Top Financial Moves When You Hit 3 Revenue Milestones with Erica Goode, CPA

Have you noticed how no one talks about what to do financially when your business hits certain milestones—and then you’re left wondering what financial moves make the most sense? CPA Erica Goode is out to change that.

We discuss:

Building a solid financial base for your brand-new expertise business (and why it’s OK to start with a spreadsheet).

How shame around money can keep you from getting the help you need—and why you want to reach out anyway.

The value of consistency—in paying yourself a salary, staying current with the IRS and starting to direct funds to the causes you care about.

When to think about saving for short and long-term goals, including tax-advantaged retirement.

Being aware of your money mindset and where you live on the SPEND to SAVE continuum.

 

LINKS

Erica Goode | Guide For Coaches + Consultants | LinkedIn | Instagram

Rochelle Moulton Email List | LinkedIn | Twitter| Instagram

GUEST BIO

Erica Goode, CPA is the host of the Coaches, Consultants, and Money podcast where she helps business owners get their money right. She also runs a virtual accounting firm supporting coaches and consultants with bookkeeping, tax planning, and CFO services. She’s a former Director of Finance at Walgreens and started her career as an auditor at KPMG. Erica also loves avocados and a heavy dose of sarcasm. She lives with her two kids and fellow-CPA husband in the mountains of Idaho.

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TRANSCRIPT

00:00 – 00:28
Erica Goode: There’s a lot of professionals who will tell you how much you need to save, but nobody’s holding your feet to the fire per se and nobody’s keeping you accountable. So like, it sounds all well and good that, yeah, I should put away $20, 000 a year or whatever that may be. But having somebody come alongside you and say, okay, in July, we’re doing 10 and in December, we’re doing 10. It’s in your cashflow forecast, I think makes the hugest difference in the world.

00:32 – 00:57
Rochelle Moulton: Hello, hello. Welcome to Soloist    Women, where we’re all about turning your expertise into wealth and impact. I’m Rochelle Moulton, and today I’m here with my pal, Erica Goode. And she is a CPA who runs a virtual accounting firm for coaches and consultants, and she hosts the Coaches, Consultants and Money podcast where she helps business owners get their money right. Erica, welcome. Thanks so much for having

00:57 – 01:01
Erica Goode: me, Michelle. This is so great.

01:01 – 01:15
Rochelle Moulton: Well, I am so looking forward to this discussion for like a multitude of reasons. But 1 of them is because I feel like no 1 ever talks about what to do financially when your business hits different milestones, you know, until it’s usually too late.

01:16 – 01:24
Erica Goode: Yeah, yeah, I think that’s a huge question I get is, or just some confusion out there of like, what should I be doing first? What should I be doing next?

01:24 – 01:41
Rochelle Moulton: Yeah, what do you do when? And so what we’re going to talk about today is what to do before you have any revenue. And then when you hit your first 150, 000 and then 300, 000. And Erica, I like how you refer to those as revenue toll gates. You guys are really

01:41 – 01:47
Erica Goode: helpful. Yeah. Yeah, we’re all on a journey, and we hit different points around the path.

01:47 – 02:11
Rochelle Moulton: Yeah. Well, in addition to that, I’d really love for our listeners to hear how you’ve gotten to this place. Because whenever we talk, whenever I watch you on Instagram or LinkedIn, by the way, follow her. It’s hysterical and helpful at the same time. You exude so much happiness for your life and passion for your work. Let’s start with what made you decide to start your own business.

02:12 – 02:43
Erica Goode: Oh, how I got to where I am. I recently said this and it was 1 of those things where people like said it out loud and I heard myself and I was like ooh isn’t that the truth I said it’s taking me a lot of years and a lot of tears I am very happy nothing fake on social media for me when you see that I appear happy, I’m very happy. I have a long, long, long career corporate career, like I think a lot of the listeners might hear as well. But I came out of college

02:43 – 03:26
Erica Goode: in a traditional CPA kind of way. I went to Big 4 Public Accounting, spent some time there and what I call Accounting Boot Camp, I did audit there and if anybody’s familiar with Big 4 Public Accounting, it is a boot camp for sure, but it teaches you well. And after that, I went to Fortune 50 retailer did corporate finance there, and spent years learning, SPNA, financial planning and analysis and budgeting, and just a whole bunch of the corporate race, if you will. And they came a time where it was just, just time to go home. I

03:26 – 04:00
Erica Goode: had had some burnout, I had had some come to Jesus moments. And it was just when I left that role it was you know it was a big big time in my career and at that time that I left I was in a good place actually but I had had enough experience in the corporate life to know that this is not what I should be chasing right now. What I really wanted to chase was our then 5 year olds and 1 year old at home. And I just wanted to be very present at home in that

04:00 – 04:20
Erica Goode: season of life. And so with lots of spreadsheets, and talks with my husband, it was time for me to come home. And he was fully supportive of that. I came home for a few years. And I say I was quote, just mom. Because anybody who is a parent knows that just being mom is still a lot of work.

04:21 – 04:22
Rochelle Moulton: Full-time plus.

