The Educational Accountant: Learning to Minimize Your Tax Bill featuring David Encarnacion with Daycare AccountingPRO

Full Transcript

[00:00:00] Intro: Tell me your story.

[00:00:01] Intro: Tell me your story.

[00:00:02] John Kelley: How did it all start?

[00:00:03] John Kelley: Do you remember?

[00:00:04] John Kelley: Oh, I know what happened.

[00:00:04] John Kelley: How did it stop?

[00:00:06] David Encarnacion: You're now tuned Intro the Small Business Origins podcast.

[00:00:10] David Encarnacion: I love an origin story.

[00:00:11] David Encarnacion: Each week, we dive into the real stories of entrepreneurs and businesses from across the nation.

[00:00:17] David Encarnacion: Louisian, what's his origin story?

[00:00:18] David Encarnacion: Who started with just an idea, and they're now making waves.

[00:00:21] David Encarnacion: I told you this was a good idea.

[00:00:23] David Encarnacion: This is Small Business Origins.

[00:00:30] Intro: Yeah.

[00:00:31] Intro: What's up, everybody?

[00:00:32] Intro: Welcome back to another episode of Small Business Origins.

[00:00:35] Intro: I'm your host as always, John Kelly aka John the marketer on Instagram and TikTok, and you're tuned in.

[00:00:41] Intro: It's our nationwide search.

[00:00:42] Intro: We're looking for entrepreneurs that have a story to tell.

[00:00:45] Intro: And joining us virtually in the studio from New York City, I've got David Encarnacion with day care accounting pro.

[00:00:51] Intro: David, welcome to the show, man.

[00:00:53] John Kelley: Thanks so much, John.

[00:00:54] John Kelley: I appreciate it.

[00:00:55] John Kelley: I appreciate what you're doing for the entrepreneurs with, sharing this platform and trying to get these stories out there.

[00:01:02] John Kelley: Keep up the good work.

[00:01:03] Intro: Man, I love it.

[00:01:04] Intro: Every single episode, there is just some really cool stuff that I run across.

[00:01:08] Intro: You know, we were chatting prior to the show about yesterday's episodes were just so heavy with this guy that at 17, had a brain tumor.

[00:01:17] Intro: Kelley it wasn't cancerous, but when he had surgery to get it removed there's a 1% chance he goes blind.

[00:01:22] Intro: Boom.

[00:01:22] Intro: It happens to him.

[00:01:23] Intro: He goes blind, you know, and then this, lady that I had on the show, she gets hit by a car, like car versus pedestrian, injured in chronic John, and, you know, finds her way to kinda deal with that stuff and open up her own entrepreneurship into CBD and finding, you know, these alternative ways to cure her pain.

[00:01:41] Intro: And it's like there's some crazy stories you come across, and then there's just some people you start talking to them and you just find out, like, that entrepreneurial spirit is so real.

[00:01:49] Intro: And you don't need a crazy war story prior to opening your business to be able to tell an excellent story.

[00:01:56] Intro: Like, some business owners are just out here on the grind for a reason trying to do something different than their competitors doing, and I love hearing those stories too.

[00:02:04] Intro: So it's everything in between, and I can't wait to unpack what your story is because as you know, I don't know much of your story prior to this, so I don't know what we're gonna talk about, but I enjoy it.

[00:02:13] Intro: But we have to start out with our icebreaker question.

[00:02:15] Intro: Every single episode, we start out with 1.

[00:02:17] Intro: Today's icebreaker is pick your favorite decade and tell us why.

[00:02:22] John Kelley: Favorite decade was 19 eighties.

[00:02:24] John Kelley: In the eighties, I was going through high school.

[00:02:26] John Kelley: We had the hip hop era.

[00:02:28] John Kelley: Love music.

[00:02:30] John Kelley: It was a time when, I was transitioning from high school and into college where I became a club kid in New York.

[00:02:37] John Kelley: So if you ever heard of a club kid, means that we went to every club in New York City.

[00:02:43] John Kelley: And back then, all the all the clubs, discotheques, I wanna call them that, they used to choose certain people how do you who gets in.

[00:02:53] John Kelley: And it got to the point where we were on every list.

[00:02:56] John Kelley: We just walk into these clubs.

[00:02:58] John Kelley: We met all these celebrities.

[00:02:59] John Kelley: We have a bunch of fun.

[00:03:01] John Kelley: We went to all these different parties.

[00:03:03] John Kelley: And that period of time is when I really exploited my youth, and I have fun.

[00:03:08] John Kelley: So I can tell you now, in 54, I can tell you that I have no regrets, especially during the eighties.

[00:03:17] John Kelley: I lived that life.

[00:03:18] Intro: I mean, that's the stuff they wrote movies about that.

[00:03:22] Intro: You know?

[00:03:22] Intro: I mean, like, that was the that's the kind of stuff you see in New York City TV shows and movies and all that kind of stuff about that life.

[00:03:29] Intro: You know?

[00:03:29] Intro: It's not something I ever lived because I've only been to the big city once, but it's definitely something that I've heard about.

[00:03:35] Intro: And, Yeah.

[00:03:36] Intro: I would have loved to experience something like that.

[00:03:39] Intro: I definitely don't hate the way that I grew up and where I grew up and all that kind of stuff.

[00:03:43] Intro: But New York City was always a bucket list for my wife and I because we knew we wanted to go experience because it's so different there than it is anywhere else in the world, even in the city of Houston.

[00:03:54] Intro: You know?

[00:03:55] Intro: So it's like even though it's a big city versus a big city, it's still a very different type of big city when you go to New York, man.

[00:04:01] Intro: It's it's mind blowing.

[00:04:02] Intro: And if our listener hasn't been, definitely a trip you have to plan because there's just everything you wanna do there.

[00:04:08] Intro: You know, as a firefighter for me, it was the World Trade Center Museum.

[00:04:12] Intro: It was visiting the fire stations, you know, and doing a lot of kind of the first responder based stuff, but then everything else that you get to see there is just mind blowing.

[00:04:20] John Kelley: And even as

[00:04:21] Intro: a New Yorker John in 88.

[00:04:23] John Kelley: And even as a New Yorker, there's so much to do here.

[00:04:26] John Kelley: You can't do it all.

[00:04:28] John Kelley: So, you know, within a 10 book radius, there are 10 museums, if you like museums.

[00:04:33] John Kelley: That's a lot of information for you to consume within a period of time.

[00:04:38] John Kelley: And, you know, there are places my son, he goes out a lot, and he's always telling me, dad, have you heard about this place?

[00:04:43] John Kelley: I'm like, no.

[00:04:44] John Kelley: Because it's constantly evolving, constantly changing.

[00:04:49] John Kelley: Now there are no more clubs.

[00:04:50] John Kelley: Now they're called lounges.

[00:04:52] John Kelley: Now there are more Yeah.

[00:05:01] Intro: Yeah.

[00:05:01] Intro: I was born in 88, so I didn't get to experience the eighties.

[00:05:05] Intro: I think it is something I probably would have loved.

