There are few things more satisfying for a small business owner than watching your company grow. However, while many business owners are ready to embrace the exciting opportunities and extra revenue that come along with this increased momentum, very few of them are as well prepared for the additional expenditures and tax liabilities that also accompany their newfound success. So, how can you ensure that your business is able to financially sustain itself during these periods of growth? In this episode, Gene Marks and Tuesday P. Brooks, Founder of AJOY Management, discuss the strategies that her firm uses to assist her clients with tax preparation and financial planning.
Podcast Key Highlights
- Why Does AJOY Management Focus Primarily on Women Business Owners?
- After evaluating their current client base, they found that their female business owners were the ones that they enjoyed working with the most; the ones that paid without quibbling; the ones that were responsive to whatever they needed; and the ones who seemed to get the most out of their services.
- As a woman herself, Tuesday P. Brooks found that she was able to make financial management information more accessible to her female clients in a safe and supportive environment.
- Some of the dissatisfaction that these female business owners expressed about working with their previous male accountants included their tendency to ignore women’s questions; to talk over them; and to even abruptly abandon their clients without any warning.
- What Challenges Are AJOY Management’s Clients Currently Facing?
- One of the main challenges that AJOY Management has observed among its clients is that many of them are not prepared for the additional taxes that accompany their increased revenue.
- Another issue that their clients are encountering is that although their businesses are continuing to grow, they’re not yielding enough profits to sustain this momentum.
- How Is AJOY Management Helping Its Clients Prepare for Taxes?
- AJOY Management has started offering early tax planning consultations as a part of its services.
- By encouraging their clients to actively communicate with them about any major business developments, they’ve been able to prevent any last minute surprises during their mid and end-of-year financial meetings.
- How Is AJOY Management Helping Its Clients Sustain Their Company’s Growth?
- First, they ask their clients to identify what they need in order to maintain their comfort level.
- Once they determine all the non-negotiables, they examine whether their current staffing and operational costs need adjustments. This evaluation will also enable them to see whether they should be saving or redistributing their finances in a more efficient manner.
- What Can Small Business Owners Learn from AJOY Management’s Hiring Practices?
- When interviewing potential employees, you need to make sure that they have experience working within a smaller company. Candidates who have worked primarily in larger corporations, where all the systems are already in place, might not have the skills to set up these same structures in a newer business.
- Remote and virtual staffing, particularly offshore-based staffing, can serve as a great tool for business owners who want to keep costs low.
- Not every vacant position has to be a permanent hire; you can always offer temporary positions to see whether the potential candidate is a good fit for your business.
- Where Can Business Owners Find Potential Job Candidates?
- Listing your openings on an online job site usually results in cold leads and spam.
- Small business owners are better off reaching out to different firms that specialize in training talent for various positions and departments.
- Which Benefits Draw in the Most Talent?
- A Comfortable and Safe Work Environment
- Dedicated Computers
- Virtual Private Networks
- Proper Equipment for Remote Workers
- Generous Compensation
Links
Transcript
The views and opinions expressed on this podcast are for informational purposes only, and solely those of the podcast participants, contributors, and guests, and do not constitute an endorsement by or necessarily represent the views of The Hartford or its affiliates.
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Gene: Hey everybody, it’s Gene Marks and welcome back to another episode of The Hartford Small Biz Ahead Podcast. Thank you for listening and watching. I have got Tuesday P. Brooks with me today. Before I even introduce you Tuesday, and before I even say your company and all that, what’s the P stand for?
Tuesday: P stands for Phindiwe. It’s Xhosa language, an African dialect, and it means second beloved daughter.
Gene: Second beloved. And so does that mean you are…
Tuesday: Yeah, my sister Thandiwe, first beloved daughter.
Gene: Got it, okay. That was exactly what I was going to ask. Well, Tuesday, thank you so much for joining us. Tuesday Brooks, everybody is, Tuesday P. Brooks is an MBA and a small business profit and tax advisor and the founder of AJOY, A-J-O-Y. Her website is ajoymanagement.com. Tuesday, first of all, tell us a little bit about yourself. And I’d also like to know, and I know our audience would like to know what AJOY does.
