistakes because you don't understand money, you don't understand the markets, and maybe you didn't plan properly.
And then, of course, the inevitable is going to happen. ¿You're going to have a storm, come your way, and then you're going to be wondering, am I going to make it? And that's a source of incredible stress.
And I don't wish that on anybody because many a person has suffered physically, their health suffers because of this kind of stress so spend the money, hire a financial professional to assist in making decisions.
[00:11:50] Speaker A: I love our conversation, Joseph, because financial Clarity gives entrepreneurs more than numbers. It gives them the direction, the confidence and the ability to make decisions before problems become expensive. And after the break, we will look at how proactive tax planning can help business owners like you. Reduce surprises, keep more of what they earn and build stronger companies con mas historias her ramientas y con sejos que teluderana transformarto negocio. Esto es se l inrediente secreto porn.
Welcome back to eligredientes secreto de los negocios. Stay connected to this show and every Now Media TV favorite live or on demand anytime you like download the free now Media TV app on Roku or iOS and unlock non stop bilingual programming in English and Spanish. If you're in the move, catch the podcast version at www dot nowmedia, dot TV, from business and news to lifestyle culture, entrepreneurship and beyond. Now Media TV is streaming around the clock. Ready whenever you are.
Before the break, Joseph and I talked about why financial Clarity is one of the secret ingredients. Growth.
Now we're moving into tax planning not as a once a year task, but as a year round strategy that can strengthen the entire business.
The goal is not only to reduce taxes, but to use better planning to protect the cash flow, improve, profitability and create more opportunities for growth.
¿So, Joseph, what's the difference between tax preparation and proactive tax planning?
[00:13:54] Speaker B: Yeah. One of my favorite topics tax preparation is reporting history.
Right. You wait for the year to be over. Right now we're in the middle of tax season. ¿If you will for twenty twenty five, what are we doing? Right, We're reporting what happened in twenty twenty five.
That's history, which is important. You got to know your history.
Especially the IRS wants to know about your history. ¿Did you make money? ¿Did you lose money? ¿Did you make money? Okay. Pay taxes. Okay. That's history.
But tax planning is a different animal. Altogether proactive tax planning is okay. We're in twenty twenty six. Right now, we're right past the middle of twenty twenty six. ¿And what are we doing with our clients who are interested in planning? We're preparing, making decisions for how the business is doing right now, how they think they're going to end the year.
And then, when twenty twenty six ends, what have we done to make some moves to reduce the tax bill.
Right now, I have a hundred million dollar e commerce company, you know, they're going to be making. They're going to have to have a two or three million dollar Tax bill for twenty twenty six. They're smart. ¿They say, Joe, how do we not pay two or three million dollars in taxes? And we're planning. We're making moves, we can buy more equipment. We can do all kinds of things to bring that tax bill down and then go into twenty twenty seven, not worried about paying so much money in taxes. So planning is just being proactive and doing it early, not doing it during Christmas season, doing it, you know, throughout the year to, you know, talk to your accountant, make sure that you're planning in advance what the tax bill is going to look like, and then find ways to reduce that legally and morally. And that's what planning is.
[00:15:51] Speaker A: Wow. I love it. I love this conversation. ¿So what do you, what, Joseph? ¿Why do you think so many entrepreneurs wait until tax season to make the decisions that should have been planned much earlier?
[00:16:08] Speaker B: An inexperienced entrepreneur, an inexperienced business owner. They, they, you know you. When they hear the word taxes or the const, the conversation comes around to taxes. They immediately go to tax preparation. ¿What do I have to report?
¿What do I have to put set aside and having to pay the tax?
I never met an entrepreneur. That's not busy. You know, we entrepreneurs wear twenty twenty five different hats. And so it's very easy to just gloss over the concept of taxes and think, oh, that's tax preparation. I just got to get ready for that. My accountant is going to help me save money. Tell me how to set, how much to set aside. So that's one of the reasons that entrepreneurs, you know, they don't think about tax. The tax planning side of things.
So they're busy. They think about taxes. They just default to tax preparation. ¿What they're not thinking about is, well, can my accountant help me not pay so much in taxes?
And if you can get to that mindset, you're ahead of the game. Because now you can maybe not pay two million dollars in taxes. Maybe you can wind up paying a million dollars in taxes.
