Nolan Bradbury (00:00):
The place I see people get themselves the most trouble is, not really respecting the difference between the business they've created and their personal life. When you're a solopreneur, it's kind of this gray line of like, it's me and I'm an individual and I'm a business. But the reality is you need to treat them as separate things.
Intro (00:17):
Welcome to Solopreneur the One-Person business podcast for professionals ready to take charge of their company of one and reclaim their freedom. Join us as we bring you inspiring stories, invaluable insights and practical strategies from successful solopreneurs and industry experts. Get ready to feel empowered to create a thriving business that aligns with your unique goals and allows you to live life on your own terms. Here are your hosts, Joe Rando and Carly Ries.
Carly Ries (00:50):
Welcome to the One Person Business podcast. I'm one of your hosts, Carly Ries.
Intro (00:54):
And I'm Joe Rando.
Carly Ries (00:55):
Joe, this won't be our first published interview of 2024, but this is our first interview that we're doing live in 2024, and I feel like as solopreneurs, we all want to kick off the year thinking this is going to be the best year yet. We truly believe this is our year, and I feel like that goes hand in hand with the financial health of your business. Today we have on Nolan Bradbury and he helps business owners achieve their dreams through sound accounting and financial strategies. This may not be the most glamorous of topics that you want to discuss today. However, I think we can all agree that this is definitely one of the most important things you need to be thinking about for your business. I'm so excited to kick this off. Nolan, welcome to the show.
Nolan Bradbury (01:39):
Thank you for having me. Excited to be here.
Carly Ries (01:41):
This will be great. I mean, I know maybe it was a selfish thing to have you on today because I know that this is on my mind. I'm like, this is going to be the biggest year yet. Let's get just hit the ground running. And that's my mindset. I'm trying to be positive about all of it. That leads me to my first question, what role does mindset have for solopreneurs when it comes to the financial success of their business?
Nolan Bradbury (02:03):
Yeah, great question. I'll start this by answering it, but with a bit of a PSA, which is if you've gotten to this point after seeing accounting, was what we're going to be talking about. God bless you for sticking to this point because the reality is that for most people, accounting is something they hate. It is, it's something that they don't have a great relationship with. Unfortunately what ends up happening is as human beings, we also tend to avoid things we don't like. And we end up avoiding accounting. But the problem is that accounting is really important to running a business. It's kind of an unavoidable cornerstone of all that. It's important to have a good relationship with accounting. That's the first thing off the bat, I would say. Additionally though, from a more broader perspective, as a solo entrepreneur, it's really important that you don't have a limiting mindset.
(02:50):
And what I mean by that is one that focuses on what you don't have or what you aren't able to achieve or sort of putting a ceiling on your capabilities. It's important to have sort of an outlook on things that allows you to achieve beyond what you might not think is possible. I think the other thing that comes to mind is that for a lot of entrepreneurs, especially solo entrepreneurs, there's this mindset. Because you're doing everything yourself, you have this DIY mindset, which is then everything that comes up, you have to do yourself. The problem is that it's only you have a finite amount of time to do things with. So one of the other things that we have to sort of get over a hurdle of is you don't have to do everything yourself. You don't need to be the person that solves every problem. Part of that is having a mindset of where can I find time back and claw back in my schedule? Where can I have other people who are professionals, experts in their area of expertise that I can rely upon and use to take some of the burden off of myself so that I can focus on the things that only I can do. Growing the business, doing the work, whatever your sort of business entails. I think those are really the most critical pieces of that.
Carly Ries (03:57):
We love that you say that because we always say going solo in business doesn't mean you're alone. It's so important to connect with others. I argue sometimes that I have more of a community now than I did when I was working for a company just because we all need to help each other out and hold hands. Let's actually talk about that for a second. If people were to outsource these services, what should they be looking for? Where should they tread lightly? What kind of relationship should they have? Let's talk about all of that.