Tuesday: Well, AJOY is a financial management firm that supports women led businesses with all things financial management. So that pertained to their accounting, their tax, their payroll, and making sure they stay really compliant and can minimize their taxes and maximize their profits. We are really, really focused on businesses becoming profitable or if they’re already profitable, becoming more profitable. And how I got here is a long, whimsical story of doing…
Gene: Well, take your time. We have hours and hours. It’s completely fine, okay? Go all the way back when you were born.
Tuesday: Yeah. In short, I did several different things since graduating from high school. So high school in the dark ages. I actually majored in accounting, because I went to a specialized high school where we all had to major in something, so it could have been journalism, computer, legal studies. I chose accounting and I did really well with it. But then once I got out of college, I did some time as a teacher in the New York City school system. I worked for a housing organization, I worked for a venture capital firm. And then finally, I worked for a boutique CPA firm, and he specialized in tax accounting, and that’s really where I cut my teeth, and I saw the need of small businesses. Because while we were doing taxes, most of the time they came to us with no sort of records or really reliable records to actually do the taxes. And these were small business owners. So I saw the opportunity to actually use the skill I had learned so long ago in terms of the accounting and the bookkeeping.
Gene: That is great. So you’ve decided to specialize in women owned businesses as well, and I want to talk about some of the general issues that all business owners are facing. But before I do that, I mean, let’s talk about women-owned businesses and some of the specific issues they might be facing. And by the way, my wife runs a nonprofit in Philadelphia. She was a school teacher as well for 15 years and started this up three years ago. She’s got five employees, female-owned, although it’s a nonprofit and she’s getting a lot of an education.
Tuesday: Yes, yes, indeed.
Gene: I’m going to start with the female side, because I’m interested in that and I think our audience is that what specific challenges or issues do you think that female business owners have today that we as male business owners don’t really either understand or that we don’t really have to maybe deal with?
Tuesday: So I don’t know that there’s a huge difference between the issues based on gender in terms of the issues that you face as a business owner.
Gene: By the way, that’s good. I’m glad you said that. Carry on.
Tuesday: The reason why we focused on women-led businesses is because I took, about four or five years into business, I took a bootcamp with Carissa Reiniger and SLAP, Silver Lining, and in that bootcamp, she had us make a list of our clients, the ones that we enjoyed working with, the ones that paid us without quibbling, the ones that were responsive to whatever we need, whether it’s information and documents, just all around who was the better client for us. And that’s how when I figured out it was women, I was like, oh my god. Because when I started, it was men, male business owners who were hiring me. So I thought my client was male or just everybody. But once I did that bootcamp and I figured out it was women, that’s when we started to focus on women. And what I learned since then though is why it’s important to work with them and why I get such joy out of it is because as a woman, I’m able to make the information more accessible. I start off making reassuring them that this is stuff that you have to learn.
Tuesday: We’re not born understanding all of this financial stuff for our business. So I reassure them that they’re not expected to know certain things until after I tell them. Then after I tell them, I expect them to retain it, and then I make it accessible. I speak to them, meet them where they are, because there’s a lot of frustration and fear around that. A lot of times we get clients who left a male accountant and say, he wasn’t answering my questions, he was talking over me. I was so frustrated, or he disappeared or whatever. And so not to be male bashing, but those were real issues and concerns that they had. So by the time they get to us, we could sort of nurture them and their understanding of what they should be doing in a different way.
Gene: I really love that answer. Just funny as an aside, I mean, I’m in my late fifties and I got to admit, when I come across prospects or potential clients or even people, partners, people to work with, I mean, I have to admit, I mean, I feel more comfortable working with people that are more like me. I feel more comfortable interacting with a man in his late fifties than say a woman who’s 30 years old, for example. There’s just something… And weirdly enough, and I don’t know if you feel the same way, that I’m feeling that change as I get older. It’s not necessarily a male, female thing anymore. I find myself more when I talk to even women that are my generation, we have more of a connection now I think, than we ever had before. You know what I mean?
Gene: As you get older, you just kind of feel like you just start to converge a little bit more between the… But I think the takeaway there is that you made a choice of saying, listen, I’m going to have my firm and I want to pick and choose the clients that I really connect with and want to work with. And you’re like, I feel more comfortable working with women, I feel like I connect with them more. And I think it’s a valuable lesson to anybody. We should be working with people that we feel comfortable working with.
