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Defining Your Business’ Finances for Tax Season with JWellsCFO’s Jeremy Wells

April 29, 2020

Outsourced back office services.

Jeremy Wells is the Founder and CEO of JWellsCFO.

JWellsCFO helps small businesses operate like Fortune 500 companies as your strategic ally on finance, operations, and revenue.

Learn more about how Jeremy Wells can help your business with the back office services by listening to this episode of The Thoughtful Entrepreneur above and don’t forget to subscribe on   Apple Podcasts – Stitcher – Spotify –Google Play –Castbox – TuneIn – RSS.

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Josh Elledge: Welcome to The Thoughtful Entrepreneur Show. I'm Josh Elledge, Founder and CEO of UpMyInfluence.com. We turn entrepreneurs into media celebrities, grow their authority, and help them build partnerships with top influencers. We believe that every person has a unique message that can positively impact the world. stick around to the end of the show, where I'll reveal how you can be our next guest on one of the fastest growing daily inspiration podcasts on the planet in 15 to 20 minutes. Let's go.

All right with us right now. We've got Jeremy Wells. Jeremy, you are the Founder and CEO of JWellsCFO.com, Jeremy, I'm a big fan of having a CFO and and I was at first off Thank you for thank you for joining us.

Thank you very much for having me. It's pleasure to be on here.

So at what point do you think obviously provide a lot of services and your base just up the road and St. Augustine, Florida you provide Tax Services. Looks like you do a lot of planning, analysis, reporting, budgeting, sales, accounting, that sort of thing. Can you just start off I kind of kind of spoiled it by kind of giving you a quick overview, but can you kind of explain what Jay well, CFO does? Yeah, absolutely.

And and, you know, you started off with it taxes, the number one thing that, you know, individuals, families, small business owners, the number one thing they're concerned with was his taxes, especially when we get around the start of the year, right. When we get into what we accounts called tax season, it's all about the taxes. But you know, the reason you have to worry about taxes is because you're making money. And so either you're making that from a job or you're making it from a business you're running. And so the questions that I like to get into once tax season is over is how can I help you be better at your job? or How can I help you be better at running your business and so very quickly, that conversation goes from just being How can I get you a better deal on your taxes to how can I improve help you improve your business? How can I help you improve your career prospects? These kinds of things, too. And so that really starts to fall under that umbrella of that CFO. So I put it out there that I'm not just your tax guy, right? I am your chief financial officer. Usually, that's something that big fortune 500 corporations have is a CFO, somebody in that in that leadership? Well, I want to bring that model down to anybody and everybody who just wants a little bit of help with their finances.

So Jeremy, you know, I know, there's probably a lot of, you know, people like let's talk about the life cycle life cycle of a lot of typical listeners to this program, as they probably were working a regular job. Then they started free, you know, maybe freelancing and consulting, and then that's kind of expanded. Maybe they went the agency route, maybe they developed a SaaS product, you know, maybe they developed another kind of business, and now they're growing and scaling and so they may be young. The point of this question, but at what point does it make sense for someone who's doing freelancing to say, Oh, well, I'm just going to use some free tax software to saying, No, I should actually be a little bit more thoughtful about this and bring in as a consultant like yourself.

Yeah. I it's a simple answer, that it's never too early. Right. I mean, as soon as the, as soon as the germ of that thought enters your mind, maybe I want to do something outside of what I've been doing, get get help with that, whether it's in the form of a mentor or an advisor or professional such as myself, and especially if you're going that route, where you're going to be starting a business, you're going to start taking on the obligations of running a business, which is that you're keeping good records for that business, that you're separating the business from your personal finances through opening a separate bank account. You know, whether it you know, and now you've got a separate tax filing obligation for that business. That all that starts the moment you start developing that product, it starts before you even make your first sale. Because there is something there is some work, there's some expense that went into getting yourself to that point. So at that point, you know, at that point where you've got that idea, be talking to a professional, make sure that you've got somebody on your side, I scale, the services that I offer, as well as the pricing to make it to where anybody at any stage can get the help they need. On top of the fact that it's free consultation, you know, to talk to me, so you automatically get a free half hour to just run these ideas by me. And then if it's something that we can build on, we can go from there, but I tailor every single engagement I tailor every single contract that I have with my clients to whatever that client needs.

And so to get the free consultation, I just go to JWellsCFO.com, is that right? That's right,

that's right. You go there, you know, I make it as simple as possible. You go there, you click the link, it'll take you to my calendly page, which is where You can find a time that works for you. And once you set up that appointment, it's automatically on my calendar. I'm looking forward to it, I get a notification. And and we'll get on that call, and we'll figure out how I can help you.