04:23 – 04:57
Erica Goode: Yes, but I do say that it was easier than juggling both at the same time, a big corporate career and being mom. And so I was really just happy to be home and be present for for our littles and make PBJs and do bus stop pickup. And so I did that for a couple years and really just missed I missed the work. I never left my corporate gig because I didn’t like what I was doing. I have been budgeting and forecasting since I was 8 years old. And I did not leave that job because I didn’t

04:57 – 05:07
Erica Goode: like the work. And so I got to a point where I really just missed the accounting, missed the finance aspect of my old career. And so I, you know, accidentally started my own accounting firm, as we do.

05:08 – 05:12
Rochelle Moulton: Now, how did you wind up in Idaho? Because I know you were in Chicago.

05:13 – 05:47
Erica Goode: Yes, I’m lifelong Chicago suburbs, went to college in Illinois. And my husband, who also is a CPA, who also started at Big 4 Public Accounting at the same firm, which is how we met. But he was in Idaho, and I was in Chicago, and we just happened to meet at a conference in Florida. And the rest is history. We got married within a couple of years. And so I always say he did my place for 10 years and we’re doing his place for however long we left here now in Idaho.

05:48 – 06:10
Rochelle Moulton: I love that story. You know, all the times we’ve talked, I never knew when you moved to Idaho and the story behind that. So that’s awesome. Yeah. So let’s talk revenue for just a minute. Like how long did it take you to hit your first hundred thousand? Like if you were doing it accidentally, like were you not really focused on the revenue but on the work? I mean how did you approach that?

06:10 – 06:45
Erica Goode: Yeah, it really did happen on accident. I accidentally picked up my first client because it was a coach of my daughters who was then said 6 or 7 years old. And, and I really wasn’t worried about making money, we had obviously planned financially for me to not have an income. And so it wasn’t a financial need for me to go start a business. It was really just a missed passion. And so I picked up my first client and I honestly back then I had never even looked at QuickBooks. Like I came from a huge corporate background.

06:45 – 07:01
Erica Goode: I had never seen QuickBooks. I had to learn software. Yeah, I was I was an SAP. I was in BI tool like these big fortune 50 tools. And I was like, Oh, my gosh, I have to learn how to use a bookkeeping program.

07:01 – 07:02
Rochelle Moulton: Yeah.

07:03 – 07:43
Erica Goode: And so I did. And so it was really just more of a quiet building of a business. And I didn’t do any marketing for probably 3 or 4 years. And that was very intentional because because I had experienced burnout and in my life before that really had to work I was very very diligent and I held my boundaries very strong that I wasn’t going to build a business that I had to work outside of when my kids needed me. And so I always said, my business is going to grow as fast as my kids grow. And

07:43 – 08:06
Erica Goode: we say they grow fast, but when you’re trying to build a business, and if that’s your cadence, they also grow very slow. And so my business grew very slow intentionally and happily, because I only worked when they were not in the house when they were in preschool when they were in kindergarten. And so every year they grew an age and a grade, I got to work a little more.

08:07 – 08:13
Rochelle Moulton: Yeah. So more of a stair step, kind of like the kids are growing stair steps. So is your your business and your revenue.

08:14 – 08:24
Erica Goode: Yeah. And so I probably didn’t hit my chance your question. I probably didn’t hit my first 100, 000 until 3 or 4 years in the very intentionally because it didn’t tell anybody I had a business. I would not tell anybody.

08:25 – 08:39
Rochelle Moulton: But the other thing is, is you’re earning 6 figures and you’re not working full time. And when I say full time, I don’t mean 40 hours either. I mean, you know, full time in a job job now, nobody works 40 hours. It’s always significantly more.

08:39 – 09:01
Erica Goode: So right. Right. Yeah. And even to this day, I don’t I don’t work 40 hours. And so I still hold true to I only work with my kids are at school and I also and actually where we live, we only do 4 day work weeks. Like the town works on 4 days in the school operates on 4 days. And so I have to operate on 4 days as well.

09:02 – 09:04
Rochelle Moulton: Wow, that’s, oh that’s a whole other conversation.

09:04 – 09:07
Erica Goode: But I know, yeah it is, fascinating.

09:07 – 09:15
Rochelle Moulton: Yeah, it is awesome when you can work your life around that. It probably wouldn’t be if you had trouble with that fifth day, but that’s a whole other topic.

09:15 – 09:16
Erica Goode: Right.

09:16 – 09:42
Rochelle Moulton: Okay, so thank you Erica for sharing that. Yeah. So let’s, let’s get down to the kind of these financial moves that we can make. I hate using the word should, but the things we really want to be smart about. So if a listener is just getting started with their expertise business, just starts having revenue come in, what should she be thinking about?

09:43 – 10:01
Erica Goode: Yeah, so I think of kind of the toll gates and the path that we should be on as a pyramid that looks like a hierarchy, you know, way back when we would have called it a food pyramid and put all the carbs at the bottom because we needed to eat all the carbs, right? That’s how the 80s were. I don’t remember. I don’t know if you remember that.

10:01 – 10:05
Rochelle Moulton: Still works that way for me. I’m all about the carbs.