So being really busy, i think, is one of the reasons. A lot of business owners don't think about the opportunities that exist in the tax planning world. And a lot of things, a lot of things, another thing about lot of people don't think about is that there are things you can do to control the tax number.
A lot of people think, well, it's taxes. You just, you do the business. Whatever happens, happens. And then you report and you pay taxes. We're like, no, not necessarily. You know, we. We can do things, you know, that are legal. We know the tax law. We can show you some ideas and then help you maneuver into a situation where you won't have to pay so much in taxes which puts money in your pocket.
[00:18:03] Speaker A: Well, it's basically being more proactive than reactive. So that's Joseph advice. So follow it, please.
¿So Joseph, what should entrepreneurs understand about the relationship between taxes, cash flow and long term wealth creation?
[00:18:22] Speaker B: Yeah. ¿So the relationship is, you know, what does it take to pay a tax, right?
Cash.
You know the the government doesn't take horses and cows and goats as payment they want cat wish. ¿Right?
So, at least not in the United States.
So, but so the relationship is that if you're. If you approach the tax situation as. ¿As a strategy that requires cash, and then the question becomes, how much cash does it take to deal with the taxes?
That's an important question. And then, of course, a lot of people don't know this. But taxes are the number one wealth killer that we have. So it's been proven time and time again. The more you pay in taxes, the less wealth you're going to have. So they. They are all together.
Taxes, cash flow, wealth creation, They work together, control the tax.
Have more cash flow. You have more cash flow. You can invest. You can invest in more equipment employees, new lines of services and products, you know. ¿Or you can take the money out of the business and put in your pocket and go buy a boat or buy another house or make other investments, right? So they are absolutely intertwined, very critical that that gets controlled because that's where a lot of people they don't. I just see it time and time again. It's And I've been doing this a long time, and it just. It saddens me to see so many business owners not paying enough attention to controlling the tax throughout the year. Then the year ends, and for the most part, it's too late. And then you just watch people get poorer and not richer because they gave the money. Money to the government. ¿And what does the government do with the money?
¿They're giving it to somebody, right? Or they're spending it. Maybe oftentimes in ways they shouldn't be spending it. ¿So who should be controlling your money, right? It should be you, not not the government in my opinion.
[00:20:33] Speaker A: No, definitely. ¿And I agree with you because sometimes, and this is something I tell my I tell people when they are employees and when you wake up in the morning, what who is your first stepter? It's the IRS, because your money is going to be taken out of your paycheck every single day.
So make sure that you are planning and not reacting with your taxes. Business owner, please follow Joseph's advice.
¿So, Joseph, but what tax planning mistake do you see most often in growing businesses and how can owners avoid it?
[00:21:11] Speaker B: Yes, that's a good question. And by the way, piggyback on what you just said in your last question, a lot of people don't realize that they. ¿They work for the government for taxes for the first three or four months of the year, you know, when you start, right? Exactly.
Taxes. So if you're thinking about that, then if you. If you have that mindset, okay, I'm working for the government, you know, for the first few months of the year. And then I can start working for myself and my money can work for me.
But as far as the, the biggest tax planning mistake, that that's an easy, that's an easy question to answer. It always comes down to the planning side. They don't plan. They think that a tax professional, let's say, is too expensive. And tax professionals are expensive. At least the ones that are looking forward and planning now somebody to do your tax return, You know, they're, they're tax preparers who will do your tax return for two hundred, three hundred dollars. Right. But if you want to save two million dollars in taxes, you want to save a million dollars in tax taxes, well, that may cost you fifty thousand dollars. One hundred thousand dollars. ¿So let me ask you if you, if you knew that you paid somebody fifty thousand dollars to save you a million dollars in taxes, would you do that every day and twice on Sundays? ¿Or would you say, no, that's too expensive, right? No. Business owner is going to think, well, that's a bad deal. It's a great deal. So if a good tax professional, tax planning professional, it's going to be expensive, but the tax savings will pay for the tax professional. Plus it puts money back into your pocket and then you can use that money to build your own wealth. So at the end of the day, it's the planning that a lot of people mistake and they don't do it. And I think that's a huge mistake and I see it all the time.
[00:22:58] Speaker A: Yeah, me too. And let me add something else with the tax planning mistake. Stop watching reels on Instagram and Tik Tok for tax planning, please. Right, Joseph, It's a nightmare. Not everything you see on social media is the truth.