[00:05:08] Intro: Just the way I was raised, the parents that I had, I've always loved good music, and it's been a range of things.

[00:05:15] Intro: I was born to be a DJ, which is why I own a company that does that stuff now because I I DJ'd for a lot of my life, and I love all music.

[00:05:23] Intro: So I think seventies eighties was some of, like, the biggest music revolutions we've ever had in our lives.

[00:05:29] Intro: But I will say the nineties kind of continued that really, really nice hip hop transition and change that was occurring.

[00:05:37] Intro: And so there's a lot of really good rap that I was introduced to as a child that came out in the nineties, and I thoroughly enjoyed the nineties.

[00:05:46] Intro: And I think that our country was kind of in a really cool place in that period of time, man.

[00:05:50] Intro: A lot more harmony.

[00:05:51] Intro: You know, it started getting bad, and then 911 happened, and then it's like our country came together even harder.

[00:05:57] Intro: And I just feel like the nineties and early 2000 were such a period of just unity in America versus the divisiveness we kinda start to get into now.

[00:06:08] Intro: So I know we always wanna live in the past, but I just feel like I'd love to go back to those days where things seem so simpler.

[00:06:14] John Kelley: But Totally agree.

[00:06:16] Intro: Awesome, man.

[00:06:16] Intro: Well, we are here to talk about David.

[00:06:19] Intro: So where did you come from?

[00:06:21] Intro: How'd you get into entrepreneurship?

[00:06:22] Intro: I always ask, man.

[00:06:23] Intro: What's your origin story?

[00:06:24] Intro: Okay.

[00:06:25] John Kelley: I was born in the Dominican Republic.

[00:06:27] John Kelley: My mother was a interpreter at the American Embassy.

[00:06:31] John Kelley: And when she passed away, I was imported here into the US to live with my father.

[00:06:38] John Kelley: I have 5 brothers, 1 sister.

[00:06:41] John Kelley: 2 of them are cops.

[00:06:43] John Kelley: 1 is a MMA trainer.

[00:06:46] John Kelley: The girl, she's an artist.

[00:06:49] John Kelley: The other one, what does he do?

[00:06:51] John Kelley: He's a residential manager in the building.

[00:06:55] John Kelley: So pretty much, we were a close knit family.

[00:06:59] John Kelley: We grew up in the same household.

[00:07:02] John Kelley: When I went into high school, that's when everything began to change.

[00:07:10] John Kelley: I started looking for different avenues, what to do.

[00:07:14] John Kelley: We had a radio show at a college.

[00:07:16] John Kelley: We were doing a lot of parties back in the eighties.

[00:07:22] John Kelley: We were getting involved with a lot of things that were basically programming us to where we are right now or to who I am right now.

[00:07:31] John Kelley: When I was in college, I used to drive a cab in the evening, go to school during the day, drive a cab in the evening.

[00:07:38] John Kelley: The last time I've always been a self employed or a 1099.

[00:07:42] John Kelley: The last time I received a w two, I had to be maybe 18.

[00:07:48] John Kelley: So back then, when you were in high school, you had to get your working papers.

[00:07:52] John Kelley: So I got my working papers, and I started working in a supermarket, getting $3.35 an hour.

[00:08:01] John Kelley: That's amazing when I think about that.

[00:08:03] John Kelley: Then, I found another place that was paying more.

[00:08:06] John Kelley: They were paying $5 an hour, but it was in one of these meat warehouses.

[00:08:10] John Kelley: But you had to, you know, carry cabs, frozen cabs from the truck into the freezer.

[00:08:18] John Kelley: And, you know, as a 16 year old, it became overwhelming for me because these things are heavy, and I wasn't built for that yet.

[00:08:27] John Kelley: Then finally, I went to college.

[00:08:29] John Kelley: I got accepted to Ohio University, and my father refused to pay because it once again, my father was a doorman.

[00:08:37] John Kelley: He drove a cab, and he had those type of funds.

[00:08:40] John Kelley: And I ended up going to City College, local community college.

[00:08:45] John Kelley: I started as an engineer.

[00:08:47] John Kelley: I missed one math class.

[00:08:49] John Kelley: And the last thing I remember, we were working with numbers.

[00:08:52] John Kelley: When I came back, we were working with symbols.

[00:08:55] John Kelley: So I was totally lost and had to withdraw.

[00:08:59] John Kelley: And then my GPA, fell down to, like, 2 point o because once again, it's eighties, heavy party.

[00:09:07] John Kelley: The dean called me in.

[00:09:09] John Kelley: I mean, David, if you know, we have to expel you if you don't pick it up.

[00:09:13] John Kelley: And that was it.

[00:09:14] John Kelley: And from then on, I hit the books, and I finished up with the, 3.2, GPA.

[00:09:21] John Kelley: Made the dean's list.

[00:09:23] John Kelley: The day after I the day of my graduation, I moved into my new place.

[00:09:29] John Kelley: So, technically, if you wanna look, I did everything the way I was supposed to as a child.

[00:09:34] John Kelley: Bench cards.

[00:09:35] John Kelley: Next day, moved out.

[00:09:37] John Kelley: And when I moved out, I was I was working.

[00:09:40] John Kelley: I had my business.

[00:09:40] John Kelley: I had a, a window cleaning business, and I was a bartender at one of these bars in Manhattan.

[00:09:46] John Kelley: I was doing pretty Kelley was getting tired of it after a while.

[00:09:52] John Kelley: Then I had some friends that went to school with me.

[00:09:55] John Kelley: They became stockbrokers.

[00:09:57] John Kelley: And, you know, you have 22 year olds, 23 year olds making $20 a month.

[00:10:02] John Kelley: So if you could do it, I can do it.

[00:10:04] John Kelley: So I became a stockbroker, and that was the hardest training I've ever had.

[00:10:09] John Kelley: I worked from 7 to 7, Monday through Friday.

[00:10:14] John Kelley: And on Thursdays, I would Tuesdays Thursday, I would stay till 9, and on Saturdays, 10 to 2.

[00:10:20] John Kelley: And my weekly pay was $200 a week.

[00:10:24] John Kelley: And the reason they do that is they wanna sort through they want the top 1%.

[00:10:30] John Kelley: And I started with about a 100 guys.

[00:10:32] John Kelley: At the end of the training, they were maybe 5 because some couldn't probably take the because you have to make $400 a day.

[00:10:40] John Kelley: So you have to deal with rejection.

[00:10:41] John Kelley: If you can't deal with rejection, that's not the job for you.

[00:10:44] John Kelley: So we went through those 400 dials.

[00:10:46] John Kelley: If you weren't able to make that, you were out.

[00:10:50] John Kelley: Then you had to pass the series 7 exam, which is the 3rd hardest in the nation, and they gave us a month to study.

[00:10:57] John Kelley: So after work, we will go to the library.

[00:11:00] John Kelley: There was a there's a library called in Baruch College where they were open to midnight.

[00:11:05] John Kelley: So a group of us that were in the training class would go there study, study, study, study.

[00:11:09] John Kelley: I took exam.