10:05 – 10:43
Erica Goode: Yeah, I’m going to live in that decade because those are tasty. So what I think of the financial hierarchy of what business owners need, it’s really layering that first financial foundation at the bottom. And that being setting up your LLC, getting your business insurance, getting your business bank account, setting up your bookkeeping procedures or process, how whatever you want that to be and really laying that that foundation so that everything you build your business on top of kind of has that solid financial and legal foundation so that everything is safe and solid on top of it.

10:43 – 10:58
Erica Goode: It’s really hard to go back And you almost have to redo everything. If you don’t do the LLC, the EIN, all of that seemingly unfun stuff at the beginning, you’re going to wind up having to unwind it and rewind it later down the road.

10:58 – 11:10
Rochelle Moulton: So is the current thinking, like if you’re starting your business right now that you want to start with an LLC, like right out of the gate versus, you know, like just doing business hours with a separate account.

11:11 – 11:44
Erica Goode: I mean, I think it’s easier down the road. I think an LLC always protects you legally. And the reason we set up an LLC is because an LLC kind of acts and I’m not getting legal advice here for the record. LLC kind of is a box and everything you put in that box is your business. All of the risk lives in that box. And so should somebody for example, should somebody, I’ll use me as an example, should somebody sue me for bad financial advice, they’re suing my LLC, not Erica Goodie. And so they can’t touch my

11:44 – 11:49
Erica Goode: house or my cards or my personal assets, they can only touch the assets of that LLC.

11:50 – 12:04
Rochelle Moulton: Perfectly said. It’s like I would be petrified to start a business without putting some kind of a ring around it. A ring of protection is kind of how I think about it. Okay, so the LLC you mentioned, insurance?

12:05 – 12:23
Erica Goode: Insurance, so if LLCs protect your personal assets, your business insurance protects your business assets. So the 2 of those are kind of like your, I don’t know, powerhouse twins that kind of protect you on both sides of your of your now life. You have a personal life and a business life and you want both of those to be protected.

12:24 – 12:39
Rochelle Moulton: And so when people are just starting out, like are you typically recommending that they have like long term disability insurance, some kind of, you know, business interruption, loss, liability insurance, Like what do you usually recommend right at the beginning?

12:40 – 13:14
Erica Goode: Yeah, I mean, again, I’m not an insurance salesman by any means, but I think just having a general liability professional insurance coverage just to kind of house what you’re doing. Some professions have specific coverage like CPAs need E&O insurance and if you’re a coach who’s also a therapist you might need malpractice insurance And so there’s different professions that might need additional items specifically, but in general, I would say a good professional general liability policy is going to cover you at the beginning.

13:15 – 13:42
Rochelle Moulton: Well, I think the other thing like we just have to tackle right now is the bookkeeping side because it just feels like so many people start the business and it’s not till tax time in their first year that they start to go, oh, what do I do? And God forbid if it’s a shoebox full of receipts, right? What do I do now? So how do you, how should people start with the bookkeeping process at the very beginning stages of their business?

13:42 – 14:15
Erica Goode: Yeah, I’m probably going to be the only CPA who says this. It’s okay to start with a spreadsheet. I mean, we all start somewhere, and I think especially in an expertise business where you don’t have heavy cost of sales and you don’t have heavy expenses, I think a spreadsheet, if that’s what you’re comfortable with, is perfectly fine to track where your revenue is coming in, what expenses are going out. If you’ve gone ahead and gotten a business bank account that makes it super extra easy because everything in and out of your business is just filtering through

14:15 – 14:16
Erica Goode: 1 bank account.

14:16 – 14:47
Rochelle Moulton: I like the idea of starting with a spreadsheet. When I started a little side business a while ago, that’s what I started with, was just a spreadsheet because it was an easy way between that and the bank account. I could figure out what was there. But Once you start to get more revenue, what I like personally is I love watching, whether it’s QuickBooks or FreshBooks or whatever platform somebody uses, I love watching all those little expenses go into the right categories and being able to just click on a report whenever I want.

14:48 – 15:04
Erica Goode: Yes, I mean, I love I love a good accounting software. That’s me. And that’s why I say it’s okay to start with a spreadsheet. I get a lot of clients who come to me embarrassed that they have a spreadsheet like, oh, I just have a spreadsheet. I’m like, no, no, no, you have a spreadsheet. That’s fantastic.

15:05 – 15:07
Rochelle Moulton: Yeah, it’s probably more than a lot of people start with. Yes.

15:07 – 15:35
Erica Goode: I find it especially women will come to me with a little bit of shame, a little bit of their shoulders up, and a little embarrassed that they have a spreadsheet, which is ironically usually far better than what their male counterparts are coming to me with. And so it’s so interesting that like, as women, we like, expect more out of ourselves, or we think we should be doing something different to you. I know you hate using that word, but we we should on ourselves.

15:36 – 15:38
Rochelle Moulton: Yeah, we do. We do. We should a lot.

15:39 – 15:56
Erica Goode: Huh. Up to our elbows and should. And and I think we we come with this like presumption of ourselves that we should be better at this. And it causes this internal shame that often our male counterparts do not carry with them.