Nolan Bradbury (04:34):
I'm going to give a little bit of context before I answer that directly. Bear with me here. I think it's important to understand that when you're starting out, you don't want to overreach with whatever you're doing, whether it's hiring people or setting up processes or designing whatever it is doing. You want to start from a place of making sure the first step you take is going to be successful, but if it isn't successful that it isn't like a huge overstep and that you are not in a really negative place in that sense. When you're starting out and you're looking for the people to hire, I would focus on some of the key areas. One, finding a good attorney or legal counsel that can help make sure that the aspects of your business are set up right from the beginning.
(05:13):
We tend to think, oh, it's easy or it's simple. But just because something is easy does not mean it's simple. Things can be complicated even when they're easy steps. So making sure your business is formed in the correct way can avoid a lot of headaches down the road. I think selfishly, self-promoting here, I think accounting is another area. We tend to view it as things that, oh, I can do that. It's not hard, but we forget that we don't know what we don't know. And you find yourself in a place where you think you're doing everything correctly and then suddenly you're getting notices that you didn't know because you didn't know you were doing something wrong. Beyond that, I think if you're a solo entrepreneur, I would say those are the two things that really come up first. Then additionally, depending upon how you're generating business, it would be finding someone who you can partner with who understands your business from a marketing perspective that can help you find the way to present yourself in the best way possible to the public. You can do a great job, but if nobody knows about you, unfortunately you're going to have a hard time getting business.
Joe Rando (06:15):
I just want to say that I so agree with you about the first two hires. Attorney lesson learned, I have an old story about my dad not having a good attorney. He built a restaurant, being leased space in a hotel, ended up doing the equivalent that today would be about $6 million in revenue his first year. As soon as they saw what he was doing, used a poorly written lease to take it away from him. He spent his entire life telling me, "hire good attorneys, hire good attorneys", because it was such a bad experience. Whatever it is you're doing, if you find the right person, you can remove a lot of risks that you otherwise would've had. It's hard to have put a number on what it's worth until you have to deal with it, and then it's invaluable. So thank you for saying that.
Nolan Bradbury (07:09):
Yeah, happy to say it.
Carly Ries (07:10):
I think the little guys, the one person business owners don't often think that that applies to them. They're like, "oh, legal advice, that's for a big company". But it's just not true, especially if you're a solo business owner.
Nolan Bradbury (07:25):
I think unfortunately, and I don't want to say it's naivety, but I think when we start out, we tend to think, oh, I'm operating from a place of good faith so everyone will be operating from a place of good faith. Unfortunately to Joe's comment and story, that isn't always the case. It isn't always out of malice or anything like that. It just important to have someone who's on your side, looking out for just your interests whenever you're doing a negotiation in a legal matter or from an accounting perspective, making sure that you're taking advantage of all the opportunities that exist for you, not just the ones you know about because there are a lot that you may not know about.
Joe Rando (08:00):
Can I throw a little bit of clarification on that? As you can probably tell, I've been around for a while. So there are a few different kinds of attorneys that I've come across over the years, and there are the ones that are looking out for their client's interest no matter what. And there are the ones that are looking out for their client's interests, including actually making a deal happen. And there's a distinction. There are attorneys that are basically trying to craft works of art in the form of contracts that reflect really well on their legal abilities, but don't necessarily get the deal done. You really want to look for that because it can be very painful to have an attorney representing you that you have to fire in order to actually get the deal signed.
Nolan Bradbury (08:46):
Yeah, a hundred percent, anyone you hire needs to make sure they need to understand what your goals and objectives are and that they're working in alignment to make sure those are achieved. A service provider should be focused on making sure your outcome is the right outcome.
Carly Ries (08:59):
Absolutely. I wanted to start with this question and kind of lead into the outsourcing thing because we have a lot of listeners that are either thinking about becoming solopreneurs but haven't made the leap yet, or they're just getting started. I just wanted to reiterate, "you are not alone". Definitely consider outsourcing before you do anything else, but some people will want to do it themselves. So if people do want to go it alone, whether it's a trust thing or if it's a financial thing or they just want to see if they could do it themselves, what are some things they should look out for that people don't always do correctly in the financial world that they need to keep top of mind that you can kind of use as a cautionary tale of what people should avoid and what they can start doing correctly?
