The Void #16 – Setting up retirement, It’s okay to be successful, and Credit Card Processing-
Mar 27, 2022

In this episode, Mitch and David discuss three very real topics you’ll encounter as a small business owner.  We’ll discuss how to set up retirement accounts for you and your employees.  We talk about the feelings you’ll work through as you become successful.  And lastly, we discuss some tips and tricks for how to pick the correct credit card processing option.  If this show raised questions you’d like us to answer, please feel free to email them to [email protected]  Thanks for listening and thanks for sharing!  Enjoy the show!

[Music] hey everybody and welcome to the void a

show dedicated to filling the void between being an employee and becoming self-employed most people refer to starting your own

company as taking the leap as if you’re blindly jumping off a cliff and into the unknown

this show is here to help you understand that it doesn’t have to be that way dave and i saw an opportunity to help

others who are considering starting their own companies through this journey and and to help

them get their company up and off the ground uh that’s the whole premise of this show is to guide you through the

self-employment journey and make that transition from employee to self-employed i’m your host mitch

smedley and with me as always is david hilton mitch buddy dave what’s up it’s just me and you we’ve been knocking all

these guest shows out and it’s like okay it’s just us we’re back to normal it’s us us and marcus good bottle of bourbon

what’s up everybody we got marcus back there we love marcus we always say that and i look up and he’s on his phone yeah

well i got to see what’s going on with my chiefs so yeah just got rid of it yeah yeah ty we lost harry killed today we’re yeah we’re filming the show

yesterday actually when we got here so i got here a little early and marcus had already set everything up and he was

there’s a bed in the other room and he’s laid up there curled up in the fetal position crying because he was pretty upset about it

he was he was pretty mad i’m i’m like in the minority going i’m not going to miss him that much i’m not yeah i’m stuck in

the middle i don’t know if they make a bunch of good picks yeah but dude he was he was going to be the fastest nfl

player ever if we want to start a sports podcast we could just go ahead and we’re not going to get back on time

today but i mean did you see pic pics of hill out in hawaii at mahomes wedding i

didn’t you didn’t right no i don’t think he was that good of friends with a lot of people on the team i think they’re

i’m not going to say he was cancerous he wasn’t cancerous but i’m i’m just i don’t think he melded well without

getting me wrong he’s not even riled up let’s let’s get back to topic the boys

edition yeah we lost harry kill and people are pissed yeah

so uh this show is going to be another random fire show where marcus grabs a whole bunch of topics off this endless

list of show topics that we have and we don’t know what marcus is going to ask us about but marcus is going to ask us

a random question or talk about a random show topic and you’re going to get david and eyes raw and unfiltered he might be

writing responses like ideas he wants to ask about right now yeah it could be i don’t know like

marcus could be like how do i tell my boss i want to quit my job here’s a better question how do i tell

mitch medley he’s a giant dude which one of you guys are first which one is going to we don’t know yet we don’t know yet just ask a question what do you got

here’s the first question list one off what do you got retirement for your employees how do you do that maybe guest related

i wrote i wrote that because i didn’t know if we were gonna have a guest about it right right and i’m not gonna answer

that question because i know mitch just signed up his guys

for retirement yeah what’d you what what did you do what process yes you got a couple of different options um

you can do a traditional 401k for your people yeah um and and that’s gonna take

uh it’s a little bit more difficult of a process as an employer um

yeah for the guys it doesn’t matter for the guys they don’t care right they’re signing up and they’re gonna they’re gonna your employees are gonna

contribute x amount of their salary or their annual earnings or whatever um

but a traditional 401k has some different rule breaks as far as like the owners of the company can have

they can be subjected to different rules than the rest of the employees uh and what i mean by that is like your

um your your company rule could be like we match 50 cents on the dollar up to

five percent of your annual salary unless you’re an owner of the company or a principal

of the company and then that could be dollar for dollar up to five percent of your salary or something

like you can you can actually have rules change there at a certain level um

the some of the retirement options also change on a traditional 401k versus

like what we did in our company we did a simple ira um so with a simple ira everybody plays by

the same rules uh so my match as the owner of the company my match is

the same as my employees match is um but then also the company only and this

may change state by state i don’t know for us we were only given two options

for the types of contributions people could make so

uh one option was we match dollar for dollar up to three percent of the

employee’s salary um regardless of what they put in

uh no no this was um we match dollar for dollar up to three

percent but they had to put in three for us to match three gotcha okay the other was we chose to put in

so much up to i think two percent

like we could choose to put in two percent of the employee’s salary regardless of how much they put in they could put in nothing and we’re still

putting in oh you can still put some in right and so uh lots of companies aren’t gonna do that yeah so

