Build a Business Around Your Creativity (While Keeping Your Integrity) [S4E03]

This week I break down the nuts and bolts of how my YouTube channel is set up as a business. You might remember that Season 2 ended with Heather and I forming an LLC, but how have we actually been able to use our LLC since then? How do we handle income, pay ourselves, and keep everything the up and up? 

•Here’s the app that we use to track our expenses:
https://www.waveapps.com/

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📲 Connect!

•Send a voice message to be included in a future episode!
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•My Podcast with Peter Lindgren:
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  https://couplestable.buzzsprout.com

YouTube: www.youtube.com/tombuck
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Main Site: www.himynameistom.com

S4E03 | Series Episode 66

Transcript

SPEAKER_00 0:23

Hello and welcome. My name is Tom. This is the Enthusiasm Project season four, episode three. Can you believe it? And today we're gonna dive into some nuts and bolts. So get ready for that to happen. I don't know how to do intros very well. But before, before we jump into that, actually, I did have something I'm super excited to share. And lately I've been getting uh like more messages and emails from people specifically about this podcast, which really means the world to me. And we've talked before about if you make stuff online uh and you get comments and feedback, it can be, you know, you get nine positive things and the one negative one, like I don't know, you have weird eyes or something. That's the one that sticks with you. And then every time you're doing something, instead of thinking about all the people who said this was great, I enjoyed it, it was helpful. You're thinking, like, Am I doing the weird eye thing? Do I have weird eyes right now? Oh no, what do I do about my weird eyes? And I wish that weren't the case, but this morning I got an email. Um, and I it was one of those things that really hit me in a way. I guess I just wasn't expecting to read it first thing in the morning or whatever, but it was one of those super rare instances where something positive hit me with as much force as you know the negative stuff usually does. And I just wanted to share that because it really means the world to me. So this was from Roshan, who I completely appreciate this. Thank you so much. Um, and thanks for letting me share this too on the air. I appreciate it. It says, Hi Tom, I just listened to your latest podcast and wanted to say how genuine and personable you are when you're recording them. I work at both a clinic and at the University of Alberta, and on my way home from clinic, I always listen to your podcast. It allows me to unwind and explore my creativity all at the same time. You speak from the heart, and it really inspires me to try and push the boundaries of what I can accomplish as an educator. From the bottom of my heart, thank you. So, from the bottom of my heart, thank you for that. This I it was just such a kind, you know, simple, short, kind message, but maybe it was just how you painted the picture of, you know, going home listening in the car, because that's what I do. Well, back when there was more of a commute, listen to podcasts that I like in the car, and especially if they had to do with anything creative, then I start thinking about how I can apply those things to my own work and to what I do. And the thought of my podcast being able to do that for someone else in some way is really, really flattering and humbling and an incredibly great honor. So I just wanted to let you know how much I appreciate that and let you know how much I value that and how seriously I take that as a responsibility because I feel like that is a responsibility. And I'm really glad that by listening you can get uh you know creative inspiration. Now, I think that's sort of funny because today you might not get any of that. And the reason I say that is because, like I said at the beginning, we're kind of diving into nuts and bolts. So I've teased this idea a couple times, and it's not because I'm teasing it like, ooh, that you know, future episode's gonna be so hot when it drops. It's just really because I I think this is important information, but I don't know how super exciting it is, which is I legitimately just want to go through as matter-of-factly as I can and explain how I've gone about setting up my YouTube channel and like it not really this podcast because it's never been monetized, but my creative endeavors as a business. And I think that's helpful. I think that's really important information. If you listened to season two of this podcast, which wrapped up uh about a year ago, the the whole like arc of that season, not that every episode necessarily like harped on the point, but the main theme was starting a business and figuring it out. And it ended with my wife Heather and I forming an LLC, and we were like, Yay, we did it! Like officially we started a business, season over. But now, a year later, what does that even mean? How do you use it? What do you like? Basically, if you're somebody who creates something online in any capacity, or just does business in general, as soon as you start making more than $600 a year, at least in the United States, that's when you need to start thinking about what you're doing. And I know that for me, starting my YouTube channel, not only did I not start it with the expectation of making money, but I was specifically against the idea of making money at the time, which looking back, like I understand, I know I didn't want to be, I didn't want to to be perceived as doing something creative solely for the sake of making money. But I also think that I like shot myself in the foot a little bit by being like adamant about something that I actually didn't know that much about. And I I agree with the idea of having values and integrity, which is why we go through the whole ethics statement thing, and you can go back and listen to those or go read them on my website, but I don't think that it's inherently bad to start making money off of a creative endeavor. Getting into something creative specifically for the sake of revenue or money, that's where I don't think that's great. I don't think that's sustainable. It definitely will negative I don't sorry, words are hard. Um, at least for me, it will negatively color how I view the work if I know the person is only doing it specifically to to make money. And I but I don't think there would be that much work because my own experience at least, which might just be an anomaly, but I kind of don't think it is, is my first 40 videos on my YouTube channel, 40 videos over I don't know, what was it, six months, something like that? Maybe not six months, but 40 videos, number of months, 26 subscribers. Like I appreciated those 26 people very, very much, but there's not a lot of people watching, all 26 of them