15:56 – 16:32
Rochelle Moulton: You know, I’m glad you brought that up because this idea of shame makes me crazy. And I’m not saying I haven’t been there. I’m not saying that at all. But it’s just so misplaced. It’s like, I worry that someone that feels shame around their finances is not going to get the help that they need, because they’re so focused on that they’re not where they think they need to be. So I’m with you, like, come forward, whether it’s a shoebox or a spreadsheet or a perfect QuickBooks report, like come forward with that and just get met by

16:32 – 16:36
Rochelle Moulton: where you are with the professionals that you’re going to use.

16:36 – 16:45
Erica Goode: Yes, absolutely. And I will tell you that the men will come forward and couldn’t care less that they don’t have their act together and they don’t feel any shame about it.

16:46 – 16:55
Rochelle Moulton: Well, and the other piece is if a financial advisor kind of makes you feel shame, like run, right? Run, run.

16:56 – 17:07
Erica Goode: Yes. Also, do you know what else I hear? This is Like this makes me cringe when when women tell me that their tax CPA wants to speak to their husband.

17:08 – 17:10
Rochelle Moulton: Are you that still happens?

17:10 – 17:20
Erica Goode: Yes. Yes. In the year of 2023, this is still happening. And And it’s almost like it doesn’t only create shame in the woman, it’s anger now.

17:20 – 17:26
Rochelle Moulton: Yeah. I was going to say that’s a fireable offense in my, in my world. It’s like, excuse me.

17:26 – 17:38
Erica Goode: Yes. But you know, so often because this is what I hear is that, People are already, you know, they’re well into tax season and they don’t realize this is the person that they’ve hired, the person who’s asking to speak with their husband.

17:38 – 17:41
Rochelle Moulton: Yeah, and it’s kind of too late to do anything about it then.

17:41 – 17:52
Erica Goode: Yeah, you cut. Yeah, you’re kind of like, well, what do I do now? It’s end of February or early March and like, gosh, like, I just got to get this done. And now this is this is who I’ve got to work through it with.

17:53 – 18:03
Rochelle Moulton: God, that’s depressing. Did we hit the basics on the bottom of the pyramid for the starting or is there anything else that that someone who’s just getting started might want to think about?

18:04 – 18:23
Erica Goode: No, I think we hit it all. The only last thing I will say is there are plenty of people who are at the multi 6 figure mark that sometimes don’t have these things put together. And again, this is not a place to put shame on yourself like, oh, I should have gotten that business insurance years ago. No, it’s fine. We’re going to do it today. It’s not a big deal.

18:23 – 18:27
Rochelle Moulton: Yeah. Exactly. When we know better, we do better.

18:27 – 18:42
Erica Goode: Yeah. And I think there is this assumption that like, I should have learned this in college, or because I’m X age, I should know this. And if nobody taught you this, you should not know this. And that’s okay. This is the day you learn

18:43 – 19:00
Rochelle Moulton: it then. Yeah, it’s most places. There are some now that are starting to teach personal finance in high school, but most places don’t teach it, you know, unless you learn it at home, right? Which is not the majority. You don’t learn it till you have to. And sometimes we learn the hard way. I’m pointing to myself in this moment.

19:01 – 19:03
Erica Goode: We all learn at some point. Yes.

19:03 – 19:13
Rochelle Moulton: So let’s talk about the $150, 000 toll gate. So what do you see happening at that kind of magic number or magic range?

19:13 – 19:47
Erica Goode: Yeah, so this is this is a fun point in business, I think I see it. This is when people tend to come find me in my line of work, because things are going really well, they’ve proved a concept, they’ve proved a need. And now they’re making traction, and they’re able to get, you know, recurring clients. And it’s really exciting time in business. This is where we start wondering, well, am I, now I’ve figured this out, but like, am I doing it right? And so this is where with my clients, I start to build consistency. And by

19:47 – 20:28
Erica Goode: that, I mean, really cashflow consistency. This is where we really start to hone in on paying the IRS consistently. And that sounds a little funny like, well you should be paying the IRS every year. Yes, yes, absolutely. But as we grow and especially as a self-employed taxpayer, as we grow our businesses, that liability to the IRS grows much faster than we remember as a corporate employee. And that can really sneak up on us in April at the end of tax season. And we could see a potential tax bill that we had not anticipated. And that can

20:28 – 20:33
Erica Goode: really sour the mood on your growing fantastic business.

20:33 – 20:56
Rochelle Moulton: You think? Yes. I literally don’t have enough fingers to count the number of people who’ve said that to me, like around March or April. They’re like, my accountant just told me, the number that I thought was due for my taxes, it’s $30, 000 more than I thought. It’s those, those March and April surprises that can be terrifying if you don’t have the cash available to pay them.

20:56 – 21:20
Erica Goode: Absolutely. And then you spend the next year paying off not only your last year’s tax bill and then trying to stay update on your current tax bill and you almost feel like you have a 0 profit or 0 cash flow year, which is really just a sad year to have when your business actually from a revenue standpoint and from a helping people standpoint, it’s really thriving.

21:20 – 21:29
Rochelle Moulton: What does that look like, the consistency? Is it paying yourself a salary? Is it tucking away money for Uncle Sam? Like what does that look like?