That's awesome. All right. So, so at the beginning, obviously, people likely come to you, because they have they start with the tech services. And can you kind of talk about the general evolution as businesses start growing and scaling? And, and at what point do they say, you know, we, we need some pretty robust CFO services?

Yeah. And so, you know, you know, I just gave a talk on this the other day, you know, if you if you, I like to look at the example of Apple, right, the, you know, this huge giant tech company, but even that, right, this, you know, trillion dollar business, at one point, it was a guy in his garage, tinkering around with some hardware, and it was nothing more than that. And so at some point, we're all Just people tinkering around in the garage, whether it's an idea for some new product that's going to revolutionize your field or some service that's going to blow away your industry. It all starts somewhere, right? And so, from there, you start to get into ideas of, you know, how are we going to make sure that this thing is legitimate? How are we going to make sure that financially I've separated this business operation from my personal finances? That's the number one red flag. Yeah, in an IRS audit is what the IRS calls commingling where they can't tell the difference between your business finances and your personal finances. So if I'm looking through, you know, a lot of small businesses, they have 12 months of bank statements, and that's what they consider their bookkeeping. The problem is, it's all running out of the same checking account. So how can I tell if this trip to the grocery store was a business expense or a personal expense? Well, the IRS default position is it's all personal at that point. If they can't easily tell the difference between business and personal, then it must all be personal and that can Cause you big problems, you're going to lose all those deductible expenses, you're going to pay taxes on all that money that you shouldn't have in the first place. So the very first thing we need to do is get that business and personal finance separated, then we need to start looking into whether we need to legally separate this business from you. And so we start talking about actually registering the business whether you need an LLC or not, a lot of people, they they jump on to the Secretary of State website for their state, and they say I need a I need a corporate I need to incorporate right or I need an LLC. And even worse, they'll go here, they'll hear about these deals that you can get if you register your business out of state, right. And so I need a Delaware Corporation, Wyoming LLC, right. And there are some cases where that makes sense. But for the vast overwhelming majority of cases, it doesn't, right, you just want a simple LLC in your home state 99% of the time, that'll get it done. And so that's something that you know, we help with as well. From that point, we can start launching into more advanced tasks. Planning strategies. So a lot of people have heard of an S corp, you know, self employed people, you know, buddy of mine told me I need an S corp, what's that gonna do? So then we start looking at these kinds of strategies. And this is all assuming it's just you, right? You know, Apple Computer originally started off as a partnership between Steve Jobs and Steve Wozniak, what if you've got a partner, right? How are you two going to differentiate what one partner contributed to the business versus the other one, how much of the profits go to one partner versus the other one, all of this needs to be spelled out from the very beginning because if it's not, it's going to cause problems down the road and I've seen it too many times. Hmm.

So Jeremy will talk just briefly as well like how you found your way to starting and launching your own company which is gone on to your rapidly growing, so we want to talk about what you're doing right. And, but but you know, just kind of a little bit of a backstory. How did you get to where you are right now? Is it a little bit circuitous, not Not very tradition. Yeah,

absolutely no, I started off thinking I was going to go to law school, and then law school turned into grad school. And I ended up teaching at a university in Texas for five years. The last couple years of that, I realized that, you know, even though I think I'm a pretty decent public speaker getting up in front of 80 100 400, college students, you know, 19 year olds every day, that just wasn't doing it for me anymore. And so I started looking for alternatives. I still enjoy that aspect of teaching of helping of, you know, inspiring and so so, you know, one of these service field right just seemed like where I get a chance to still have that experience of helping individuals. And so I looked into accounting university I was at was very good as far as letting faculty and staff you know, continue with their education even though they were teaching so I took some accounting courses, hit it off, met a CPA online, literally through direct messages on Twitter. Since then, he's become my mentor, he helped me get my business up and running started referring some potential clients to me who would become some of my best clients now, and it just kind of took off from there. And so I did some work in the meantime for some other firms to try to, you know, make ends meet so that I could get out of academia and, you know, put myself fully into accounting. But really, in May of 2019, right after the the 2019 tax season was over, I went full time with my own firm. And in you know, the the six or eight months that followed, really went from, you know, just barely getting by on what that firm was producing, to where now, revenue from that firm has tripled, the client base has doubled. And you know, I've really had an opportunity to step back and think hard about what are the services I'm offering? What does my ideal client look like? What does my target demographic look like? And so now that we're going into the next tax season, I'm in control of my own family. And control my own destiny and I love it. I wouldn't trade anything about it.

What have you done specifically to grow your business? Like and I guess, you know, predominantly, you know, what are you doing for client acquisition?

