Profit First Supports Your Small Business Tax Strategy

How Profit First Supports Your Small Business Tax Strategy

Today we have with us Leslie Lyons. Leslie is a member of The Bold Profit Academy but she is a new member, so I want to be very intentional about here. Anything that we discuss around Leslie’s success today is not a reflection of her time in The Bold Profit Academy because she just started. This is her success. It’s important for me that women own their success and it’s important for me that I don’t put my hands on people’s success. When they’re in my programs, we partner for that, but what I want to be clear about is she’s new and we haven’t even really gotten stuck into partnering yet. Leslie, welcome, tell us a little bit about yourself.

Hey, everyone. Welcome to The Bold Money Revolution Podcast. I’m your host, Tara Newman. I am here today with a guest. As you know, I have been doing some partner podcasting where I’m inviting guests on, either from my team or contractors that I work with or people in my community, to help hold space and have money conversations; one, because I haven’t been feeling great and it’s easier on my energy to share a conversation, but also because I like to get outside of my lens of money and I like to not guess on what’s an important conversation that we need to have. Sometimes when I have other people on and we have these conversations, it really broadens the discussion outside of just my frame of perspective.

Leslie Lyons: Yeah. Tara, thank you so much. While I might be new to The Bold Profit Academy, I am not new to your work. I have been following you for years and I am absolutely excited to be sitting here with you today, so thank you for having me and thank you for helping me and coaching me through my shit, ma’am, because I’m going through some stuff. My name is Leslie D. Lyons and I actually used to own—I have to get used to saying this—brick and mortar pole and sensual movement studios here in Chicago. I just recently sold one like literal ink just dried last week.

Tara Newman: Because she’s a freaking badass. That’s why.

Leslie Lyons: Thank you for that.

Tara Newman: Grew and sold a business for money.

Leslie Lyons: I did. That’s how I spent the majority of the last 15 years. About four years ago, I moved into the coaching-mentoring space and I help women specifically around sales confidence and also other sensual movement studio owners, I help them on the business side as well. But I help any woman who is struggling with standing in the power of her voice and her authority around selling because that’s the engine to your sales. One of the things I always say is you don’t need more sales strategy, you need more sales confidence. That’s who I am.

Tara Newman: One of the things that you had said to me that I was like, “Nailed it, yes,” you said you work with women who are sometimes told that they’re aggressive.

Leslie Lyons: Yes, very aggressive. I’m an Enneagram 8, so if there are people out there who are like, “Enneagram nerds, you all know this,” if not, I am just very high-strung, intense is the word that I like to use for myself.

Tara Newman: A high D on the DISC profile perhaps.

Leslie Lyons: I am, definitely. Other people might use the B word, just depends on on how they see you. But I deal with women who are very intense, very sure-footed typically, but are often finding themselves in conversations. Even like before we started the mic, before we started recording, Tara was correcting me because it’s a default pattern of feeling like you’re too much. People have told you that your energy is a bit much to deal with and really you’re just passionate. Intensity in women is not often celebrated.

Tara Newman: It’s not. I want to also say I wasn’t correcting you, I am calling you up to your highest level of leadership because you belong there.

Leslie Lyons: Thank you. That’s so kind. I need that, so thank you.

Tara Newman: We all need that.

Leslie Lyons: Yes. That’s who I really find gets the most out of working with me, especially on the leadership side of things, are women who fall into that intense, driven, see people as disposable, see business as a means to an end, things that really self-sabotage us. We need perspective shifts.

Tara Newman: I don’t know if this is irony, I think it is, I always get that one mixed up, but I think the irony is that these women are often protecting themselves from something. That’s the behavior that they use to protect themselves.

Leslie Lyons: That’s so true. A lot of the stuff that we’re protecting ourselves from got us to where we are. I often think about those defense mechanisms, those shadow, depending upon what world you come from, those are the things that kept you alive, those are the things that kept you safe. Your body is still functioning, your sympathetic nervous system is still so activated. It’s never calmed down, you’ve never gotten off of that place of “I have to defend myself” even though your life is radically different. The thing that is now hindering you once protected you and so I’m very sensitive to that.

Tara Newman: Yeah, I love that. This is such important work right now, especially just as we’re all being called up to, just waking up around different aspects of ourselves, humanity, politics, climate, geopolitical, and money, it’s all tied together.

Leslie Lyons: It is. For women, especially women identifying folk, it’s even more nuanced for us. It’s like, “What do you say? What are you allowed to say?” There are real consequences for women like us, Tara.

Tara Newman: Yeah. There always has been.

Leslie Lyons: That’s the point.

Tara Newman: Also, I think we’re at a time where women are waking up to the fact that they don’t have to be like men. Some of that aggression and an unhidey assertiveness I think came from us believing that in order to get ahead to prosper financially, to be promoted, we had to do it like the boys did it. I know for me, that had been a huge part of my journey over the last eight years from leaving a corporate job to starting my own business is realizing that I don’t have to work like a man.

Leslie Lyons: That’s right.

Tara Newman: I could do it my way. It could be genderless. It doesn’t even have to have a gender, it could be fluid. It doesn’t have to be so binary.

Leslie Lyons: Yeah, and men are binary just by nature. They put things in boxes a lot easier than we do. When I say binary, I’m not talking about gender, I’m talking about thinking.

Tara Newman: Yeah, black or white, this or that, this way.

Leslie Lyons: They’re designed that way. It’s why they could fight each other in the office and literally be at each other’s throat and then 15 minutes be like, “So did you want mayo on your sandwich or no?” Because that was an incident that happened in that moment and they’re able to move on.

Tara Newman: Yeah. I think it’s been interesting unpacking this type of conditioning because they’ve been conditioned just as much as we have.