21:29 – 22:02
Erica Goode: Yep, it’s a little bit. I kind of have 3 people we pay consistently. 1 is the IRS. We set up those quarterly tax payments and often your tax CPA is telling you what to put aside to the IRS based on last year. They’re not looking at this year. And so it’s really important to set aside money based on this year, not last year. And then secondly, we set up a consistent pay for the business owner for you the business owner, just to set up a regular monthly dollar amount cadence of what you can pay yourself. There’s

22:02 – 22:34
Erica Goode: some mixed, you know, mixed trendy mass, mass and money things where do you pay yourself a percentage of your revenue, or I like a flat dollar amount. And so I’m really big on paying yourself the same flat dollar amount every single month, because most of our bills in personal life are flat dollar amounts every month or consistent dollar amounts. And so I really think it’s important that your business life, pay your personal life a consistent amount that you can plan on.

22:34 – 22:35
Rochelle Moulton: Yes.

22:35 – 23:12
Erica Goode: And then the third thing, the third person, it was IRF yourself, and then anybody else I think you want to help. And by that I really mean charitable giving, especially when it comes to women, we generally have a passion, a cause, something where we want to feel like we’re making a difference with the money that we’re making. And so I think this is this process and that that 150 revenue mark is where we start building those consistencies of paying all the people that we want to be paying every year. And I think when you have a

23:12 – 23:34
Erica Goode: cause or a passion that’s important to you, the time to start doing it is now, as opposed to waiting for a time when you’re making X in revenue or X in profit, or you’ve been in business for so many years. I think if you have a passion to help somebody, you start doing it as soon as possible in whatever amount that feels right to you at that time.

23:35 – 24:01
Rochelle Moulton: I love that. I mean, the whole idea behind this podcast is to increase women’s wealth and impact. And, you know, I was thinking when I use those words, impact of the work that we do. But what you’re saying, which I love even more, is the impact that you can use with the money that you make. It’s not just your teachings and the people you touch that way, but the causes that you support in your life.

24:02 – 24:37
Erica Goode: Yeah, yeah, I think so often we feel helpless. I’ll speak for myself. I feel helpless because I’m not a doctor or I’m not a scientist or I’m not this inventor that can help the certain kind of people or area of the country that I really want to help. And so you kind of feel like, Oh, I can’t do anything, but it’s really amazing to think that we can turn accounting or IT or engineering or HR or marketing or branding, and we can create profit from that and then go give some of that money to the scientists

24:37 – 24:42
Erica Goode: and the doctors and the inventors that can help those people that we so desperately have a heart for.

24:43 – 24:59
Rochelle Moulton: Yeah. So I’m just curious though, is this the point at which you start talking about retirement planning through the business or do you wait till they’re further up the revenue scale? Is this part of the consistency?

25:00 – 25:34
Erica Goode: Yeah. So I think your first tollgate is setting up the consistency to pay yourself today because we went into business to pay ourselves. Yes, to help people. Yes, to do something. But we went into business, we didn’t go into hobby. And businesses make money and hobbies cost money. And so I think it’s really important like your step 1, pay yourself consistently. And then at that next tollgate, whether it be as soon as you get that consistency down, or at that next $300, 000 revenue tollgate that we had talked about. That’s when we start looking into really

25:34 – 26:02
Erica Goode: big future goals. Saving for retirement is paying for your kids’ college into a 529 is important to you. If really just anything that you have a financial goal around, Maybe it’s not retirement yet. Maybe it’s you just want to take your family on a week long vacation every year. It’s things that we want our business to drive for us in the future and just really building success around those goals that we’ve set for our business.

26:03 – 26:36
Rochelle Moulton: Yeah, you know, I’m thinking back to, you know, when I first started paying myself a salary, it felt, you know, I’ve had a business for a long time, but somehow it feels more real. When you pay yourself a salary, It’s like you’re not like looking for crumbs that are leftover after you get that. But you’re, you’re not only paying yourself, but you’re committing to paying yourself a regular amount. I just found that it added a level of, I don’t know if professionalism is the right word, but there was like an aspirational piece to it as well.

26:36 – 27:09
Rochelle Moulton: Like if I’m gonna pay myself this much, well, gee, I’d like to pay myself twice as much. What do I have to be able to do that? The other thing is that I’ve got a couple of regrets about the way I ran my the financial side of my business over the years. Thank goodness I’ve long since corrected them. But I wish I had started my solo 401k way sooner. Way sooner. It is such an incredible advantaged way to tuck money away. And it’s not like I didn’t know they existed. I just kind of just never really

27:09 – 27:28
Rochelle Moulton: paid attention to it. So I think I would have done that a lot sooner. So, you know, that’s why I asked. So once they’ve got that consistent pay myself, then you decide what you want to do next. And if 1 of them is a tax advantaged way to save for retirement, this would be the point where it would make sense.

27:29 – 28:08
Erica Goode: Yeah, absolutely. And that’s what I helped through with my clients of there’s so many options for self-employed retirement planning and I think we’re so Like we don’t we don’t know as W2 corporate employees how much more you can actually put away for retirement as a self-employed person until you get there. I mean, I had no idea. You know, at a W-2, you’re capped out in the low 20s. Maybe you have a catch-up contribution if you’re a certain age, but you come into the solo self-employed arena and suddenly you can start stocking away $70, 000 if you

28:08 – 28:23
Erica Goode: wanted to every year. Just like you said in the solo 401k and it’s just like I got here and I was like, how did I not know this existed? Because you don’t know, because it’s not even an option to you as a W2 employee.

