What Your CPA Wants You to Know
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What Your CPA Wants You to Know
82. Sticky Business Partnerships + Lessons Learned with Sarah Mechling
Curious about the secrets to stress-free potty training and successful business partnerships? Join us as we chat with Sarah Mechling, the brilliant mind behind Tinkle and Toot, a potty training support business for parents.
We discuss the complexities of business partnerships and Sarah's previous experiences. She opens up about the importance of setting up proper legal agreements and the steps new entrepreneurs should take to protect their ventures. From obtaining an EIN to forming an LLC, Sarah shares lessons learned the hard way.
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For a while it did feel very aligned, but I think there were just other things that weren't covered in those conversations that ultimately led to just having differences that didn't feel like they were going to be resolvable.
Speaker 2:Welcome to what your CPA Wants you To Know.
Speaker 3:Tax and accounting help can be expensive, so we've created this podcast to help guide you through it all and make you feel like you have a CPA in your back pocket. I'm Carson Sands and I'm Taryn Sands.
Speaker 2:I'm a CPA with over 10 years of experience helping people start and grow their businesses.
Speaker 3:And I'm an MBA with a specialization in marketing and entrepreneurship. Taxes suck and we want to make sure you don't pay more than your fair share.
Speaker 2:We're here to share everything your CPA wants you to know in a fun and easy to understand way. Let's get started.
Speaker 3:Let's do it Today. I have Sarah Meckling joining me, from Tinkle and Toot. She is a potty training expert and her business provides support for parents potty training their children, so thank you so much for joining me today, sarah. Thanks for having me. Taryn, of course I can't laugh when I say your can't not laugh when I say your business name, which is actually really good and catchy, so I love that. Please introduce yourself, your business and everything to our audience and tell us all about Tinkle and Toot.
Speaker 1:Yes, so, as you said, my name is Sarah. I have been potty training since 2010. I'm a board certified behavior analyst. That's kind of where my experience started, and it was mostly with kids with autism. I still dabble in that, but I have ventured into helping parents of all kids with potty training, and Tinklin2 was born after some experiences in the business world and really finding where my passions lie. I love potty training and I really want to be able to bring this support and resources to parents everywhere so that they don't have to feel like potty training is like the most stressful experience of their life. It might not be their favorite, but it doesn't have to be the worst. That's what Tingle N2 is all about Awesome.
Speaker 3:I love it and, as a mom of three, I wish I would have known you before I potty trained all of my kids, because, yes, I do think it's one of the worst things that you have to do as a parent, along with teaching them other things that they definitely don't really care to learn Right?
Speaker 1:I always tell parents I'm like, why would your child think that they should not pee and poop in their diaper? That's all they know. And you're telling them now that they have to pee and poop in a hole. I'm like, why would they think that they should do that? We have to convince them that it's a good idea. Yeah, exactly.
Speaker 3:It is hard and they lead you to believe that you can do it in three days and it can be so easy. And I know my grandma was like oh yeah, I potty trained at 18 months and you're just getting all kinds of like different stories and I remember at the time I was just like so frustrated with trying to get poop in the potty I would have paid any amount for someone to help me. Like I just felt like I was doing it all wrong, and so I'm so glad that there's businesses like this that support that now, because it's so easy to do virtually and just have somebody that's an expert help you troubleshoot so that you feel like, okay, at least I'm trying to do what I should be doing and I'm moving in the right direction.
Speaker 1:Exactly. I aim to make it as simple as possible for parents so that when they're in it they're like okay, at least I know exactly what I'm supposed to do, what to expect, like is my kid going to pee or poop on the floor today? Obviously I can't predict the future, but to kind of give them those realistic expectations of like what the experience should even be like.
Speaker 3:Yes, exactly, I love that, yeah yeah. So before this episode, sarah and I were just talking about what direction we wanted to go and what we wanted to focus on, and we decided to talk about partnerships. So Sarah will give you all the details. But she was in a partnership before Tinkle and Toot and it ultimately ended. And you know, if you listen to our podcast Carson has said it many times the partnership is the only ship that won't float. So it is kind of funny, but it also is kind of true.
Speaker 3:We see a lot of partnerships that are formed just don't make it within, like, the year mark, and there's a lot of reasons for that and there's also a lot of benefits to partnerships.
Speaker 3:But the thing that we always tell people is that we can't just simply set you up an LLC for your partnership, which we could but the reason we won't is because you need to make sure that you really set up all of your agreements like your partnership agreement, your operating agreement, all of those things with an attorney.