[00:11:10] John Kelley: First time I failed with a 69.

[00:11:12] John Kelley: Passing is a 70.

[00:11:13] John Kelley: I was like, oh my god.

[00:11:15] John Kelley: I said, alright.

[00:11:16] John Kelley: It's a done deal next year.

[00:11:18] John Kelley: So I scheduled it for the next month, and I passed it, and I was in.

[00:11:21] John Kelley: And then I started working as a stockbroker.

[00:11:24] John Kelley: And, I started developing a certain niche within the business where I was dealing with institutions because I got a referral from someone.

[00:11:34] John Kelley: And the first account that I had, institution, was the Lowe's Corporation, and they're worth over a 100,000,000,000, and that came through some contacts.

[00:11:43] John Kelley: Then as I developed, I started working with Spanish speaking clients, and they were coming in.

[00:11:49] John Kelley: Their first stop was Miami.

[00:11:50] John Kelley: So I said, hey.

[00:11:51] John Kelley: Let's go down to Miami.

[00:11:52] John Kelley: So I looked for a firm down there, and this is how I fell into accounting.

[00:11:57] John Kelley: I go down there, and, they give me a signing bonus.

[00:12:03] John Kelley: Give me a signing bonus, start doing business.

[00:12:06] John Kelley: Then 911 hit.

[00:12:09] John Kelley: And this is one advice to that I have for anyone that's an investor, a young investor, is to be careful with margin.

[00:12:17] John Kelley: So margin is when you purchase stock at half the price.

[00:12:20] John Kelley: Actually, you put up half the money, and you borrow the remainder.

[00:12:25] John Kelley: But what happens when that stock goes the other way?

[00:12:29] John Kelley: You get these margin calls.

[00:12:31] John Kelley: So you have no idea how difficult it is to write a check for $200,000 to cover a margin call.

[00:12:37] John Kelley: And if you don't, they sell all your stock.

[00:12:40] John Kelley: And during 911, I remember we were in, our sales meeting, and it was early in the morning.

[00:12:48] John Kelley: And after we left the meeting, everyone went to their office.

[00:12:50] John Kelley: So we had TVs all over the place, and we saw the the planes crashing into 911, into the buildings.

[00:12:59] John Kelley: And I thought it was a replay.

[00:13:02] John Kelley: What I was actually seeing was the 2nd plane hitting the towers.

[00:13:07] John Kelley: It got so bad that I I just left home.

[00:13:09] John Kelley: So I'm going home.

[00:13:11] John Kelley: But the market start stopped trading.

[00:13:14] John Kelley: And when we went back, we had some losses that I have never experienced.

[00:13:21] John Kelley: So a lot of people, a lot of brokers, suffered a lot.

[00:13:25] John Kelley: Some contemplated suicide.

[00:13:27] John Kelley: Because, you know, I lost a fortune.

[00:13:29] John Kelley: At least a fortune to me.

[00:13:30] John Kelley: For some people, you know, a couple 100,000 is nothing.

[00:13:33] John Kelley: But, you know, when you lose you know, it cost $1,000,000 in the stock market, you feel that pain, and you feel like you have to start all over.

[00:13:41] John Kelley: And I said, this is for me.

[00:13:46] John Kelley: I was crushed, and that's one of the things I regret because I should've stayed, but I was crushed.

[00:13:53] John Kelley: Then I said, okay.

[00:13:54] John Kelley: I started a a mortgage company.

[00:13:57] John Kelley: Started doing mortgages.

[00:13:58] John Kelley: Everything was going well.

[00:13:59] John Kelley: Then we then I started a a partner, a real estate company.

[00:14:02] John Kelley: Everything was going well.

[00:14:04] John Kelley: Then 2008 comes along.

[00:14:06] John Kelley: The market crushes us again.

[00:14:09] John Kelley: Like, oh my god.

[00:14:12] John Kelley: Again?

[00:14:12] John Kelley: Okay.

[00:14:14] John Kelley: So then during that period of time, when I left the firm because of the sign bonus, there was some accounting error that happened where I received the 10.99 actually, no.

[00:14:28] John Kelley: I received the tax bill from the IRS because, apparently, my accountant screwed things up, and they wanted me to pay them $75,000.

[00:14:34] John Kelley: I was like, what was this from?

[00:14:36] John Kelley: And I tried to explain it to them, find a higher than account, And that accountant, I was shuffling their feet.

[00:14:44] John Kelley: So it got to the point that I was so frustrated because you get these notices John the IRS, and they cause so much anxiety and fear.

[00:14:52] John Kelley: I said, you know what?

[00:14:53] John Kelley: Let me speak to them.

[00:14:54] John Kelley: So I started speaking to them, and I basically got the work done, and I was able to negotiate it down to 16,000.

[00:15:01] John Kelley: So that was a huge burden off my shoulders.

[00:15:04] John Kelley: And the owner of the firm, when he became wind of it, said, David, would you like to work here?

[00:15:09] John Kelley: I'm like, sure.

[00:15:10] John Kelley: So I started working as a tax repairer accountant.

[00:15:14] John Kelley: I was there for about 10 years.

[00:15:18] John Kelley: And when it got to the point where everyone in the office, including the owner, were coming to me, asking me questions about certain tax strategies.

[00:15:26] John Kelley: I said to myself, I need to do this on my own.

[00:15:29] John Kelley: So I went on my own, and we started targeting construction companies.

[00:15:34] John Kelley: We started targeting construction companies because accountants, they shy away from that because it's very the accounting is very overwhelming.

[00:15:43] John Kelley: There's a lot of things to track, and the taxes are very difficult to prepare.

[00:15:48] John Kelley: So if you don't wanna do it, I'll do it.

[00:15:51] John Kelley: So I went after it.

[00:15:52] John Kelley: And then my day care business in day care business started increasing.

[00:15:58] John Kelley: All these day cares started coming to us, and we started developing relationships.

[00:16:03] John Kelley: And I came to realize that that's the industry that's suffering the most, and they're suffering the most for very simple reasons and very simple fixes.

[00:16:13] John Kelley: But like I tell my clients, and you'll see on TikTok, YouTube, all these TikTokers.

[00:16:20] John Kelley: They're pushing.

[00:16:21] John Kelley: Open an LLC.

[00:16:22] John Kelley: It's easy.

[00:16:23] John Kelley: You can do it in 5 minutes.

[00:16:24] John Kelley: It's great.

[00:16:26] John Kelley: And I'm not hating on them, and I appreciate what they do.

[00:16:29] John Kelley: I just wish that they would also talk about the tax consequences of opening an LLC.

[00:16:36] John Kelley: Because if these business owners knew that, they can make a determination as to what's the best fit for them.

[00:16:44] John Kelley: It's it's not frightening to me, but it's upsetting when a client is sitting across the across the table from me and I could pay the tax return, and they have this huge tax bill, and they ask me why.

[00:16:55] John Kelley: The reason why is because you created this LLC, but you didn't choose a tax structure.

[00:17:00] John Kelley: If you want to an LLC is a disregarded entity, quote, unquote, according to the IRS.

