12 - Interview With a Small Business: Beginning Your Financial Journey
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Joe Rodriguez
Hello. My name is Joe Rodriguez and you're listening to Get the Money Right with Todd Butzer. Todd has decades of experience giving real estate agents the training and resources they need to get their finances on track. In this episode, Todd will be interviewing a small business owner who is beginning to get their money right. And now, here's Todd.
Todd Butzer
Thanks, Joe. And hi, everybody. Welcome to episode twelve of Get the Money Right. And today we're going to have some fun and we've got a very special guest. And the guest is actually our producer, Joe Rodriguez. We've been talking about this for a while because obviously Joe and I work closely together to produce this podcast, and we've been working together for quite some time now, and it's been kind of interesting in our side conversations to really hear what Joe's doing with his own business as a result of us working together on the podcast.
So because he is a small business owner, he is an independent contractor, I thought it would be great to hear from him as to the steps he's been taking and what those results have been. So Joe, it's kind of fun to have the tables reversed here and have you as a guest.
Joe Rodriguez
It's great to be here Todd.
Todd Butzer
All right. I'm looking forward to it. So for those who, you know, they've heard you on the podcast in the background and popping in now and again, but tell us about your business.
Joe Rodriguez
Yeah, so I own Roza Creative. It's a marketing and design business that develops and strategizes various types of media for all kinds of businesses. I've been doing general graphic design work for the past ten years now, and I've had the opportunity to work with companies that range from local to international. My biggest thing is I just like solving problems. If a business comes to me, I just want to help them find a solution.
Todd Butzer
And I've lived that because really, when you and I first met, I looked back at my notes and I think it was nearly a year ago from this recording. Not quite, but when I first reached out to you, it was for design elements, for artwork regarding the podcast, and it morphed very quickly into you doing post-production and production work and all the electronic coordination, if you will, of the podcast. So I've experienced exactly what you're talking about.
So prior to getting involved in the podcast, Joe, what, what was the condition of kind of how you were operating the business and being an independent contractor and so on? What was kind of the condition of the business at that time in terms of financial?
Joe Rodriguez
The problem was that mentally there was no business. You know, I have a full time job. I have a salary position where I work 9 to 5, five days a week. And any design work that would come my way, I would just treat it as like extra. I would get contacted by a business owner to create a business plan or to create some various marketing materials and I would just not take it seriously if I'm being perfectly honest.
And it was in those initial conversations with you and me that I really began to think like I need to treat this seriously because this is serious.
Todd Butzer
So when you were - and thanks for being vulnerable about that because I think that's where we all learn is when we just can open up and say, this is what I was doing. So in those days, you're let's say you've got this full time salaried position. Somebody contacts you and says, Hey, I need a logo. And you say, yes, and you work with them and you charge them, you know, let's say $300 for a logo or whatever it is, thousand dollars for a logo, and they pay you that money at that time, Joe, was the money just going into your checking account?
Joe Rodriguez
Yeah, you know it. In the initial conversations that you and I had, you said something along the lines of there are some agents that pay, you know, their fees or whenever they get their commission checks, it goes straight to their checking account. And I think something like, that's wild. Can you believe that?
And I was like, oh, wow, that's unbelievable. Meanwhile, like, the invoice that you had just paid me went straight to my checking account. I think I spent it on my Buffalo Wild Wings or something. It was like, if I'm being completely honest, I think there was a part of me that was definitely apprehensive and internally defensive about, Oh, that's for real estate agents. You know, I'm a designer. I don't need to worry about that. But I think it was just me not wanting to truly admit that there was a problem with the way I was looking at my business and even like the limits I was putting on myself.
Todd Butzer
Thank you for that. So as you listened and produced these podcasts over the last three months or so, and you've you've heard several different guests on you've heard a CPA and a financial planner and a very gifted agent and so on. What started to sink in? What changes did you actually go out and start to do?
Joe Rodriguez
The biggest change for me was to treat the business seriously. It's not just it's not just a thing I could do on the weekend, get 200 bucks and get them for that and then spend it on tacos or something. It's something that I need to take as seriously as, you know, my regular job. The biggest change for me is forming a DBA and then using that to create separate accounts.
And that alone I say that's probably the the level of effort compared to the amount of reward I got from that is completely unbalanced because I always assumed that starting a business was this long, arduous legal process where you need to like get a lawyer, develop an LLC and do all this work in order to get your business off the ground. And it would be expensive and annoying.
So I met with a lawyer who I was referred to by a fellow freelancer who owns a photography business. And I spoke to the lawyer, explained my, you know, my situation, my business, how much money I bring in that kind of stuff. And he was like, you don't need an LLC. That, that kind of surprised me.