[00:23:17] Speaker B: Yeah, It could. It could be true. Maybe, Maybe not. But you talk to a professional. A licensed certified professional, by the way.
[00:23:30] Speaker A: Exactly.
Oh, my God. Joseph, I love our conversation. So when tax strategy is connected to the business plan, entrepreneurs stop treating taxes as a surprise and start using the financial intelligence as a tool for stronger decisions.
Coming up next, we will discuss how bookkeeping, accounting systems and advisory support help entrepreneurs move from financial blind spots to disciplined execution.
Jabol vemos con mas historias her ramientas y con sejos que tegocio. Esto es el ingrediente secreto Porno media television.
Y estamos de vuelta. Soy Yol Gurtado y estadriendo el in.
Welcome back to el inredientes secreto de los negocios. I'm OL Gurtado and I am here with Joseph Reyes of JL Regis accounting and tax CPAs. We have talked about clarity and tax planning and now we're looking at the systems behind the numbers. The bookkeeping, accounting sales, tax resolution, financial reporting and advisory guidance. A business cannot scale what it cannot see. So strong systems help owners understand what's happening where the money is going and what decisions need to be made next.
¿So, Joseph, how do messy books or incomplete financial systems limit a business owner ability to grow?
[00:25:14] Speaker B: ¿Well, just think about a plane, right? Just imagine getting on a plane without good systems in place. ¿On that plane, it can kill you, right?
A bad financial system for your business won't kill you when it can kill your business.
And I see it all the time that a business owner is sloppy about their finances and they think about bookkeeping and accounting.
As you know, something back office, it's administrative. It belongs in the back. Just tell me how we did, and you know, we'll worry about the next month after I see the reports. If they see the reports. Because sloppy, you know, people who treat their finances sloppily generally tend to go months without ever seeing their financial reports or getting the bookkeeping done, probably because they don't have the cash for it. They don't want to spend the money on the accounting firm or the bookkeeping firm or whoever it is, that they hire to help them with the books so they fly blind. Well, flying blind is never a good thing. I mean, if you're not keeping on top of your business every single day, every single month and knowing what the numbers are, you're. You're setting yourself up for failure.
So being the CEO of a business is not easy. If you own a restaurant, you are the CEO of that restaurant. You know, if you have a manufacturing business, you are that CEO of that business. So a CEO have the right systems in place, has to have the right information.
They have to be able to pilot their business properly. Otherwise they just might be flying, right into a brick wall.
And when they. When they wake up, they realize that that happened because they were not paying the right attention to the numbers. Business is about money, so you got to watch the money, and the only way to watch the money is by having the right reporting in place. So. So you have to hire the right help to do proper bookkeeping every single month. Give the accountants and the bookkeepers the information that they need to properly report what's going on. And if you. If you do that one thing, you can at least see that you're going into a brick wall and maybe pull up or pull down or go around it instead of just going right, slamming right into it and then asking what happened. Well, what happened was. ¿You were not being the CEO of your business in the proper, proper method, Right?
[00:27:44] Speaker A: ¿And talking about reports, Joseph, what financial reports should entrepreneurs review regularly if they want to make better decisions?
[00:27:55] Speaker B: Well, so. So a lot of people know already know that. Okay. You know, especially if you have, like, quickbooks or Zero or, you know, freshbooks, there are many different. You know, bookkeeping products out there that can easily give you easy reports like an income statement, also known as a profit and loss statement.
Well, and you know, this. This is also how you run, run your household. ¿How much, how much is coming in? ¿That's your checkbook, right? ¿How much is coming in? ¿You know, what bills did I have to pay and how much is it left over for me to maybe go to the movies, dinner, whatever, go on vacation? So an income statement basically reports any money coming in, money going out. So that's a basic standard financial statement. The other one is the balance sheet. And I found a lot of business owners don't pay enough attention to the balance sheet. And I equate a balance sheet to owning a home.
You know, if you own a home, you know, you have an asset. ¿But what's the asset? It's the home.
¿A lot of people have a mortgage on the home, but that's a liability, Right? ¿What's the difference between owning the ass, said, and having the mortgage? The difference is, everybody knows, is equity. Well, a balance sheet is the same thing.
¿How much does it? ¿How much do I own?