Leslie Lyons: That’s right. When a woman tries to play that game, it doesn’t go over well because we’re just not in neat little boxes. I don’t believe any human is in neat little boxes, to be truthful, but I think there is conditioning and I also think there is natural patterning for people to respond in certain ways. In corporate environments, it’s respected when men are able to be emotionless. Having emotions is seen as a liability. But men are some of the most emotional people you will ever meet in your life.

Tara Newman: I had this exact thing happen to me in corporate. I was working on a big project, it was my responsibility. I was implementing a new HR information system in HRIS. There were a lot of stakeholders on this project. The software company was screwing us around and I got irritated.

Leslie Lyons: Was it PeopleSoft?

Tara Newman: No.

Leslie Lyons: Okay.

Tara Newman: I had to really think about that though. They’re all the same. I was like, “I’m managing all this data transfer and managing everybody’s expectations and now this company is not delivering on what they said they were going to deliver on.” I sent a very direct email about this. The director of IS, a man, came back and told me that I was being too emotional.

Leslie Lyons: Oh, wow.

Tara Newman: I was like, “Really? Because you’re a snowflake.” I said to him, “Yes, I’m angry. And anger is an emotion.” I’m pissed because we’re getting screwed and anger is an emotion.

Leslie Lyons: It is. I just wonder sometimes, if that email would have come from a man, if it would have been met with that as a response.

Tara Newman: I worked in a very male-dominated, conservative environment, so 100% it was always this or them.

Leslie Lyons: Because of that, it’s like the story that I tell about my kindergarten teacher who took me by my ear and walked me to the back of the line. It’s the punishment for women who show any aggressiveness that’s not useful. That’s a whole conversation for another day. Corporations and patriarchal structures use angry women too. It pushes things forward, especially in the black community, it will push things forward, it will move things forward. They will use your anger. They will use your aggression but it’s for a time.

Tara Newman: And not compensate you for it.

Leslie Lyons: Oh god, hello.

Tara Newman: Because now we’re getting into the good juices here where we can talk about money, gender, marginalized people, and unpaid labor. Why there’s such a lack of confidence around money is that this is the knowledge that has been kept from us, it’s the knowledge that’s been weaponized. Now women are like, “I must be doing something wrong. Somebody else has this information and it wasn’t given to me. I don’t know how to do these things and I’m running a business.” So now not only have we taken a place that we haven’t had access to, a place that it’s been weaponized against us in a whole myriad of forms, but now we’re just throwing shame and guilt on top of it.

Leslie Lyons: So true.

Tara Newman: But it’s not our fault. I know that you and I are going to have some money chat here and you’re going to ask me some questions and you’re asking very good questions. What I really want women to take away before we even start this conversation is you’re not doing anything wrong, bad, embarrassing, or shameful with your money. We literally don’t know what we don’t know. It’s come from the system and there’s trauma involved. There’s a gazillion in one intersections with money and we now have the opportunity to change that.

Leslie Lyons: Amen.

Tara Newman: We’re talking about it more, podcasts like this giving access to information, women like you who are courageous enough to come on here and ask some questions. I have chills right now. I’ve got goosebumps that we get to have these conversations now and it’s a challenge because now it’s almost like we can no longer say it’s because of this, which is sometimes really hard and frustrating because there’s learned helplessness. Sometimes that learned helplessness is really comfortable. We’re like, “Oh, shit,” but now we have choice and agency that we didn’t have before so now we have to do something about it which feels hard and uncomfortable. It’s easy to go back and be like, “Oh, but I don’t know. I don’t have the information. I don’t have access.” It’s a whole new dance now.

Leslie Lyons: Yeah. When I think about money and to transition into the questions that I have, one of the big things—and I’ve shared this story and I’ll share it again—coming from poverty, I came from a blue-collar family. My mom was a stay-at-home mom. She was a mother of six. I love to say she had one job when she was 16 and my dad got her fired from that following her around the damn store while she was stocking, wouldn’t leave. My dad always had two, sometimes three jobs: security worker, truck driver, just trying to make ends meet. I’m not college educated, neither of my parents.

That was our background. There was never enough money with six kids. There was never enough money with being able to live an extraordinarily materialistic life. But we always had our needs met, but there were times when those needs were hot dogs and baked beans. It was just what it was. To fast forward to me getting my very first sales job, I had worked in corporate HR for many moons. I started as an HR assistant, I left as an HR generalist when I went into the recruiting side of things, which was my very first entree.

Tara Newman: That’s how you got into sales. That makes so much sense. That’s a very common career track.

Leslie Lyons: Yes. I was recruited out. I was recruited out right at the Y2K because there was such a need for COBOL programmers at that point because everybody thought the world was going to end in the year 2000. Those programmers were in high demand and they were looking for recruiters to go after these people. That’s how I was exposed to recruiters because we hired all of these recruiters to help us.

The way I was recruited out though was, I’ll say the name Robert Half International, they’re one of the largest staffing companies in the world, they were starting a new division because as you know as an HR professional, recruiters hate HR people. We are seen as the gatekeepers to the money. They feel like there’s typically not a real respect or partnership there. I didn’t know that. I was a kid. I was in my 20s. I didn’t know that there was this rift, but anywho. Long story short, they were starting a division where they wanted to hire permanent temps. Not like consultants but like consultants.

Robert Half wanted to have permanent employees that they would send out on jobs so they weren’t always looking for temps to fill jobs. These people would be employed by Robert Half. My background was particularly attractive as an HR recruiter and employee relations and all the things for this division. It’s a whole nother story, but they typed to me because Robert Half had a typing system. They were looking for somebody who came from a background where they didn’t have a lot of money, where they would be extremely money motivated. They literally profiled me.