ain't watching every single video. You know, if you're just in it for the money, are you gonna make 40 videos that basically nobody is watching and then make 200 more after that? Probably not, because you're just gonna move on to the next thing. That's you know, whatever the next easier seeming thing is. So you have to have that that drive and that passion to keep doing the thing, even and especially when no one is watching or no one is listening. And eventually it can it can potentially start earning revenue, and that's what happened with me. So it wasn't something I planned to do, but the first revenue stream specifically was Amazon affiliate links. And I'll do if this episode ends up being helpful, I would love to know that. And then I can do an entirely different episode where I break down all of my current revenue streams, and I'll just we'll dive into the numbers and everything. But I think there's 10 or 11 specific revenue streams now coming in through my YouTube channel, which have all developed organically, they're not like manufactured, it's nothing I have to force, it's just because I allowed it time to breathe and happen organically, and I love that because it feels really, it just feels like a good fit. Uh so we're not gonna dive into like specific revenue streams today, but I can tell you the first bit of revenue that started this whole thing was Amazon affiliate links. And when I first started my channel, because of the kinds of videos that I make, it only makes sense that a lot of times I put a link in the description. And I used to just put like, you know, if I'm talking about, I don't know, a microphone or a camera lens, I'll just put the link to that on BH or Amazon. But it's just a regular link, like not nothing affiliate or anything. And part of me was like, yeah, this will really show my integrity, that it's not one of those affiliate links, because you know, there's definitely been uh instances on YouTube where people will make videos just to share affiliate links, and I get accused of that pretty regularly. Most recently, yesterday, someone's like, This is just one of those videos where you're just trying to like pitch something, and then here's my affiliate link. And I was like, Did you watch like 30 seconds of the video where you could tell that that's not the case? But you know, that's a whole separate thing. And that person clearly has been burned by other people doing that, which I have too. I've all I've seen, you know, the video where Harley even talks about something, but it's all about like go to the affiliate link, go to the affiliate link in the description, and it's just kind of gross. But for me, as a viewer, I actually appreciate it when there are links in descriptions because sometimes if there's something I I really am interested in, want to know more about, and there isn't a link, I have to go to like, you know, go to Amazon or wherever and try to find the thing, and then sometimes literally have like a paused frame of the video up and look back and forth and try to compare. Like, is this the same model that they're using there? Is it okay? And if someone just puts the direct link to the exact right thing, it's actually super helpful. So that's what I was starting to do. And I did that for, you know, I don't know, actually it was a while, maybe the first seven or eight months of having my channel. That's how all my links were. And it wasn't until I did my first lens review video, which I had spent a thousand dollars, bought the Canon 16 to 35 F4. Like that was the first lens I had bought in years, and it was a wide-angle lens. Um, and I just wanted to do a review on it specifically from like a video perspective, and made that video, and the video did pretty well. And of course, I put a link to it because there's like three different 16 to 35 millimeter lenses that Canon makes. So, okay, here's the exact one. And within like two weeks, even though the channel was small, even though the views weren't super high, I had like five people telling me, This convinced me to buy this lens. I bought that lens because of you. Thanks for like helping me make my lens choice. And I was thinking, I have just sold five thousand dollars worth of lenses. This is interesting because it's not the intention, it's not why I made the video as like a Canon commercial or anything, but that's just what happened. And that's when I'm sure it was Heather was the one who was like, that should be an affiliate link, because literally nothing changes except the type of link that I paste. Doesn't change the person who goes and buys it, doesn't change anything in the video. I don't have to like start talking about it, but now I could get, you know, whatever it was at the time, six percent of each sale, of each one thousand dollar sale times five, plus anything else they could have bought at the same time. Like, hmm, that's that's actually like a decent chunk of money. And since most of my most of my videos include some kind of gear or specific piece of equipment that I'm always linking to, it just sort of made sense. And what I love about affiliate links, they they like let me dip my toe into the water of earning revenue because I didn't have to talk about them in the video. I could say, hey, there's a link in the description, but I didn't have to I didn't have to like do a two-minute ad read about anything or make a big deal out of it, or even mention it at all. You do need to mention, of course, in the description that they are affiliate links. And if you ever go through any of my video descriptions, you'll see it's very upfront that they're affiliate links, each one is labeled, like there's nothing nothing being secretive there, which is a good thing. But that's that's pretty much it. So it's very unintrusive, but it's really effective, and everybody wins. People get the info they need, and then you can potentially earn some revenue. And it was, I think, the first year, so that would that must have started almost in the middle of 2018. By the end of 2018, I had earned, I think it was like $700 from Amazon affiliate stuff for that rest of that year, which I thought was amazing. $700 that I didn't expect to earn, but it was over $600, which means the next year, or uh in the beginning of 2019, Amazon had to send me a tax form because in the United States, if you earn over $600 a year, you have to then start reporting it in your taxes, which was super easy. It was not a big deal at all, but it was something to be aware of because what I quickly learned was that it was easy to earn $600 a year. I mean, that's really not that much money if you think about it. And as the channel grew and things started growing, it wasn't that long before it was $600 a month in Amazon Things, and then um even beyond that. So something had to happen, and that could just go into a personal checking account. There's nothing wrong with that, but if you want to go beyond that, that's where you start having problems. So if you