[00:17:06] John Kelley: If you Google disregarded entity, LLC is gonna pop up.

[00:17:10] John Kelley: IRS doesn't care about that.

[00:17:12] John Kelley: All they wanna know is how will I tax you?

[00:17:16] John Kelley: Am I gonna tax you as a sole proprietor, s corp, c corp partnership?

[00:17:20] John Kelley: And if you don't make that election, the IRS automatically defaults to the highest tax, hence, these LLCs.

[00:17:29] John Kelley: So when they get here, then we have to make adjustments, and I'm able to fix it and get them on the right path.

[00:17:34] John Kelley: But I just wish they could, fix that.

[00:17:37] John Kelley: And part of all of that led me to where I am now.

[00:17:43] John Kelley: Just constantly hustling, constantly looking for avenues.

[00:17:47] John Kelley: Last year, we rebranded, and we went to the day care counseling pro servicing.

[00:17:52] John Kelley: There's a division of our system that services the daycare industry.

[00:17:56] John Kelley: Because if I were to tell you, I would say about 75% of the day care owners or child care owners right now that we've spoken to, 75% have the wrong tax structure, and that's why they're paying so much tax.

[00:18:15] John Kelley: You know, it it's disheartening to know that these child care providers, they're afraid of income.

[00:18:26] John Kelley: Today, there was a post where someone posted on a because I'm in these different, chat groups.

[00:18:32] John Kelley: The person posted that, she pays so much tax because she received so much grant money.

[00:18:38] John Kelley: So during the pandemic, the government was sharing and giving grants to childcare owners, and some didn't know exactly what to do with it.

[00:18:49] John Kelley: So that money is taxable.

[00:18:51] John Kelley: And there are some because they had to pay tax because they, again, they were the wrong tax structure.

[00:18:57] John Kelley: They were complaining.

[00:18:59] John Kelley: And, you know, it's all a matter of mindset because I wanna pay personally, and I posted it.

[00:19:05] John Kelley: It says, listen.

[00:19:07] John Kelley: I wanna pay $10,000,000 in tax.

[00:19:09] John Kelley: Because if I'm paying $10,000,000 in tax, I'm producing a 100.

[00:19:14] John Kelley: So paying the tax is not the issue.

[00:19:16] John Kelley: You have to look at the revenue.

[00:19:17] John Kelley: If you bring it in revenue, that's what you want.

[00:19:20] John Kelley: We're all in business to bring in revenue.

[00:19:23] John Kelley: So if the IRS or whoever the government is giving you a 100, a $150,000 in grants, how can you say no to that?

[00:19:30] John Kelley: And you will be surprised how many, childcare owners on that thread regretted getting the money, will not do it again, and I'm just in awe because it's free money.

[00:19:43] John Kelley: I wish I can get $200,000.

[00:19:46] John Kelley: Well, I'll pay tax on it.

[00:19:48] John Kelley: I'm sure you'd agree if if I gave you a $100,000 and I told you you're gonna pay 20,000 in taxes, would you take it?

[00:19:55] John Kelley: Everyone would all day.

[00:19:57] John Kelley: But it's so disheartening that that's happening.

[00:19:43] John Kelley: I wish I can get $200,000.

[00:19:46] John Kelley: Well, I'll pay tax on it.

[00:19:48] John Kelley: I'm sure you'd agree if if I gave you a $100,000 and I told you you're gonna pay 20,000 in taxes, would you take it?

[00:19:55] John Kelley: Everyone would all day.

[00:19:57] John Kelley: But it's so disheartening that that's happening.

[00:20:01] John Kelley: And one of our focus is to educate the 856,000 childcare owners in the US where we can show them how they can use bookkeeping, payroll, and taxes as a tool to increase their business and pay less tax.

[00:20:20] John Kelley: Everyone, you know, talks about, without naming any names, all these companies and individuals that are paying 0 in taxes or or very little.

[00:20:29] John Kelley: Well, guess what?

[00:20:30] John Kelley: That's what you should be following.

[00:20:31] John Kelley: Don't hate on them.

[00:20:33] John Kelley: Find out what they're doing that you could be doing.

[00:20:36] John Kelley: The IRS gives us a road map.

[00:20:38] John Kelley: They want us.

[00:20:39] John Kelley: They'll encourage us us.

[00:20:40] John Kelley: They encourage us to avoid paying tax.

[00:20:44] John Kelley: So if you have the same ability, just use it.

[00:20:48] John Kelley: You know, there's so many from putting your kids on payroll, using a 100% bonus depreciation.

[00:20:57] John Kelley: What's the other one?

[00:20:58] John Kelley: There's so many.

[00:21:00] John Kelley: The point is you the strategies are there, and most people in general, they think about tax prep.

[00:21:07] John Kelley: I need to get my taxes done.

[00:21:09] John Kelley: No.

[00:21:10] John Kelley: You need tax planning.

[00:21:11] John Kelley: You need to find out what you need to do to pay zero tax.

[00:21:16] John Kelley: But no one is basically talking about that, and I am.

[00:21:21] John Kelley: So it's more of a tax advisory business that we have where we share the knowledge.

[00:21:28] John Kelley: You know, I had a friend yesterday.

[00:21:30] John Kelley: The guy that I, went to his wedding over the weekend.

[00:21:33] John Kelley: We were discussing before.

[00:21:34] John Kelley: I told him what I do.

[00:21:35] John Kelley: He tells him, why are you giving away all that info?

[00:21:37] John Kelley: Is she charged for this?

[00:21:38] John Kelley: I give it away.

[00:21:39] John Kelley: Because you know what?

[00:21:40] John Kelley: They're gonna try it themselves.

[00:21:42] John Kelley: It's gonna become overwhelming, then they're gonna end up calling me because they know what I'm doing.

[00:21:46] John Kelley: And the information that I give, I give free ebooks.

[00:21:50] John Kelley: I give I do webinars, podcasts.

[00:21:53] John Kelley: It's all free with the intent of educating the taxpayer because the education is critical.

[00:22:01] John Kelley: And the more knowledge that a taxpayer knows or has, the easier my job is because then we could talk the lingo, then we could talk about other things.

[00:22:09] John Kelley: Like, I had clients this year.

[00:22:10] John Kelley: Talk to me, David, I wanna open a trust.

[00:22:12] John Kelley: I said, wait.

[00:22:13] John Kelley: Before we talk about that, that's a great idea.

[00:22:16] John Kelley: We first have to master the bookkeeping.

[00:22:18] John Kelley: Because if we can't master the simple, the basics, there's no way I'm gonna talk to you about trust.

[00:22:23] John Kelley: Because if we can't do this, how are we gonna do that?

[00:22:27] John Kelley: So these type of situations arise, and it's our job to help the childcare industry overcome

[00:22:33] Intro: them.

[00:22:33] Intro: Yeah.

[00:22:34] Intro: I I love that.

[00:22:34] Intro: So are you just kind of, you know there's so many different ways you can do this type of service for a a company.

[00:22:42] Intro: So I'm curious exactly how you're carrying this out.

