In the previous episode of Mitchell's Mailbag, Mitchell and Scott set aside one email to dedicate an entire episode to -- this is that email! Listener Tim W. (T-dub for short) shares his new SEO marketing business he has rolled out, and some reservations he has about growing it beyond a certain point. While T-dub only wants to grow the business enough to cover his monthly nut and a little profit on top, Mitchell and Scott warn of the dangers of a business that just generates enough profit to get by, especially when times get tough and business slows down. They also take aim at his service offe ..read more

Mitchell Baldridge, CPA and Scott Hambrick reach into the Stupid Tax inbox and look at three questions submitted by listeners. One young business owner started a handyman business in the fall of 2023 and started off with a bang, making $14k in his first full month of operation. The following three months were lean, however, with revenue falling off signficantly and net operating losses. Mitchell and Scott offer some advice on ways to figure out what worked in the first month, and target his customer base with higher margin, more attractive service offerings.   Another listener has been si ..read more

Many business owners struggle with the idea of raising prices. Even in the current environment of high inflation and rapidly increasing costs for just about everything, many people struggle to raise prices. Sometimes it's in fear of losing good business, sometimes it's because raising prices feels like conflict and owners are conflict-avoidan. Other times it is because people have deep seated insecurities and low self-confidence, and feel like they simply aren't worth the extra fee. Regardless of the reason, raising prices regularly, to keep pace with the costs of running the business as well ..read more

Mitchell and Scott discuss a common problem that successful business owners encounter in their first coupe years of operation -- an income tax trap caused by rapid growth. Here's the scenario: our young business owner Connor leaves his low paying W-2 job to start a business, and it's a hit! He generates $150k in profit in his first year of operation. He leaves $50k in the business, and distributes $100k to himself. The newfound income is a windfall for his family. But... the looming tax bill is greater than you think, and requires careful planning to make sure you have enough cash to cover it ..read more

Bad businesses are a Ponzi scheme, says Mitchell, in which owners hang on for dear life until the next check clears, only to immediately be in the hole again when the next project -- and the costs associated with it -- comes in. In fact, most businesses start this way! The job of the owner is to turn that bad starting business into a good one, a business where there is plenty of cash flow to handle the costs associated with taking on new business, hiring new employees, and other working capital needs without needing the cash from the next project to cover them.   Lack of capital, or under ..read more

Hang around a group of small business owners -- folks who have been in the business for a long time -- and you'll find that nearly every one of them has had someone steal from them or commit fraud at one time or another. Small businesses are prime targets for fraud and theft, mainly because they tend to have weak or ineffective fraud controls, if they have any at all! It's imperative for any small business owner to understand common fraud risks and develop some basic processes to ensure they don't happen.   The most common reason people get away with unchecked fraud and theft is because t ..read more

Mitchell and Scott answer questions submitted by listeners, including: do I need a lawyer, how much do you need to know about industry to buy a business, should you ever go into debt to buy a business, and more!   Ask Mitchell and Scott a question: show@stupidtaxpod.com   Stupid Tax is now on Twitter/X! @stupidtaxpod   Mitchell Baldridge Twitter: @baldridgecpa https://baldridgecpa.ck.page https://baldridgefinancial.com   Scott Hambrick Twitter: @hambrickscott IG: @ogscotthambrick https://onlinegreatbooks.com https://scotthambrick.com ..read more

Starting and growing a business is hard, but are some harder than others? Absolutely! Scott and Mitchell discuss the factors that make a business difficult to succeed in, and what things they like to look for in businesses with a high chance of success. Scott also points out that while some businesses are difficult to scale, there's no reason an operator can't make a good living running a business at a certain level and refusing to grow beyond that point. At the end of the day, the business exists to serve its owner, and a profitable, cash-flowing business that does not achieve huge scale but ..read more

Mitchell and Scott pick up today's episode in the middle of a conversation about whether "the kids are gonna be alright." As Gen Z enters the workforce en masse, they do so with very different expectations than the millenials before them. Zoomers are well aware of the long and ongoing slide in real middle class wages, as well as employment uncertainty. They have less of the entitlement and belief in institutions compared to millenials, and they exhibit no lack of work ethic. In spite of this, says Scott, many Zoomers lack creativity and ambition when it comes to building their lives, and, in t ..read more

Mitchell Baldridge and Scott Hambrick answer a listener question asking about switching from cash accounting to accrual accounting in his farming buinsess, and a potential tax bill that would arise from that switch. Listener Austin also asks about the common practice of spending money on new equipment to reduce taxable income, even when the business doesn't need the equipment. Scott and Mitchell explain why spending money on equipment you don't need to save on taxes is a bad decision, and why tax planning around write offs is a poor strategy for the small business person in general.   Ask ..read more