Growth Mindset for Business Success

What separates successful entrepreneurs from those who struggle isn't just skill or opportunity—it's mindset. In this illuminating solo episode, we explore how shifting from a fixed to a growth mindset can transform your business trajectory.

Ever find yourself setting "attainable" goals that keep you comfortable rather than pushing your boundaries? We challenge the traditional SMART goal framework, arguing that the "A" should stand for "Ambitious" rather than "Attainable." By setting goals that force you to think differently, you create the conditions for breakthrough growth rather than incremental progress.

Delving into Carol Dweck's pioneering work on mindset, we examine how entrepreneurs can practically apply these concepts using the RAD Shift Framework: Recognize your mental resistance, Align your thoughts with your intentions, and Direct action with one clear step today. This approach transforms overwhelming challenges into manageable opportunities by focusing on progress rather than perfection.

We also tackle two common pitfalls that drain business profitability: inadequate ROI analysis and scope creep. Learn how to evaluate potential system investments by calculating time savings against costs, and discover straightforward strategies to confidently handle client requests that fall outside your service agreements without damaging relationships.

As we pass the midpoint of 2025, now is the perfect time to reassess your business strategies, goals, and financial structures. Whether you're considering shifting from an LLC to an S-Corp, implementing automation, or refining your service packages, small, consistent steps today create the momentum for significant business transformation tomorrow.

Want to dive deeper into these concepts with personalized guidance? Check out our Triumph Mastermind program, where founding members receive substantial discounts and daily access to business strategy sessions. Your journey from fixed to flourishing starts with a single shift in perspective.

Chapters

• 0:32 Episode Introduction and Updates
• 2:09 Setting SMART vs Ambitious Business Goals
• 5:40 The Growth Mindset for Business Success
• 8:53 The RAD Shift: Recognition, Align, Direct
• 14:12 Business Automation and ROI Analysis
• 26:46 Combating Scope Creep in Your Business
• 35:28 Business Structure and Financial Planning
• 47:34 Mastermind Program and Episode Closing

Transcript

Dave: 0:32

Thank you, hey, hey, hey, what's up everybody? It is episode 15 of the Business Unscripted podcast. And well, since we're unscripted, as we always say, we just needed it. So you just get to listen and hear my lovely voice today as Dwarin. As we were talking about in last week's episode, dwarin had a beautiful, beautiful baby girl this week with his wife. Obviously, obviously, his wife did a lot of the work, but, um, so he is on father duty today. Um, so he is going to be off, but for now, um, it just gets me.

Dave: 1:14

And when I you know, and it was one of those things where I was trying to kind of figure out, all right, what, what do I want to talk about? You know what, what, what might be interesting for you all? Um, and as everybody knows, right, we are here kind of talking business. We're kind of going through our own sort of journeys and what we are going through in our business, right, as well as ways that we are helping people be better with our clients, with our you know, obviously, our visuals here, and we just want to be here to help you kind of level up in your business. My personal goal, my personal goal, is to have influence at least a thousand businesses by the end of 2028. Now it's a lofty goal. I get it. If you know and you've heard me talk before I believe in setting ambitious goals. I believe in setting things that are going to make you think a little bit differently in your business, and for that the SMART acronym we're all possibly familiar with it right. So S stands for specific, so make sure it's actually specific and detailed out. The M stands for measurable, so not only is it specific, but can you measure it Right and is it something that is you know, can be tracked with data and results? A is where I like to change it Right. A is where I like to teach being ambitious.

Dave: 2:43

Now, if you just look up smart acronym, a stands for attainable, but I don't like attainable right. Attainable means that it's you're going to continue doing what you're doing and you're going to be able to reach it. Right. It's like an attaboy. Well, if you're in business, attaboys aren't going to make you profitable. Attaboys aren't going to make you scaleaboys aren't going to make you scale. So what you need to do is you need to step and ambitious, right goals that are going to push you outside of your comfort zone, push you to do more in your business. So, with that, what I want you to start thinking when you think of your goals and you start setting your goals is to start using ambitious goal setting in your business, right.

Dave: 3:29

So then you have the other areas and write the R stands for relevant, so it makes sure that it's relevant in terms of your goals where you're heading into the future, right? So make sure that you want to set a goal, like, let's say, you want to grow and maybe you want to reach 100 clients. Well then, you don't want to set a goal that is going to be on the culture of your business, right? Unless it's also aligned with your future success. And then T is time-related, right. So it's time, you know, restricted. So you're setting some sort of time limit to your goal. You don't want your goals to just be open-ended forever, otherwise you'll never be able to measure and hold yourself accountable for that.