[00:22:45] Intro: So if I'm a day care and I wanna start doing business with you, is this a coaching thing?

[00:22:49] Intro: Is it over Zoom or some type of video call?

[00:22:52] Intro: Is it a software you have?

[00:22:54] Intro: What does it look like to be your client?

[00:22:55] John Kelley: There's different options.

[00:22:57] John Kelley: There's the the most popular we have a package where we do your bookkeeping.

[00:23:02] John Kelley: We provide you the profit and loss and balance sheet every month along with the video.

[00:23:06] John Kelley: And the video is critical because it's a form of education.

[00:23:10] John Kelley: The video will break down the profit and loss.

[00:23:13] John Kelley: The bookkeeper will do that video, and they'll explain our findings and what our concerns are so that it doesn't follow through to the next month.

[00:23:21] John Kelley: We do their, taxes, personal and business, and we do their payroll if they choose.

[00:23:27] John Kelley: So those are 3 services within that package.

[00:23:30] John Kelley: Then we also have individual services.

[00:23:32] John Kelley: But if you just wants to do your taxes, we can do that.

[00:23:34] John Kelley: If you just wants to do the bookkeeping, we can do that as well.

[00:23:37] John Kelley: If you need tax planning, we can do that as well.

[00:23:40] John Kelley: So all of our clients that are we have clients in 36 days.

[00:23:47] John Kelley: So, obviously, we can't sit face to face.

[00:23:50] John Kelley: So what we do is we have a secure portal with a 500 plus bit encryption.

[00:23:56] John Kelley: Clients are able to upload their documents.

[00:23:58] John Kelley: We we prepare the return, then we schedule an appointment for Zoom.

[00:24:02] John Kelley: John the Zoom, from my understanding, I haven't seen anyone do it yet.

[00:24:06] John Kelley: We're the only ones that we do a share screen.

[00:24:08] John Kelley: So I share the screen of the tax return, and I go line by line explaining what each line is and how it's affecting the return.

[00:24:17] John Kelley: And then depending on what situation we have, I go back into the w two and I make changes.

[00:24:24] John Kelley: One of my, popular changes is if you were to put $21,000 into your 4 zero one k, you will pay less tax.

[00:24:34] John Kelley: That's huge.

[00:24:35] John Kelley: That's something everyone should be taking advantage of.

[00:24:37] John Kelley: So I have clients says, no.

[00:24:38] John Kelley: I added an extra $100 to be taken out of my pay for taxes.

[00:24:44] John Kelley: Why you pay more taxes?

[00:24:45] John Kelley: Pay yourself.

[00:24:47] John Kelley: Put that money into the 401 k, and you don't have to add any more tax.

[00:24:52] John Kelley: So these type of situations, always arise.

[00:24:55] John Kelley: There was

[00:24:57] John Kelley: client that, he had 451,000 he was gonna pay $60,000 in tax.

[00:25:04] John Kelley: I told him, listen.

[00:25:05] John Kelley: Put 61,000, because as a business owner, you could put $61,000 into a SEP, SEP IRA, and get a deduction.

[00:25:13] John Kelley: That's John put 61,000 into the SEP, and his tax bill went from 60 to 40.

[00:25:20] John Kelley: Saved $20,000.

[00:25:22] John Kelley: So I told him, pay yourself.

[00:25:23] John Kelley: Don't pay the tax.

[00:25:25] John Kelley: Put the money away and pay yourself.

[00:25:26] John Kelley: It's a win win.

[00:25:28] Intro: Yeah.

[00:25:28] Intro: Those are the kind of secrets that I need in my life.

[00:25:31] Intro: What, so is there, like, a minimum income that a company needs to be making to type me type thing.

[00:25:44] John Kelley: Our clients range anywhere between gross income of 50,000 to several million.

[00:25:49] John Kelley: So it Kelley doesn't matter.

[00:25:50] John Kelley: It's just you you're at a different stage where you have where you will need different strategies, but we service pretty much anywhere between 50 to several million.

[00:26:03] Intro: Gotcha.

[00:26:03] Intro: Are you just, you know, niched down into daycares, but you accept everyone as a client that has a business, or are you really just looking to target day cares right now?

[00:26:12] John Kelley: Right now, we target day cares, but we also have physicians, restaurants, construction companies.

[00:26:19] John Kelley: We have different industries, but our focus is on the child care industry.

[00:26:25] John Kelley: But we have clients that come to us where we are able to service them.

[00:26:32] John Kelley: It doesn't matter.

[00:26:32] John Kelley: It's just our niche.

[00:26:34] John Kelley: We're targeting, childcare industry, but we service everyone.

[00:26:38] Intro: Absolutely.

[00:26:41] Intro: So are you just offering the accounting services and the tax preparation and tax, you know, planning services, or are you looking more into, like, some of that financial advisement as well where, you know, you're helping with investments and stuff?

[00:26:56] Intro: Because it sounds like there's kind of a it's all kinda gray area connected.

[00:27:00] Intro: Right?

[00:27:00] Intro: Because like you said, if I can invest into some of these IRAs or 401 k's, it's gonna help my tax bill.

[00:27:06] Intro: So is it just stuff that's closely tied to taxes, or are you helping with some financial planning as well?

[00:27:12] John Kelley: I do help with the financial, strategies because I used to be a stockbroker.

[00:27:16] John Kelley: But since I don't have my license anymore, I can't really sell we'll use the word sell or advise on certain situations.

[00:27:25] John Kelley: I have a partnership with a securities firm where if I see a situation where the client needs some help, I would let them know.

[00:27:32] John Kelley: I'm gonna have, a friend, Mike, give you a call.

[00:27:37] John Kelley: He works at this firm, and he's gonna discuss the best scenarios for you.

[00:27:41] John Kelley: In the meantime, I usually tell him exactly what they should be looking for and what could be done.

[00:27:45] John Kelley: And I also prep Mike Mike.

[00:27:46] John Kelley: This is what I think you should do.

[00:27:47] John Kelley: But you're a professional.

[00:27:49] John Kelley: You may have something else.

[00:27:50] John Kelley: Because the financial, planning, it's like our DNA.

[00:27:55] John Kelley: It's different for everyone.

[00:27:56] John Kelley: So we have to find out what the client objectives are and find something that's ideal for them.

[00:28:03] John Kelley: And every year, you have these new products or new bells and whistles, and we're able to find those and offer it to the client.

[00:28:11] John Kelley: But, primarily, Mike will take care of that through our partnership with the securities company.

[00:28:16] Intro: Gotcha.

[00:28:17] Intro: Do you have a specific software or anything that you prefer clients use for keeping up with their own accounting that you can access and take care of their account?

[00:28:25] John Kelley: We pretty much use QuickBooks, and QuickBooks is basically the stable in accounting.

[00:28:30] John Kelley: They're different softwares, and sometimes they're specific to some industries.

[00:28:36] John Kelley: Like, there's Xero.

[00:28:39] John Kelley: There's some that are specific for nonprofits.

[00:28:42] John Kelley: There's some that are catering to construction companies.