28:24 – 28:54
Rochelle Moulton: Yeah, you don’t think about it. And there’s even some really crazy things with defined benefit plans that you can do if you really want to get crazy. So yeah, there’s a lot of options. And you really just have to find yourself the right advisor, your tax person, your accountant, your financial advisor if you have 1, to figure out the best way for your whole life, because your business is typically just 1 piece of your financial life. It might be the biggest piece, but it’s not the only piece.

28:55 – 29:29
Erica Goode: Yeah, absolutely. And the feedback I’ve seen in the marketplace and in the industry, just amongst business owners, is there’s a lot of professionals who will tell you how much you need to save but nobody’s holding your feet to the fire per se and nobody’s keeping you accountable so like it sounds all well and good that yeah I should put away $20, 000 a year or whatever that may be. But having somebody come alongside you and say, okay, in July, we’re doing 10 and in December, we’re doing 10. It’s in your cash flow forecast, I think makes

29:29 – 29:30
Erica Goode: the cutest difference in the world.

29:31 – 30:09
Rochelle Moulton: Oh, my God, yes. I mean, So I just have to share this a little bit. So I switched accountants recently because my other accountant who I’d been with for a while was very reactive. And I would get these tax surprises. And I said, I don’t want this surprise. And I’m happy to communicate. I’d rather, you know, keep giving data. So when I picked my next accountant, I said, okay, I need you to be proactive. I want to know how much money I need to be putting aside for taxes. I don’t want the $30, 000 surprise in

30:09 – 30:43
Rochelle Moulton: April. And so together, we designed a system. So I know When money comes into my business over a certain amount, I know what to do with it. And I have a plan, I know where it goes, and it sits there earning interest, waiting for the IRS. And I’m intentionally conservative so that I will have money left over, which is really fun because then we do something fun with the leftover money and we start the new year again at 0. But it’s not the norm for many CPAs, certainly not all, but for many CPAs, it’s not the

30:43 – 30:55
Rochelle Moulton: norm because they’re really focused on the tax equation, right? The production aspect of taxes versus really thinking about what makes sense for you and for your business.

30:56 – 31:24
Erica Goode: Yeah, absolutely. And so I get to see that from the other side because I don’t, not always, once in a while, I don’t do my clients tax returns. And so I get to communicate with other CPAs. And I’m kind of like this middleman, I always say I’m the translator, because sometimes if you say the wrong word to the tax person, or the tax person says the wrong word to the business owner, like nobody’s on the same page, which is really dangerous. And so I will send the email and I’ll be the person to send the email

31:24 – 31:53
Erica Goode: to the tax preparer and say, hey, profit looks like it’s going to come in at like, you know, $100, 000 in 2023. Can you give us an updated estimate? And they’ll give me the same estimate from last year, and which I will push back. And I don’t know that the business owner will always know to push back. I know to push back. And I I’m like, well, that’s the same number that you gave us last quarter. So how is the increased profit number taking up into account? We’ll be like, Oh, let me send you new numbers.

31:53 – 31:56
Erica Goode: Yeah, that’s what we’re looking for. Because we’re trying to avoid that tax surprise.

31:56 – 32:20
Rochelle Moulton: Yes. Yeah, it’s just it’s the focus. And I think as business owners, you know, what we usually want to do, the reason we go into business is we want to help people. We want to do the work. We don’t really want to think about all this other stuff. We have to think about it, you know, a certain amount. And so surrounding ourselves with the right advisors to make sure we’re asking the right questions is worth its weight in gold.

32:20 – 32:24
Erica Goode: Yes, yes, it could literally mean thousands to you.

32:24 – 32:31
Rochelle Moulton: Yeah, yeah. So, so is there anything else that that kind of 150 mark that we should be thinking about?

32:32 – 32:53
Erica Goode: No, I think that’s it. We kind of already hit the 300. The 300 is a big, big future vision that we just were talking about the retirement and just future goals for your business that we kind of already hit on. And That’s usually where we’ll start talking about S Corp, somewhere between 150 and 300 is where we start talking about transitioning to an S Corp as well.

32:54 – 33:12
Rochelle Moulton: Gotcha. It’s so funny because when I started my business, I started with 0 revenue. I immediately went to SubS because all the other businesses I’d had were sub-S’s. I didn’t even think about it. I just did it. And I look at it. In retrospect, I probably could have started with an LLC and work my way up.

33:13 – 33:31
Erica Goode: You could have, but sometimes people know right off the bat that they’ve got a hundred thousand dollar client that they’re gonna, you know, take with them from their old job or something. And sometimes it makes sense. But I think even in those situations, you could start with an LLC and then make your way, make your way up as you progress.

33:32 – 34:01
Rochelle Moulton: Yeah. So, you know, when I think about money in business, my mind always goes to mindset. Like, what’s your mindset around money? And all sorts of gurus have opinions about that. But are there sort of planks when you think about your most successful clients, are there things that they, ways that they look at money that are particularly helpful?