again this those two options there were on this simple ira on a simple ira what’s the

um when do your employees become vested so on a simple there is zero vesting

okay um and so once they fire it up that’s it once they fire it up that’s it and they can start

almost immediately so the the rule it’s kind of weird the rule was if you anticipate the employee to make more

than 5 000 in a certain time frame which was like it was like six months or something it was a long way out

but if you anticipate the employee to make more than five thousand dollars in six months then they can start with the ira

um and then they’re fully vested from the get-go so that’s one of the drawbacks of

a simple is yeah on a traditional thing come in and work for you six months and that’s just

money out the door and then they got three percent because you’re investing in that employee right is what you’re doing you’re trying to get them to stick

around yeah yeah so that’s one of the the perks of a traditional 401k yeah is

is you can see that it’s a schedule yeah you can send this and you can basically encourage your guys

a lot of people set it up like twenty percent every year and then after the end of five years

every year no no no like twenty percent vested every year okay so at the end of five

years like it went up by that increment every year yeah i’m sorry no like uh so at the end of the five year term now

they’re fully vested and they do that because they’re trying to get their employees to stick around for five years yeah well and they’re trying to have a

way to get some of that money back if they do just blow out the door right and they’ve only been there two years so let me ask you this

is the max amount of money so if

if i’m self-employed and i start my own ira the most i can

put in it is six thousand dollars a year right if if you are on an employ uh

if you’re on your boss’s plan is that max the same or is it more like

a 401k where you can put like i think it’s like 22 now or 20 000 a year in there yeah so ours was um

i’m gonna be a little vague on the numbers here i want to say it was like 14 000

was the somewhere around 14 was the max for the employee okay that does not include the employer’s contribution on

top of that it’s their tax conduction max say yep deduction because it’s not it’s it’s

a pre-tax contribution that’s what you’re meaning yes thank you um um the

um if you were over 50 then that number jumped up a couple

thousand dollars yeah so basically yeah they’re letting the people that are on the farther end of the runway contribute

a little bit more so it’s different than a than your own ira if you made it could you do it through an employer correct so

one another question one more yeah yeah yeah so since you are doing the simple ira

if you say you were to balloon out and grow big and have 25 employees can you go to a

401k yeah you have to start everybody over no we can um there’s anytime you’re going to sign up with anything like that

there are some rules and it’s going to be different per program but there are some rules basically some notification timelines that you have to give your

guys so like we could change the amount of match we’re doing we could do

like we could do like right now it was it was matching up to dollar for dollar up to three percent of

their annual salary right well if i wanted to change that dollar for dollar up to two and a half percent i

could do it but i gotta like give everybody notification and writing and it’s got to be like 60 or 80 like 60 or

120 days or some some weird number yeah but there’s just some rules that you have to play by so you’ll the the person

that is setting up all of that retirement stuff you’d want to chat with them about it i’m fortunate that my dad

is a a farmer’s insurance agent and he also does a little bit in the financial

financial services department it’s not as mega forte but but he was able to help you out and

get you yeah he i mean he’s our guy that’s doing it um and and it was so it makes it a little bit easier because i

can call him up at 7 30 at night when i get home and be like hey dad yeah how do we do this like one of my

guys asked this it just makes it a little bit easier and it doesn’t change any like it didn’t give me any discounts or anything

it no it doesn’t help me that way he’s just setting it up for you yeah and then you’re paying just like you like anyone

else would yeah so and so as far as my answer for that question is you know how do you do it there’s a tons of ways you

can do it you can go through an insurance agency like farmers you can call fisher investments you can go into

your local like edward jones yep you can just call them and make an appointment they do not charge you to go in there

and sit down and talk about taking your money yeah okay they are extremely helpful they want you to come in there

and get it set up so if you’re thinking about doing it just go in have a consultation don’t go with the

first guy talk to three or four people it’s all free and then decide what you want to do

and there’s no real i mean there’s some costs to it like i have some cost as the business to it

um well you’re talking costs in addition to putting money into their in addition to

their contract when you’re chatting with people about

it you’re wanting like it’s not like there’s going to be a guy that saves you more money than another guy you’re basically chatting with people to

try to learn okay who’s going to be the easiest to walk me through this process who’s whose personality am i going to

drive with the most yeah and when you go into places like that let’s be honest some of those guys are

pretty arrogant don’t want to talk to you don’t use that guy go to the next guy okay we talk about

this in a ton of episodes about uh be comfortable with who you’re doing business with yeah yeah i mean it’s just

it’s it’s really just common sense 101 yeah and there’s no way to go to

don’t be afraid to go to a financial advisor and ask stupid questions yeah your son

and i were talking about this earlier don’t care what anyone else thinks about you yeah okay you’re trying to do right