[00:28:45] John Kelley: But QuickBooks is pretty much the general format.

[00:28:49] John Kelley: And once with the day cares, once we set up the chart of accounts and we have the category set up, it's pretty much the same for every one of them with very little subtle differences.

[00:29:01] John Kelley: But once we are able to do that and develop that system, then everyone is able to join in.

[00:29:10] John Kelley: Depending on what the client needs, we'll provide them with the QuickBooks.

[00:29:14] John Kelley: We'll do the payroll, and we'll do the taxes.

[00:29:17] John Kelley: And it's all in John, all inclusive.

[00:29:20] Intro: That's amazing.

[00:29:21] Intro: If you could get a message out to every potential client that you're talking to before they sign with you, that's just gonna make them be in a better position already when they come to you, what would that message be?

[00:29:32] Intro: What do you see that people are making the most errors at, if you will?

[00:29:40] John Kelley: Everywhere.

[00:29:41] John Kelley: So we have these these corporate so another thing we have, we have these s corps in which the owners are not taking a payroll, a w two.

[00:29:51] John Kelley: So if you have an s corp, you are required by the IRS to take a reasonable wage in the form of a w 2.

[00:30:01] John Kelley: Now which reason?

[00:30:02] John Kelley: There's diff depending on you depends on the industry, depends on the state that you live in, and depends obviously on the economy.

[00:30:08] John Kelley: And we're able to determine that so that you pay less tax.

[00:30:14] John Kelley: Now if you're not doing that, you need to start immediately.

[00:30:19] John Kelley: The IRS is hiring 87,000 new auditors, and they're gonna go after the low hanging fruit.

[00:30:28] John Kelley: And anyone that is an s corp that's not taking a payroll it's a prime target.

[00:30:35] John Kelley: So if I like to do things from the seat of an order, what is the order looking for?

[00:30:41] John Kelley: And that will be one of them.

[00:30:42] John Kelley: If I was an auditor, I'd just look at everyone that's in escrow and see if they're taking a w two.

[00:30:47] John Kelley: And if they're not, I will audit them.

[00:30:48] John Kelley: And you wanna avoid that because audits, not only do they become expensive, but there's so much of a stress and a burden on you that you don't wanna deal with that.

[00:30:59] John Kelley: I mean, people have so much anxiety.

[00:31:02] John Kelley: You know, people that work here in the office, they tell me they will you know, why don't you speak to the clients that way?

[00:31:07] John Kelley: Some because I have to be a therapist.

[00:31:09] John Kelley: People come here with anxiety and fear, and you have to address that.

[00:31:14] John Kelley: They're afraid that if they owe and they don't pay, that the government is gonna arrest them.

[00:31:18] John Kelley: I hear that all the time.

[00:31:20] John Kelley: It may seem silly, but it's the truth.

[00:31:23] John Kelley: Are they gonna arrest you?

[00:31:23] John Kelley: They're not gonna arrest you.

[00:31:25] John Kelley: What do I have to pay?

[00:31:26] John Kelley: You have to pay that by this date.

[00:31:27] John Kelley: But if you don't have it, don't worry about it.

[00:31:28] John Kelley: Just make payment arrangement.

[00:31:30] John Kelley: And you hear the fear.

[00:31:32] John Kelley: I had a client that he texted me 5 times within 2 minutes of each other.

[00:31:40] John Kelley: Listen.

[00:31:42] John Kelley: How much do I owe?

[00:31:43] John Kelley: How much do I owe?

[00:31:44] John Kelley: And then he finally put my anxieties driving me crazy.

[00:31:47] John Kelley: And I showed it to one of the staff members here.

[00:31:49] John Kelley: I said, this is the reason why we're therapists.

[00:31:52] John Kelley: Because these people are going through anxiety and fear, and we have to address and put them at ease.

[00:31:58] John Kelley: They don't understand taxes the way we do.

[00:32:00] John Kelley: They don't understand that, you know, we get tax notices all the time.

[00:32:03] John Kelley: Just read them.

[00:32:04] John Kelley: Okay.

[00:32:04] John Kelley: We'll address it.

[00:32:06] John Kelley: But they're so nervous that, you know, they're basically pulling their hair out, and we have to avoid that.

[00:32:12] John Kelley: So the IRS is not, you know, the monster in the room.

[00:32:17] John Kelley: It's just a situation that you have that can be fixed.

[00:32:20] John Kelley: And, unfortunately, for me, I learned that the hard way.

[00:32:24] John Kelley: So when I received my bill, I felt the same.

[00:32:27] John Kelley: And I remembered, okay.

[00:32:28] John Kelley: This is just something that we can deal with.

[00:32:31] John Kelley: And I was able to overcome it, and I'm hoping the clients that we service will do the same.

[00:32:36] Intro: Yeah.

[00:32:36] Intro: It wasn't until I've been an entrepreneur for a while.

[00:32:39] Intro: I've owned a business, but it wasn't until I brought on a partner and really took business ownership serious because like you said, so many it's like, well, I'll just put it on my personal taxes.

[00:32:49] Intro: I'm a sole proprietor, whatever.

[00:32:51] Intro: And you float that river for so long and hope to god it doesn't come back to bite you.

[00:32:55] Intro: But, you know, that IRS anxiety is real, man.

[00:32:59] Intro: It's something even when I was a w two employee working for a company, and then they switched me because he wanted to do his taxes incorrectly to protect himself during a, slump in payments that were coming in for the company due to Medicare cutbacks and stuff like that.

[00:33:17] Intro: He switched us all to 1099 even though we were driving his ambulances using his equipment, showing up to his company to clock in, being told when we had to be there, where we had to go, what we had to do.

[00:33:28] Intro: All intents and purposes, we are w two employees, but we were being paid 10.99 so he could save on the tax burden for the company for having employees.

[00:33:37] Intro: And even though that is the story, and even though I knew I was right when I went to the IRS filed this, I don't even remember what they called it now, SS8 or something like that, where you're filing that basically the employer gave you the wrong documentation.

[00:33:47] Intro: The IRS came to me and said, well, you still have to pay the tax bill as it's presented currently.

[00:33:57] Intro: And for someone who made, like, $12,000 but was now listed as a sole proprietor and had to pay $2,000 in taxes, I didn't have it.

[00:34:05] Intro: So I got set up on the payment plan, and then all of a sudden, now 10, 11, 12 years later, I'm still paying penalties and interest and everything else because I never had the money at the time for all those years to be able to just pay this tax bill outright.

[00:34:21] Intro: So they're keeping my tax returns, but then the taxes and penalties double every single year.

[00:34:26] Intro: And then now all of a sudden, you know, your $2,000 bill turned into a 6 or $8,000 bill, and then you're making these payments of $2,000 per year, but it's inflating and inflating.

[00:34:36] Intro: And it's like, when you go through a decade of fighting with the IRS for an issue that you were right about, I can understand why people go insane when it comes to the IRS.

[00:34:45] Intro: And it's just like you said, the biggest lesson I learned there was I'm not a tax professional.