Now this would be like illegal and people don’t talk about these things but this was very common back then. I worked in HR in the days I worked for bank, I won’t say the name, but I worked for a very large bank. I worked in the era where the fax machines would come over and it would say white male when we were looking for executives.

Tara Newman: Yes. You and I are of an age where we remember things like being able to smoke in the office, like rampant enraging sexual harassment, really inappropriate things being done, said in the office place.

Leslie Lyons: Yes. Long story short, when I went into that recruiting space, I made $100,000 the first year that I was there because of the commission structure, the potential being poor. Not everybody’s poor experience is monolith, but for me, it was like, “Oh, my god. This is more money than I’ve ever seen in my life and it’s endless.” There’s no cap. I literally could work till midnight, and I would, so I made $100,000. When I left there, I was almost at $200,000 when I left that company three years later. As a sales rep, I was killing it but I was also killing myself.

Tara Newman: In the year 2000. I just need everybody to hear how much money that was because today that would be a lot of money. Twenty years ago, that was like a shit ton.

Leslie Lyons: A shit ton of money for a black girl with no education, just a whole lot of moxie. It was a lot but I didn’t know what to do with it and I had no one in my circle to advise me about them. At one point I was living like Diddy and Jay-Z. I was making him reign over every materialistic thing that I ever could want because there was nobody telling me, “Hey, you should save some of this. Hey, you should invest some of this. Hey, there’s a thing called taxes. Hey, there’s other things you should be doing with your money.”

All of those bad habits that I picked up and never had anybody to really correct for me had me with terrible credit and overextended that led to me filing bankruptcy in my 20s. Long story short, that was my background with money just like money was always something that didn’t stick around.

Tara Newman: Thank you so much for sharing your story because I think it’s so important. We had a call yesterday in The Bold Profit Academy and we were talking about money stories. I think it’s so important to talk about them, to share them, to look at them from different angles. I want to acknowledge how predatory that was to be typed like that, but I also want everybody to know this is still happening.

If anybody’s watched LuLaRich, the documentary for LuLaRoe, very similar stereotyped but also then they encouraged them to buy the luxury items, they encouraged them to retire their husband, they encouraged them to spend all the money so that they are continually dependent upon LuLaRoe for income because they can’t stop. They’ve created habits and spending environments that if they stop, they’re in a lot of trouble.

There’s even some of that in the online spaces, especially as we talk to women who we wonder why women are just so preyed upon in the internet marketing space, especially if you’re a woman business owner because you’re the larger population. More women are entering small business ownership than men, and marginalized women are entering small business ownership at a greater pace than white women, non-marginalized women.

You have to really understand that you are a marketer’s boon. If they can type you and understand you and know how to pull those specific emotional strings and triggers in a way that is seedy and icky, and then they can keep you in that ascension model, continually buying from them, then what they do is they create a tremendous amount of overwhelm and confusion so then you still need them then to buy the next thing.

This is an economic fallacy that people think economics is dollars, facts and figures, and formulas and graphs, but it’s actually human behavior. There’s a fallacy in economics that speaks that there’s the right way, that there’s the man, the one man who has the secret, and that this is scarcity, this is scarce. This one person has this knowledge that you need to have. Yes-and, there’s no one person, there’s no secret, however, marginalized groups have not had access to.

So we believe there’s a secret. There are things we don’t know. It gets very conflated and convoluted, and in my opinion, dangerous. That’s why, again, it’s so important that we’re having this conversation, we share our money stories, we talk about these things, we affirm each other, we build each other up, we show each other how we each have unique value to add in a place, that we pay each other for that value, that we don’t continue to perpetuate this unpaid labor among women and marginalized communities in any way, shape, or form, that we look at where we feel entitled to somebody’s energy, thinking, teaching.

Again, this is also being perpetrated in the online space where it’s like, “Content for free for days. You never have to pay anybody for all the things.” It’s super tricky. It makes me really concerned and alarmed. That’s why I just like to sometimes shed light on it, so thank you. Let’s stick into some of your questions that you have.

Leslie Lyons: Yeah. This is a great segue when you said the secret. One of the things that I do feel like is a secret is tax strategies.

Tara Newman: Oh, that’s a secret for everybody.

Leslie Lyons: Okay, obviously not, because there are some folks who didn’t figure this shit out, it is just not me. That’s one of the things that I definitely wanted to talk about because I do believe it is one of the things that keeps women, but small business owners and micro business owners in general, at a disadvantage. It’s this exorbitant tax liability that we have on money that we make. Then you hear something—this is where you’ll be way more educated and helpful in this regard, I’m just like snippets on this—but you’ll hear about Jeff Bezos or Trump or somebody who’d paid zero in taxes. First of all, is it true? But then second of all, if it is true, I need those types of tax shelters. I need those types of tax breaks.

Tara Newman: Great. Let me tell you yes, that’s true and why.

Leslie Lyons: Okay. Help me, please.

Tara Newman: First of all, I’m not an accountant, I just want to go on record and say I am not an accountant. I like to be very honest about what my knowledge is and my limitations are. Obviously, I’m not their accountant so I don’t know why they might be paying zero. Something tells me they are paying taxes, it’s just not adding up to what their net worth is. Because you’re taxed on earned income, which is by the way, why having a small business is actually really good because you are taxed differently than the folks who are working in a corporate setting where they are being taxed fully on their earned income.

When you are a small business owner, you do have advantages and opportunities to use to mitigate some of your tax liability, strategies that you can mitigate your tax liability. People like Elon and Jeff, there’s a loophole or intention, whatever, in our taxes where you’re not taxed on earned income. If they’re making money through their investments, they’re not taxed on it. It says Elon’s worth like $270 billion. He doesn’t have $270 billion in cash.

Leslie Lyons: Right. It’s not sitting in a bank account.