by your guys and your business who cares what they think yes some of the questions you have are stupid and it

may not be stupidity it may just be ignorance because you don’t know right that that doesn’t mean don’t ask the questions right just go in there and ask

the questions and get it set up if you’re thinking about doing it and i that’s probably one area that’s gotten me pretty far in business

is being willing to ask questions and i mean i’ll preface it with

look i’m i’m really ignorant in this area so forgive me if i’m not using the right terms but like

how does this happen or how does this thing work or you know whatever the case may be you just tell them that up front

and all of it it’s like it lowers their guard a little bit and now that arrogant guy is not going to be so arrogant with

you he’s actually going to come he may think about it for a second yeah he’s going to come down and be like all right this guy’s dropping his guard let me

drop mine a little bit and yeah and when you live like where we live in the middle of the country people are nice

don’t think you’re just going to go in there and they’re just going to light you up for being an idiot yeah it’s not the east coast i haven’t did i say that

they’re all out there but just you know don’t be afraid to ask the questions right right we probably

drug that question out a little bit but that’s right that’s what i would say yeah so so like on that on that ira

topic um it’s pretty normal for businesses to uh like if you go work somewhere

sometimes you’re not even eligible to get into the 401k um

like a pretty common thing you’re talking about from the employee side yeah as an employee so put yourself in your employees shoes here for a second

most places you work that that business is only going to have two buy-ins a year

so there’s two dates per year where people can get in if they’re 401k lots of them do it like

yeah once a year we do it right right and so like i worked at a place that had about 120 employees and it was january

1st and july 1st those were uh you if you were if you were in it you had to be

an employee for a full year before january 1st and so like or a full year before july

before july first right so like if you started in a february you weren’t going to get the january deadline

so you had to work there for a full year and then wait till july first to get into the 401k yeah or if you started in

december then you could work your full year and then you were in before january 1st so then you could get in kind of a

little bit earlier but that’s pretty common too so don’t think that like you have to have 401k

ready to roll for your first employee no like think about it like you need 401k

ready to roll after your first employee has been there for a year

and that was my deadline like i knew yeah i i had a rolling one-year deadline

to get retirement set up from from the one year that we hired our first guy and so

um that’s that’s the metric we used and we got it in about two months early which is kind of cool

so um and don’t think that just because you have one employee say your wife is an

employee and you’re an employee and then you have your one employee you can still start one don’t think oh yeah big i

gotta have five i gotta have ten no no you can do it right away if you have you know ambition to do that and have the

money which you should to do that then go ahead and do it yeah the the sooner you get started the easier it is to add

employees later it’s it’s not as much of a benefit for me as an employer

without employees so like let me let me preface that you mean before i hired people you mean what your ira would be

yeah so like before i hired people and it was just me and my wife um

it actually hurts you doing a 401k would hurt me right i mean if you have one employee it hurts

you versus if you have no employees if you literally have no employees no wife

no kids no nothing the cap look you’d have to talk to your financial advisor but i’m pretty sure

the cap instead of being 15 or 20 000 is like 45. but that’s a whole nother well

that’s a whole nother show yeah we could talk about and also when it’s just you and your one employee

and and you’re building a business for growth at that moment your money is not best spent in a retirement account at that

moment your your money is best spent reinvesting it into the business and getting the business prepared to add

more employees as far as the business is concerned and that’s a double-edged sword because it’s easy let’s be honest

it’s easier to get employees when you automatically offer that right simple ira right out of the gate exactly so if

you are small and you say you have three guys and you need five and you have started that simple ira

like you can go out there and be like dude you don’t have to wait to be vested we’re going to invest you right now

right and then you want to come on so i mean there’s you know there’s balance there yep depending on what you want to

do yeah it’s just you don’t want to be if you’re a shop of one or even one in your your spouse

it may not be the best option for you to do it yet right but if you’re a shop that’s planning to grow

then get all that stuff in the works and then once you start adding people then go

yeah and you can start it and not have one for you and your wife too you could take instead of giving yourself those

retirement funds you could just invest those and then just be paying for your one guy you could you could do that too

yep i mean i i’m the owner of the company so i’m the owner of that that whole retirement

policy right but at the same token i’m also on another sheet of paper i’m an employee of the company yeah that’s like

signed up to contribute myself and then the company matches my contribution too so yeah and we’ve talked about that in

previous episodes about look you own the company but you’re still an employee yeah you’re not

we you know we’ve talked about taking members draws you know and doing it that way but it’s it’s better for you if you

can get a paycheck yeah you can get that paycheck where social security’s coming out where you know retirement’s coming

out insurance is coming out if you can set it up so that you’re getting that paycheck that’s the smart way to do it yep yep that’s how we do it

next question oh wait wait one more thing on the employees if you are an employee and you go to a place and they

say hey it’s going to be a year but you want to start investing right away start your own simple ira or your own roth if

you do go ahead and put that money in there right away exactly exactly i’m going to say that earlier yeah you can do a roth yes pers like you

yourself can go to a financial person yeah all your guys all your guys could have a roth yep and they could do their