Nolan Bradbury (09:45):
Great question. I think first off, the place I see people get themselves the most trouble is not really respecting the difference between the business they've created and their personal life. When you're a solo entrepreneur, it's kind of this gray line of like, well, it's me and I'm an individual and I'm a business. But the reality is you need to treat them as separate things. If you're starting out as a business, you need to make sure you're avoiding just using your personal credit card to pay for expenses if you can. First off, I would always set up a separate bank account that's specific for the business, and if you need more money in the bank account, you should transfer it to the bank account and then spend it. Really try to avoid using your personal card and things to pay for other expenses.
(10:29):
It just could of creates some messiness that doesn't need to be there. Similarly, I would apply for business credit card if you can. Sometimes you aren't always able to qualify right out of the gate because you don't have really any background, and that's okay, but that's another thing that I would try to apply for separately. The next thing would be on the record keeping side of things. Depending upon the complexity of your business, you may be able to get away with something as simple as an Excel file or a Google sheet where you track everything down. If your business has a bit more going on and there's a bit more complexity to how you collect revenue and the type of expenses you have, it may be worth upgrading into something like a QuickBooks Online or a Xero account. If you're going to start to navigate into the QuickBooks Online and Xero account, even if you want to do it yourself, I would have a professional at least set it up for you.
(11:16):
Again, using the baseline of get off on the right foot, make sure that you haven't missed a step in creating those pieces. That's a really important piece. And then ideally, when I do this for clients, if they want to do it on their own and I set up their QuickBooks file for them, I will then sort of usually give them a tutorial on here's how you use the system and here's how we walk through it. Then about a month down the road, I ask them to reconnect, bring all your questions back to us. Let's go through these. Let's make sure you don't get too far down the path before you realize, "oh, I've been doing this wrong for the last 12 months", and now it's a lot more work to unwind. So I would say, if you're going to do it yourself, that's fine, but I would have a resource in place that you can go to with questions and bounce those off. And I wouldn't be embarrassed to ask them earlier than later. Don't assume that, "oh, I'm doing it right and this will be easy to fix if I don't". It can oftentimes be a real mess to unwind. So ask the questions early, but those would be the areas that I think would be most beneficial when you're really starting out of the gate, but you still want to be sort of in control and doing it on your own.
Joe Rando (12:16):
Awesome. I have a question. So there's two major types of accounting. There's cash accounting and there's accrual accounting, and I don't want to go into the definitions, but accrual accounting basically recognizes your revenue and expenses when they occur in the business as opposed to when they necessarily transact. So if I get paid money for something I have to do in the future as accrual accounting, I'm not going to recognize that as revenue until later. Let's define that. Are there any situations that you've seen where solopreneurs need to use accrual accounting in order to take advantage of tax opportunities or something else, or it's typically just cash accounting that's the right way for them to go?
Nolan Bradbury (12:56):
It's a great question. I would say 99% of the time you want to be on a cash basis. The reason for that is, you as an individual are always on a cash basis, and so you want the actual cash movement of the business to coincide with your personal finances in a bit better way. Now there is that 1% because there's always an exception to the rule. It's probably going to be where you're generating a lot more in revenue, so higher revenue amounts. If what you're doing has a big difference between when you sell the work versus when you actually perform the work, there could be reasons that it would be better to be on an accrual basis. You can defer some of that revenue down the road because you haven't performed it yet for someone or they haven't paid for it yet in some cases.
(13:46):
It's very rare though. Most businesses are better off being on a cash basis until they have to be. So there is a revenue threshold that the IRS has in place that once you trip that you do have to become an accrual basis, but we're in the millions of dollars in annual revenue and it's for consecutive years. So in most cases, cash basis is the way to go. If you are in that sort of scenario, definitely something you should be talking to a CPA about or a bookkeeper about to make sure that it's right for you because it isn't just as simple as the revenue components. There are other pieces that come along with being on an accrual basis that make it much more complicated and much more time intensive. And as you could probably imagine, then it costs more. So you want to make sure that before you incur that additional expense and time, it actually is going to save you money and be right for you.