34:03 – 34:40
Erica Goode: Oh that’s a good question. Everybody’s so unique in how they how they look at money. Gosh, that’s a good question. I think there are, you know, it’s funny, because you can get the the person who wants to spend, spend, spend in their business and their personal life, right? And they don’t always see what that’s going to do to their profitability at the end of the day. And then on the flip side, you have the savers and I’ll raise my hand for being a saver. I’m almost sometimes to a detriment to myself being a saver that you

34:40 – 35:14
Erica Goode: don’t invest in your business and you’re holding back the growth of your business because your mindset is that you have to save everything and it’s really hard for you to spend. I think what helps people the most whether you go towards the saver end of the spectrum or the spender end of the spectrum is being aware of where you fall. Because as soon as you’re self aware, you can then make decisions based on what you know your natural inclination to. Like for myself, I would be like, well, I know I’m a saver, it’s hard for me

35:14 – 35:34
Erica Goode: to spend money. And so my instinct is going to be to not spend money on this business investment. But what do I think it’s actually going to drive? And I have the ability to convince myself that it’s probably the best business decision to invest in this because of, you know, whatever ROI I think I’m going to get back on that.

35:35 – 36:05
Rochelle Moulton: It’s almost like wherever we are on the spend-save spectrum, we’re always kind of maybe pushing ourselves a little towards the opposite end. It’s like if I’m a spender, it’s like, Oh, what would this look like if I didn’t spend the money? And what would you know, what am I going to get from this? And it may be they may look at it as an ROI. I’ve had clients who spend less on ROI and more on I don’t want to call it ego exactly, but sort of like a public perception. Like I want to spend money on

36:05 – 36:11
Rochelle Moulton: this thing that really isn’t going to drive revenue, but I’m going to feel really good about it. Right?

36:12 – 36:34
Erica Goode: Yeah. Yeah, I think just being self-aware of that, what your inclination is to just helps you immensely. And, and like you said, surrounding yourself with a team that maybe is aware of that as well and maybe has a different perspective than you, you know, sometimes we, it’s very easy to align ourselves with people who are just like us and sometimes that doesn’t serve us.

36:35 – 37:04
Rochelle Moulton: Yeah, I’m thinking of I was once in a group that my bookkeeper put together of and it was all women with different kinds of businesses and it was fascinating how they looked at spending money. It was so different and there were only like 5 women in the group. I don’t think any 1 of us looked at it the same way. I mean, and we all had fairly similar businesses of about the same size, but we would make spending decisions very differently.

37:05 – 37:32
Erica Goode: Yeah, I think it’s important to hear other people’s, other people’s take on things. And what a blessing to be in a group of women who wanna talk about money, because I don’t think that that naturally exists really in the world. It’s just so taboo to talk about money. We don’t actually get to hear other people’s experiences or thoughts about how they would spend or save something.

37:33 – 38:08
Rochelle Moulton: That drives me crazy. Like I do understand, at least in the US, where that taboo comes from, but it’s part of why I wanted to start this podcast. I wanted us to be able to talk about some of those things, like what it feels like when you’re on the brink financially, or what it feels like when you hit enough, when you hit the enough button. And we have a guest from, I think, the second episode who talks about what that was like. It’s, I just feel like it’s so secretive that we don’t have any idea what’s

38:08 – 38:08
Rochelle Moulton: possible.

38:10 – 38:42
Erica Goode: Yeah, absolutely. And I think, at least in my experience, I don’t know, you tell me, Rachelle, what you’ve experienced, but I think women actually are much more comfortable talking about money. We just don’t necessarily have a space for it. Whereas I think our men will shut down and men, I think in general will be like, no, we don’t talk about that at the dinner table, you know? Whereas like women, like if I get together for a girls weekend with my college friends, you better believe we’re talking about stock options and RSUs and tech stuff. Because everybody

38:42 – 38:47
Erica Goode: just needs a little help and they want to talk it out. Because Who else are they going to talk about it with? Well, you know,

38:47 – 38:58
Rochelle Moulton: it’s interesting. I’m thinking about some folks in my neighborhood where we talk about investments, and they’re all men. Like, they talk about investments. They say, oh, I bought this. And it’s, you know, it’s that I bought this, and

38:58 – 38:58
Erica Goode: it

38:58 – 39:31
Rochelle Moulton: went up, and I bought crypto, and it did this. And you know, and it’s so fascinating because those are the people who I do talk about money with but we don’t talk about so what’s your what’s your net worth? I mean, who wouldn’t you know, it’s like we wouldn’t discuss that but it’s we can kind of discuss around it. But with business owners and women in particular, it’s also why I started the Soloist Women community is because it’s so fascinating how much we can learn from each other and how someone has been able to either monetize

39:31 – 39:44
Rochelle Moulton: their business or pull that money out and build wealth for themselves and their family. Wealth being money, but not just money. It’s also free time and the flexibility on how you use that free time.

39:44 – 40:19
Erica Goode: Yeah, I was actually just on a call with somebody today, it was actually a group of women talking about money. And 1 of the women said, I just am finishing up a 3 month sabbatical, just trying to figure out what’s right in my business and what direction I want to go. And even that, like, that wasn’t necessarily about traditional money that we would normally talk about. But that was a permission to like, step back and assess your business and permission to not generate revenue for 3 months, so that I could get it right for the future.