14 uh thousand a year match and then put six thousand in a roth on top of that

yeah so you’re at twenty thousand dollars and if marcus is not doing that we’re gonna have a talk with him after this show oh the uh

just to clarify so a simple ira and a 401k is pre-tax contributions you’re

taking your gross a portion of your gross earnings in in investing those yeah so you’re not

paying taxes on those until you pull them out later right at retirement right so you’re going to pay tax in the future

when you retire yes a roth ira you pay tax on the money and then you take your post tax money and put it and deposit it

right and invest it well then when you take that money out because you’ve already paid tax on it for one there’s

no retirement age requirement you can take that money out whenever you want um but for two are you sure about that

yeah i’m positive okay um um they may have like a small fee it’s not a penalty

it’s like a fee they may have like a 50 fee to make a withdrawal or something like that but um

for two your a roth ira the benefit of a roth is you’re banking on the idea that taxes in

the future will be higher than they are today yes and so it’s smarter to save post-tax money today

at today’s tax rates rather than in the future yeah so the only problem with that is the stupid government caps that

at six thousand a year correct so if you’re planning on doing that i mean it’s hard it’s yeah it’s hard

you’re not gonna save a boatload and and you do that in addition to yep if and and i get this question all the time

from people hey man so i work at a place or i own my own small business and

i don’t have they don’t offer it yeah let’s do a roth do a roth but listen

do a roth and do something else do stock index funds do etfs do something because that six thousand dollars a year is not

going to be enough when you get older yep and listen we are not fiduciaries yeah we are not

financial advisors yep before you do anything like going on robinhood and spending 50 grand in an etf you need to

talk to someone what did i say etf oh did i

i think it is etf eft well you just look it up see marcus will tell you see what i mean but you need to

talk to someone about the tax implications you need to talk to

someone that knows what they’re doing right before you just take our advice and just say hey right well dave and mitch told me to spend a hundred

thousand dollars yeah talk to someone yep okay that’s licensed yep all righty we beat that one to death that was

really long when it long so marcus are you matching your match

you’re are you putting the most in there yet i towed um what’s the answer buddy this is real

personal right on the internet going right out to everybody [Laughter] next question he has he hasn’t told his

wife yet he’s he’s contributing good okay yeah yeah good it’s okay to be successful

you’re not a fraud you deserve it yeah this is mine of course it’s okay

what was the ques say it one more time it’s okay to be successful you’re not a fraud you deserve it so the premise for

that what’s the what is the question yeah the premise is i’m just when you start a business i got

you that’s why i started making an answer yeah when you start a business and you follow all the right rules so

like um um when so you talking about self-doubt when you

start making serious money no no or guilt when you start making a ton of money right guilt more or less but

not guilt off of your gross earnings like like we talked about in one of the

previous episodes about how you’ll pay yourself uh if as a new llc you’re going

to take an owner’s draw and you’re going to want to like let’s say you want to pay yourself a thousand dollars a week you’re actually going to

owners draw 1 300 a week 30 over and then once that money lands

into your personal account you’re going to move that 30 overage into a tax savings account a personal tax savings

account yeah um and all that so when you’re doing everything by the book

and that bank account starts growing it’s very easy to feel

like a fraud it’s easy to feel guilty about your success yes because you’ve been

your whole work life if you started later or whatever you know you’ve been kind of down here at this level and and

now you’re up here but you’re doing the same amount of work or the same style of work it is it is easy to feel guilty

about what you’ve done profit is not a dirty word no you’re in business

to make profit what does profit do it allows you to hire employees when you hire employees

what are you doing you’re creating jobs you’re being a plus in the economy okay

you’re also involving yourself in the community like what better way to involve yourself in the community yeah

than than help somebody earn a living yeah when you’re when you’re i’m gonna take a donald trump thing here when

you’re paying taxes and paying a lot of taxes that tax money went to make the coveted 19 vaccine right okay

do not feel guilty right right feel empowered that you have got off the ground that you have created these jobs

that you’ve been successful and that you’ve risen above the that you were trying to get out of before yeah

there’s no reason to feel guilty and people do a lot of people do um you know we

some of the ladies we’ve had on their shows aren’t out i don’t know if this is gonna show is gonna be out before theirs or whatever but they’ve talked a little