Carly Ries (14:35):
Listening to this, I'm like, I don't pay my CPA enough. If she can hear this. I'll pay her more. I do outsource this side of my business, and it makes you really appreciate my relationship that I have with her. Which leads me to another question going back to the outsourcing, because a lot of people, everything we're just talking about, it's kind of like, oh, I wanted to run my own business. I'm really passionate about content writing. I don't know anything about the money side of things. When you're looking for somebody to outsource to, how do you decide the best fit for you? Thinking about mine right now, and she's such a hand holder and I need a hand holder, but then you have some people that are like, "I'll talk to you once a year, just do my taxes". What's the vetting process that you'd recommend?
Nolan Bradbury (15:31):
That's a great question. I think waht is important to remember is that at the end of the day, this is a relationship just like any other relationship in your life, or you should view it as that. You need to be honest about what you need and what you want from this relationship and find someone who's going to be able to reciprocate that for you. They could be the best technical accountant, best CPA in the world, but if they don't communicate in a way that works well for you, it's not going to work. It just isn't. You're going to be disappointed. They're going to be frustrated. You're going to spend a lot more time than you really need to work on. It's like being in a bad relationship. If the person on the other side of it can't communicate with you, can't be there for you in the way you need, it doesn't matter how much you like them, it's not going to be a good fit.
(16:12):
With that said, I think when you're doing the initial vetting process, it's important to ask those types of questions. How does the person communicate? What is the preferred method? How do they approach things? Are they more aggressive? Are they less aggressive in terms of the approaches and stances they take and how does that align to your own risk tolerance? Are you risk averse? Are you willing to dabble in the gray a bit more? I think all of those things are important, but you have to be honest about it. Don't shy away from asking direct questions during the vetting process. I'm never offended when someone asks me like, well, how do you communicate? Do you text? How can I get ahold of you? How do I share information with you? Those are meaningful questions. They may seem like they're in the weeds and not important, but they are going to have a major impact on how you're going to communicate. Again, communication is the single most important part of that relationship. So I would just say, be honest. Don't shy away from what you need to do or what you want from that relationship. I would say, remember, it is a relationship and viewed as that, if you only want someone to talk to you once a year, then say that. If you want someone who's going to be there for you whenever you need it, make sure they know that and are willing to give that to you.
Joe Rando (17:24):
That's a really cool point too though about the risk tolerance. People don't really think about that. I work with CPAs. I've been in a few different businesses and I understand my business in some ways better than they do because it's my business. I remember one time there was something and we were going to basically buy it and sell it in the same day, but I had a right to buy it that I had for a few years. I said, "what if we sold our right to buy it to them and they bought it instead of buying it and selling it? Could we get long-term capital gains instead of short-term capital gains?" They're like, "oh, it's a little aggressive, but might work." They were cool with it, but some accountants probably would've said, "oh, no, no, no". We did it. The IRS was fine with it, but it's really important. That's a really great point. If you have any kind of business that has anything where there might be some opportunities for saving on taxes, there's that risk tolerance that you and your accountant need to agree on.
Carly Ries (18:30):
A follow up to that question. If people don't know a lot about the accounting side of their business and they do outsource and they found a good person, what we were saying earlier, sometimes people just because a standup person, that doesn't always mean the person you've hired is. Are there any red flags to look for? What can people look for if they don't even know much? Is my question making sense?
Nolan Bradbury (18:58):
Hundred percent. How do you actually know that this person is trustworthy?
Carly Ries (19:03):
How do you know they're not messing up because you don't know what you're looking for?