¿How much do I owe? And what's the difference, and the difference is equity. And if you have good equity, if you're making money and your books are being maintained properly and the business is doing well, you, you know, you're going to have positive equity. But it's entirely possible that you have negative equity. Well, you know what negative equity is. It's called insolvency. You could be technically insolvent and not even know it because you don't have. You're not watching your balance sheet. So a lot of business owners don't realize that you have to keep your eye on that. Because if you have a loan with a bank, that loan covenant, you may have a loan that in the fine print says, if you ever become technically insolvent, you know, we're going to call in the loan covet. It happened during covet all the time.
Another statement is the cash flow statement. ¿But what is the cash flow? Well, it's like blood flow where the, you know, money going up and down, in and out, in and out, you know, into the heart, out of the heart. So cash flow shows where the money's coming from, where the money's going.
Maybe some of the money is being used to buy equipment. Maybe some of the money is going to, you know, build, you know, selling and buying goods and service it, and maybe some of the money is going to pay debt interest payments. ¿Right? Those are the three basic financial statements, you know, the income statement, the balance sheet and the cash flow statement. But there are other statements like accounts receivable. You need to count an accounts receivable report that shows who owes you, how much do they owe you, and how long has been out there that they haven't paid it.
If you're not keeping an eye on your accounts receivable aging, you might wind up financing somebody else's business and not knowing that and not remembering that they owe you money. ¿Right? So you don't. ¿You don't want that bad ar to put a drain on your company, right? Also, another one of my favorite reports is the sales by client. You know, you can run a report in any end of these bookkeeping products to find, okay, who did we sell to last year and how much and you could sort it by the top client to the least client.
That's interesting information to have. Maybe you spending a lot of time with a client that's bringing in very little money and comparing that to a client that, you know you're making a lot of money from or just bringing in a lot of business.
¿So maybe you need to be getting rid of some clients, you know, or maybe raise your prices, you know? So there are all kinds of reports that you can easily look at. And you can use a bookkeeper or a financial professional to get those reports. But all these products nowadays, all these online bookkeeping products, they're free, They're there. You can easily get these reports and then sort it by highest to lowest, you know, left to. ¿Right? I do that all the time for myself and my clients. And it gives you very interesting information about. ¿Okay? ¿Why hasn't this client paid me in three months when they were supposed to pay me?
[00:32:11] Speaker A: ¿Right? You cannot imagine what things you can find when you run these reports.
¿Right, Joseph? So, and I love the. I love the analogy by the way for the house, like the explanation. I love that. ¿So, Joseph, where does technology help business owners gain better financial visibility and reduce confusion?
[00:32:33] Speaker B: Yeah, well, you know, you and I, we're all living in very amazing times, you know, And I'm referring to artificial intelligence.
Chat GPT is one of my favorites. I I have like, five or six different AIS that I use. But chat GPT is good for, like, the common person, somebody who's not a financial professional. So a business owner, you know, tells his bookkeeper or her bookkeeper, hey, run me my financial reports. You can run all the financial reports that we just talked about. ¿You can take all those financial reports and dump them into chat GPT and you can just tell, chatgpt, hey, how am I doing?
And it's going to read those financial reports in, like thirty seconds. And it's going to come back with feedback.
Well, there's technology giving you financial visibility and. And it does a very good job of it. It'll tell you from what I can see you're technically insolvent.
You thought everything was going well, but you find out you're technically insolvent. ¿Do you pick up the phone and call your bank and tell them, hey, i'm technically insolvent?
I'm in default of my loan covenant. Do you want me. ¿Do you want to call the loan who's going to do that? ¿Right? But like we have with Covid or an emergency of some kind, sometimes they can come to you and say, we need to see your financials because. Then they'll run it through their financial process and their financial tools and detect whether you're insolvent or you're nearing insolvency and just imagine having a huge loan with a bank that you rely upon to build your business. And then, all of a sudden, they tell you you're in violation of your loan covenant. And we have to call the loan. You may have a personal guarantee on it. You may have to sell your house. You have to take a mortgage on your house to pay the bank. So you need to use the technology that's available in conjunction with a financial advisor or financial professional to make sure that you're not running afoul of covenants. We have the loan companies, the banks or the loan company. Whoever making sure that you're going to make payroll and that you're good for the next twelve months.
¿Things like that, right?
[00:34:47] Speaker A: I love what you said about comparing the information and uploading information into chatGPT.
But remember, and if you're watching this show, prompting is the new skill.