Tuesday: Working with. And does that mean we don’t have male clients? Absolutely not. Of course we have male clients, but it’s just where we place our focus in terms of marketing and so forth.
Gene: That’s great. Okay, yeah, I mean, it makes complete sense to me. All right, so you deal with a lot of small, mid-size business owners. We’re having this conversation. It’s the early fall of 2023. When I speak to my clients, there’s a lot of challenges. There’s always a lot of challenges. I’m curious, Tuesday, what challenges you’re seeing out there. And you can talk about your own business too because you’re a business owner, but also about your clients as well. What challenges do you see your clients facing right now? And then I’m also kind of curious, I think we’d all like to know, how are we addressing some of those challenges? So speak to me about some of that.
Tuesday: So I’m actually seeing two issues as it pertains to financial matters. One is, our women business owners, their businesses are growing and they’re becoming more profitable, but then they end up owing so much in tax. They’re not prepared for the tax implication, especially because we’re in New York. So a lot of our clients are in New York, we have them across the country, but in New York especially, we’re in a high tax area. We have three levels of taxation, and then there’s business franchise tax and so forth. So I’m seeing not a lot of pre-planning for growth. And then on the other side of that, I’m seeing a lot of struggle with certain businesses that are not growing and their revenue might increase little by little each year, but they’re still not very profitable. So they’re in that struggle area where they’re growing enough where they need help, they need to hire more staff, but not really enough to hire that extra staff person.
Gene: Let’s break down. Let’s break down those two because they’re really important. So first of all, you talk about financial management and taxes, not preparing for growth financially and also not planning for these kinds of things. So what advice, what are you telling your clients on that specific matter? What should they be doing to make sure that they’re…
Tuesday: Yeah, well, that’s when we start having the conversation around tax planning, and that’s actually a service that we added as of late because I started seeing the need for it and I would sit in consultations, I’ll have a midyear and a year-end with clients and we’d literally cry, because we would realize how much money they made. It’s like a champagne problem, but it’s because we didn’t do anything in advance. So I got over that happening over the last prior year. So then we started incorporating some strategy in there. So they’re thinking about whether they have to convert the company type or if they have children of age that they can hire, the different tax strategies. So that has been a work in progress.
Gene: And it is something that you do throughout the year. My own personal example is we all pay in estimated taxes if we’re a business owner, and it’s important to make those payments, but it’s also just important to know they can be adjusted. My business goes up and down. This year has been a little bit slower than it was last year. We’re paying in our taxes based on our last year’s income, and we’re through the end of August, and even though I’m an accountant, I have an accountant of course, because I’m terrible at doing taxes. So we have our sense, listen, look at our numbers, because I think we’re that much slower that I think we can pay a little bit less in estimated tax.
Gene: So it’s an evolving thing. In other words, you should be doing this on a continuous basis with a financial advisor and reevaluate where you are. Just because you’re a financial advisor, just because you need to be paying in taxes doesn’t necessarily mean you have to pay in all the taxes that you owe if you can make the case for saying, we can be paying in a little bit less. Does that make sense?
Tuesday: Absolutely, yeah. It’s very fluid and we do our best work with that business owner who is acting as a true partner in that. If they notice something or something happens, they can email us and say, oh, I want to meet because we just got a huge contract or infusion of cash or something like that. You know what I mean?
Gene: Sure.
Tuesday: So it’s a back and forth conversation. The business owner that just sort of disappears into the sunset until tax time, that makes it a little bit more difficult. So we’ve incorporated touch points in there for that reason.
Gene: And it’s funny you also say that, you just said that your best clients are the ones that engage you and involve you in their decisions, and I just have to give that message out. I mean, you and I are two accountants talking here, but for people that are listening or watching this, if you do have any kind of unusual transactions or anything going on in your business, you need to make sure that you’re telling your accountant about this when… You don’t wait until the year is over, because you could be facing a tax liability because, or there could have been different ways to structure something that would minimize your taxes. So I guess your best clients are the ones that are communicating with you when they should be communicating with you, yeah?
Tuesday: Yes. Yeah.