Nolan Bradbury (19:08):
That is a great question. I'll be honest with you, it's really hard. Because the way you do that is you kind of have to check their work. And if you're an expert in that area, it's hard to know if what they're telling you is a hundred percent accurate. What I would say is, with any professional you hire, it's still important that you recognize your obligation and role in that relationship. It's still, ultimately anything that happens is still your choice. You need to be the one who says yes to a significant decision. And if you're going to say yes, you need to make sure you understand it. So if your accountant or your lawyer is telling you, you should do this, do a little bit of research, ask them to explain it to you in a way that you at least understand it. If they can't, why is that? Is it because maybe it's not a hundred percent right? Is it because maybe the communication isn't that great? What is it that's causing you to not fully buy in?
(20:07):
Trusting your gut is dangerous, but there are times when it's really important to listen to it. It shouldn't be the sole thing that makes a decision in my opinion. But you shouldn't also completely ignore it. If part of you is going like, "this doesn't feel right" maybe it's because it isn't right. Maybe you should get another opinion on it. If you go to the doctor and he's like, you should have surgery, you probably want to see another doctor and make sure that the surgery is actually required before you just say, okay, great. Do the little bit of research on your own. Even though you're not an expert in it, maybe you find some questions that are worth asking so you can sort of get a better sense of how confident this person is and what they're telling you to do.
(20:45):
Again, and I can't stress this, it is your records. At the end of the day, they are just the gatekeeper of them. They hold them in their possession, but everything is yours. The IRS comes knocking, they're going to come talking to you. If the law comes knocking, they're still going to come knocking for you. Even though you have these people in place to help you, it's not them. It's you at the end of the day. So make sure you're comfortable with whatever it is that you're being asked or told to do.
Joe Rando (21:09):
I have a question. So I haven't done cash accounting. I don't remember how long it's been. Everything I've done has been accrual, but if you're doing cash accounting now, if you turn around and look and say, well, I did a hundred thousand dollars in revenues and my expenses were $70,000, and my account and is telling me that I don't owe any taxes. I'm saying, well, it looks like to me when I look at my dumb numbers here that I've got $30,000 in profit. Is that something that would at least make you ask questions to say, why do I not have any taxes due? Does that do anything? With accrual accounting, it tells you nothing.
Nolan Bradbury (21:47):
Yeah. I think I understand your question correctly, and let me know if I'm not answering this right. I think that's a great example of where it can still be right but you have every right to understand why. What I would say is if you get a tax return, you're like, well, I had $30,000 in profit. In your scenario, why don't I owe anything? It's probably good to ask them. Can you explain to me how I was able to get my taxable income down or I didn't end up owning anything. Again, this is where it's really important that if you've picked a good accountant who was in sync with you, they should be able to communicate in a way that works for you and that they should be able to explain to you, well, look, yes, your profit was 30,000, but then there were other deductions that we were able to take that ultimately reduced your taxable income down to a point that you didn't end up owing anything on. But, it's good to know that, and it's good to understand that because that plays into other decisions you may have in your life. I think that's a great case in point of, it's not wrong necessarily just because you don't understand it, but it's also if you don't understand it, it's a good opportunity to learn more about it and get better information to make sure you are comfortable with it.
Carly Ries (22:51):
Speaking of all this education and everything, do you have any tools, resources, processes, or anything you'd recommend for people going in alone in business? I know we talked about QuickBooks, good old Excel spreadsheets if you're just getting started, but even educational resources or anything for people just trying to better educate and put their best foot forward for starting out.
Nolan Bradbury (23:19):
To reiterate, I think one of the questions I get a lot is, should I choose QuickBooks online or some other company? Xero? There are a lot of them out there. What I always try to tell people is accounting isn't necessarily a place you need to try to reinvent or be creative in. Pick something that's kind of tried and true. Now, that's not a knock on Xero or any of the other companies that exist out there. They're great and they work for some people better than QuickBooks Online. But QuickBooks online, if you need someone to help you with it, you can find hundreds of thousands accountants across the country that will be able to step in and help you if you pick a lesser known one. You have a smaller population to pick from in terms of people that can step in and support you.