Tara Newman: It’s in his equity, stocks, and things like that. There are better tax opportunities when you’re investing your money and you’re earning money through taxes and dividends and not through your earned income. I think one of the biggest problems, and you’re going to hear me talk about this more, is that small business owners are hyper focused on earned income, earning their money, working hard for their money.

If we zoomed out when we look at our business plan and consider what other revenue streams we can start to build as a byproduct of owning a business to over time take the burden off of us having to earn that income and turn it into income that generates cash passively, we’re not going to pay as much taxes but we’re also not going to have to work as hard. When people start to talk about business models and revenue streams and they’re like, “Okay, in the online space, you’re going to have your issues, you’re going to do one-on-one, and you’re going to do group and you’re going to do an info product.” No. I don’t want anybody thinking like that. I want you thinking where is the most money that I can make for the least amount of effort, I want it to be efficient because businesses require efficiency.

The most efficient way if you are an expert is actually to go and have a premium level service that you sell to a moderate volume of people. That is the most profitable business model. Then you’re going to apply Profit First and manage your cash really well and you’re going to use the cash that you generate from that to go invest into other revenue streams like stocks and equities, real estate, dividends. I’m really into laundromats right now, I’m looking for laundromat because they’re really good for like absentee owners.

Where can you be putting your money that it starts to work for you so that you are not working for it? Obviously we want to do that because that feels good, but also, there is a benefit when it’s not earned income.

Leslie Lyons: That makes a lot of sense. It’s interesting you say this because the business broker who helped me sell my business, he has a coaching program as well. I was telling him, “This tax thing is really weighing me down.” He talked about how back in the day—and I’m not going to get this right so this is not verbatim but the gist of it is what he shared with me—he said back in the day, so many moons ago, probably about 20 years ago, there was something with reservations, so native Americans in their reservations and losses that they were taking on something that our government has set up as a form of reparations, as a way to pay them back, but it didn’t work for them, so they were losing money off of the thing that was supposed to help them.

Our government went back to them and said, “Okay, you’re losing money, we’re going to allow you guys to sell these losses to corporations who need these losses.” His company and his friends were literally going and buying these losses from these native Americans reservations to mitigate tax shit. That is not a conversation that is happening in the average black community. We wouldn’t even be aware that this was even—I’m not saying if it’s exploitative. I’m not even going into that—but it was legal is my point.

Tara Newman: Yeah. We’re not having a lot of these conversations in any community below a certain level. These are the secrets of maybe the really wealthy. Because people also don’t understand them.

Leslie Lyons: No, it’s complex.

Tara Newman: I think we’re calling attention to the few people who leverage these and it makes it seem like everybody’s leveraging these, but the reality is that ultra wealthy population is the ones who are really making use of this, but most business owners have no idea what to do with their taxes.

Leslie Lyons: You know what he said to me, which I think is super key? This guy is a white Jewish guy, he’s your people, Tara. He’s also Christian though. We’re united in that way. He probably had a conversation with me that he may not have felt as comfortable having a conversation with someone else, I want to say that. But he said to me, “What I’ve observed about black people and money and in terms of knowledge sharing, because this is what you’re saying, there’s a knowledge gap. I’ve seen it, because you guys don’t have country clubs.”

When you first hear that, it’s like, “What are you talking about? I can afford a country club, but you don’t see us in those spaces.” He was like, “What you don’t understand about country club environment–” which he grew up in, “–is you show your worth to the group by the knowledge that you bring to the conversation, so they outdo each other trying to go up the pecking order with how I could save you the most money, who’s found this new shelter. That’s how you get your worth and your social standing within this elite group, if you will.”

Tara Newman: Is by finding new tactics and techniques to shelter money. Interesting. I have not been in country clubs either, so this is not for me.

Leslie Lyons: He was like, “But this is like a pissing contest” is what I would say, he didn’t use that language but it’s what I would say. It’s a bunch of guys standing around saying, “Who can piss the first?” In order for you to get another notch, you got to bring some valuable information. This is all they sit around and talk about. This was his question, “In your community, the spaces where people are competing off of is the most knowledgeable.”

Tara Newman: Right. There’s definitely a huge, in lots of communities, some more than others, there’s a huge issue around access to information.

Leslie Lyons: That’s it. He’s like, “So you–” and I felt particularly challenged and feel that burden and I believe you feel that burden that’s why you have this podcast and we’re having this conversation, we’ve got to create our own version of a country club, for lack of a better term, where we aren’t doing it for bragging rights but we’re doing it for actually–

Tara Newman: To lift each other up. First of all, I also want to say that there are a lot of people that do things that are not legal and there are a lot of people who do things with their taxes that very much skirt what is legal and what is not legal. When we hear these stories, I don’t want you to immediately think because they’re wealthy they’re doing something nefarious, that’s not what I’m saying, but we do have a lot of information now that people are not always on the up and up with their businesses.

We’ve got Travis Kalanick from Uber. We’ve got Elizabeth Holmes from Theranos. We’ve got Adam Neumann from WeWork. I can keep going. We’ve got the LuLaRich people, Donald Trump. In some way or another, there are people out there that really grift off of, and take advantage, of a system. However, there are legal ways, legal strategies that we can use—and I always want to preface that by saying legal–

Leslie Lyons: Right, and this was legal, that was the thing, this was legal. How ethical, that’s a conversation for another day, but it was legal.

Tara Newman: Yes. That’s the other piece to this too, your values come into this picture as well. There are a lot of strategies and so I just want to go back to the earned income versus not earned income. For example, if I have money in my brokerage account, and obviously, the market’s not doing that right now so I have losses, not gains, but if I were to then this year, the market was up 10% and I had made $20,000 and I’m keeping that in my brokerage account, I have made $20,000 that is not being taxed. If I make that $20,000 in my brokerage account and then decide I’m going to take it out, now I’m paying capital gains.