Dave: 4:17

So, just to recap, s, specific M measurable. A, ambitious Don't use attainable, be ambitious with it. R relevant to your future. And T make sure there's some sort of time restriction to your goal. So, whether that's six months, 12 months, two years, as I stated, right, my thousand is by the end of 2028. So there's some sort of time measured goal with that.

Dave: 4:49

So, going back to goals, make sure that you're setting things up in order to be different, right To order to require you to think differently about what you're doing in your business, because that's where you're truly going to make that growth, that differently about what you're doing in your business, because that's where you're truly going to make that growth. That's truly where you're going to make that next step forward, not just continuing to do the things that you're doing. You got to think outside the box. So that was kind of the first thing that came to mind was thinking my goal, thinking of ways that I help teach people along that. But then the next thing is I was kind of like trying to figure out OK, what do I want to talk about? Like, what do I think is relevant?

Dave: 5:33

I'm working on a presentation that I'm about to be giving on change, and it's going to be two presentations, but this first one is coming up next week and it's for a local college here and the topic is on. This one is on mindset as a leader and as business owners. We are leaders. No matter how much we, even if you're leading yourself, you're still a leader and how important you have to pay attention to your mindset in order to you know kind of lead and through change as a leader. And as everybody knows, and if you don't know, this book right here, right Mindset by Carol Dweck is a big, probably one of the biggest impacts in my life in terms of how I change the way that I think. So in this book, dr Carol Dweck talks about the two different types of mindsets that you could have, and one is a fixed mindset and another one is the growth mindset.

Dave: 6:40

And if you are living with a fixed mindset, then you're thinking things like I'm stuck, I'm never going to be able to do better, this is the only thing that was meant for me. You're always thinking like in that woe is me, like never going to be able to find opportunities, right? You kind of feel like whatever your destiny for your life was was set out kind of by the time you were born. Your abilities are truly set in stone. You're not able to kind of grow and evolve. When you struggle with a test or results, or maybe you struggle with growth in your business, you think to yourself well, it's just because I'm not good enough, right? Maybe I'm not supposed to do this right. So those are fixed mindset beliefs. Those are things that are deep seated in your mind when you're in the fixed mindset.

Dave: 7:39

Now, when you're in the growth mindset, this is where you start seeing the struggle right, the obstacles, as part of your learning process, as part of your growth. So when you fail, or maybe when you don't reach the objectives that you want, you see yourself being able to get better through more effort, through better strategy, through maybe other areas of support or education or growth. This is when you're in the growth mindset, right. You look at things and, instead of saying I can't do that because I'm not good enough, or I can't do that because I don't know how, you start looking for the ways right to find the opportunity and lead with a growth mindset and you can help other people around you also begin to get in that mindset.

Dave: 8:31

So in this presentation that I'm going to be giving next week, I'm going to be talking through a quick sort of framework that anybody can kind of begin to use to start thinking through a shift in their mind, and it's called the RAD, the RAD shift framework, and the R stands for recognize. So this is where you kind of pause and you take notice of your thoughts, right. What is your emotional resistance? Your mental resistance to what you're facing in terms of the conversation and the presentation is about change, but for you, as a business owner, it could be towards maybe hiring on a new employee, it could be launching a new product or just getting started. Right, recognize what are those mental and emotional resistance points that you're feeling right now. The A stands for align.

Dave: 9:34

So this is where you begin to reframe your thoughts with intention and begin to link those new thoughts to your focus moving forward. Right. So you begin to realign the negative or the blocks, and begin to realign it Like I can do this, like what's the worst thing that could happen? Right, Let me just get started. Let me just take that first step. And that's the D, which is direct. So it's taking one clear action today that can reinforce that shift in your mindset.

Dave: 10:05

Because I think what a lot of people it happens is, they feel like anytime they need to make a shift, that shift feels gigantic because they're thinking the end, the end of that shift, right, and they're thinking where they're at today, so like the beginning is here and the end is way over here and they're like, oh my God, that gap is so large, I can't do it. But what you need to do and this is what the direct step here is in the rad shift is you need to take the beginning over here and take your end goal and just move it way over here. So you just take one step today, right, and now your gap is so much smaller. One step today, right, and now your gap is so much smaller. And if you're listening to the audio, I just kind of I'm using my hands and kind of reducing the gap between my two hands, right, and ultimately, it's just take one step today, a clear action that pushes you towards that outcome that you want. So you know, if you're thinking change, it's okay. What's one clear step that I can take today that's going to get me towards making that change with my team or in my business, et cetera? And then tomorrow, ok, follow up on that change. What worked? What didn't Look for the opportunities? If it didn't work, what do we need to change? What do we need to make it a little bit better? That's how this kind of rad shift begins to work, and what happens is it's not going to be perfect, you know, I think when you're going through shifts like this and I'm speaking from you know kind of personal experience here it's not going to be perfect overnight. You know it's going to take repetition, it's going to take consistency for you to continue to kind of put this into action in your mind in order for you to, you know, kind of make it an everyday occurrence For me when you're going through Carol's book.