[00:34:52] Intro: There's a reason that people go through years of schooling and then years of experience on the job to learn how our tax system works.

[00:35:00] Intro: There's a reason that the tax codes is a book, you know, that's this big.

[00:35:03] Intro: Like, there's a reason for all of that stuff.

[00:35:05] Intro: And so I would just use my story to encourage listeners that, like, everything we're listening to here today is not a sales pitch.

[00:35:13] Intro: This is real life adulting advice, and that is I don't care if you're just filing a single w two 1040 e z.

[00:35:24] Intro: Talk to a tax professional about that form and make sure because you could be doing this all of your life with this 1040 e z using something like TurboTax online and missing out on deductions you still could have taken because if you would have taken the time to talk to a tax professional and I'm not talking about H and R Block or, you know, Jackson Hewitt.

[00:35:44] Intro: Like, good on those people.

[00:35:45] Intro: They're doing good.

[00:35:46] Intro: They're making money.

[00:35:47] Intro: But I'm talking to someone who's gonna open up your life and look at it and say, you know what?

[00:35:51] Intro: You could actually do this, do this, do this, make these decisions like you said, plan for it.

[00:35:57] Intro: You know, get more money back.

[00:35:59] Intro: If you're making $25,000 a year or less, then there's no reason you shouldn't be getting money back from the government every single year.

[00:36:05] Intro: If that's not happening, there's something wrong.

[00:36:07] Intro: But even if you're a corporation, just like you said, unless you're super profitable making 1,000,000 and 1,000,000 of dollars a year, then you should be breaking even on your taxes or barely paying anything in.

[00:36:17] Intro: So talk to a tax professional.

[00:36:19] Intro: That's my personal, personal experience is talk to a tax professional.

[00:36:24] John Kelley: You touched on 2 things, and I tell all my clients, there are 2 rules.

[00:36:29] John Kelley: There's a rule for the people that know and a rule for the people that don't know.

[00:36:33] John Kelley: If you're paying tax, you're in a group that doesn't know.

[00:36:37] John Kelley: And those 10 90 nines, that is rampant amount of day care industry.

[00:36:41] John Kelley: They refuse to pay on a w two.

[00:36:44] John Kelley: And those workers comp penalty audits start the penalties are $15.

[00:36:49] John Kelley: So if you wanna avoid them because, you know, in during a period of 18 months during pandemic, 17,000 child care businesses closed.

[00:37:01] John Kelley: You don't wanna fall into that trap.

[00:37:03] John Kelley: So make sure you're paying your employees.

[00:37:04] John Kelley: And the first question that the IRS is gonna ask is, do they have to be does the person have to be there at a certain time?

[00:37:11] John Kelley: And the moment you say yes, automatically, it's an employee, and they have to pay self employment tax.

[00:37:18] John Kelley: I'm gonna tell you from personal experience.

[00:37:21] John Kelley: So I was I'm an s corp owner, and I try to skate.

[00:37:25] John Kelley: I I I roll the dice sometimes, and I roll the dice, and I try to skate.

[00:37:30] John Kelley: I wasn't paying myself a w two.

[00:37:32] John Kelley: And one day, the IRS actually in New York knocked on my door.

[00:37:36] John Kelley: Hey, David.

[00:37:37] John Kelley: We need to set up an appointment.

[00:37:39] John Kelley: We need to see your last 3 year bank statements and your last 3 year profit and loss.

[00:37:45] John Kelley: And they came in.

[00:37:46] John Kelley: They went through it together, and any item on that bank account that I couldn't account for or had justification was considered income to me.

[00:38:00] John Kelley: Can you imagine that?

[00:38:01] John Kelley: It's like the end of the audit.

[00:38:03] John Kelley: Yeah.

[00:38:03] John Kelley: They, you know I said, okay.

[00:38:04] John Kelley: We'll we'll send you a tax bill.

[00:38:06] John Kelley: Tax bill is 5 figures, and I paid it.

[00:38:08] John Kelley: But the point is it happened to me, but I took the chance.

[00:38:13] John Kelley: I knew what I was doing.

[00:38:14] John Kelley: But for those people who aren't and they come across an audit, is gonna build up your anxiety.

[00:38:22] John Kelley: It's gonna put you in a position where you have to lay off to pay some tax.

[00:38:25] John Kelley: So in order to avoid that, just pay the tax, and you would find that you'll benefit from that.

[00:38:33] John Kelley: During the pandemic, with the PPP loans, a lot of these day care loans couldn't qualify because they did not have a payroll.

[00:38:42] John Kelley: They were paying on a 10.99.

[00:38:44] John Kelley: So because you were paying John a 10.99, you didn't qualify for those funds, so you lost out on that.

[00:38:50] John Kelley: And sometimes people have to understand.

[00:38:52] John Kelley: If you do things the right way, you will come out winning because they want you to avoid paying tax.

[00:39:01] John Kelley: You just have to look at the roadmap and figure out what works for you and use it.

[00:39:06] Intro: Absolutely.

[00:39:07] Intro: Man, how do we get in touch with you and and learn more things from you and most importantly, do business with you if I'm a day care owner out there that's looking for someone like you?

[00:39:18] John Kelley: They can call our office.

[00:39:19] John Kelley: The number is 718 515-2532.

[00:39:24] John Kelley: They can go to our website and schedule an appointment.

[00:39:27] John Kelley: It's www dotdaycareaccountingpro.com.

[00:39:35] Intro: Perfect.

[00:39:35] Intro: Y'all on social media or anything?

[00:39:37] John Kelley: Yes.

[00:39:37] John Kelley: I'm on TikTok, Instagram.

[00:39:39] John Kelley: I think, TikTok is, daycareaccountingpro.

[00:39:44] John Kelley: On Facebook is also daycareaccountingpro.

[00:39:49] John Kelley: Yeah.

[00:39:49] John Kelley: If you search if you go to the website, you'll find all our, social media, and you can just follow us.

[00:39:54] John Kelley: So I constantly do educational videos on what strategies to use, so that these John fair owners and business owners can take advantage of this tax code that we have.

[00:40:08] Intro: Man, you're not doing any of those TikTok trend dances or anything like that?

[00:40:12] John Kelley: Yeah.

[00:40:12] John Kelley: But if you wanna do a duo, I'm willing.

[00:40:18] Intro: I'm gonna tell you right now, you don't wanna see my dance skills on TikTok.

[00:40:20] Intro: That's for sure.

[00:40:22] John Kelley: Yeah.

[00:40:23] Intro: No.

[00:40:23] Intro: I love it, man.

[00:40:24] Intro: I love whenever companies put out that educational content on social media.

[00:40:27] Intro: It's a question I ask almost every single episode, and I'm always hoping the answer is yes because we follow the same at Beefy Marketing, the same exact philosophy that you do, and that is we'll tell you how to do every single part of your marketing ventures.

[00:40:41] Intro: Everything you need to do, how to do it, everything from follow our social media, and you're gonna get that stuff for free.

[00:40:47] Intro: Listen to our podcast that we have, Business Growth Hacks.