Now I’m going to be taxed. There are some legal strategies around that as well in terms of taking money out of brokerage accounts, and things like that, that are honestly way the hell above my pay grade but they exist. That’s all I want to say is that they exist. How to find the best tax strategies? I want to talk about that because interestingly enough, Leslie, you might not realize this and I want to share this with the world, it would not be sexy for me to be like, “Join The Bold Profit Academy and pay all your back taxes back,” that’s unsexy marketing. But the reality is a lot of people join The Bold Profit Academy, they implement Profit First, and the first thing they do when they implement Profit First and get that cash flow going is pay back the taxes that they may owe.

First and foremost, it is normal and okay if you owe taxes. When somebody’s like, “Oh, my gosh. I have this big tax bill,” I’m like, “That’s the best bill you can have.” And I can’t pay it, I’m like, “Fantastic,” because the IRS will very happily give you a little bit of a payment plan to pay it back over time so you do not crush your cash flow. I don’t want anybody to feel like if they are being faced with a tax bill that they have to drain some savings account or take money out of a retirement account to pay that back. IRS will give you a payment plan, it’s a fairly low interest rate, they just want their money because there are shit tons of people who don’t actually pay that stuff back. All they want to know is that you’re going to pay them back over time.

Leslie Lyons: Okay. That’s good to know.

Tara Newman: People freak out because we have been conditioned to pay our taxes, to pay our debts on society in a way that is actually not healthy, that sacrifices us. Like, “Okay, could you have maybe known better? Or maybe you shouldn’t have run up the debt on the credit card, or whatever.” But like, “You did and it’s okay.” This is not the Dave Ramsey school of thought.

I know a lot of people have this panic and this fear and this debilitation around debt. I will tell you, the only reason why I am so calm about this is when our first business went out of business and we declared bankruptcy, we used to get a lot of notices—time to pay your mortgage that you haven’t paid in three months. We’re coming for you. We’re going to foreclose. The IRS notices—and you know what, it’s all fine. It’s fine. They send really scary things to be scary, to be intentionally scary.

Leslie Lyons: But there are folks who end up in jail about taxes for real. Look at Wesley Snipes. He went to jail.

Tara Newman: Right, because he didn’t pay his taxes. That’s not what any of you are doing. You’re like, “Oh, crap. I didn’t think this through or I made more money than I thought I was going to make and now I owe some money. Hey, Mr. IRS person or Mrs. IRS person, I’m so sorry that we had this blip. I’m going to pay it back. Can we work something out?” That is very different than intentionally defrauding the government or deciding like, “Hey, I owe the money, but piss off.” None of you are doing this.

I said this yesterday on The Bold Profit Academy call like, “Listen, I’m going to sit here and believe in you, believe in your capability, believe in your wisdom, and trust that you make solid and good decisions around your money. That’s where I default to because y’all aren’t defaulting there. You all think you’re going to be Wesley Snipes over a $10,000 tax bill that you’re freaking out about paying back. You’re all fine.”

They have to send the scary notices for the people like Wesley who doesn’t care. He rips them up anyway so the whole system is dumb. People who are going to defraud the government and not pay their taxes don’t care how many messages or nasty letters they get. All that does is create anxiety fuel for the rest of you who made an honest miscalculation and are happily going to pay those taxes back over time when your funds are available to you without putting your families or your businesses in jeopardy.

Leslie Lyons: I have a question about that. I shared this with you offline yesterday. I literally just got my taxes back from a new CPA. It’s $19,000, the tax bill. I told her, “Don’t you file that shit. Hang tight, because I need a second opinion. Don’t file it, but what I do need you to do is file an extension for me so that I can get a second opinion to see if we can get this down so I don’t have to come out at $20,000.”

Tara Newman: Beautiful. You did everything correctly.

Leslie Lyons: Yay me for that. But let’s say it comes out and I owe $19,000. I thought there were things in place like number one, if you owe money, you can’t file an extension. That’s the first thing I thought I’ve heard before. But the second thing is do I just file it and wait for them to send me a bill and then call them and be like, “Hey, I ain’t got it? Can I do a payment plan?” What do I do?

Tara Newman: Again, I’m not an accountant, but I did happen to ask my CFO. He did say, “Tell her not to file that and to get a second opinion.” If you can do that, I would do it. I don’t know if they’ll give you an extension if you owe money, check on that.

Leslie Lyons: Yeah. I asked the CPA. I asked her if she could file an extension for me and she said she could. But I had a CPA before who didn’t file my shit on time, Tara, and I got a $20,000 bill.

Tara Newman: Right. Not all CPAs are created the same, but also in defense of CPAs, we don’t always know what to ask. It’s very likely that there’s a breakdown in communication between a business owner and a CPA. First things first, if you’re using a CPA who is like, “I file personal taxes,” that’s not who you want. You want a CPA that specializes in small business tax strategy.

If you’re using—and I’m sure a lot of women are—they’re using a family member, the person who they were using when they were working a nine-to-five job, or their husband’s handling it, or something like that, but their husband works in a nine-to-five right, you really need to find somebody, it is worth whatever time, it’s going to cost you a bit of money, but they’re also going to save you money.

Leslie Lyons: How do I find these people though? Because that’s what I thought I had found in this person. I swear to you that I could have went to H&R Block, that’s how I felt, because there wasn’t any questions that were asked. The only thing she asked me at the time of filing taxes was “Do you have any investment income?”

Tara Newman: There are a couple of things that I would do. One, I would say, “Do you work with small business owners specifically? What size business owners? What size revenue business do you work with? What types? Do you work with service based? Do you work with product? Do you work with manufacturing? Get some understanding on who their client base is. Then I would ask them “What’s your process for creating a tax strategy? Not filing my taxes.” That’s muggle shit.