Dave: 11:53

I had to read it twice in order to kind of really begin to implement that kind of change and growth mindset in for myself. And even now I'm not perfect. There's probably some times where I still fall back into um, you know the fixed mindset sometimes. But here's the thing I can catch myself quicker now than I used to. I used to be very negative, be able to go down the rabbit hole and be there for a long time. But now since reading you know minds, the book mindset, I'm able to kind of catch those things maybe in like 30, 45 minutes, sometimes even quicker, and bounce back. And it's funny because I still get, you know kind of people commenting, you know, to me regularly like how are you so positive, right? You know things aren't perfect sometimes, and but how do you stay so positive. Right, you know things aren't perfect sometimes, and but how do you stay so positive? And it's right there, it's the growth. I'm always trying to find that opportunity to grow and to make myself a little bit better, just day after day. And that's it. Because what happens is when you turn around and you look at yourself, you know maybe three, six, 12 months down the road and you make small shifts every day, you're not even going to recognize the person that you were 12 months ago because you've just become that much better. So I hope you were able to take something from that. Again, if you want the book, I highly suggest picking this up for yourself.

Dave: 13:21

Mindset by Dr Carol Dweck. No paid advertising here, just kind of my personal sort of reference for you all, because I think it's that important for people to kind of pay attention to their mindset, important for people to you know, kind of pay attention to their mindset, and I'm also so, after I give the presentation on Tuesday, I will. I will actually be recording the entire presentation as well and I'll have it out here probably on our YouTube channel so you guys can all kind of you know, listen through that in terms of you know the importance of your mindset, right, and, and how change truly does start from within, and and how you as a leader, as a business owner, can begin to cultivate change by focusing on your mindset. Um, another, so another, um, you know kind of thing that I was thinking of, of kind of going over it's, of kind of going over it's. You know, um, we've been talking automation, right, we've been talking systems and how, sometimes it can be overwhelming when you start thinking of, like how do I begin to implement some of this, like either automation or these sort of efficiencies, within my business?

Dave: 14:33

And one one thing that happened this week um, I was working with a client and it was the biggest sort of, I guess, aha moment that he had. And, as we're working, one of the first thing I noticed and I asked him because they do billing, and he was spending 10 hours a week, know, 40 to 50 hours a month, billing manually, um, all the while like having a system that they have to use to track everything. And my question was like, well, why are we not using this, this complete, robust system that we already have in place for tracking, to also do our billing and the? And you know, sometimes the answer is just like well, I'm not sure, and that's kind of where we were at here and it was like all right, well, we need to get you back that 10 hours a week because as a business owner, we all know how important 10 hours a week can be or at least outsource that or figure out some way to sort of look at what's the best way to put a system in place for billing. And that's where, you know, a lot of people think like they worry about you know, implementing kind of these new sort of systems or these new sort of processes, and they wonder, like what's the ROI Like?

Dave: 15:53

And so, as an example of this, if you look at a task so in this case it was billing and then you kind of time it out Like what is the time investment manually, which in this case it was 10 hours a week or 40 to 50 hours a month, and then you offset that with okay, either you know, let's use the system which we found out this past week that by going through the system and implementing that appropriately and correctly, we could take billing from 10 hours a week down to like maybe 30 minutes a week. So now you're talking 40, 50 hours down to maybe five hours a month. So you kind of look at that ROI and you're like, okay, that's a no brainer. And then the cost of that was, you know, like under 250, under 300 bucks. So when you start thinking of the ROI you're like, okay, how much is my time worth? Right, you know, and give yourself a value of.

Dave: 16:50

You know, if you get this time back in your business, how can you, how much would it? Would you be able to generate new business into the business by having that time back? So let's just say, for example, you estimate that to be 50 bucks an hour. So by you being able to go out and have conversations and network and talk to prospective clients, that could essentially bring you into the business about 50 bucks an hour. That could essentially bring you into the business about 50 bucks an hour. Well, it's easily becomes to see how the ROI on this implementation in this example is way worth it. Right, $200 to to get back something like two or $3,000 a month for 200, it's a 10 times ROI. It's a no brainer and even so, like in his case, his ROI is a lot more because his hourly rate by being able to generate a new client, that customer lifetime value of a new patient or a new client could be drastic, could be like tens of thousands of dollars, right, by having that time back. So that's an ROI test that you can do.