(24:04):
And so something to consider is the tool. I'm picking something that is readily supportable by the people that are out there. I think that's one thing when it comes to picking that. The other area that I think business owners tend to overlook but can really bog them down is in the actual billing process. Making sure that you don't have a lot of AR or accounts receivable or billing that you need to be hassling clients for to come and get. There are a lot of softwares now, or companies, that have tools or billing systems where you can invoice, you can send engagement letters if you're a service business directly to the customer. They sign it and then they input their billing information, and then it basically just puts them on a billing process that's automated. This is really great if you're a solo entrepreneur that you don't have to then go out and be like, "Hey, remember that invoice I sent you?
(24:56):
Can you maybe pay some attention to that and get it paid?" Removing the uncertainty around when you're going to get paid is a huge hurdle when you're a solo entrepreneur. Getting something in place like that is going to be huge. An example of that, especially in the accounting industry, is called Ignition. It used to be called Practice Ignition, now it's just called Ignition. It's a really nice tool. I use a personally. It does a great job of just getting one sort of administrative step off of my books. I review it, but I don't have to be involved in as much as I used to.
Carly Ries (25:26):
All great resources, all great recommendations. All of this will go in the show notes. Nolan, you help people with their financial success. So we ask this to all of our guests, what is your favorite quote about success?
Nolan Bradbury (25:42):
So my favorite quote is, "perfection is the enemy of progress" by Winston Churchill. The reason I say that is because as a perfectionist myself, I tend to let the vision that I have from the beginning get in the way of me getting to that actual end goal. What I mean by that is we have to understand that when we're starting out with something, we are going to have setbacks. We're going to have things that we try that don't work. That is a hundred percent okay, and in fact, it's great. Don't let that lack of perfection slow you down or the desire for it to be perfect, prevent you from taking the next step. You sometimes have to take a step, and fail, to be able to find the right one. From my perspective, a failure is only a failure when we don't grow from it. So don't let that idea of perfection be the thing that limits you from trying new things and getting things out of the way that maybe weren't the right answer, but help you get closer to the right answer.
Carly Ries (26:42):
Great answer. Does that mean I don't have to bow my checkbook prefectly.
Nolan Bradbury (26:47):
You say that as a joke, but I would say to some extent, if the difference between you doing it 80% and zero is not doing it perfectly, I would say 80% is better than zero. So yeah, to some extent it is better. If you have some idea, some idea is better than no idea.
Carly Ries (27:06):
There you go. I like it. Well, Nolan, this has been so wonderful. I'm really excited for our audience to listen to this. If people want to learn more about you, maybe then use your services. Where can they find more about you?
Nolan Bradbury (27:18):
You can find me on LinkedIn, Nolan Bradbury. You can reach out and message me, connect with me. Just mention this podcast. At least I'll know how you came across me. You can also email us at the very clever email, Contactus@bradfieldco.com. We have a website, although we're working on getting it updated, but you can go out to bradfieldco.com and find out about us and how we work. Any of those work. I'd be happy to connect with people and help them however I can.
Carly Ries (27:47):
Nolan, this has been so great. Thank you so, so much for coming on this show. Like I said, this won't be the first one we publish in 2024, but I really hope it helps them to get started in the right direction. This will be released early on in the year, and I think people will find a lot of value in it. I know I did, and it's been a great time. Thank you so much for coming on.
Nolan Bradbury (28:08):
Thank you for having me. It's been a pleasure. I appreciate it.
Carly Ries (28:10):
And listeners, we are growing and growing. We are so excited about the trajectory of this podcast, but we would love your help. So subscribe on the podcast, subscribe to YouTube. Like all the buttons, show your support. We would really appreciate it. Five Star review! Anything less than five stars, forget about it. We'd really appreciate the support, so be sure to do that. We will see you next week on the One-Person Business.
Closing (28:41):
You may be going solo in business, but that doesn't mean you're alone. In fact, millions of people are in your shoes running a one person business and figuring it out as they go. So why not connect with them and learn from each other's successes and failures. At LifeStarr, we're creating a one-person business community where you can go to meet and get advice from other solopreneurs. Be sure to join in on the conversations at community.lifestarr.com.