bit about um just off camera those certain things about you know uh

you know i’m successful yeah you know i don’t know if it’s more prone than women or if guys just hide it better i’d

say guys probably hide it better that’s all but do not feel guilty about being successful take it and run with it

i felt guilty so i set this crazy go like keep in mind i didn’t know what

like i had realistic expectations and then i had goals right and so when we started ours i had a realistic

expectation that i could pay myself as little as possible and then i could re like pay

back all of our startup expenses in five months but then i set like a goal of like let

me try to do it in three months well i did it what was that called again a b hag a b big hairy ass goal

yeah uh so i i did it right and this was right about the time that we were firing our

first accountant and uh and picking up our new accountant and so i’m sitting in that new

accountant’s office and we had paid off like like

yeah start-up costs are paid off and we’ve talked about this yeah and i’m sitting in his office and i’m like

like what do we do now like like that was that was all the farther i was thinking was like pay the

startup cost off pay the startup and and i mean i had in the back of my mind i had longer term visions right but i was

so focused on paying the startup cost off and he’s looking over everything and he’s looking at what i’m paying myself

and he’s looking at how much work we’ve done and how hard i’ve worked and everything else and he’s like you’re

going to burn yourself out unless you pay yourself more like you’re working you’re paying yourself

less than you’ve made for a lot of years yeah and you’re doing so much more work

than you’ve done in a lot of years and i’m like yeah but look how successful the business is doing right yeah he’s like

you were feeling guilty yeah i was feeling guilty at yourself that check right i didn’t want to pay you i wanted i want this to be in the business it’s

like you’re trying to hold your you were trying to hold yourself accountable right and so i needed a new truck like

we’ve talked about on the show before i uh was this when you were driving the danger range yeah this is when i had my my 98 ford ranger the danger ranger with

walt like window no power windows no nothing right no i’ve almost crashed

more than one of those they’re so light they just yeah it’s the scariest vehicle ever to drive in the snow other than a

prius yes the correct um and so i’m sitting in his office and he’s like is there anything

you want like you need you need to treat yourself to something and i said well i’ve been eyeballing a new truck i’ve actually been eyeballing

a new truck for a long time but i didn’t like how like the

if i’m going to spend this much money on a truck i wanted it to have like under 75 000 miles and i wanted it to be a 2015 or newer and this is like 20

20. it doesn’t say it was 20 20. the end of 2020 so it’s five years old right like and i’m i’m haggling about buying a

five-year-old truck yeah like a lot of people would just go straight to the dealer and like be like give me the 20 20. i never buy new trucks right right

that’s just and i’m like i wanted to have all these options and everything else because again if i’m gonna spend all this money like i don’t i want it to

have a sunroof i wanted to have all you know all this stuff and he’s like well why don’t you just go do it i’m like because every time i find one around here it’s 43 000 or more and

i don’t want to spend more than 35 and he goes okay well like when you find one for 35 you should

go buy it like you’ve earned it you should go buy it i said well ironically i found one but it’s in new jersey and

we’re in kansas city i’m like it’s in new jersey and the guy’s trading it in in like four days and he’s just trying

to sell it for more than he’s gonna get in a trade-in in four days and and he’s like well let’s look at it

so we jump online and look at it real quick and he’s like you should go you should fly out there and go buy it he’s

like you’ve earned it you’ve really you should do that other you’re going to burn yourself out unless you do that and i’ve seen what you drive yeah

so the whole time basically what he’s telling you is you drive a piece of yeah and you should get something nice yeah and you look like a loser you’re

driving an 800 truck right and so uh i i’d call my wife as i believe in

his office i’m like charles said we should go buy that truck and she’s like i’ve been telling you that forever you need to go back

so like people had to convince me to go buy a five-year-old truck this truck had like 80 000 miles on it that was the

only thing that was outside of my little list of things yeah but like people had to convince me to go buy

an 80 000 mile five-year-old truck i was so guilty about the success i had

the money like we were we were successful enough i had the money to do it but i still didn’t want to go like i

didn’t want to come off as being a show off i didn’t want to come off as like oh all the success went to his head or

anything else yeah so we’re being humble about yeah it was a responsible you know choice but

it’s very real because just like you said you’ve worked for years and years and years making wages and now that

you’re on the other side of things and you’ve you’re assuming the risk of owning the company and figuring out how to get the

customers and how to pay the taxes and how to do the insurance and everything you’re going to make a lot more money

yeah you’re going to feel guilty at first it’s a little bit to get used to yeah the one thing i would caution it’s a

head trip for sure yeah the one thing i would caution everybody on is don’t spend it

at first right like get your mind right first get your mind right get used to that kind of money coming in and then