We’re not muggles. We need the special stuff. We need the magic. What’s your process for creating a tax strategy? Because they should be sitting down with you and saying, “Okay, this is how much you made last year, let’s estimate a little bit of growth for what you would be making this year, and here’s how we can mitigate and use all the things that are to your advantage. We’re going to open you up a SAP or a 401(k), you’re going to put money in a Roth IRA. This is how much is going to go.”

Because sometimes here’s the rub, this used to really tick me off, when my CFO would be like, “Okay, we’re going to save $20,000, but I need $10,000 now. Because you have to put the money into the tax-deferred account to get the savings. Sometimes business owners don’t like that. They’re like, “Well, I don’t want to have to pay $10,000 in cash to save $20,000. We can get penny-wise and pound-foolish. We do have to realize that sometimes we need to do things like that.

You’re going to say, “What else can I do legally that would be to my advantage?” Then you have Profit First. There are no surprises when you implement Profit First because when you implement Profit First, if you’re in the States, it’s going to be 15% of gross revenue of all the revenue you make goes into the profit account. It’s not too different for Europe if you’re listening to this and you’re in Europe or Canada because you back out your GST and your CST, you back that out, it’s like a pass through so it doesn’t count towards—of course, Leslie you’re an American so you wouldn’t but many Europeans are listening to this—so you’re going to back that out of gross revenue and then it’s 15%. It does work out to be similar-ish, but you’re going to want to put aside 15%.

Depending on your tax planning, you might need less and your number, over time, you might realize is 12% or 13%. Then you get to take those little percentage points and put that towards something else. But if you’re implementing Profit First and you’re taking 15% of gross revenue and putting it into an account somewhere, and you get a tax bill, you have the money sitting there. To me, that’s one of the biggest benefits of Profit First if you utilize it to its fullest potential because then you’re not worried. When you’re not worried, you feel good. When you feel good, you feel confident. When you feel confident, you can make more money. All those things really add up.

Profit First is definitely a part of that tax strategy. The other thing is you’re going to want to ask your tax accountants like, “Will you help me pay my taxes quarterly?” So then you’re paying them through the year and it’s not adding up to the end of the year. “How can you help me set up where I pay these quarterly?” You don’t have to pay them quarterly. You pay a little bit of a fee, a fine if you don’t pay them quarterly, but you can. Also, having an accountant look at “Is your business structure correct?” “Can you advise me on my business structure?” I’m an S corp. My accountant set that up.

Leslie Lyons: Yeah. See even becoming an S corp, I had to fill out that paperwork and all of those sorts of things. I’m like, “What the hell do I have an accountant for if I’m doing all of these forms and stuff that I really don’t understand?” The IRS is very particular about things. If a form isn’t correctly filled out, right now, I don’t know if I’m actually an S corp, I don’t know because it also happened during a global panorama, as one comedian said, during the global pandemic, they’re so backed up. I don’t even know if I’m actually an S corp at this point.

Tara Newman: That’s the other thing you would want to do as a tax strategy. Again, check with an accountant. If you’re in The Bold Profit Academy and you have these questions, we do have my CFO, who’s also a Profit First accountant under my firm, come in, sometimes on a monthly basis, and answer these questions. We could be collecting these questions for him and he can come in and he can answer some of these.

But as an S corp, you’re taxed on, again, your paycheck, your earned income, but not your distributions. Your small business tax accountant, CPA, would want to help you decide how much are you taking in a paycheck versus how much you’re taking in distribution to offset some taxes.

Leslie Lyons: Got it.

Tara Newman: There are a number of things that are available. These are questions that you can be asking this accountant. A good business CPA could project, and if you listen to them, I don’t ever owe money, I come out, it’s a wash, and you want to come out as a wash. You don’t even want to be in a place where you’re getting money back because that’s money that you can be using in your business to make investments and not having the IRS holding that you’re not earning any interest or growth on. You always do want to get to that point.

The IRS is not a savings account is exactly what I’m saying. They’re like a really crappy savings account and they were super backed up this year and so people who were even owed money didn’t get money back, but you bet you, they want their money on time. System is not always built for us. We want to make sure that, and I want you to tell your CPAs, “I want to be at zero. I don’t want to owe money come the end of the year. I want to make sure we’re managing this in a way where they’re not holding my money and I don’t owe them money.”

A couple hundred bucks, a couple thousand bucks, we’re not concerned about. But you pretty much want to come out as even as possible. How do I do that is the question for the accountant. You’re going to want somebody to talk to you more than once a year at tax time.

Leslie Lyons: That’s how I felt. I felt like this was just somebody who was a tax preparer, not someone who’s a strategist. My thing is like, “Where do I go find this strategist?” Because this can’t happen next year.

Tara Newman: It’s going to cost you a little more but it’s also going to save you a bunch.

Leslie Lyons: Yeah. I’m willing to pay if it’s going to save me a bunch. Thank you for that. I guess the last thing, because I know we’ve been talking forever, is I do use Profit First but I did not get it set up through you. I went through an another person. Every week though, I get from my bookkeeper, and those numbers aren’t adding up. I literally pulled it up while I was talking to you just to say this. For profit, she has two percent going to profit. Owner comp 34%. Tax 4%. Op-ex 60%. I must screw where the numbers came from.

Tara Newman: I’m going to make a stab at what happened. Let’s take a stab at what happened. When we look at our numbers for Profit First, whether it’s me that’s doing it based on how I’ve been trained by Profit First, or we’re guiding you through doing that in The Bold Profit Academy, the first thing you’re going to do is understand what your current situation is, your current allocation percentages. What is currently happening? If you’re not putting any profit away, your profit is zero percent. If you’re not putting any tax away, it’s zero percent. If you’ve got a lot of money going out to expenses, which is normal, which usually happens as people find Profit First is their money is all going out to expenses and they’re keeping very little of it. Those would be your current allocation percentages.