If you prompt correctly to chatgpt or to Claude or whatever AI you're using, it will give you great insights about your business if you get the information from your accountant. So thank you, Joseph, for reminding, reminding us that we can use AI and technology for our leverage. So systems create visibility. Visibility creates better decisions. And better decisions are what allow entrepreneurs to move from survival mode into disciplined, intentional growth.
After the break, we will bring the conversation home. With practical steps, business owners can take to build wealth, improve profitability and create lasting financial freedom.
PORNO Media Television Si gamos con la conversacion de hoy.
Welcome back to el Inredientes Secreto de los Negocios. Stay connected to this show and every Now Media TV favorite live or on demand anytime you like download the free now Media TV app on Roku or iOS and unlock non stop bilingual programming in English and Spanish. ¿Are you on the move? Catch the podcast version at WWW Dot nowmedia DOT TV, from Business and News to Lifestyle, Culture, Entrepreneurship and beyond. Now Media TV is streaming around the clock. Ready whenever you are.
Welcome back to el Inredientes Secreto de los Negocios. Today, Joseph Reyes and I have been exploring how financial clarity, tax planning and strong systems help entrepreneurs more profitable and sustainable businesses.
In this final segment, we are connecting those ideas to the bigger goal helping business owners keep more of what they earn, build wealth, strengthen the business and create lasting financial freedom.
¿So, Joseph, what does it mean for a business owner to use financial intelligence to build real wealth?
[00:37:39] Speaker B: Yeah, this is. ¿This is where it all comes together, right?
Creating wealth is not accidental. To most business owners. I mean, you have to be intentional. I would have. I would venture to say that most people who go into business do it because not only do they love what they're doing. They like. Like the idea that they have. But at the end of the day, people go into business to make money, money to make a profit, and that profit is going to fuel their lifestyles people, they don't just go to work because they want to work, even though some people do. But they enjoy being paid for what they do.
So to be a business owner to, you know you, you have to use.
You have to be very focused on making a profit.
So that that profit can then fuel retirement, planning that boat. We talked about earlier, you know, college education for the kids, or opening up another business.
So it does require having the right financial advisors.
And financial advisors don't have to be the top of the line. Financial advisors, you can use bookkeepers, accountants, cpas, you know, financial planners, you know that are affordable for the average American.
And using financial professionals and people to help you think about what you're doing with the numbers of the business which then you use to build wealth as long as you're making a profit. But unless you have a financial bracket, a finance background of some kind, usually business owners really need somebody to assist them with watching the money and then using that money to build a lifestyle and to do whatever it is they want to do with that money. ¿That comes their way, right?
[00:39:23] Speaker A: So basically, you need to add that whenever you are opening a new business, or, you know, you are embarking in a new entrepreneurship. So make sure you do that.
How can entrepreneurs balance, growth, ambitions with disciplined cash flow management and profitability.
[00:39:45] Speaker B: So one thing that comes to mind is that I find a lot of people make a big mistake with. And I. I usually see this with young people.
I'm sixty eight. So I know better. But you have a business.
I know well, I hope so.
So But I. I think taking money out of the business too early, you know. One of the things I recommend people do is you're starting a business, you're a startup, you don't. Even if you're making a profit, do not take money out of the business to live off of. Take that money, reinvest it back in the business to create growth, to scale, try to live off of other money if possible. And if you're going into business really, you really shouldn't be going into business unless you have money saved up for living expenses at least for six to twelve months. ¿Right? And then if the business is making a profit, you can take some out. But one of the big mistakes I think is people are taking money out of the business when they really shouldn't be taking money out of the business. They should be investing it in new products or growth or financial professionals more employees, things of that nature. So having that discipline and and resisting the temptation to take money out of the business, leave the money in the business and keep pumping it and pumping until you get to a point where you and your financial advisors say, you know what things are going great, we're on track it is time to start cashing in.
So have that discipline.
[00:41:18] Speaker A: I love that.
¿So, Joseph, what mindset shift helps owners stop seeing accounting as a burden and start seeing it as a leadership advantage?
[00:41:32] Speaker B: Yeah. So I would say that a lot of us financial professionals are just as much to blame as the clients and the business owners that we serve. A lot of us just don't pitch if you will or recommend financial planning advice or tax planning advice.
And so business owners will see us as an expense that we need to control.
Whereas a really good forward looking accountant or forward looking financial professional will not only look at the what has happened, but also look at we should make these moves to increase wealth, to increase sales, to reduce expenses, to make the company more financially solvent, make it tighter.
