The Importance of Knowing Your Numbers to Protect Your Business
Episode #245 with Braden Drake
Overview
I hate the topic of this episode. Just the mention of taxes and numbers sends shivers down my spine. But just because I wish I could ignore the issue doesn’t mean it isn’t important. If you’re serious about your business, you need to be taking these things seriously too. Fortunately, today’s guest is here to make the numbers less intimidating for small business owners like you and me.
Key Takeaways
The essentials for all business owners boil down to being able to track income and expenses and having the proper legal protections in place.
The two most important insurances to have for your business are general liability insurance and errors and omissions insurance.
Having a contract between you and clients will set proper expectations and show that you’re a true professional in your field.
About Braden Drake
Braden is a California licensed attorney and tax professional. His tagline is your gay best friend here to help you get your legal and tax sh*t legit. Braden works primarily with service-based, creative small business owners through his courses where he educates on contracts, business entities, cash flow, systems, and taxes.
Knowing Your Numbers
Braden starts off by explaining what many business-owners get wrong. To run efficiently, we need to be implementing the right tracking systems. When you accurately know your income and expenses, not only will you be better at tax time, but you’ll be better informed to make strategic business decisions.
While it’s often best to get professional help, there are certain steps that you can take on your own. Braden talks about how to go about forming an LLC, doing your own bookkeeping, and even how to file some of your taxes.
Protecting Your Business with Insurance and Contracts
Life is unpredictable and so is business. Braden talks about important types of insurance to have to protect yourself and your livelihood. General liability insurance and errors and omissions insurance will protect you and your business from many mishaps. With all the many possibilities out there, Braden urges all of us to find an insurance agent who really understands your industry.
Contracts are another thing to pay attention to. Although many of us make deals with just a handshake, putting the important parts in writing is in everyone’s best interest. A well-written contract sets expectations and can protect you if things go awry.
In This Episode
- Why your numbers matter for more than just taxes [4:50]
- The most important insurance considerations [11:00]
- What every contract needs to include [14:50]
- How a contract will improve your reputation [23:38]
- Setting expectations for pro bono projects [25:25]
- How to move forward in your business when you’re feeling stuck [28:10]
Quotes
“You never want to get hate mail from the IRS. So if that’s not incentive enough to be on top of your numbers, then I don’t know what will be.” [4:44]
“The idea of insurance is that we hope that we never need it. A lot of people say that they don’t want to pay for it because they hope to never use it. Well, we hope they won’t have to, but if they do, they’ll be really happy they have it.” [14:37]
“If I, as a client, am hiring you and I’m ready to pay you money and you don’t send me a contract, I’m going to be questioning your professionalism.” [25:00]
“If you’re feeling stuck and challenged, first of all, you got to strip it back and ask yourself why you’re feeling stuck and what’s challenging you.” [29:00]
Links
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Unf*ck Your Biz by Braden Drake
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