Dave: 17:55

Right, look at a task that you're doing right now, that you're doing manually. Figure out how much time is it costing you a month. Then find one or two solutions, right, and look at, well, what would the time investment be with the solution? Obviously there may be some higher time requirements during implementation, right, because you got to make sure it's right. But then, once it's running, what is that savings for you? Are you able to get back 90% of your time for 10% of the cost? And this is where you can then kind of make that decision for yourself and your business about what process, what system works for you. And especially if you're a small business, right, so you're either a solopreneur or maybe you only have a couple of employees like work with your employees as well, because there are ways where you can take your one employee and make them, you know, be able to be efficient and effective enough as three or four.

Dave: 18:52

You know that aren't using some sort of systems or automation. You know that aren't using some sort of systems or automation, and let your employees know that, like you're there to help them be more efficient and more better with their time, so that they can do more as well. And as the business grows, they're going to grow. So when you think of systems, you know you should always be looking to evaluate what's going on in your business, whether it's onboarding, whether it's client outreach, whether it's you know financials. Like you know, sometimes it's not a system, sometimes it's outsourcing it too.

Dave: 19:28

So you know, for example, let's say the system in our example, you know, instead of $200, it was going to cost like $6,000 a month, based on charges, and this is just a crazy number, but I'm just throwing it out there. When you do your analysis, you find out okay, in order to do it 30 minutes a week, it would cost us like $6,000 a month. But you could potentially have somebody come in, maybe part-time, that could do it 20 bucks an hour and it would take them, you know, 10 hours a week. So you know that would take, that would cost you eight hundred dollars a month, right, to have somebody come in part time and still give them back the 10 hours a week. So, even still that would be worth that investment to hire somebody versus, you know, having the system done, that investment to hire somebody versus having the system done. So look at all solutions available to you, price them all out, look at the time investments that would be needed for all of them and then make your decision. The first one isn't always the best. A lot of times you want to deep dive a little bit further, but once you do that, you're able to then make the right decision for you, financially as well as efficiency as well.

Dave: 20:44

And if you have any questions or you want to kind of talk through what systems look like in your business, you're more than welcome on any one of our videos to drop your question down below. We dwarn I uh will be. You're kind of taking a look at those questions and answering them. If you post them live while we're live, we'll try to answer them live during the session, or we'll make sure to include kind of like a q a session in future episodes as well, uh, with the answers to those questions and let you know what episode we're answering them in, because we want to make sure that all of our viewers, all of our listeners, are getting all those questions answered and there's no dumb question. I've said that to my teams when I love them. You are probably not the only person that is thinking a question if you have a question, so it is more beneficial for you to ask it, not only for yourself, but for others as well. So drop it down below. We'll make sure to answer those in future episodes or live on screen the screen Also.

Dave: 22:02

I'd love for you guys to share your feedback. Maybe there's some topics that you want us to talk through. Maybe there's a formatting change you want us to change. Letting you know as well. Dorn and I were talking last week after the show we are going to start bringing in guests as well. So we're going to be talking through our networks people that are that we feel are experts in different areas or in different business owners that, whether our clients are ours, that you have gone through struggles, and we're going to kind of help answer those kind of questions and things like that on air as well for you all. So if you're interested in possibly coming on, drop a comment down below. We'll outreach you and make sure that you're a right fit and that it makes sense for you as well to be on the show to talk through business questions, feedback, et cetera, just to help you move directly forward in your business journey. So if you're interested in possibly joining a future episode as well, let us know and we will outreach you. We're looking forward to that because I feel like that's going to be a beneficial part of the show for not only you who are on, by being on the show, but also, um, anybody who's watching that, you know, may have a question that you bring up.

Dave: 23:19

So, which brings me to the uh, let's just so we all got to make money, right. So we all got to, uh, try to offset costs, etc. So this brings me to, um, the advertisement portion, right? So you know, ding, ding, ding. But as we talk about every episode, dwarin and I have revamped our Triumph Mastermind program with daily, monday through Friday, open Q&A sessions. So for an hour every morning we're going to make ourselves available to anybody in the group that wants to stop in, ask a question, you know, ask for prioritization, anything that relates to your business. You're able to do that Monday through Friday. We're also going to have a weekly strategy session where we're going to talk through a different sort of you know, maybe it's a marketing strategy, or maybe it's a financial strategy, but something that can help you in your business level up and, you know, kind of continue on and reach that next level in your business journey as well. As we'll have a community for everybody so you all can network together and we have our WhatsApp available for 24-7 questions so you're able to kind of ask within the group questions that are maybe pertinent at even 10 o'clock at night and somebody will answer you.