Speaker 3:So sometimes, when that happens and you decide to part ways, you have no idea what to do because you have none of these agreements set up from the start. So I think that this is such a good thing to discuss because a lot of people don't talk about it, right, they just kind of sweep it under the rug and they don't want't talk about it. Right, they just kind of sweep it under the rug and they don't want to talk about it, which I understand. So thank you so much for being willing to just open up a little bit about this topic and share your story, and hopefully that will help somebody else if they're starting a partnership, do the right things and take the right steps or learn from your advice. Sure, so can you tell us all about the partnership that you had started and all the details about what ultimately happened with that?
Speaker 1:Sure. So about two and a half years ago a little bit over than that I decided I wanted to take myself on this entrepreneurial journey and I knew I wanted to do something with potty training. But originally I wasn't quite ready to do it on my own. So I did some independent contracting for a little bit through another company. And then I had a friend who was also interested in starting a company for potty training, so we decided to start a company together. That previous company was a partnership.
Speaker 1:Despite lots of advice from a family member who's actually a business attorney and some other sources my accountant I did not get an operating agreement. So we did not start out our company with an operating agreement. We were kind of excited friends, trusting I am a optimist, toxic positivity, all that stuff so I was very excited to get started and thought it will be fine, I don't need this operating agreement. At some point we went to open a bank account and we needed an operating agreement. So we did get one, but it was a very generic from one of those websites that it just has like who knows what information, the basics, yeah, yeah.
Speaker 1:So we never really discussed what happens if this issue arises, or this issue or one of us wants to part ways, or both of us decide we want to part ways, or any of the details. To be honest, I don't even know what would be in an operating agreement that covers all bases. We didn't have those conversations. We didn't have any of that in writing.
Speaker 1:So when it came time to part ways, just due to differences in where we saw the company going and how we wanted the company to be run, nothing major, nothing grand happened. There was no big fight or argument. It just was not working out and we didn't have anything in place to decide to guide us in how to move forward from there. So from that point we tried to figure it out on our own. That wasn't working out, so we did have to seek legal counsel to guide us through that process, which of course costs money. So the money that we potentially could have spent up front for an operating agreement that would have more easily helped us part ways would have saved us money in the long run on attorney fees and all of that stuff that comes along with that. So that's kind of the gist.
Speaker 3:And I think that you hit the nail on the head there. It's that people don't want to pay that extra money. So just to give you an example in our office we charge $425 to set up a new LLC and that could be a partnership. But then we direct these people to the attorney and you're also paying into the state of Texas $300 extra to Texas just to set this up. So you're already out almost a thousand dollars just setting it up and we're like no, you need to go to this attorney and it's going to be more, probably closer to $2,000.
Speaker 3:But the good thing is they know exactly what to ask you guys. Sitting down. They're like well, if this happens, what will you guys do? What about this part of the business? What if this happens? What do you guys do? What about this part of the business? What if this happens? What do you guys do? So it really gives you time to think through each of those things and decide right then and there. So I do think that usually money in the beginning, like you said, you're so excited to get started and then you just kind of avoided that step. A lot of people do that Very, very common.
Speaker 1:Right and I had the advice at the time to do it and I was just so hopeful and not worried about it. I guess at the time that I was like it's okay, it'll be fine and of course, like you know, everything is still fine. But I lost a friend along the way, I lost a business that I had worked hard at, and that's obviously very sad. And if those things could have been avoided by having legal counsel in the beginning to guide us into how to make the decisions should they get to that point, that would have, I think, saved a lot of heartache, headache, all that stuff.
Speaker 3:And a lot of stress. I know it was a very stressful situation there for a while. I'm glad that you kind of worked through that, but for a while it was very stressful because you need to know what you're going to do to move forward in your business.
Speaker 1:Right, it is definitely stressful. There was a lot of questions, things left up in the air for a bit, and that was hard.
Speaker 3:So I think it's pretty clear that you didn't anticipate any of this happening. So I think it's pretty clear that you didn't anticipate any of this happening, obviously, like you said, but did you two ever have a conversation about issues arising or if one of you needed to go in a different direction? Were there any of those conversations during your business together?
Speaker 1:Yeah, I think there were some surface level conversations about really figuring out whose role was what we see the company going. Those conversations were had and for a while it did feel very aligned. But I think there were just other things that weren't covered in those conversations that ultimately led to just having differences that didn't feel like they were going to be resolvable are you ready to start your new business, but you're just not sure what is needed to get your business started legally.
Speaker 3:Like all the paperwork, your ein, your llc, all of that.
Speaker 3:You may have a brilliant business idea, but there is so much more to starting and running a new business that no one tells you about but every single person has to do, no matter what type of business they're starting. To make this very frustrating process simple, we created a step-by-step checklist to help you get started so you know what you need to do legally to start your business your EIN, your LLC, your bookkeeping, saving for taxes. If you want to make sure that you're doing everything correctly and you're moving forward, knowing all about those important due dates and filings and all of the tax things that you really should know before you just jump into entrepreneurship, this new business starter kit is exactly what you need. We designed this to help simplify the complicated process of the paperwork and the filings at the very beginning, and most entrepreneurs don't have extra hours to research all of these steps. Our new business starter kit helps you file the necessary paperwork and set up the required processes to start a new business step-by-step.