So I'm not gonna pretend like I know it completely, but I'm in Texas and there's a lot of like protections for business owners in Texas and essentially all the assets that would be on the line I don't have yet. And my own lawyer said that he didn't start his LLC until like six years into his business after he had built something that he needed to protect.
So within an hour of speaking to that lawyer, I went down to the county office, I got my DBA. It was like $30 - and I expensed that, by the way. And then I immediately took that DBA, went to the bank and set up my business checking and savings account within 2 hours, I've immediately put myself in a significantly better position because for me the biggest problem I had was that our money was competing against each other.
We had personal money and we had business money. And whenever those are in the same account, it makes it very difficult for me to make decisions that are good for the business, like buy a laptop, buy business cards, buy marketing materials. It's very difficult for me to make that decision when I'm making the decision from the same account that I pay rent from, that I buy groceries from. And psychologically, for me, it was this money's in the business account. It belongs to the business. The business needs to see this money before I do.
Todd Butzer
Yeah, that's great. So you I witnessed this, by the way, because when I was paying invoices to you, they were originally going to Joe Rodriguez. And and very quickly, after we began working together, I was soon sending payments to Roza Creative, which is your DBA. Correct. And I hope everybody's hearing what Joe brought up that, you know, I know we talk a lot about LLC and please seek your local legal advice and local tax advice, folks.
But for many of you, a sole proprietorship is totally fine. It's just we're still going to, though, operate as a business in that sole proprietorship. We're going to operate with our own banking accounts. We're going to operate with our own business credit card. And so on, and keep good track of that and keep business financials and all of that, which is what Joe is doing right now.
He's just doing it as a sole proprietor, doing business as was a creative is what he's doing. So so since making those moves, which you just said, did not take you that much time or that much money, Joe, what have you started to notice since this this. An aha. If you will, of I own a business. What, what's manifested from that?
What have you noticed?
Joe Rodriguez
I think I kind of said a little bit of it earlier and this might sound weird to some people, but I feel more free to spend the money that I have because it's for the business. I'm more free to make investments in the business and to do things that will grow it. And I'll say even just like the immediate response I've been having with my business, I've only been in operation since May of this year.
And the numbers I'm seeing now are in the past two months, I basically have done what I did all in 2021. I think that just derives from a focus that like, okay, this, I can now invest in the business and it can be its own thing. I think that just for me sitting here every week and hearing you talk with these really successful people and you yourself being a really successful person when it comes to your finances, I had this moment where I was like, How foolish would I be to be in these conversations?
Every week I hear them about two or three times as I edit and produce them and to let all the information go in one ear and out the other. You know, I'm being exposed to these ideas and to this knowledge I need to start implementing. I need to start making it part of my life and me and my wife.
We didn't operate from a budget for years and I think we knew that we were spending more money than we should have. But once we put the numbers on paper, we were kind of in shock of how much we were spending. And there's definitely a level of anxiety and pain that comes from that. It's like, Oh man, what have we been doing?
But once you get over the initial hurdle, you get to the point where you're like, Okay, that's where we are. Where do we want to be? How can we get there? You know, we have some financial goals now and we broke it up into bite sized chunks and we're making progress, you know, every month, every week, every day.
And, you know, we still have fun. We still, you know, go out shopping and go out to eat. But it's restrained. It's planned, it's limited because we never want our goals to be hampered by what we're doing in the moment. And I can't even say how freeing that is, the level of peace that gives me to know I'm doing everything I can in this moment as opposed to my entire relationship with money and financial stability hinge on essentially a gut feeling, right?
Todd Butzer
Boy, you said a lot there, Joe, and I'm so proud to hear you talk about that. You listened and then you did it a lot of us don't do is you you just started taking action and then it's like any other discipline as you start to work on it, the results start to show. And that's what you and your wife are experiencing, which is so fun.
Fun to witness. What steps are you still looking forward to getting started on? Are there some areas that you still haven't really started with?
Joe Rodriguez
So I definitely need to still create my P&L’s and create a business budget that I operate from because my business is so new. I'm still building the data essentially, and there's a lot of startup expenses. But I had a conversation with a bookkeeper last week. I had a conversation with the CPA last week as well, and we're kind of planning out what our annual return is going to look like at the end of the year. I know when to give them everything they need to get started, like January 20, 23.
My bookkeeper, we're going to have a cadence on a monthly basis where, you know, we just go over my spending and categorize it to make sure that we're in the appropriate place. And I think that I'm definitely going to go back to the previous episodes that we listened to and listen to them probably a few more times. Whenever we get into the weeds of like the P&L and the budget, just so I have a bit more clear of an understanding, but these financial experts, you've said it back and you know, the assembling your financial team episode, you they can only give you what you get out of them.