Dave: 24:32

The ultimate goal with the mastermind is when I mentioned earlier on how can we shift my thinking into helping those thousand business owners by the end of 2028? This was one of those opportunities. That is there. So the mastermind is there. We have some founding member benefits live right now. So we'll share the link down below and, if you are interested, the founding member benefits, if you are one of the first 20 to get in. So the mastermind is going to be $199 a month after the founding member specials are over. So after we're launched and the founding member spots are claimed, it's going to be $199 a month, but the founding member specials you're going to get in lifetime for $59 a month for the first 20. So now you're getting, like you know, ridiculous percent off, but you're also going to get access to everything. You're not going to get anything different and you're going to get some of this first early access. You know, kind of to me and Dwarin themselves, kind of to me and Dwarin themselves. So if you're interested in being one of the founding members, we will, down below after the show, I will make sure to include a link to the Mastermind website so you can take a look at that, and we're also offering a 30 day money back guarantee. So after 30 days, right for the founding members, if you're like like man, I appreciate you, let me in, but I don't feel like I got the value out of it. We owe more than happily refund your investment for your first month, but we know you will. So, which is why we're so confident that we're gonna offer that 30-day money-back guarantee. All right, done with no more advertising. Okay, that, that was my kind of two or three minute pitch here for the mastermind, so look forward to seeing you in that.

Dave: 26:22

One of the other topics and I just actually created a video script on this this morning and it was about and I've had a conversation with people and I myself have been a victim. I guess a victim, or I've fallen into this trap myself, and that is falling victim to what we call scope creep, right? So people may be like, what's scope creep? And no, it has nothing to do with that weird guy in the band that's watching you. That's a different kind of creep. And no, it has nothing to do with that weird guy in the band that's watching you. That's a different kind of creep. But this is when you are offering extra time over and beyond a package that a client has purchased with you, and a lot of people fall, especially solopreneurs.

Dave: 27:19

Small business owners fall victim to this so often because they feel like they have to do everything in order to keep their clients, and so what happens is somebody will reach out, one of their clients will reach out, and they're like I need you to do this, you know, quick for me, or or can you help me with this? Um, I really would appreciate. You know? Uh, you, you can help me create some copy around this email campaign, for example? Right, this is just, you know, kind of an example, and us, as small business owners, are like sure, you know, I can easily help you out with that. You know, I'll send it over to you Right.

Dave: 28:01

And what happens is that campaign let's say they want a 10 email campaign which you're thinking, hey, it's going to be easy, I'll kind of create it with, with, with AI. You know it'll take me, you know, 20 minutes. Well, here 20 minutes turns into three hours because they're pushing it back to you and saying I don't like this, I don't like that. And so now you've just spent three hours of your time this month that you did not get paid for doing something free for one of your clients. And this is where we call this is what we call scope creep, because now you're starting to do things outside of the relationship that you're contracted with with your client.

Dave: 28:39

So what you want to do is you want to get comfortable by you asking them, you know kind of acknowledging the request, like you know, hey, john, totally understand, you need help with with some copy as sort of like a one-off. You know it's not typically included in the, in your current package. So there's like one or two ways that we can, that we can handle this. You know, kind of request for you and we'd be more than happy to take care of it. One, we can do it as a one-off project. And if you need 10 emails, let's say it's going to cost you $200, right? Or whatever your pricing may be like, whatever that is, or we can actually, if you'd like, we can actually just add on $150 a month to your current package and you'll get up to two hours or three hours for this type of additional work that's already included in your package and we can work on it every month. Is that which offer or which option sounds like it would be more feasible for you? The project at $200 or $150 a month?

Dave: 29:47

And so what this does is allows you to anchor in your client's mind that you are giving them extra time and that you also need to be compensated for that extra time. Right? Because what happens is, if you continually do that, month over month, your clients will then begin to expect it as part of what they're paying you for. Your clients will then begin to expect it as part of what they're paying you for, and then you get caught in kind of this conundrum that when you you know maybe their renewal comes up and you kind of explain to them hey, just letting you know like we're adding, we're upping it, you know, by $250, because what we saw is that you know we're doing all this extra time on your account. That wasn't part of your agreement. They're going to know wait, wait, wait. Well, that was a part of your agreement. They're gonna wait, wait, wait. Well, I was already. I was paying 250 less for all that work. Why would I pay more for it now?