have like one affiliate program or one simple revenue stream and you just put it in your personal account and you know, fill out the tax forms at the end of the year, you're probably fine. But if you want to go beyond that, that's where the problems start showing up. And my first experience with that, I know this is a lot of backstory, but I love context. That's the beautiful thing about podcasts, right? Context. So the first experience I had with that was in late 2019 when I did what is, as of now, the only actually sponsored video on my YouTube channel, which was with Epidemic Sound. And I've talked about this before, but they they were super great to work with, and I wasn't even that excited about doing a sponsored video. And of course, at the time, I think my channel had like um, I don't know, six or seven thousand subscribers. So they weren't paying me a lot, it was like a couple hundred bucks. You know, it wasn't like, wow, that sweet, sweet YouTube money, like go ahead and quit your job right now. It was pretty minimal. But when they first approached me about doing that, the first thing I said was, I've never done a sponsored thing. I'm not gonna lie, I feel like I have no idea what I'm doing. So I'm happy to do it if you don't mind like walking me through the process. And a big reason that I did the sponsored thing, other than that, like I actually use epidemic and you know pass that whole litmus test, was they were totally cool with holding my hand the whole way through it. They were so great to work with, and that that was so helpful because I could ask them questions every step along the way. There's like a contract, and they just helped clarify everything, and I trusted them. And so I that was the main reason I did it was to gain that experience. But as we're going through it and they're talking about payment, they're like, okay, send us your your EIN and your payment number or your you know your payment info. And I was like, Oh, you know, just send it to my here's my you know, it goes to my personal checking account. And they were like, we don't just send money to people's checking accounts, like it needs to go through a business thing. And I was so confused by that because I had seen epidemic ads on other channels that were the same size as mine, or maybe a little bigger, a little smaller, and I was like, You mean to tell me all of these people when I see someone with 5,000 subscribers and they're saying this video is sponsored by Epidemic, that they they have like a company set up to accept payment for that? And the answer was yes, they absolutely did. And I felt ridiculous because I had not heard anybody talking about. I've heard people talk about like start an LLC for this, but I wasn't doing client stuff, I wasn't you know, sending out services, I was just making my YouTube videos, and it it seemed like not something I had heard of, and it was kind of shocking that you know, epidemics said, Yeah, every everyone pretty much does. And I even started reaching out to a few people I was comfortable with or had like you know some sort of relationships with and asking them, you know, if you don't mind telling me, like, do you have like a company set up to take in revenue or do you just do it yourself? Literally 100% of the people I asked that responded said they had an LLC set up, and that blew my mind because I hadn't heard anyone talk about that, specifically in the world of having a YouTube channel, especially as a side thing. I get it, if it were my full-time thing, I it would really pop into the front of my brain of like, I need to make this an official business, what do I do? But when it's a side thing that's earning a couple thousand bucks a year, it just isn't something that popped into my brain. And what I also learned though was at least in my niche of camera, photo, video, that kind of stuff, a lot of people got into YouTube after already doing client work. So they're doing you know, video work for clients, starting a YouTube channel, YouTube, YouTube channel starts earning revenue, but they do already have a business set up for their client work, and then they just use that for their YouTube revenue. So that actually made sense. Okay, a lot of these people already had something in place, and now it was just working for this. Maybe you're in that situation too. I was not, I had nothing in place, had to start from scratch. And that was when the person I was working with at Epidemic said, if you're ever thinking about growing or incorporating, now would be a good time to do so because it's good for you and it it makes you easier to work with. And I was like, okay, and they they luckily were able to like to fill out some extra forms or whatever it was, and I was able to get paid uh to my personal account at the time, but it was like a one-time deal. And so then Heather and I started talking about, okay, you know, she had her business. She had basically been like a sole proprietor of her thing for you know the past several years, ever since she quit her full-time job. And then I was doing mine, and and we were sort of having the discussion of what is the best thing to do. And we decided that we would just form one LLC together. We could have each formed our own, but there was no real need. Like, we're not hiring employees, we're not dealing, we're not a Fortune 500 company or anything, like we're not dealing with any of those kinds of numbers. It's just the two of us. But there are a lot of revenue streams, which you know we could get into in in the future episode, but it's a lot more than just like, here's my ad revenue, here's my ad revenue, that's everything we've done. I mean, we each have between five and fifteen different revenue sources in a given month. That's a lot to keep track of. Um, but it it's it's not too crazy to the point where we would need like our own separate entities. And we knew at the time we were engaged, we knew we were getting married because at the beginning of 2020. Little did we know what 2020 would be, but we knew we were getting married, and we figured, why not just do one? Like it just seems, you know, we don't need to be a married couple with our own separate things, and we're kind of doing the same thing anyway. Plus, it saved money because an LLC, you have to register, at least in California, um, it's $800 a year to re-register your LLC. So if we had two, it'd be $1,600. If we have one, it's just $800. So we signed up as we created an LLC where we're both managing members. Um, if you're by yourself, you would create an LLC where you're just it's a one-person LC. It's actually even simpler. And I would I do have to say the process of starting an LLC overall is incredibly simple. Um, you know, it's gonna depend on what state you're in, what country you're in, but we live in California, which is notoriously bureaucratic, and it was still a pretty simple process. You can do the basics literally just online through the state website. You get to choose your LLC