Intro to a future penta-millionaire

[911Carrera]

Welcome to the boards dude.

 

[77startup]

I'll see you in the winners circle

 

[rexxkai]

Sounds like a plan; defined, reasonable time limits -- if your product/service is strong enough, should be doable. Welcome aboard!

great point, makes me think that i should revise and make my plan more clear

 

[JEdwards]

good going... Break even is the easy part.. paying yourself is the hard part.

Keep it up.

 

[CPisHere]

good going... Break even is the easy part.. paying yourself is the hard part.

Keep it up.

Breaking even in the first month of a completely new concept brick & mortar retail store....

But you are right, that was the easy part. The tough part will be growing large & fast enough successfully. I've just hired a consultant who helped one of his clients go from 1 store to 14 in 7 years, so I'm very excited.

 

[theBiz]

Careful, if you pay out $100K in distributions and $0K in salary you will be ripe for an audit. You must pay yourself a reasonable salary relative to distributions.

can someone elaborate, why must you pay yourself regarding your distribution amount?

 

[healthstatus]

The IRS wants payroll taxes and unemployment to be collected, the assumption is that they have a "S Corporation". My accountant has suggested somewhere in the neighborhood of 50% distributions and 50% salary as a good guidepost. Check with your tax advisor to make sure that works in your situation.

 

[CPisHere]

Correct healthstatus, it comes down to taxes.

My understanding is that the law merely says the salary must be "reasonable", which leaves a lot of room for interpretation. Per my consultant, a lot of owners pay themselves something like a fresh college grad ($30 to $40k) in salary, and keep it in this range until the profit (after many 'personal' expenses have been run through) of the business is ~4X this high. At that point they keep the salary in the 1/4th of profit range.

This is NOT tax advice, just what I've heard.

 

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[CPisHere]

Be careful putting too many "personal" expenses through the company, it destroys the personal liability protection that a corporation normally provides. We had dealings with a shady character, when we were forced to go to court to get several hundred thousand dollars of resolution, he bankrupted the company. We showed how he had used the company as his personal bank (legal term is piercing the corporate veil), and were able to go after his personal assets.

By 'personal' expenses, I mean the things you are legally allowed to run through the business - your car, your cellphone, home office, etc. I should have specified.

 

[CPisHere]

Wtf....

Guess I failed.

 

[devine]

This thread is hilarious.

2OP, don't F*cking settle. You'll make it.

 

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[mayana]

Okay okay I was unnecessarily rude and should shut up so I'll do that now.

Very cool! Not everyone will come out and say that Glad that you are still around.

 

[CPisHere]

Aha! Yes, that's how I prefer to work. Get into a rhythm, do the right thing, and the results will follow.

James Clear wrote an excellent article about systems vs goals here:

• http://jamesclear.com/goals-systems

I recently had a call with someone of the SMART goals mindset (who funnily enough had a net worth goal) and I tried really hard to explain my way of working. I was editing it to drop into the forum but I wasn't sure it would have been useful. I'll add it to my list.

A SMART goal is an okay starting place, but it's just not real helpful to achieving the goal. Fine, set the $X million net worth goal, but then choose a system to achieve it and focus on that.

Nick Saban, football coach at University of Alabama, may be the greatest practitioner of this philosophy with his "process" focus.

 

[mitchyQ]

For me, the issue was less about his financial position to give you advice and more about the specific advice he gave. He basically gave you a lot of motivational platitudes, but given that you've been running this business for 5 years it sounds like motivation is not what you need.

After five years of running a business, telling someone that they need to work hard and they need to read books and they need to really want it is ridiculous. You don't get five years into a business if you're not motivated and if you're not working hard to make it work.

Reminds me of the time a couple years ago when I was at a party and a guy there finds out that I flip houses. He struck up a conversation and decided to give me advice. But, it wasn't worthwhile advice... It was stuff like, "You make your money when you buy," and "If your offer isn't embarrassing, you offered too much." The best part of the conversation is when he recommended my own book to me without knowing who I was. And I just listened and smiled.

I was annoyed with that guy, but NOT because I felt like he wasn't good enough to give me advice. I was annoyed because he didn't take the time to figure out his audience before giving advice and he didn't tailor the message towards his audience. Same with the guy's response to your post.

In the entrepreneurship world, being able to figure out your audience and tailor your message appropriately is a very important skill.

If you don't mind me asking, which book is it?

 

[nradam123]

I don't want to be rude, but are you in a position to be giving me advice?

Read my post again. If you don't identify with it, leave it.

 

[BlakeRVA]

Look, I agree it was bad advice. My point is that you shouldn't burn bridges with people for no reason. You never know who you are talking to or how they might be able to help you in the future.

What if someone gives you bad advice on the forum? Ignore it or help them understand how they can improve the feedback they give others.

As MJ talks about in his book, your net worth is directly tied to the value you provide to others.

It starts with the little things. Be respectful and helpful and see where it gets you in life.

 

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[Jon L]

Despite the sideshow drama, just wanted to say thanks for updating the thread. Most people who make bold declarations disappear from the forum and go into hiding because they find out posting "I'm going to be rich in 5 years!" is not the same thing as doing it.

Very much agree. We all benefit quite a bit from posts like this.

 

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[nradam123]

Woah, I just read this thread and its all about me lol.

Honestly, what i feel really happy about is that I would have participated in this drama 11 months ago. This is feedback that I have matured a lot mentally in my journey.

Secondly, I get feedback all day, every hour sometimes. Some feedback hurts. What I learned "very" early on is that every feedback matters. When i improve my product or service its the feedback that takes me from A to B and B to C until I reach Z. The key is to figure out how to understand the feedback without letting your mind and ego get in the way.

Lastly, its for OP's own good. Forget my feedback, but if you reacted to it, its guarantee that you haven't been tested (or learned from the tests) enough in business in 5 years.