Dave: 30:40

And it allows you right to kind of alleviate that sort of stressful moment when pricing change comes up. So, for yourself, begin to get comfortable with that kind of acknowledge the request, frame it, it right. So, framing it as hey, we're happy to help. But here's the two kind of options we can do, because it's not included in your package or your membership and then offer two or possibly three alternatives for them to select from, to then have that you know kind of service done through you. This is the easiest way to kind of stop yourself from falling under that scope creep sort of trap.

Dave: 31:20

And what happens is, you know, when you fall victim to this is your time. It gets sucked away and your profits get sucked away, because what you find is that you're not able to you know those three hours could be impactful for you to go out and outreach new clients, to prepare some proposals or, you know, do some other project work that you're actually going to get paid for. So stress your confidence that, hey, you are more than happy to help them, but you also want to make sure that you're staying within the agreed upon you know work within their membership or their, you know their retainer or package, whatever it is that you want to call it, um, and and what you could also do. A way, also a way to alleviate this would be in you, the initial agreement. I think we talked about the importance of agreements in a prior episode, but this would be in in the agreement, actually, maybe even calling this out and saying you know, any work that you know is requested outside of the scope mentioned in Appendix A or however you want to word it in terms of your legalese terms, will be billed at a rate of X amount per hour, and so if you have that in the agreement, that could be one of the great ways to acknowledge it. You know, when I say, hey, john, or you know Jane, or whatever your name is, I need you to. You know kind of, help me with this. You know email campaign Is that something you can help me with? You can respond with. Absolutely Just wanted to. You know kind of, bring your attention back to the agreement that, since this is not included in the scope, we both agreed that this would be billed at $75 an hour. I'll track my time on this and I'll bill you appropriately, okay, and then just get their. You know kind of. You know, just get their bite. It's the easiest way to kind of alleviate it and you can feel comfortable with it because it's in an agreement that they signed.

Dave: 33:22

So, getting rid of scope creep in your business, you may so for yourself, give yourself some time like think through this morning, like Look at the last 30, maybe 60 days and look at the work that you've done for your clients and has there been anything above and beyond the membership or the package that they've been with and with that, has it gone way behind it that you you realize, hey, I've been spending five, six, seven hours above and beyond here that I wasn't getting compensated for, and if you don't have it in your agreement, start building that into your agreement. You may find that you know the results are. The results of that may be shocking to you because you're like, oh my gosh, I'm spending. Be shocking to you because you're like, oh my gosh, I'm spending extra hours everywhere and then you're probably wondering well, why are you still stuck where you're at? So that's another one that I was just kind of thinking about this morning was scope creep, as I was making that sort of video this morning, because it is something that it creeps up on you because you don't really think about it. We're all trying to help our clients. We're all trying to do the best, but ultimately, for everybody's sake, if you're not getting paid for your time and you're doing all this extra work, yeah, in the short term it feels like they're getting a benefit and they're happy, but in the long term you may not be around, you may not be able to help people right, reach the goals that you want. So, you know, make sure you're billing appropriately for your time. Um, and if you're not, you know, find ways. You know, as we just talked about, like, acknowledge it, frame it, offer it, and if you have questions on that again, we're more than happy to drop it down below. We can kind of talk through the situation and kind of go from there as well, but it's, I cannot believe. By the way, it's you know another thing kind of top of mind here that I just looked at the date, right, it is almost the end of June already, which is pretty crazy to think that, like, we're already through the first half of 2025. Crazy to think that, like we're already through the first half of 2025. Um, and I'm working on this for another one of my clients is a report casting of the the 2025 kind of fiscal year and kind of planning out the rest of the year. Now is a perfect time for you and your business.

Dave: 35:39

If you haven't looked at your financial statements, if you haven't, um, you know, begun to doing any sort of analysis on your business, like now's the time to do it. And it is still funny to me or it is funny, but it's also, like, you know, um alarming to me that there are still businesses out there that are doing, you know, seven figures of revenue that don't have a financial team. Uh, I just saw an example of this this week where you know a business is doing greater than five million dollars um in revenue and refuses to hire on any sort of financial team. It's like, what are you doing? Um, you have no financial processes, you have no checks and balances, you have no accounting software, like what. Like to me, it's like astronomical how businesses like this can actually get to that size um and and not have, you know, realizing the risks that not having something, somebody like that on the inside, or you know even an outsourced sort of fractional person, um has to their business. Not only that, but then it and managed software, and so there's so many different risks and I know it's a little bit off topic from re-forecasting, but there's so many different risks that you as a businessman have to think about.