[00:40:50] Intro: You can find that anywhere.

[00:40:51] Intro: We're gonna give you all those answers for free and talk to other experts in the industry and tell you that stuff too.

[00:40:57] Intro: But at the end of the day, when you open up all of the marketing things you need to do, like keeping up with social media, your website, and, you know, rebranding something you just went through, When you open all those things up, you're gonna be like, I don't care if I do know how to do all of it.

[00:41:11] Intro: It's time consuming.

[00:41:12] Intro: And I have other things to do, and you're gonna wanna pay us anyway.

[00:41:15] Intro: So we'll tell you the whole secret to the farm.

[00:41:17] Intro: You're just not gonna want

[00:41:18] David Encarnacion: the whole farm.

[00:41:19] David Encarnacion: That's for sure.

[00:41:20] John Kelley: And as a business owner, you have to understand what you're good at.

[00:41:23] John Kelley: There's some things that you just have to put on someone else so that you can I try to get rid of everything?

[00:41:30] John Kelley: My focus is bringing in revenue, bringing in new clients, educating more clients so that they can call the office and become clients.

[00:41:39] John Kelley: And that's my only focus.

[00:41:42] John Kelley: There's no way that I'm gonna sit behind a computer and prepare a profit and loss.

[00:41:46] John Kelley: Makes no sense.

[00:41:49] John Kelley: I mean, I could use my time to increase the business, not to, you know, do things that anyone else can do.

[00:41:57] John Kelley: And we have to change that mindset where we think we can do it all.

[00:42:01] John Kelley: You you can't do it all, and you're not the only one that knows how to do it.

[00:42:06] John Kelley: So find someone.

[00:42:07] Intro: I'm I'm mad at myself.

[00:42:10] Intro: Sorry.

[00:42:10] Intro: I don't mean to interrupt, but I just I love what you're saying, and I'm mad at myself.

[00:42:13] Intro: I can't remember the, like, principle or whatever they named it, but there's, less than 20 generate, less than 20% of the revenue that that business is making.

[00:42:32] Intro: And then the inverse is also true that there's 20% of tasks that generate the 80%.

[00:42:37] Intro: And it's like, as a CEO or a founder or whatever you call yourself, that's what you should be focusing on is moving the needle, and that is whatever is generating the majority of your income, get on it and do that shit until you can't do anything Kelley.

[00:42:51] Intro: But that's the only thing you should do.

[00:42:53] Intro: If any any object within your company, any service, any product, anything that you have to do requires your time and doesn't make you money, then you say, no.

[00:43:03] Intro: I'm gonna pay someone to do that.

[00:43:05] Intro: Whether it's, you know, someone who's gonna manage your accounting, someone who's gonna manage your marketing, someone who's gonna manage the front end of the house.

[00:43:12] Intro: Like, whatever it is, you just focus on making yourself more money.

[00:43:15] John Kelley: I had a consultation with someone last in December of last year, and she was so proud that she was spending 20 hours a week on her bookkeeping.

[00:43:25] John Kelley: So really?

[00:43:25] John Kelley: So I I did the math because accountants, we all numbers don't lie.

[00:43:28] John Kelley: So I did the math.

[00:43:30] John Kelley: 20 hours a week times 52 equals 43 days that you're spending 43 days spending doing accounting.

[00:43:37] John Kelley: Now when I asked her, how much business can you bring in if you had an additional 43 days?

[00:43:43] John Kelley: How much time can you spend with your family with your kids and the family if you had an additional 43 days?

[00:43:50] John Kelley: How many vacations can you go and spend time with your family with within those 43 days?

[00:43:56] John Kelley: And about and the bulb went off.

[00:43:58] John Kelley: She David, you know what?

[00:43:59] John Kelley: You're right.

[00:44:00] John Kelley: And she became a client.

[00:44:01] John Kelley: But these are the type of situations that I don't do my own bookkeeping.

[00:44:06] John Kelley: How about that?

[00:44:08] John Kelley: There's no point.

[00:44:09] John Kelley: I can have someone else do it.

[00:44:10] John Kelley: Yeah.

[00:44:11] John Kelley: I need to focus on building the business and increasing revenue.

[00:44:16] John Kelley: That's my only focus.

[00:44:20] Intro: Absolutely.

[00:44:21] Intro: Man, every single episode, those are the kind of things that we get to, and and I love that you brought that up.

[00:44:26] Intro: It's such good information.

[00:44:27] Intro: I hope everybody goes and follows you.

[00:44:29] Intro: It's been a great conversation, man.

[00:44:30] Intro: Thank you for being on the show, David.

[00:44:31] Intro: I appreciate it.

[00:44:32] John Kelley: Thanks for having me.

[00:44:33] John Kelley: Appreciate it, man.

[00:44:33] John Kelley: Keep up the good work, man.

[00:44:34] John Kelley: You're doing an awesome job.

[00:44:37] Intro: Absolutely.

[00:44:38] Intro: Listeners, I hope you enjoyed that conversation.

[00:44:40] Intro: There's always so much to unpack in every single one of these episodes when we have something incredibly different than other accountants may come and, you know, kind of come to this business and just John take your your money, prepare that tax thing for you, and that's it.

[00:44:58] Intro: We're looking for entrepreneurs like David who wanna educate you and make you experience and educate in what you're doing so that you can make better decisions for yourself.

[00:45:06] Intro: So if you're not following David, please head out there to the show notes, check out everything that's in there.

[00:44:37] Intro: Absolutely.

[00:44:38] Intro: Listeners, I hope you enjoyed that conversation.

[00:44:40] Intro: There's always so much to unpack in every single one of these episodes when we have something incredibly different than other accountants may come and, you know, kind of come to this business and just John take your your money, prepare that tax thing for you, and that's it.

[00:44:58] Intro: We're looking for entrepreneurs like David who wanna educate you and make you experience and educate in what you're doing so that you can make better decisions for yourself.

[00:45:06] Intro: So if you're not following David, please head out there to the show notes, check out everything that's in there.

[00:45:11] Intro: Check out his guest profile, www.smallbusinessorigin.com.

[00:45:15] Intro: It's attached to this episode.

[00:45:17] Intro: You can see how to get in touch with him, how to follow him, and most importantly, if you wanna become a client, become a client.

[00:45:22] Intro: If not, we just appreciate you tuning in.

[00:45:24] Intro: We couldn't do this thing without you.

[00:45:26] Intro: But that's it for us.

[00:45:27] Intro: It's been another week, another episode.

[00:45:28] Intro: We'll see you on the next one.

[00:45:29] Intro: And as always, stay beefy, my friends.

[00:45:34] David Encarnacion: Thanks for listening to another episode of Small Business Origins.

[00:45:38] John Kelley: I love an origin story.

[00:45:40] David Encarnacion: If you like what you just heard, leave us a review.

[00:45:42] David Encarnacion: Subscribe and share with a friend.

[00:45:44] David Encarnacion: You guys, check this out.

[00:45:45] John Kelley: They're gonna love it.

[00:45:46] John Kelley: You're gonna love it.