Speaker 3:If you want to grab a copy of this today. Just check out the link in the show notes. Now back to the show. So, moving forward, what are you doing differently with your new business and is there any advice that you would give everyone listening?
Speaker 1:Loaded questions. Taryn, I'm just kidding. So what am I doing differently? So my new company is a single owner, llc I'm not sure if that's the right way to say it, but it is. Yeah, okay, I got it right. Cool, good job. So I am doing this solo. I am really excited. I am doing a few things different, I am Okay. So I'm starting a YouTube channel. That's really exciting. By the time this episode airs, that will be live.
Speaker 1:I am really looking for more speaking engagements like podcasts. I would love to just get in front of more audiences so that I can help more people. I really love talking and I love talking about potty training. Anybody that will listen. I'm going to tell them something that they probably weren't even really interested in. So it's really hard. On Instagram and stories or reels it's really hard. Or even posts, it's on Instagram and stories or reels it's really hard. Or, you know, even posts. It's hard to filter myself to 15 seconds, 30 seconds, it's so difficult. So I'm excited to be able to have a little bit more long form content that's going to be able to more like I'll be able to explain things further and really dive into the subjects. So those are some things that I'm doing differently this time around. I am refining resources, I'm creating a course that will also be available, probably by the time this podcast airs. I'm trying to get all the information that's in my brain out in the world so that all the families that have access to it can have a Smith-Potty training experience. That's my main goal. I want people to just get past this part of parenting so that they can enjoy their life. Yes, yeah, so I I'm just trying to get creative with how I can do that. So I think that's some of the main ways that I'm kind of doing things differently.
Speaker 1:Okay, so do I have any advice? I definitely do. I would say, if somebody is thinking about going to a partnership, the advice that I got that I didn't listen to. So, of course, like we talked about the operating agreement, even though it might seem like a lot of money upfront in the beginning of starting a business, I really think it's pretty important. So that's definitely a piece of advice.
Speaker 1:I also got advice that when going into a partnership and of course, I don't know everything about partnerships, I'm by no means an expert in this, but the advice that I got was, when you go into a partnership, you should really be bringing different things to the table that are going to help your business grow and support your business in different ways, because your skills and personalities and experiences are going to complement each other with growing this company and the goals of the company, each other with growing this company and the goals of the company.
Speaker 1:So I really think that that is an important piece, that I didn't think deep enough when it came to a partnership and I would do differently if I were to ever think about doing something like that again. And then my third thing, I guess, would be following your gut and your intuition. I think oftentimes we don't listen to our gut because there's other chatter whether it's our own chatter in our head or other people's opinions and thoughts, or maybe, like me, someone's like too optimistic about life and wants to say yes to everybody but really listening to that gut feeling or thought or you know what's kind of like on our heart and trying to figure out how that can help guide us versus all the other noise.
Speaker 3:Yes, I love that and I think you can correct me if I'm wrong, but I feel like sometimes people jump into a partnership because they're a little scared to do it themselves. They're a little scared to do it themselves and, like you said, it's really important if you're forming a partnership that both partners are bringing something really big to the table. So maybe you're really good at the business side of things and you're going to run that, or you know someone else is going to be like the face of the business and you have those specific jobs, but a lot of times it is people just like well, if we both go into it together, then if we fail, it's not just me. Yeah.
Speaker 1:I think that I absolutely agree. For me, I think it was in part the idea that it would be fun to do it with a friend, it would be fun to have somebody to, like you know, to do all the things. And I'm such a talker, like I was saying, that I like to bounce ideas off of other people. I like to, you know, I kind of question before I put something out into the world. And I think, since you know, about two years ago, when I started that partnership, to who I am now, I've learned to like back to trusting that instinct.
Speaker 1:I don't necessarily need to bounce every single idea off of my husband, my friend, my mom, you know my business friends. Like you, taryn, like I don't need to ask every single person, every question. And I got to that point through some great coaching from one of our friends who challenged me to ask myself, before I ask other people, their opinion or their advice or whatever like, can I answer this question myself? And it's been life-changing. I'm not even kidding. I'm like, wait, I don't need to ask this. Like with my YouTube editor, I was like I can't make this decision. You just mentioned it for me when I could have just made this decision, like I'm still working on it, but we really do just need to trust our gut.