Then what we do is we put you on a plan. The plan is somewhere between 12 to 18 months, depending on what the difference is between where you are and what those Profit First numbers are. Those Profit First numbers, 15% for taxes, is what they call a target allocation percentage, a tap. That is based on fiscally elite businesses; businesses that are running like–

Leslie Lyons: Oil machines.

Tara Newman: Yes, well-oiled machines. Sometimes we can get a business there immediately. Typically, a service-based business that doesn’t have a lot of overhead and there’s a lot of discretionary spending going on, a business where maybe the business owner has a lot of fear around money and they’ve just been hoarding it all up in an account and they’re not spending it, which is not good either. We can get them to those target allocation percentages pretty quickly.

But if you’re a brick and mortar, if you are someone who has a lot of expenses and overhead who has maybe a lot of employees, whatever, those numbers are going to look drastically different. My husband’s numbers in Profit First for a manufacturing company were nowhere near where my numbers are as a service based business running out of my house. Very, very different. What you would need to do then is look at where you can be cutting expenses and taking that money and reallocating it to profit in taxes. But if you’re not saving the 15%, you’re going to fall short on the taxes.

Leslie Lyons: Yeah, because it’s only taking four percent is what’s going into that account right now.

Tara Newman: Right. You have four percent. You’re not going to do it immediately because you don’t want to screw up the business, you don’t want all of a sudden cut things and you actually need them. It’s not always about cutting things, it could be about renegotiating a contract, it could be looking at maybe an employee that is underperforming and you’re tolerating performance but you’re paying them because they’re always the loudest ones that want the most money sometimes. You know, HR stuff. You might need to swap out an employee or you might need to wait for something to be paid off that you have, but that over time, each quarter, you’re adjusting, by a hair, a percentage point to five percentage points, depending on how much leeway you have there.

Right out of the gates, they will tell you they want one to two percent going in your profit account because that’s the whole purpose of Profit First. There’s that, and then you want to start to get that factored in because depending on what that looks like, and again, I don’t have this information for you in front of me, but I can give you an example, you might not necessarily need to be going out and making more money, you just need to be using the money you’re making differently.

When my husband took over his company, they were not profitable and they were bleeding out. Any revenue that he piled on top of that was going to keep going out. He wasn’t set up to be profitable yet. We actually scaled his business back.

Leslie Lyons: Okay, that helps me. There are target percentages and she was basically baby stepping the large expenses I had as a brick and mortar business.

Tara Newman: Yeah. If you didn’t continue on with that plan–

Leslie Lyons: Well, it ended.

Tara Newman: Right, so we need to keep adjusting you, if possible.

Leslie Lyons: I need to go back and ask for an adjustment.

Tara Newman: What you need to do is go through the Profit First stuff in The Bold Profit Academy, and we’re going to help you do that. Because like I said, with my husband’s business, we had to scale him back, things like he didn’t replace a position when somebody left and he did it a while for himself and then realized how he could streamline the position, automate it, use systems instead of having a full-time person, and then it became a part-time position. Just things like that that now, flash forward, he’s way more profitable, he’s consistently profitable, and now he’s adding revenue which is profitable revenue.

That’s why we want to be looking at it from both perspectives. Is it a revenue issue or is it a profitability issue? Because we don’t want you running out and overworking to just have money flying out the door. That doesn’t work. We want to make this as easy on you as possible. We want to make sure that the strategies you’re using are the most profitable ones. We want to make sure that you know your numbers and you’re working on them, and then really start filtering in the revenue.

Leslie Lyons: Okay. We went through that yesterday. That is on my schedule today and over the weekend to go through that module. But when you set the numbers again today, I’m like, “That’s not my numbers. I got the report right in front of me. That’s not what I’m doing. Maybe that’s why I got a $19,000 tax bill, because I’m only giving 4%, I’m not giving 15%.”

Tara Newman: Yeah. I think it’s probably both. I think you could be using tax advantage strategies. I think you can have a couple of strategies that are working for you, being clear about whether or not—so we’ll recap here—being clear on whether or not you’re an S corp and how that might be able to positively impact your tax burden. You can ask or find an accountant who will put together a tax strategy for you where it’s clear like, “Okay, if I open a SAP or if I have a SAP and I put $7,000 away in a SAP, that’s going to reduce my tax burden by $4,000.” But then you might have to pay $7,000 to save $4,000 but that’s all your money now.

There might be other opportunities for you to take advantage of. I don’t know if there’s any like even grants or tax credits or anything like that, especially since you are a black woman running a business, that we can certainly look at. The desired outcome is to get to the end of the year zero, as close to zero as possible. I think with you having that frame and just simply saying, “How do I get to the end of the year with zero?” sets you up for a better conversation.

Leslie Lyons: Yes. Thank you. I wrote down the questions because I feel like now that we’re at the end of tax season, this would be a great time to start interviewing CPAs for next year. They’re not just overloaded with trying to get everybody’s taxes in on time. The questions about “Do you specialize in small business? What type of small businesses do you work with? How can I come out even? How can I get to zero? What’s your process?” I think that’s the biggest takeaway today, what’s your process in helping me develop a tax strategy? Golden.

Tara Newman: Is there one particular insight or something that you want to leave the audience with as we roll out of here?