before you start spending it on yourself learn how to reinvest it into the

business so that you can be working yourself out of a job yeah right get the business to be a little bit more

automated so that like if you spend all that money you okay you busted your ass

and you you went crazy for a couple of months and now you’ve got enough money in the bank to go buy a truck with cash right

well if you spend all that money on that and you didn’t invest anything back into the business or create some automation with

it now you’re back over square one yeah you’re out of money you have a truck

and you’re still having to go to work every day and grind it out every day and and do

all the things every day right well yeah pause for a minute reinvest in the company try to work

about you know getting employees getting other people to help do the thing for you and that way

you can you can slowly be working yourself into a position where you don’t have to put in the 70 and 80 hour weeks

to be successful to be successful right you know when it’s weird so like if you weren’t a manager

not you just in general if you weren’t the manager of a company uh if you weren’t doing any of the finances or any

of the accountant accounting um you’re not used to seeing um what i

i call it big numbers you know yeah you’re not used to seeing big numbers yeah okay and it can go one of two ways

you’re not used to seeing that and then you start out your company and it takes off and all of a sudden you look at that

checking account and it says a hundred thousand dollars it goes one of two ways you either lock up

because you’re afraid to spend it and you do the responsible thing and you you save that money or on the other side you

think you’re rich yeah okay say you didn’t do what we said and you’re not putting part of that

money in for taxes and i’ve seen i’ve literally seen people do this they think

that money’s theirs and they go out and just freaking spend it yeah and i know this is a little off of what the actual

question was but don’t do that either yeah they go buy a nice car with cash and and wasted all their money yeah and

then if if something does happen and you go downhill little ways you might be in trouble now right okay

so or the tax man comes yes for his tax on that hundred grand of property hey where’s my where’s my thirty three

thousand dollars bud right and you’re like oh uh it’s in the parking lot oh it’s got it’s got some twenty okay

and my my point with saying that is is you know people have money shock

when you’re not used to seeing those big numbers come in and you’re you’re not used to looking at the balance sheet and

at the bottom it says oh we brought in 1.5 million dollars it goes one of two ways you either it up

or you’re smart about it yeah okay so don’t let that money shock dictate your decision and that maybe take time and if

you have to talk to your accountant say hey dude okay i’m seeing this and and i

say you want that money okay say you think that that money’s yours go to him and say or her and say hey is this mine

i have this i’m seeing this i want to do x with it i’m am i missing something yeah what can

i do with this he’s going to say look okay this is what’s happened you have these bills that are still outstanding

your tax implications after you pay those bills are going to be this this is more he’s going to write down a

number this is going to be more realistic it’s not 1.5 million it’s a hundred and twenty-five thousand right

and that all that well okay now all of a sudden you’re seeing real life what’s going on and at the level of the listeners of our show

uh let’s assume your first year out of these are not gonna do one it doesn’t mean smart or anything like that no no no you’re new in business yeah you’re

self-employed your first year in business or your first year and a half in business or whatever the case may be you’re not doing 1.5 million most likely

dude things happen i know things happen i mean you could do a high material job where you’re doing 1.5 but but

like if you’re in commercial you could have that number just like that you realistically you could be in a

position where you’re used to making 80 to 100 grand a year and now you’re gonna go start your own company and six months

in you’ve been paying yourself a nice salary and all of a sudden

here is 60 or 80 grand extra in the bank and you’re six months in yeah and you’re

going well you know um so don’t have money that’s that’s

that fraudulent feeling that you can get you’re almost gonna be like is this real like i almost feel like

i’m cheating or i feel like i’m doing something illegal because it seems and this is the benefit of prep work

like you’ve done all the prep work and everything else so at that point where you’re seeing that it almost seems easy

but it’s because you’re finally getting a chance to reap the rewards of so much prep work early on yeah so

um that’s a great that’s a that’s a good question yeah great question yeah solid question people feel stuff about that

you know it’s just what it is let’s let’s pause real quick and uh remind everybody that if you like what you’re

hearing on the show and if the show is teaching you something new or if it’s bringing value to you uh do us a favor

and share this show with somebody else who might be wanting to start their own company do it right now yeah do it right

now like that’s a good point pull your phone out yeah it takes two seconds whatever you’re listening whatever platform you’re listening send it to a

friend of yours literally pull your phone out right now hit the share button and text it to one person

that you know that is also wanting to start their own company if someone if one of my friends is watching this show and they send it

to me i’m gonna be really pissed oh i’m gonna love it i’m gonna love it dave

you need to be watching this that would be freaking hilarious if they actually share a link to me my friend dustin

would probably do it yeah he’s a that would be freaking hilarious hey i was told to share this with a friend here you go here you go that’d be funny