name, which is super fun. It's like choosing a web domain where you have to see if something is available. Um, your name does have to, they'll, you know, it'll say all this on the website. The the LLC name does have to have LLC in it, um, but it can be whatever you want. A lot of people just use their names, so it'd be like Tom Buck LLC. Uh, and the reason for that is because it's simple, it's clearly connected to you, and it doesn't define a specific service. So if you want to kind of bounce around and offer different things, lots of different types of revenue, it makes that really easy. Um, if you did something that's really specific and then you want to do something else, it could be a little confusing. We just went with ShareSpark Media LLC because ShareSpark was Heather's, you know, that was the name she had been using for everything she did from the beginning, and it made sense. So uh we just went with it. So that was our LLC that we formed, and that just handled everything that we do under there. If you're unfamiliar with LLCs, uh another big benefit is that they do protect you. So instead of you, because the LLC, Heather and I joke, like we're not having kids, but we had like a business baby because your LLC has an EIN, and that's like almost like a social security number for your business, that's your employer identification number, and that's that's how you get taxed, and how you could hire people, and and how you can get paid and open accounts and all that stuff. And that means that the LLC is responsible for everything. So for us, it doesn't really matter, we're not doing anything crazy. But if you're doing client stuff or you're dealing with contracts, or I mean, something as simple as you're doing video production stuff and you're filming something and a light falls over and hits someone in the head and you didn't have insurance and now they want to sue you, they would be suing your LLC and not you. So if your LLC has like $1,600 in the bank, there you go. That's that's it, as opposed to like taking your house, your life savings, all that kind of stuff. So it is a very important, um, it is a very safe thing to have, and it does open up a lot of options. Uh, it can be a little confusing if you're doing more than one person, like the options that you select. I'm not a lawyer, I'm not a financial advisor, I'm not a professional business person. So keep that in mind, you know, like the the advice is I'm giving is just on my own experience. But I also think that's important because sometimes, you know, you can talk to people, like we were talking to people at the bank. And they're like, oh, do you have your LLC and your EIN and your blah, blah, blah, blah, blah? And I'm like, I don't, I don't deal with this stuff every day. Like, I know it seems like the simplest thing in the world, but it's not part of my daily world. So I don't understand that. Sometimes when you're dealing with the actual professionals, you can almost feel dumb for not knowing something. So that's why I want to share my strategies, at least we're at now, because it's it's like, hey, this is what actual person had to do. So hopefully that's helpful. Um, so we did the LLC just through our state website, super simple. Um, we did have to do a DVA in the local newspaper doing business as. Uh, I don't know if you have to do that every time you do an LLC. I think you might, but since we were using a name that wasn't our legal names, we had to. And literally, it's just like you have to pay something like $200. You run a thing in the paper for like 30 days that just says, you know, Heather Ramirez and Tom Buck are doing business as ShareSpark Media LLC. It's super archaic and completely weird. And like, of course, nobody sees that, and it kind of felt like a waste of $200, but it's at least it's a legal thing, you know. It just says, like, hey, you put notice that you're the ones doing business under this name, period. So that was kind of where we wrapped up season two of this podcast. Was like, we did that, it's up and running, yay. Almost a year later now. I want to explain to you how we're using that because that was the next thing I found was it was like, great, we've got this LLC. What do we like do with it? Otherwise, we're just sort of paying $800 a year for this name. Like, how do we actually use it? And ultimately, the LLC exists to take in revenue. And so, okay, how do we take in revenue? Well, there's no accounts, so we need to create accounts, we need to switch stuff over, we need to figure out how to move money between accounts, and that's really like the nuts and bolts of what I want to get into today is that kind of stuff. So once the LLC is up and running, actually using it is still a little bit tricky, and you know, it's still a bit of a process. So the first thing was to open business accounts under the name of the LLC. And this is where, again, if you're doing this by yourself, uh, I think this is even simpler because you just go to a bank, open up an account under your LLC name, and you're kind of done. Um, Heather and I did things, I think we did it a little uh, you know, a little unusual, non-conventional, that was the word I was looking for, which is kind of the way that we do things. And I say that because the people at the bank were looking at us a little confused, the people at like the payroll place were looking at us a little confused, but it made sense to me, and that's all I care about. So I don't know if it's super wrong, but we we opened up two business accounts and two savings accounts for the LLC. Uh, the reason being, since there are so many revenue streams coming in for the both of us, and since they can change from time to time, of course you can deal with just bookkeeping and paying attention to that, but that gets confusing and that gets annoying, and that that is easy to make mistakes. What seemed easier was to just go, hey, here are a checking and savings account for all of Heather's revenue, here's a checking and savings account for all of Tom's revenue. Done. Pretty simple. And then we just ended up opening them at the banks that you know, we had had our accounts at our different banks since like we were teenagers. So we just each opened up a new account at our bank. Now, because they're in the name of the LLC, both of our names are on those accounts. So technically, I have full access to what we're calling Heather's account, and she has full access to what we're calling Tom's account, but like we just there's no need to like it doesn't really make a difference. It's still we just use them as our own accounts. Um, and there's a checking in a savings for each. The people at the bank were really confused about why we wanted to open a savings, which I was like, isn't a savings a good thing? So maybe I'm dumb. I don't know. But here's why is uh one of our friends is a financial planner, financial advisor, and we've been working with them a little bit. And one of the first things they said was, when