Dave: 36:58

And the number one right is financial is one, and I know some people you know and so you can kind of reshift kind of this for yourself. But for me, right, my background is financial, so I'm always going to feel like financial is number one. It is another one that's up there, like especially if you are dealing with a lot of sensitive information. You know credit cards or health information, or you know anything about a personal that you keep, whether it's on your computer or if you have you know employees it's on their computer. Like IT security should be like number one for you. And then financial, so you know kind of you know the hierarchy there. And then you know obviously, like planning in terms of insurance. You know a lot of business owners I've also talked with like don't have, you know, health insurance or don't have, you know, a lot of, a lot of business owners I also talk with like don't have health insurance or don't have, you know, general liability insurance. And it's crazy to me to think that there's businesses doing seven figures a year that haven't thought about you know, kind of protecting their you know sort of business. And then on the back end of that is is the fourth area you know in terms of risk and liability is the setup of your business. And again, this isn't like legal advice but, you know, making sure that you are working with some sort of a business attorney, et cetera, to have an understanding of how you're setting up your business.

Dave: 38:25

And I think the false idea that a lot of people fall under is that they feel like they have to be an S-corp right away because they see all these benefits of the tax savings of being an S-corp and you're like I'm going to start a business and I'm going to go right into being an S-corp. Well, the problem with being an S-corp is you have some sort of requirements on you, like paying yourself a salary, and if you have no money coming into the business you can't pay yourself a reasonable salary or even afford having a payroll company. So a lot of times what my suggestion to a lot of people is is either start with an LLC or start with a partnership, obviously get an opinion of a tax attorney. So again, this is not legal advice, tax attorney or business attorney but typically start with like an LLC or start with a partnership until you have generated net profit enough right To make it worth and we've talked about ROI above to make it. You know, make sense where you have these extra expenses of payroll, where that is way less than the tax savings. So a client of mine that I've worked with since 2016,. A couple of years ago we finally moved him to the S-Corp because he was making six figures a year.

Dave: 39:49

And when you're an LLC, making six figures figures a year and that's all on your schedule, your schedule c, in your business, while you're getting taxed, not only at the income tax level, but you're getting taxed at the social security and medicare rate for both the employee and the employer, the self-employment rate, so that alone, right, there is like 16 rounded right. So let's just say, for an example, you know you make a hundred thousand dollars in your llc, well, you're gonna pay sixteen percent, so sixteen thousand dollars of that net net revenue that's gonna go to social security, medicare. You're then going to probably pay because you get one half as a deduction. So you're going to have taxable income of 92, 000 minus whatever you know. Let's say you're single right, so your standard deduction estimated, let's say it's 15 000, so you're going to get taxed on, let's say 80, uh, you know 70, let's just call it 78 000. And let's say you're in the the the 15. I think that probably puts you. Let's just call it 78,000. And let's say you're in the 15, I think that probably puts you. Let's just say the 15% tax bracket. I'm just estimating taxes here. So that is now another 10,000. So of that $100,000, you're going to pay $26,000 in taxes. So now you're actually going to only net. So 100100,000 minus $26,000, you're only going to net $74,000 of that $100,000 you made, you're going to pay $26,000 in the taxes.

Dave: 41:16

Now, if you change your tax status to an S-Corp, you're going to pay yourself through the business. Let's just say you pay yourself a. You know a thirty thousand dollar salary. You know thirty to forty thousand dollar salary. You're going to pay that 16 percent only on that 30 or 40 thousand, right, so now that 30 or 40 thousand, now that becomes, let's, let's call that what is 16 percent on 30 is like forty five hundred, forty five hundred to five thousand, ok, 15% on 30 is like 4,500, 4,500 to 5,000.

Dave: 41:52

Okay, and then your income tax right, it's going to be the a hundred thousand minus the, minus the 30,000 salary minus some taxes in there. So let's just call it a $60,000. Okay, in there. So let's just call it $60,000. Okay, plus the wage of 30. So you're going to be, you know, your taxable rate is 90,000 now, minus the 15,000. So your income tax rate is going to be about, you know, 75 grand. Let's say you're at that 15% tax bracket again. So now that's going to be another 75, about 10 grand rounded. So now you're paying 10,000 plus 4,500. So it's 14,000 before you're paying 26.