So, you know, the there's this idea in accounting that, you know, there are new small businesses opening every day everybody has filed tax return it most accountants think you don't have to do much, right? You don't have to do my

vision. People just stop being a great accountant that exactly

right, you know, just just word of mouth, word of mouth. And there's some truth to that there's some merit to that. The problem is, you know, you get out of it, what you put in, right and so you're gonna get everybody coming down the street that sees your, you know, firm signed by the road, and everybody thinking I need to get my taxes done. They stop in. Well, that doesn't mean you're really getting quality clients. It doesn't mean you're getting the clients that you want. It doesn't mean you're getting yourself into the spaces that they're hanging out in and getting yourself attracting those kinds of clients that you really want to be working with. You get so busy with the work, you don't really want that you don't have time to focus on the work you do. So I knew I wanted a different direction from that. I actually went out and contracted with a with an outsourced Chief Marketing Officer an outsourced cmo who specializes in accounting practices. And he has helped me launch a podcast focused on what my ideal client looks like figure out a way to get myself into the spaces that people in that niche are really focusing in what he calls strategic positioning. So you know, I don't want to be accountant hanging out with a bunch of other accountants, that doesn't get me in a business. But if I know what my target client is, I need to find out where they're hanging out and be there so that I'm in there and I need to be learning about what their industry demands, what their daily lives look like, figure out what they think they need, so that I can put myself in a position where they're coming to me, right? And and eventually there'll be that inflection point where I've been going to them, but now they're coming to me. And not just anybody in everybody. But that ideal client. And so that's actually turned out pretty well, the last few months, starting to see some of that picking up, you know, and so that that's been his biggest piece of advice to me. And it would be mine to my clients as well, you know, figure out what that tart, you know, at first, you got to scrap, you got to hustle, you got to get whatever comes in the door. But eventually, when you really want to scale when you really want to grow when you proven the concept, figure out what that target client is and go after that.

Yeah. So specifically, like what do you do for advertising? Or how do people discover you?

So the podcast is one thing that's been pretty big and and not necessarily just because Oh, look, I'm putting out a podcast. So I've got a weekly podcast where I bring on entrepreneurs who have interesting stories to tell. Right? And one thing has been, it's not just the process of putting that out there and saying, Oh, look at me, I'm so cool. I'm bringing all these people in. Again, it's actually reaching out to people that I want to be guest on my podcast, right? And through that starting a conversation with them, and not just about themselves, but people they know. Right? And so now just through that process of reaching out saying, hey, I've got a podcast, would you like to come on it? Right now I'm putting myself in front of them. Right. So again, that that's part of that strategic positioning. But, you know, once you start sharing that through social media, social media was something I had to relearn. I remember the day on my college campus, when rumor spread around that Facebook was coming to our college because back in the original days, where you had to have that.edu email address to log on to Facebook to set up a Facebook account. And all my friends that had gone to the bigger State University, they were already on it. And you know, I went to a smaller college. And so the day that we finally got it on campus, ran to the library to go to the computer lab and every computer was full. Everybody was trying to set up there. Right. And so, you know, I, that's how I remembered Facebook, you know, and then it got to where anybody and everybody can be on Facebook. And so that's something I'm having to relearn, because some of my target clients, they're operating out of Facebook, you know, and Facebook has become just a huge marketing machine. You know, back in the day, when I first got on it, it was this, you had to know somebody before you added them as a friend on Facebook. And now it's the other way around. I'm adding people as friends on Facebook so that I can get to know them so that I can figure out if these are people that I can help. And so it's just a shift in logic. It's a shift in mindset.

Yeah. Yeah. Awesome. Well, Jeremy Wells, I want to thank you so much for joining us. You are at JWellsCFO,com do a free consultation. Listen to the person's listening to us. I mean, hopefully you're surrounding yourself with smart money people. And if you're not, or if you'd like to get a second opinion, which I highly run Then, then you go to J Wells CFO dot com talk with Jeremy. Jeremy is a good guy. And he'd be happy, I'm sure, Jeremy to, to help give them some some great guidance in that in that initial call. Absolutely.

Absolutely. Yeah. The first thing I always do with a new client, I look over their last year's tax return. You know, that's where I start there. Get to know about you figure out if there's any way I can help you. And then we move forward from there. Fantastic.

Jeremy, what's your podcast?

podcast is a Jay will see a photo. It comes out every Monday and, you know, always happy to have guests coming on, like I said, that have these inspiring stories that have interesting stories that have some sort of different take on their field, their industry. So you know, more than more than happy to talk about people coming on to that as well.

Brilliant. Well, Jeremy, well, thank you so much for joining us.

Your deal. Thank you very much for having me. It's been fun.

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