it comes to your business, set aside so much more money for taxes than you would think. Um, and I was like, is that like 25, 30? And she was like, think more like 30, 40%. So I said, okay, I'm gonna set aside 50%. And so basically, 50 cents of every dollar that goes into that account goes straight into the savings account for taxes and fees. And I know there's other ways, you know, it could all go into one checking and I can budget it. But for me, it's just so much easier to know this money is over here for this reason. This money came here from these sources, this money is over here for these things. That's just what works for me. And again, it's two people in our LLC. We don't have employees and all this stuff. But anyway, that's why we set it up that way. So we each have a business checking, business savings, um, save money for taxes and fees. And then you're up and running. Once you've got your business account, then you can start you can start directing your revenue that way, which is awesome. So that's where uh what we had to do was go through all of our all of our sources, which can be annoying because I talked about Amazon affiliate, for example. It's not just Amazon, but because I also do Amazon in other countries, like uh I forget which ones I do, Spain, Germany, Italy, the UK, Canada, uh a couple others I'm not thinking of. Have to go through every single one of those and change the bank info, change Google AdSense, change any other affiliate programs, um, set up, you know, like you can book a consultation appointment with me through my website. That payment goes, you like where does everything go? And that sounds really simple and the process isn't too hard. It's very time consuming, but the amount of time it takes for that to actually switch over and get running, it can take a couple months. So, for example, if you you get ad revenue from a YouTube channel and that's going into your personal account, and then you switch it, it's probably not going to switch to your business account that month. It'll probably not be until the next month that it switches over. So as you're going through and you're switching things over, really give yourself like one or two months before you expect everything to be pushed over. So that's you know, that's a long chunk of time to get everything up and running. And then, of course, anytime you add anything new, just make sure it goes directly to your business account. So now for me personally, the only income that goes into my personal checking account is my school district paycheck, which has been the case for 11 years, and my paycheck now from our LLC. So we'll talk about that a little bit later. But that's it. There's no other revenue sources, no other anything else, just those things, which is all, you know, taxed income. And let's see, from there, I'm trying to think. Okay, now you've got your LLC set up, you've got your business account set up, maybe you've got a savings account, even if they look at you kind of funny. Now, what do you do? Because money's coming in. How do you use that money? So here's where I am at. Uh, it is a business account, so it comes with checks, comes with a debit card, all that stuff. Um, basically anything that's a business expense gets paid for out of that account, which when you break it down, so much of what you spend money on, if you do something like YouTube is a business expense. Not doing loopholes, not doing the thing where you go out for a fancy dinner and you're like, boy, business is crazy, right? And the other person's like, Yeah, business, I know. And you're like, well, this is a business lunch because we talked about business, none of that like weird, funny business. Legitimately, you know, I you might know I just bought the M1 Mac Mini, just the base model, the super cheap one. Well, you know, the cheapest Apple computer you can get. And that's a business expense because I mean the main reason I was using it was because literally my computer sounded like a jet engine in the back of my podcast and my streams and stuff. I need to edit videos for the channel, do all that kind of stuff. Yes, I'll use it for, you know, my other job too, and I'll use it for, you know, I don't know, personal stuff, but that's a business thing. If I need to buy a new camera or a new lens or equipment or something like that, that's a business expense for my YouTube channel. If I need to do a subscription, you know, Heather and I switched over to eCamm, that's $400 a month. That comes out of, or not a month. Oh my God, that'd be terrible. $400 a year. I hope I didn't give you a heart attack there. It's absolutely worth $400 a year, not $400 a month. And we switched over to that, and that money comes out of the business account. I mentioned consultations, setting up this the service where people can use the calendar to book and payments, send payment, all that stuff. That was like $200 a year. So all those little subscriptions, art list, epidemic, those kinds of things that I, you know, the subscription services you pay for for the thing that you're doing that's generating revenue, all of that stuff comes out of the business account. And it's pretty easy because you can just you can just use the debit card or you know the bank account number or whatever. Very, very simple. Um, you do need to need to obviously track your purchases. If you have no experience in bookkeeping, just make sure you you have access to your receipts in case you ever get audited. If you go somewhere and buy something and it's a paper receipt, um, it's a good idea to take a photo of it, scan it, um, catalog it away. If you order stuff online, I think it's actually a little bit easier because like for me, most of my online purchases are either Amazon or BH. So I could download and categorize all that stuff, but like they've already done it. I can log into my Amazon account, I can log into my BH account, see everything dated, organized. Anytime I need an envoy or a receipt for something, I can just grab it from there. Uh, but that's really important to do. Another thing that Heather and I recently, she had set up everything for bookkeeping in Notion, which Heather's like a Notion pro. Um, I'm like learning to love it, and I understand, understand it, but I'm not at the pro level yet. And that's what we were doing, but we recently switched over to a free service online called Wave. So I think if you go to WaveApps.com, um, that'll be there. And that's really cool because you you can connect your accounts and then it just tracks all of your spending. So it will just automatically do everything we were doing. It'll be like this account spent this much money at this retailer, and then you can categorize it and everything. So it just helps helps you keep track of all your books super easily, and then you can manipulate that data any way you want in terms of graphs and income and outcome, and is it outcome incoming and outgoing expenses? I don't know. It's you know, it's the