Leslie Lyons: I think the big takeaway is that we need to come up with our own country clubs within our spaces. I believe The Bold Profit Academy is one of those spaces where we can have honest conversations about the things that we don’t know, because we don’t know what we don’t know. But we need to advocate for ourselves, we can’t be the damsel in distress anymore, that no longer works. Blaming the patriarchy no longer works. There’s access. We need to go look for those things. We also need to be transparent. We also need to be courageous to really share our shit.

Tara Newman: I obviously second everything you just said. I’m really happy that you see that The Bold Profit Academy is that kind of a place. One of the biggest things that people come to me around is they feel a lot of pressure running a business, we always think about how can we be reducing pressure that women business owners feel. They feel like there’s a steep learning curve as this whole conversation, this is a steep learning curve. These are things that you haven’t had to think about before and we try and reduce that learning curve.

Women come to me and they’re like, “I have blind spots. There are things that I just don’t know but I don’t even know what I don’t know.” But it takes a lot of courage, especially as a woman who might be identifying as a high achiever, who might have a tremendous amount of experience and expertise under their belt, who are really good at doing what they do, say, “There are things that I don’t know.” Then, obviously, the whole money piece, that people really want to avoid or not have that conversation, it feels hard or icky, or whatever, and I really just want to continue to encourage women to put themselves in rooms where this is happening. You said something so profound to me when you joined. Why did you join The Bold Profit Academy?

Leslie Lyons: For me, you were speaking my language. I just knew that I didn’t know what I didn’t know and I felt safe. I don’t even know what I said to you but I know I felt safe.

Tara Newman: You said you needed a different perspective.

Leslie Lyons: Oh, yeah. I was going to say I need to change my thinking around what it is that I’m doing. I need a different perspective for sure.

Tara Newman: Right. What I think is so profound about that is that you see the ROI in gaining access to information and learning more in having your perspective shifted, versus joining a program—and I’m not meaning to crap on anybody—but there’s a difference in thinking here that I want to point out, why Leslie is the top one percent, it’s the way she thinks and it wasn’t, “How is this going to get me clients now? How do I know this is going to work? How much time is this going to take me?”

Leslie Lyons: Yeah, I didn’t ask any of those questions.

Tara Newman: No, you weren’t even like, “How long is it going to take me to get a result? How long is it going to take me to pay back this program?” I understand, when people ask these questions, I get it. People have been screwed. They’ve been burned. Women, at times, really do need that next client, they really do need that money coming in the door, and I don’t want to diminish that. But focusing on those things, focusing on what you’ve always focused on, is not going to get you a different result.

Leslie Lyons: I pay now at this stage—and I don’t know if it’s just wisdom in old age, I don’t know—but I pay for people to ask me different questions. I’m really obsessed in this season of my life with I don’t know what I don’t know. I don’t even know the question to ask. It’s not even a lot of times I think as women sometimes we’re like, “Oh, people, the patriarchy, they’re keeping this from us,” or the salesperson who’s shady. It’s not exclusively those things. Sometimes people just don’t know that you don’t know. If you don’t ask the question, they’re not volunteering answers because that may not be their goal to educate you, their goal may be to just sell you what it is you say you want.

I love to use this example to close out. Back in the pandemic days when we were shut down, our studios were closed. I decided to be a great time to go ahead and get some projects done that we couldn’t shut the business down to do. One of them was to get a new stereo system. Girlfriend loves music and I like it loud. I was like, “I’m going to use this time to get a new system.” I called up a system audio place and I told them I specifically wanted this type of sound. But then he asked me what my budget was, so I gave him my budget. Long story short, he took my budget, he put in the system, it didn’t give me the sound I wanted.

When I complained and said that this is not the sound I wanted, the salesperson didn’t say it, but this is what your budget could get you. What I said to him, I said. You need sales training, brother.” Because what you should have done is take what I wanted and then quoted me the price for it.

Tara Newman: And educate you on what something like that costs, yes. I knew you were going to say this because you’re such a good salesperson. I’m like, “This is a sales issue.”

Leslie Lyons: It is. I was just like, “But his point was–” I didn’t know the question because I don’t know the difference between this type of a subwoofer and the megahertz that it needs to be to get that type of bass. I don’t know that question to ask. He should have asked better questions that would have led to a higher sale as opposed to giving me what he thought I could afford and me being dissatisfied. Because as a salesperson, you should ask me the questions I’m not thinking to ask. This to me is basic sales.

When I talk about sales strategies and those sorts of things, it is about are you changing your customers perspective? Are you the expert? Because if you’re the expert, you should be bringing up things, there are many times just off of your free content. I do remember saying that you’re like, “If you need to hop on a call, duh-duh-duh.” I’m like, “Tara, I have watched you for years, there’s no reason for me to hop on a call with you to have this conversation. You have changed my perspective and given me insight on things from your free just rants.” I can tell by your energy sometimes that it’s a rant. I’m like, “I’m being blessed by her rant.”

Imagine when I get in a room and we talk strategy, what would it do? I’m at this season in life, and I really want to encourage women as we close to be like, “What don’t I know and who can I trust that I feel safe, that I feel courageous, that I won’t be made to feel stupid?” I never feel stupid, but I do feel like, “Well, d*mn, I didn’t know that but now I know.”

Tara Newman: Leslie just gifted you all, just put this on a repeat, she just gifted you with how to be a successful business owner, thrive, make money, be consistent, and all of those things. If you can just listen to what she said, because I’ve been saying, I know sometimes I need to hear from somebody else and we need multiple perspectives, so just put Leslie’s perspective on repeat. If someone’s like, “I need to work with that woman because she’s on fire and she’s amazing,” Leslie, where can they find you?

Leslie Lyons: My website is My LinkedIn is the same.

Tara Newman: Awesome. We’ll put that in the show notes. Thanks for coming on and for being so gracious with your time and your wisdom.

Leslie Lyons: Yes, absolutely. Thank you.

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