You know, you need to come with the right questions. You need to come with the right mindset because they have a ton of knowledge that you can draw from. But without the proper spirit of learning where you're like, I want to know more, it's very hard to get that information out of them.
Todd Butzer
That's absolutely correct. Yeah, no, that's absolutely correct. If we don't know the questions to ask, they're going to operate from whatever benchmarks they've got. But they're not they're not going to move in your direction necessarily without you asking the exact questions you want for your particular business or life that you've got going on right now.
So what parts of this have been easy? You mentioned the DBA was easy and getting started was easy. Were there any other parts of this that were really pretty easy for you to get started, or were there areas that were tougher than you thought?
Joe Rodriguez
I'll say this. The difficulty comes from the acknowledgment that I'm I'm wrong, that the way I'm operating, the way my money is flowing, that's wrong. And I think that that initial defensiveness has definitely been my most difficult challenge with this whole experience and like still acknowledging whenever I'm doing something wrong and not slipping back into old habits of like, you know, just spending money willy nilly, the mental blocks are what I would consider the most difficult part.
But once you get over that and as you start doing the functional steps, establish your entity, make your business accounts, make sure the money flows to those accounts. Contact a bookkeeper, contact a CPA. My wife is in insurance, so that makes that easy, you know, those kind of things. Like, I think the process gets easier as you move on.
And I think that I know for me that prior to this whole experience, the idea of tracking every dollar I spend and budgeting felt really overwhelming to me because it's like, Oh, I'm, it's been the rest of my life tracking every dollar I spend. But in reality it gets easier as you go on. And there's a lot of freedom that comes from that. I think I explained this to you earlier, Todd.
It’s that not knowing what's going on with my money always kept my anxiety at like a four or five, I had a ten and confronting the money brought my anxiety to like an eight or nine. But after that initial confrontation, it's down to like a zero. I'm not I'm not worried about the money because I know what's going on with it.
I know where it's going. And I know that even if I'm not where I want to be, I'm heading in the right direction.
Todd Butzer
Yeah, that's awesome. You really touched on a big point there, which is once you acknowledge and confront this, you really do it. You just start feeling better. Typically, I really believe that. So what advice would you give someone who's kind of where you were, you know, six months ago or so where you're you're you're just kind of throwing the money into your checking account.
Not a bad person, by the way, but you're throwing your money into your checking account. You're really kind of paying everything out of your personal bills. You really haven't established this as a business yet. And frankly, you've been a little reluctant to just kind of dove into this. What advice would you give us?
Joe Rodriguez
I feel like I've been saying it over and over again, but I don't know if I can say it enough. Establish the entity, set up your bank accounts for your business. That's the number one thing. And then if you've been in operation for a while, you know, doing this for several years, like I have, contact a bookkeeper and have them help you sort through the years of expenses that you may have missed.
Because, you know, often times we're spending business expenses on a daily basis. You know, whenever we are operating in this sort of like everything all in one pot and there are there are opportunities for deductions that you're missing, opportunities for business expenses that you're missing. I would just really encourage you to start the journey that's the most difficult part and find people who are, you know, that will be supportive of you.
I'm very lucky to have Todd kind of be like an accountability buddy for me to inform him on where I'm at in my business, where I'm at and my finances. Because, you know, we talk about it like literally every week with this podcast. So it's nice to have someone that wants to see you do better and will encourage you to do that.
Todd Butzer
It's a great suggestion Joe, by the way, thank you for that. And I've enjoyed the conversations as well, but it's a great suggestion for people to have an accountability partner or buddy that they can kind of check in with and say, this is what I've been doing and this is what I'm committed to doing. So this has been really, really fun today and it's fun to see you looking seriously at your business and the freedom that that's providing you.
And for those of you listening in, Joe's given you just a wealth of information today regarding what can happen when you actually take steps from what you're learning to get the money. Right. Thanks, Joe.
Joe Rodriguez
That concludes this episode of Get The Money Right. To stay up to date on the latest in Get The Money Right, follow us on social media and be sure to subscribe on your podcast platform of choice. If you want to support the show, please leave a five-star review and if you think what we’re sharing is valuable, we encourage you to share with your colleagues. If you are a real estate agent who is getting their money right and want to be a guest on the show, please submit all inquiries to getthemoneyright.podcast@gmail.com. Thank you for listening, and have a wonderful day.
In this episode, Todd will be interviewing a small business owner who has recently began their financial accountability journey.
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Hosted by: Todd Butzer
Produced by: Joe Rodriguez