Dave: 42:44

So by going to an S-corp, in this scenario and again, these are all just rounded numbers so obviously, talk to a tax attorney, talk to an accountant or tax person which we do taxes, but rounded in this scenario, so you're going to save about $12,000 in taxes by being taxed as an S-corp instead of being taxed as an LLC. So that's where these things can become drastic. Now, in that scenario, what you need to figure out is how much is it going to cost you to pay yourself a salary through a payroll company? And if it's just you, I would suggest doing it monthly so it brings your cost down, right? So now you're only paying yourself that salary once a month. Let's say you pay yourself three thousand dollars a month, twenty five hundred bucks a month, right, but you're able to save all those taxes.

Dave: 43:31

But every scenario, every individual, is different, whether or not they should be on s corp, whether or not they should be an llc. But I think a lot of people feel like, because they hear all these benefits, I have to be an escort, I have to be an escort. They make the mistake of being an s corp right away. Um, and it actually is detrimental because you're not doing the actual things that you need to be doing, to do as an s-Corp and like paying yourself. So it's actually not worth it. But talk to a tax attorney, talk to a business attorney to kind of figure out what's the best way to start.

Dave: 43:58

But, like I said, my typical suggestion for a lot of people is start with an LLC, start with a partnership and then when you start making enough profit, that's when you can make that shift to an S-Corp and you can make that election up until March 15th of the year that you want to file for. So, for example, for 25, you would have had to file up on March 15th 2025. You can always do it late If you want. You just have to write like what's the reason why you're filing late, which, and then it's at the IRS is sort of discretion if they want to accept that or grant it. But so that's why I typically say you know, make it, file it by March 15th, and then it's going to take probably six months to get that letter back. So you need to start acting like an S-Corp, like right away. So if you want to do it let's say you're looking forward and you want to do it for 2026, you want to start acting like an s-corp, so start paying yourself at the beginning of 2026. So that way, when you get that, you have right, you're acting as an s-corp, right. As long as they, once they grant you, um, your s-corp status, you're on payroll like you're doing all that. You don't have to try to like you know, do it right away when they give you, get you your s-corp status, which could be until september.

Dave: 45:11

Just some, just some overall advice there on financial side, but kind of going back, reforecaster 2025 what's happened in the first half that you didn't know was going to happen and how is that going to impact the rest of the year? Right, so plan that out. Because what I think what a lot of people do is they set their goals for the beginning of the year and then they they don't change them. They set them. They feel like they're set in stone. You can change your goals, like reevaluate now.

Dave: 45:36

Now is the perfect time. You're going into the second half of the year, take a day, maybe a day and a half, to sit down, you know, with yourself, replan out the rest of the year. What happened in the first half of the year that's changed, that you need to forecast out or, you know, overcome in the second half of the year, and how are you going to do that? Now is the perfect time to do that. It is the beginning of the second half. You can begin to make an adjustment now and now is the perfect time to do it. Um, the second, the second best time. Right, the first best time was to do it was was yesterday, that the next best time to do it is today.

Dave: 46:12

So that was kind of you know what I was thinking about today in terms of the, the topics and the discussions, and you know, kind of, as I wrap up, if you made it this far or you watch the replay again, I we love you all, like Dorn, and I definitely love you all that are that are kind of engaging with the episodes, that are here to watch, that you know we hope you're taking one or two things away every single week. We want this to be impactful for you all. We want this to be something that you come back and you look forward to every Friday or you look forward to the replays because you're able to listen and hear and make an impact on your business. So drop a comment down below, drop your questions down below. If there's anything that you have going on in your business right now that you want some support, you know, drop it, we'll answer it, we'll bring it to a future episode and answer it.

Dave: 47:03

Live for you guys to watch and listen to and take. You know, take momentum from it right, make momentum. One small step today starts momentum for the rest of your business journey Doesn't have to be a giant leap, right. A lot of small steps equal that giant leap and a lot of small steps are a lot easier to take than one giant leap. So take the small steps today.

Dave: 47:26

If you made it this far, we love you. We hope you come back for another episode. We look forward to seeing you in another episode. Arne will hopefully be back next week after being off of dad duty right now with his newborn. And if you are a business owner right, and you're listening to this if you're a business owner and you're interested in possibly coming on to a future episode, drop a message in the comments and let me know and I'll reach out to you and we'll determine if it's a good fit for both sides and what we want to talk about, what you need to be open about and, if it is, we'll get you scheduled for a future episode. But I look forward to seeing you all next week.

Dave: 48:07

I hope everybody has a fantastic and amazing week ahead and if you have anything, always feel free to reach out. And also down below is going to be the mastermind link. Go check that out. All right, I'll see everybody in the next one. Hope you have a great week. We'll talk to you soon. You'll find me losers. Set me free. You make me win every way. You show me how to spread my wings.