oh my goodness guys that’s how we grow the show is by shares so please do us a favor and share

it and then also do we have more questions we got another question we got one more you got one more oh we got time also

give us a yeah give us a five star review on whatever platform you’re listening on if that’s

youtube if that’s well youtube would be a thumbs up on this episode yeah hit that notification spotify or apple

podcasts give us a five star review i think we’ve earned it i know we’ve earned it

so all right marcus what do you got what do you got okay

what type of credit card machine or software do you use oh um and then here’s my here’s my last

part to that without being long-winded go ahead are you telling us

so when i first started out i used square yep when square was big because i could literally

i mean that was my first business in all yeah transparency was ten years ago yep so i had a square it plugged right into

your headphone jack easy peasy now after i quit using the square i used paypal

so and it’s user friendly or well when paypal started they didn’t have card readers and then they came into card

readers but what i would do is i used paypal and and they have a

um a business page that you can use okay so what i would do is literally at the customer’s

home i would enter their email and i would email them a bill right

there and then they could i thought it was going to be a big pain because what it did is it emailed them

an invoice immediately right and they had to go on their computer which let’s be honest everyone’s got one

right there right right but at the time at that time i think it made people feel

more secure because it’s on their computer they can see the secure the https

secure and they could pay right there on paypal and they did not have to be a member you could just do it as a it went

right to their email they clicked on it took them right to the page they entered their credit card info boom and that was

it that’s how i always did it yep and it was it at the time it was really easy now

seems seamless it was at the time it was i mean now obviously they have right you know if you’re a retail shop or whatever

you just get the whole little apple set up and it’s just right you know and done well and so like

your your customer relationship management system your crm yeah and i didn’t have that at the time right

so um those a lot of those will process credit cards through those systems now

they’re gonna be a little bit more expensive than if you find an outside independent processor um basically

you’re paying for convenience of being able to process it right in inside your crm the standard’s three percent right

yeah uh yeah that’s a pretty common one what’s yours yeah so what do you use yeah so we we use a company called basis

b-a-s-y-s and they are an independent processor um they basically link up with your bank

and they link up with our quickbooks and and everything and so when we

process credit cards we do it outside of our crm like there’s a little tab to collect for this you know like as they

paid by check or uh by cash um and so we do credit card offline is

technically what it’s labeled as um and then we we open up our um our app on our phones and then run it

through there um basis will use these little credit card swipers called clover goes you can

buy them for like 80 to 100 bucks on amazon um they’re not waterproof which sucks

for a plumber because i’ve lost three of them so far so i put it in my pocket our

uniform shirts have pockets right here and i just keep it on me at all times well then i’ll like bend it why don’t

you just leave it in the van it takes two seconds i know i need to but uh it’s two seconds to walk out there the

brain’s working man it is today my i’m starting to get back in the groove it’ll fall in a tub of water like

a bathtub full of water or toilet like real fast dude i’ve dropped my phone in a toilet at a customer’s house before and it was it wasn’t because i was

working on it i went to the bathroom and dropped my phone in their toilet yeah no this yeah that was the end of that phone

just just like that those clover goes they’re like 80 or 90 bucks um so you buy that and then that lets you

bluetooth connect it to your phone you run the credit card and so the way that ours works with basis

is we pay a percentage above so they’re they’re basically getting like a flat markup um a lot of companies will do

like a fixed percent like three percent or four percent that’s what most of them are right um and so those companies are

winning on some of the cards that only charge 1.5 yeah and so they’re winning

more so we basically pay a markup on every charge so um and it’s a fixed markup so if the card is a two percent

card and then their markup’s a half a point we’re paying 2.5 on that card yeah if their card’s a one percent card we’re

only paying 1.5 on that one so every month i’ve ran it we average about two to two point three percent on our credit

card stuff so let me ask you are you paying that or do you yes so

some some credit card processing companies will swipe that percentage right off the transaction i don’t like

that method uh and here’s why your accounting’s if you make it a 100 sale your accounting software is looking for

a hundred dollars yeah right so you have to go in there and gel code it differently right if your credit card

processing company takes their three percent right off the top of that and leaves you with 97 well now your

quickbooks is going wait this was a hundred dollar sale why did you only give me 97

right so that’s a problem the way basis does it and i love this is they

keep track of a whole billing cycle’s worth of credit cards and then they automatically yank the money out of our

bank account which i don’t mind they’ll automatically yank the credit card fees out of our bank account and it becomes a

processing fee a cost of business but it’s a monthly cost

instead of trying to subtract that cost from every tiny little transaction

it’s one big hit and so you know we may see a three hundred dollar

you know a three hundred dollar credit card processing fee but i would much rather have that than one hundred three