good one and the bad one. You can you can compare those two and make sure that incoming is more than the outgoing, hopefully. And uh it's it's super cool. You can even run payroll through Wave, uh, which we don't do, but you can. So I definitely recommend it. And the basics of it are free and it's really easy to use. Of course, you could use something too like QuickBooks or just make your own spreadsheet or anything, but keeping track of your expenses is crucial in some way. Wave has worked really well for us since we started using it, and that's and that's really it. So then you can you can spend the money out of your account, you can keep track of that, and then obviously at the end of the year, you know, you gotta file your income and everything, which then that means like all this the revenue sources, Amazon, all those things, they'll send tax forms for the LLC, and then that's what we will report. There is one huge piece of the puzzle though that is still missing, which is very important, and maybe you've been asking yourself this how do you pay yourself though? So it's great. If I want to buy a microphone because I want to upgrade my mic and that's a business expense, cool. I can use the business account for that, very, very easy. But what if I had a good month on my channel and I want to take some money and I don't know, landscape our yard or pay for a vet bill for the dog or you know, something completely unrelated, new tires on the car, you know, that kind of stuff. Uh, how do you use that, which is completely a non-business expense at all? The way you use that is obviously you have to get that money into your personal account. And the way that you do that is to pay yourself. And it feels very silly because you have to like hire yourself as an employee. That's what we did. So this was the last piece of the puzzle that was very, very it wasn't tricky, but it was kind of tricky. Um, if you don't know where to begin, you need to use a payroll service. There's a whole bunch of different ones. I just mentioned Wave. You can do payroll through WAVE. Um, there's another online one, I think it's called Gusto that a lot of people use, totally online based. And I promise you, when you sign up for your business account, doesn't matter what bank you use, they will absolutely try to upsell you on a payroll service, which is actually what we ended up doing. Um, because the bank that Heather's accounts are at, they tried to upsell us, like, it's like 75 bucks a month. And we were like, no, thanks. We'll use you know an online service that's cheaper. And of course, then they came back and like, here's what we'll do we'll do $40 a month for payroll. That was actually a really good deal because um, so we went with ADP, forget what it stands for, but they're the ones that handle our payroll now, and it's actually really, really nice. So the reason we chose them was because $40 a month was about the cheapest we could find. That lets us run payroll one time a month. Uh, we could run it more, but if we did more, like if we did bi-weekly or something, we'd have to pay another $40 every time. So we just pay ourselves once a month. Pretty simple. Um, the software is super easy. Like literally, you log in, you see the two employees or whoever you have. If it's just you, it's just you. If you do ever want to hire someone, they will be there, and it just, you know, you type in how much you pay them, and then it puts a direct deposit on whatever date is the pay date. Might even be the very next day, or if you have a specific day or whatever. That's pretty much it. It's pretty simple. You do have to hire yourself, so you have to fill out all the forms. I forget which form it is, like the W, it's not the W2, that's the tax one at the end of it, the W4, the one where you have to do, you know, all your info and how much to be withheld and everything, which is great because then when you get paid, just like with any other job you've had, your your pay has already been taxed, you're already done, whatever jumps into your personal account, that is your money to do with as you please, save, spend, whatever. Um, it's just your it's your pay, just like any other job. From the business side of it, the payroll is uh super helpful also, and this is a big reason why we we chose to go with ADP through our bank, is because they handle everything to do with taxes in terms of filing quarterly taxes. So, what I didn't know with a business as a person, I know you file your taxes at the end of the year, and sometimes you get money back and sometimes you don't. Um, what I didn't know was for businesses because the numbers are so different, and I don't know, for a lot of reasons, I guess, you're supposed to file quarterly taxes, uh, which basically means even if you don't know how much it is, you're just kind of guessing and going, like, well, I think we owe about this much, so here we'll pay this much, this much, and then at the end of the year, it should either all be paid or a minimal amount, and then or you get some back or whatever, instead of having to pay a giant, giant amount all at once and then potentially hurting your business or what or whatever the case might be. I don't know. That seemed complicated and confusing to me. So the payroll service handles all of the tax filing automatically. We don't have to think about it, we don't have to do anything about it. It's all done automatically. I think they even do something monthly as well. And that just getting that out of my brain, getting that off of my plate, that convenience, absolutely worth it. Uh, and then of course, they also will tax, you know, the the employees. So if you say whatever amount you say somebody's gonna get paid, um, they do then you as the business then have to pay a fee, um, which is your employer taxes, and then the person gets taxed. So you start to see if you've ever if you've never done this before, which I hadn't, but you've had jobs before, which I have, and you heard employers talk about employer taxes being frustrating, now then you will start to understand why those are frustrating because you're like, I'm paying taxes to pay someone so I can pay taxes, but it's just it's it's especially absurd feeling because you're wearing both hats, the employer and the employee, but such is the law and the way we need to do things legally and above board, and whatever. That's cool. Just do it, do it the way we're supposed to do it. No funny business, it's fine with me. So that's pretty much that then, and that handles everything. Our big So let's see, there's a couple finer points to make here. Um, our first full tax filing. I think with the amount of money we've been saving for taxes, with the way we've been, you know, filing things through payroll, I think we're fine. I'm sure there's areas we've done things maybe not as efficient as possible. Um, maybe there's areas for improvement, but I think we're fine. If anything, my goal is that we've saved more than we needed for