Let's not throw money away. We don't have to throw money away.
And let's use this money to grow the company and to make it into what we want it to be. Instead of, you know, oh, accountants, they just this is an expense. That's a big mistake. And if your tax professional is not giving you or it's not at least telling you, hey, we should. We should do some planning here.
Then you might want to rethink who you're working with or at least go to your accountant and say, hey, I really want to do some planning, you know, because you may have a great accountant who's just, you know, you're not hearing them and they're trying to get your attention. It happens to me all the time. I pitch tax planning and people say, yeah, yeah, yeah, yeah. But then they're off to the beach right in the summertime and they're not meeting when they should be meeting to talk about next moves. So that they let's move forward and doing what we need to do to move the business forward and then, and when you move the business forward, you're moving your personal wealth forward.
So that's what. That's the mindset that business owners have to have. Don't look at accountants and financial professionals that just as an expense, look at us as value. We're providing value and that will that will bring dividends that you can't even imagine.
[00:43:35] Speaker A: Yeah, definitely. I agree with you. One hundred percent, Joseph. ¿What is one practical step viewers can take this week to begin making smarter financial decisions?
[00:43:51] Speaker B: I know it's a summer. I know it's August.
But I would say this is a great time to talk to your accountant or financial advisor and say, hey, let's talk about where we are and what the rest of the year is going to look like accountants. Right now we're in that sweet spot where the tax deadlines. You know, we're in between tax deadlines. We have a little bit of time that we can relax. A little bit.
¿But now's a good time to get on your accountant's calendar and say, can we talk about what this year is looking like? ¿I know we got to talk about tax returns and all that, but can we talk about what this year is looking like and what can we do to make this year better than last year?
That one thing alone will pay dividends. That's my strongest recommendation.
Get with your financial advisor, whether it's an accountant, a financial plan or whatever, to talk about the next five months of the year before Thanksgiving. Because when Thanksgiving comes, you know what happens. ¿Things start to slow down in the business community, right?
[00:44:52] Speaker A: Exactly.
¿Joseph, what advice would you give to a business owner who feels overwhelmed behind or uncertain about their financial position?
[00:45:05] Speaker B: Yeah, that advice is again. Hire the right financial help. You know, Don't be afraid to hire that help. Now, people come to me, for instance, and I'm sure they come to you also, and we can give them advice that can unlock money for them. Maybe they're making estimated tax payments that they shouldn't be making.
You know, you make an estimated tax payment to the IRS. Guess what then you realize. Well, I shouldn't have. I didn't really have to make that payment.
You can't get it back until next year when you file your tax return.
¿Now, people don't know those rules, right? Maybe that estimated tax payment can be delayed. Maybe you don't need to make it. Now, you got that extra money that you can use to hire a bookkeeper, hire another waiter, a waitress, or hire another help, you know, or, you know, buy more stock. You know, just it can be used for all kinds of things. So my advice is get with your advisor now and start planning because you'll be surprised you he might, we might take the pressure off of you. So then you're not feeling overwhelmed. ¿Maybe you can get a good night's sleep for once, right?
And that good night sleep can help you get make a good decision when you wake up the morning, you may have a great idea that hits you because You had a good night's sleep. ¿And I. Oh, you know why didn't I think of, you know? So it all comes together. And. And by the way, avoid sugar. It messes up your brain, but yeah. So hire the right financial help now, Joseph.
[00:46:34] Speaker A: Yes, now, please.
¿So, Joseph, for viewers who want to learn more, how can they connect with you?
[00:46:43] Speaker B: My website is my best place raiseaccounting Dot Com. Very easy.
Has all my contact information.
Lot lots of content in there. So it's just very simple. We Don't have a YouTube channel yet, but we're working on it. But I always. I always steer people to the old way of my website. Reyesaccounting Dot Com.
[00:47:04] Speaker A: Well, Joseph, thank you for joining. Joining us on el inredientes secreto de los negocios. This conversation reminds us that the the secret ingredient of business is not one isolated tactic. It is the discipline to understand your numbers, plan proactively, eliminate blind spots and use financial strategy to support better decisions to everyone watching. Building a profitable business does not happen by accident. It happens when clarity strategy and execution work together.
I am ol gurtado and this is el inrediente secreto de los negocios. Thank you for watching.