dollar credit card process well that makes it easier on your bookkeeping absolutely yeah so when you you know at

the end of the month when you you know you go into all these software’s have you know

basically it’s a checking account okay and that’s what they’re that software is tabulating that as it goes

what’s a lot easier to instead of every week to have to go in there and put three dollars six dollar

at the end of the month you just it says on there yeah you know charges finance charges you know three percent whatever

and then the lump sum one time yeah and i’ll tell you so like when i just as far as like one-man shops and small

businesses go when i started out i just told people up front like i didn’t eat it

i just told them look i’ll take whatever you want yeah i said i’m i’m adding three percent

okay and and when i was when i first started out that three percent didn’t seem like a lot but it was a lot to me

yeah so after i started going obviously i was able to carry that through

you know that’s just a a personal choice you have to make like the way i did it in my software was i would just put it

right on the invoice yeah i would say credit card charge and i would just write like it would say the

you know eight hvac charge say it was a hundred dollars and then you know three

percent three dollars right and then on my deal i wrote on there paid 103 dollars well then i would go into my gl

um coding system and i would write finance charge three dollars i did it every month yeah

so i would sit there and it looking back it was ridiculous but i would have them all out and on this invoice i’d write

three dollars zero three and then so i would i would put in my general ledger okay finance charges for credit card use

um 147 dollars and i would debit that yeah you know so that when the accountant got it it all equaled out and

that’s still a very difficult way to do it and it was extremely difficult that’s my point here is it was they make it a

lot easier now so if you’re gonna do that it’s easier to do it the way mitch was talking about yeah having it do it

right in your software do it that way instead of the way i was doing it yeah and again you don’t think

that three percent very much or two percent very much that’s a lot until it can be a lot yeah until i’m like looking

at the books and it’s like dang basis just took two thousand dollars out of our checking account today yeah do you

ever think about charging customers for that so we do um but we don’t we don’t

separate it out basically you just basically i took i took all of our prices

every single price for every single repair in the book and i cranked it up by three percent knowing that our credit card processing fees hover in the low

twos yeah so you’re covered so i cranked every repair up three percent and i actually make extra money when

people pay cash or by check so um and again i’m the i’m the guy that’s like please don’t pay cash

yeah because now i have to drive that to the bank and that cost me a whole lot more in time than the three percent

credit card check yeah or you know a credit card processing fee would be so um but yeah guys you can check out basis

or and it doesn’t even have to be there’s a ton of them there’s a power now i think

i think theirs is pretty streamlined and i think they’ve lowered it

from three i think it was three percent when i did it now i think it’s like two seven or two five yeah i’m not 100 sure

but i think they’ve lowered it square is probably i don’t want to throw square squares still out there they’re they’re

still out there and they’re probably among the higher percentages but they’re not really designed for official

businesses they’re more going to be designed for the people doing like the multi-level marketing type stuff or like

little pop-up sales on the weekends yeah something like that so well it’s it’s super convenient and

and for people that aren’t doing a lot it’s real user friendly yeah it’s real convenient and it’s

when you’re talking 10 transactions a month kind of like the side hustle yeah

weighted exactly exactly and so um that that is another thing to bring up though some of those processing

software’s uh or credit card processing systems they’re gonna have a per transaction fee

as well so if whatever you’re selling if you sell a lot of transactions at a small amount that’s going to eat you

alive right whereas hours there is no per transaction fee it’s just a percentage but most of our repairs are

several hundred dollars so you’re not you’re not charging someone six now we can do i mean

at our current staffing level we can do 10 or 12 credit card processing transactions a day

but it just kind of depends so you got to look at that for your business on is it going to be a per transaction thing or a

percentage thing or both or whatever so um guys i think that uh uh unless you’ve

got anything to add on credit card processing that’s all i got man all right all right so i think that i did i think that wraps up our our uh quick

draw show for today um and uh again if you like what you’re hearing on

the show please do us a favor and share the show with somebody else who may want to hear it if you are perusing around social media

on your your facebook groups or whatever you’re in for your trade and you hear people

wanting to start their own company um please do us a favor and and tag us

at podcastthevoid um or on facebook and instagram um feel free to tag us on that

kind of stuff um what’s our uh what’s our question email again uh if you have

yeah if you have questions and you want to send those into the show it’s ask mitch mitch

so uh and that doesn’t necessarily mean you’re asking me you can ask dave yeah you can ask me ask marcus a question

yeah yeah marcus hey what’s it like working with those two yeah marcus why don’t

they ever let you on camera let me

so yeah the question email ask mitch mitch so um again uh that wraps up

our show for today so uh until next week guys we’ll uh we’ll see you later thanks guys love you