taxes, and that would be great. The thing I don't want, obviously, is to have not saved enough for taxes, and then we have to spend a whole bunch more money. Um, so that's that's gonna be our big test. And so it might be like in several months I need to do an update episode and be like, this is everything we did wrong, or hey, check it out. Our system was perfect. You should do it too. But again, I just wanted to share our experience and where we're at right now. Also, through payroll, that is where you can start. I think there's other ways to do it, but if you wanted to start offering benefits like retirement or health insurance, that's where you can start doing that. Heather and I aren't doing anything like that at the moment. I still have my, you know, full-time job, which has all of those things. So they're handling that. Um, but if this is your full-time thing and you're your only employee and you want to pay into retirement or something, or if you want to hire someone at some point and offer them benefits, uh, that's one place you can start, is is it can all be handled through how you're doing payroll. I'm sure there's a lot more to it than that, but at least that's the basics behind it. The last tricky thing, which I don't think will actually affect anybody unless you set things up in the very sort of unusual way that we did, which is how we have our separate accounts for the same LLC. And the reason it's tricky is because payroll can only come from one account. I don't think it's that unusual for a business to have multiple accounts, especially if you think of a big business like they got one account. Are you serious? No, of course not. But um, so we did this through the bank that Heather's accounts are at, so it just kind of became by default her, quote unquote her accounts were the ones that the payroll money comes from. But the situation I found myself in was okay, money's coming into my account. I would like to get paid that money, but how but it needs to be in her account for me to get paid, okay. Seems super simple. With personal checking, you can just add a transfer account, even from a different bank, and then you can just instantly transfer money between accounts or whatever. Not so much the case with a business account, and I'm sure that's because people did a lot of really weird silly things with business accounts over the years. So you can't transfer money that easily through a business account. You could use something like PayPal, but then there's a fee, and I didn't want to send money, pay a fee so that I could pay myself and then pay employer taxes and then pay your personal income tax. That just seemed like literally throwing money away at that point. So I was stuck with the dilemma of how to get money from my account to her account to be paid out. And the solution I found, as imperfect as it may be, is to just write a check. And so literally just whatever I want to get paid, I just write that amount, write a check for that amount from my account, deposit it into her account, and then that's what's used for payroll. And then I put in, you know, whatever the amount is that I want to get paid, I add on top of that to cover, you know, taxes plus just the the um payroll fee itself. So that way it's it it that would be kind of unfair if I were like, yes, I'm gonna deposit, you know, say I wanted to pay myself a thousand dollars. Here's a check for a thousand dollars, but then out of Heather's account also comes the payroll fee and taxes and all that stuff. So she's losing money. So try to like we try to keep it even and equal as much as possible that way. Um, and that that's the one area, especially of our workflow, that kind of gives me like pause and makes me go like, I know this isn't this isn't the best way to be doing it. But at the same time, I'm not too worried about it because if something were to happen and we were to get audited or something and they looked at her account and they're like, Where's the why is this money coming in here? It would take two seconds to look and go, like, oh, it came from there because it was revenue. Okay, like I it it's very clear that there's nothing strange going on there. Um, it's just sort of how we have things, how we have things set up. But in every other way, it works really, really well. Again, I'm just going to give the disclaimer of not a professional, not a lawyer, not a financial advisor. So, you know, I'm sure there are mistakes here. I'm not telling you the only way to do it, but I'm telling you my way of doing it, figuring it out from, you know, three and a half years ago starting a YouTube channel and going, oh, I have no interest in this being a money-making endeavor. To last year, uh, my YouTube channel generated $50,000, which I'm not I'm not I'm not saying that in any kind of braggy way, but that was a very different amount of money to deal with than like, oh, look, I made $600 or whatever the one year, $700. $50,000 was more like I need to like do something with this money. I can't it can't just be floating around like it needs to be taken care of in a in a real way. Um, we can talk about that later in the revenue episode. And of course, you know, not to sound super greedy, but I would love for that number to go up so that I could focus more on these kinds of things. And that's again a big reason why all this stuff is in place. If all you're doing is a couple, you know, you get one affiliate revenue source or ad revenue source, and it's like $300 a year or even a thousand bucks a year or something, I don't think you need to go through all this. Just have it put in your personal account, file the tax form if you need to, and you're done. But if you're dealing with larger amounts of money, if you're dealing with wanting to take in client stuff, if you're wanting to grow, if you're wanting to protect yourself, if you're wanting to be able to potentially do your creative endeavor as a full-time or nearly full-time thing, then I think having an LLC in place is hugely important. And I really did feel frustrated, honestly, when I found out so many people I admire had them in place, but were never talking about them. I mean, how many think about this? If you have a YouTube channel, I'm sure you've watched YouTube coaching videos. Heather, my wife is a YouTube coach, um, and there are people who do YouTube coaching stuff, YouTube strategy stuff that that I love and who I think are great. How many of them actually break down that part of it? They'll talk about, you know, growing your channel in terms of subscriber numbers or views, they'll talk about revenue, they'll talk about those things, but very rarely do you hear, hey, channel with 3,000 subscribers, you should form an LLC. Like it's it's just not it's just not something that's there. And in a way, it almost reminds me of of that thing which we've talked about before. You know, when there's somebody who who is not open about the fact that they have like help, like an editor or