40:19 – 40:30
Erica Goode: And I think that’s just so important where it’s right and like when you’re saying men get together and talk about what they’re investing, like that feels very flashy and showy off to me.

40:30 – 40:30
Rochelle Moulton: Yeah, I

40:30 – 40:51
Erica Goode: don’t know if that’s their heart’s intent. But like, that doesn’t feel as helpful to me. Like you’re telling me what you succeeded at, not what I can do in the future. Where somebody getting together and saying, Hey, I just did this really big thing, like not working for 3 months. That’s a big thing in the United States. Yeah, You know, and kind of like permission to do that, like to the rest of you.

40:52 – 41:05
Rochelle Moulton: Yes, and we shouldn’t need permission. We want to be able to do what we want to, but it’s helpful when you look around you and you can see other people, especially other women, doing the thing that you want to do.

41:05 – 41:06
Erica Goode: Yeah.

41:07 – 41:42
Rochelle Moulton: Yeah. Yeah. I’ve been doing these 15-minute conversations with women before they join the community and it’s been so really inspiring to hear what they’ve done. And there’s some women who, you know, in their first year of business, they’ve almost hit 200, 000 and they’re not, you know, balls to the wall 60 hours a week. They’re doing it our way, Right? The way that allows you to have a life and have some dreams and a vision for how you want to live your life. And until you talk to some people like that, especially in the expertise space,

41:42 – 42:03
Rochelle Moulton: it’s hard to know that they exist. It’s like a silent underground almost. So to be able to surface the questions around money and around how we spend our time and how we build our businesses or how we take time off from our businesses is, I just think it’s hugely helpful, is having those conversations.

42:05 – 42:07
Erica Goode: Yes, we need to normalize the conversations.

42:09 – 42:27
Rochelle Moulton: Yes. Couldn’t agree more. So Erica, I have 1, I think, last question for you, which is, if you could go back to who you were when you first started your business, what’s the 1 thing you would advise her to do?

42:29 – 42:30
Erica Goode: Oh, Rochelle.

42:30 – 42:34
Rochelle Moulton: I know you did it accidentally, so it’s maybe not a fair question, but I’m curious.

42:35 – 42:48
Erica Goode: I know I’m trying. I’m trying to. Oh, don’t be so afraid. Don’t be so there. I’m not even going to give it any more thought because it’s the first thing that came into my mind. Don’t be so afraid.

42:48 – 42:51
Rochelle Moulton: Yeah, yeah, that makes perfect sense.

42:51 – 43:28
Erica Goode: It’s a very, at least for me, very scary. And I don’t come from a family of entrepreneurs. And you’re a saver. And I’m a, yes, I’m risk averse, I’m a saver. We like our W2 jobs and very stable business or very stable companies. You know, my, my dad was at 1 company his entire career. And that’s, that’s what I saw growing up. And So the idea of making something from scratch is, can be very scary. And I did it, but I did it with a little bit of nerves, a little more nerves than I would have

43:28 – 43:42
Erica Goode: liked. And I think I’d go back to that woman and tell her it’s going to be okay. Don’t be so scared. You’re smart. People need what you have to offer. And you can do this.

43:42 – 43:44
Rochelle Moulton: Yeah, you’ll figure it out.

43:44 – 43:44
Erica Goode: Yeah,

43:44 – 43:46
Rochelle Moulton: which you obviously did.

43:48 – 43:52
Erica Goode: We’re all still figuring it out every day, aren’t we? There’s always something new to figure out.

43:52 – 44:13
Rochelle Moulton: I know. I know. That’s why I always laugh. I think sometimes people at corporate are like, well, you know, you’ve been in business, you know, 20 years now, like you’ve got it all figured out. No, because they change the rules. Everything changes every year, and your life changes and what you’re interested in changes. But that’s, at least for me, that’s the fun part of having a business.

44:13 – 44:33
Erica Goode: That’s the fun part. Yes, especially when, Well, for me, when you’re in a career or in an industry that is so repetitive, like we do taxes every year. We close the books every month. And so to have, you know, the fun part is things change. Things change and We got to keep up with it and figure it out. And that keeps us on our toes.

44:34 – 44:45
Rochelle Moulton: Yeah. Well, Erica, I’m going to put all this in the show notes, including a link to your wonderful podcast. Where can listeners go to learn more about you and your work?

44:45 – 44:55
Erica Goode: You can find out all about me on ericagoodie.com, but if you want to be a little more casual, you can see me hanging out at LinkedIn or on Instagram.

44:56 – 45:00
Rochelle Moulton: Both of which I recommend because they’re so much fun. I love following you there.

45:01 – 45:02
Erica Goode: You try not to be a boring accountant.

45:03 – 45:22
Rochelle Moulton: No, definitely not. You do not fall into that category. So Erica, thank you so much. I really appreciate not only your being here, but you’re talking about money shame and permission to do the things that we want and to experiment with our businesses. So thank you so much.

45:23 – 45:29
Erica Goode: Yeah, thank you so much for having me, Michelle. I love that you’re doing this and just let me support you however you can.

45:29 – 45:37
Rochelle Moulton: That’s awesome. Okay, everybody, so that’s it for this episode. I hope you’ll join us next time for Soloist Women. Bye bye!