Speaker 3:I think more often than we let ourselves do just need to trust our gut, I think, more often than we let ourselves. That's so true, and I can just hear from this you talking about your new business, that you're kind of lighting up, doing the things that you wanted to do all along, which I think sometimes in a partnership, obviously you have this whole other person and their opinions and you can't really run it the way you want to without that other person agreeing to everything. But now it seems like you know you're just taking what you want to do and you're just doing it, and that has to be a really good feeling now, yeah.
Speaker 1:I feel like it's just. I've grown as a person and it is. It's hard to have to check, you know it's. It's like a marriage, you know, and when we go into a marriage, we are making this like raising kids. You're, you are. That other person has a say and has and that's important to you, but you date that person. You think really hard about marrying them. Like, of course, we have that gut intuition, like this is a person I'm going to marry, but you still are making decisions together and going into a partnership. You're making tons of important decisions together. You have goals that are together and if those things aren't aligned, it doesn't always feel right and that's hard. Like it feels like a divorce, it does. You know? Deleting that Instagram made my stomach churn. Sending in the letter to the state that says you know this company is closing it's hard.
Speaker 3:Yeah, and I don't think that you went into that all the way, but you did ultimately just decide that you guys wanted to shut it down, and which is why you basically had to start over everything from scratch, which is so hard, when you've put so much blood, sweat and tears into a business, to have to start over Now. Obviously, you have your experience and all of that, but, yeah, just having to redo everything is, like you said, like getting a divorce.
Speaker 1:Yeah, yeah, I mean, I've never been divorced, so I don't know exactly how that feels, but it felt. You know, it's very, it's a very big decision to be in the partnership. It didn't seem as big at the time of starting as it did ending, and I think that's something that I wish I would have known more. I don't. You know, every less, every life lesson like life experience is a lesson, um, but yeah, I don't think you think about that. When you're excited in the beginning stages, you're like let's just do this, and the people who have been there are like, okay, but don't forget about that operating agreement, and you're like it's cool, it's fine, but maybe it would have been helpful in the end.
Speaker 3:I do think that it also kind of forces you into that state of mind, because a lot of times when people start a business, they're like this is fun, we'll just see how this goes.
Speaker 3:We don't know if we'll make that much profit in the first year. It's just kind of a passion. But the minute you sit in front of that attorney and they're saying, okay, we need to decide all of these things and assign people jobs and all of this and how you're going to pay everyone, it really does make you treat it like a business from the start. And that's one of the advices we give to everyone, not just partnerships you need to treat your business like a business from the very beginning, because very likely this is going to be a very serious business and generating income for your family and you want to make sure that you're you're having a good foundation from the start. And lots of people don't do that. Even if it's just themselves, you know they don't file the right paperwork, they don't start bookkeeping, they don't set aside money for taxes. So this is just one of those, those things that we always suggest people do for that really good foundation.
Speaker 1:Yeah, and I think kind of back to your question what am I doing differently? That's something that I know now. So every month I'm doing my P&L, my profits and losses spreadsheet, I'm filling that out, I'm keeping track, I'm talking to my accountant to make sure, from the start, what do I need? What do you need, like, how do we make sure we're dotting our I's and crossing our T's, whatever that phrase is? So, yeah, there's lots of things I know now that are going to hopefully help me grow this business to where I see it going.
Speaker 3:Well, I love it. I love that you didn't just give up and say this is too hard, no, that's not an option. Giving up is not an option. I love it, which tells me that you're like.
Speaker 3:We've learned about pivoting, just the power of the pivot, yep, which means you are 100% an entrepreneur. If you say, no, I'm just pivoting, I'm not giving up, yes, it's just a pivot. Well, thank you so much for coming on and sharing with us today. Sarah, I know this is kind of a hard topic for you to talk about. It would be for me if I had gone through this, because you're just like woulda, coulda, shoulda who cares, but I do think this is really good information that so many people will listen to and use. So thank you for being able to share that. You're welcome. Also, if you could just tell everybody where they can find you, where they can follow you on social she has a really great free potty training content all over her social and where will they find you most?
Speaker 1:Sure. So I enjoy popping over onto Instagram. I'm there pretty much every day. You can find me on Instagram at Tinkle and Toot, and you can also find me on YouTube, and that is my first and last name. So that's at Sarah S-A-R-A-H Meckling, which I'm sure Karen will put in the show notes.
Speaker 3:Yes, I will put both of those in the show notes. Like you said, you are releasing a course soon, so it should be either already live, or yeah, it's going to be a course.
Speaker 1:It's going to be a course. So, yes, it's going to be a course, with a membership option for some support Awesome.
Speaker 3:Well, I will put all of those in the show notes. If you are a parent and need some potty training support, sarah is definitely your girl. So until next time. Thank you so much for listening to what your CPA Wants you To Know. Podcast.
Speaker 2:This podcast is intended to provide accounting and tax information for educational purposes only. All tax situations are unique and should be handled with the assistance of a tax professional.