something. So say there's someone on YouTube, they make a couple videos a week, maybe even a video every day or something, and they're edited really well, and they're they're good, entertaining videos, and then other people go, Hey, I want to do this, I need to do that, and then they're struggling to keep up with that. But then it turns out the other person has like a team or at least help from an editor or something like that to keep them going, but they don't talk about it. There's nothing wrong with people having teams, but when they kind of hide the fact, that's always weird, and they don't talk about it, and then the other person is over here going, like, how can I, how can I not, you know, it's just not as organic, and I don't think that it's as honest about what's happening. And so I I do get a little frustrated when it's like ever I'm watching a lot of videos from people who are just like, Well, yeah, I'm making videos, it's fun, crazy YouTube stuff. And I'm like, But you you went through a whole strategy of like business development to be able to do the ad read that you did, to be able to take the money from the ad revenue that you're earning to use the affiliate programs that you have, but it's not that you have to talk about those things if you're doing them, but if you're giving out YouTube channel advice, yes, I do think then you should do that. You should make that stuff really clear. And if you've ever heard, I know you know it's a very non-subtle pitch for Patreon, but if you ever heard Jack Conti from Patreon um talk about like why it exists, he goes on, he goes into very much like there's there's value in art and creative endeavors, and there's nothing wrong with getting paid for your art. You don't being a starving artist isn't inherently better or more authentic, especially if there are people who are willing to pay for your art or pay to support you or ways to support yourself doing something creative. There's nothing wrong with that, and just understanding that and creating ways to support yourself through that is okay. It took me a very long time to understand that, and you can definitely find plenty of examples of it being done wrong. Going way back to the beginning of this episode, that was one of the things I talked about. If you're jumping into this, like I really, really, really don't want to share this as a way of like grow your your your YouTube channel, grow your business, earn money. I want to share this info as if you're making something and you're consistent with it, at some point it it probably is going to generate revenue. And what are you gonna do when that happens? Are you set up to handle that in in the way that's gonna be best for you, especially if you do have any kind of growth either as in mind, not as the goal, but maybe as a goal, or if your channel grows, you know, I um I have a consultation coming up with somebody's whose channel in the month of December went from uh like 6,000 to almost 70,000 subscribers, and has only continued to go. Um, if you have something like that, obviously the numbers are going to change pretty quickly, and being able to handle that is great. My example with Epidemic Sound, I'm really lucky that they were willing to put in extra work to be able to pay me as an individual that time, but there are lots of times where companies, partners, whatever would just say, Nope, that's not an option, sorry. And I have a feeling had I wanted to work with Epidemic again in the future and I hadn't gotten around to incorporating an LLC, they would say, Sorry, we just can't do that again. Like we can't make a habit out of doing that. We literally gave you all the info you needed to know about setting something up. Why didn't you listen to us? So it's just one of those things, and and it does offer protection too, like I mentioned. Um, you know, not that it's so much an issue if you're just dealing with ad revenue and affiliate stuff, but if you dive into the world of clients, customers, services, it does protect you as an individual because now your business entity is what is responsible for for all those agreements and all those things there. So I hope, I hope so much that this was helpful. I know it's not like necessarily, you know, we started with um Roshan's super nice email about being creatively inspired, and I just started talking about tax laws and payroll services for like 45 minutes. But I I think that that is important. Um if you're working really hard, Heather is playing Zelda in the other room. If you hear the dogs marking, we've recently rediscovered Breath of the Wild. But if you're if you're in that if you're in that situation and something is growing, I think it's a service to yourself to to set it up for success, to build that strong foundation. So um I'm super curious. If you want to reach out and let me know if this was helpful or not, I would love to know. And especially if you're interested in then having another episode where I break down revenue streams specifically, I'm more than happy to break down everything that I have. I'm more than happy to give out actual numbers, um, not for the sake of clickbaity growth, whatever, but for actual info, reference, understanding of how this can all come together, which I have personally just spent been spending a lot more time on as I'm considering, you know, like trying to push towards my goal of being able to have a career change at some point in the future, uh which we've talked about before too. So these kinds of things are just very much on my mind because it it deals very, very clearly in the world of what is practical and what is impractical, what's possible, what's not possible. So as uh stressful and frustrating as it can be, it can also end up alleviating a lot of anxiety. So again, thank you for listening. I hope that was helpful. I would absolutely love to hear some feedback. Uh if there, if you have any or any thoughts about that, of course, you can reach out to me at SodarnTom at all of things or youtube.com slash tombuck. Also, this is gonna sound sales pitchy, and it kind of is. Uh since I am working on my very first course, which would be another one of those revenue streams. Um, I want it to be all about podcasting. Um, I'm currently in like the outlining, I guess you could call it curriculum development phase of the course. But if you want updates on it, nothing spammy, I promise. Just literally like updates on where I'm at with it, when it would be available, that kind of stuff. Um, you can go to hi, my name is Tom.com slash wait list and just sign up. It's literally just emails directly from me. It's not like an automated thing, and then uh you can be the first to know. So thank you so much for listening. I hope this was helpful. I hope you have a safe, happy, healthy, fun rest of your week. And I will see you next time. That's the wrong song. Wait, this is the right song. I will see you next time. That was the couples table theme song. Here we go. That's the right one.