Gene: Makes sense. Okay. You mentioned earlier about, also besides the paying in taxes and preparing for the future and financial management, and you also mentioned about just people that are trying, they’re growing a little bit, but not enough to support their companies. I mean, can you expand on that a little bit? What types of your clients, if you can share with us what you mean by those companies that are struggling to grow and struggling to finance that growth?
Tuesday: Yeah. A lot of our clients are service-based, so I feel like it happens with most businesses as you’re growing. That’s one of those milestones that happen where you’re starting to get some traction and so you’re making enough, but maybe not enough for your comfort level. See, it really has to do with comfort level, because there are different ways of hiring so that it could be affordable. If you think, oh, I got to hire one person and pay them $80,000 a year, that might not be the option.
Tuesday: But to hire someone part-time or even seasonally or explore contractors, finding people who have their shingle out and do what they do, but can potentially work into your team. So there’s different ways of doing it and I think it’s worth having that conversation, but they don’t initially have that conversation with us because they’re overwhelmed. So we try to, first of all, encourage our clientele to hire. That’s something that I bring up to them like in newsletters and stuff like that. We like to talk about it regularly and then figure out ways to afford it. I am also a profit first advisor. We are a profit first firm, and so we’re big on the cash management and separating out cash for tax, cash for profit, cash to pay yourself. That’s the other thing we’re seeing that still businesses making good money still are not paying themselves properly, cash for savings. So I’m all about putting money in a different bucket so that you can get more accomplished and it doesn’t feel comfortable initially, but it works. I did it in my business and I saw all the difference in the world.
Gene: The thing is though, is that so many of your clients, I’m sure either don’t have the time or the interest in looking after their numbers the way they should, because it’s numbers and I’ll let the accountants worry about that. The wrong attitude, isn’t it?
Tuesday: It’s a terrible attitude, and that’s why I say we like to make it more accessible and friendly. The culture of my team, everybody know, if you get an email from us, it’s likely you’re going to have emojis, and we’re all about lots and lots and lots of emojis. We want, if they have a question to send the question, if they have an issue, send the issue, we’re going to respond in a friendly way. We want them to feel like we’re their partner and they’re going to get a warm reception. They’re not going to get some kind of standard legal, accounting answer in an email. We’re not doing that.
Gene: You had mentioned earlier that you are encouraging your clients to hire where and when they can. Obviously labor is in a shortage right now, although it’s loosening up a little bit. I’m curious to see what you’re seeing out there. It’s easier said than done to hire somebody. Are your clients able to find employees? Where do you see them going to find employees and affording these people? And I’m kind of curious if there’s even any benefits that a small business can offer that can at least keep them competitive with larger companies. What are you seeing and recommending?
Tuesday: Yeah, I’m triggered right now, because we’ve had our own challenges with hiring.
Gene: Yeah, we all do. We all do.
Tuesday: Oh my God. Just recently we put out a job notification. We’re hiring for an admin and account manager position, 200 applications, most of which did not even… It had nothing to do with the position.
Gene: Crazy, isn’t it?
Tuesday: Filtered it down to about 20 resumes. Well, I did, and then I had my operations manager filter it down to 10 that she wanted to invite to interview, four responded for the interview and interviewed. I selected one tentatively. She said she had a couple of other irons in the fire she’s waiting here back from, and then she ghosted us. So we literally end up having no one to hire after that process. It’s horrible.
Tuesday: And then there was another time we went through, I learned about hiring just from past experience and watching what some of our clients do. So I said, I’m going to get this right. I got this now. So we interviewed this gentleman to be an operations person and set up some systems for us. I said, I’ll interview him. After I interviewed him, I had the entire team interview him, and I even included some of our clients in that process to get their feedback. Then I had one of my colleagues who just knows AJOY really well. I had him interview him by himself and everybody was like, “Oh, he’s fantastic. He’s great.” He lasted all of three weeks because we kept telling him we needed an operations person and someone that’s familiar with systems and how to operate, but we never asked him his experience in setting up systems.
Tuesday: See, he was working with big corporations that had systems in place already. So of course you could go in and once you train, you could follow what’s created. We needed him to create it and never once addressed that question. So there’s all kinds of issues that happen with hiring, but the good news is, remote and virtual staffing is really a thing right now. I think most savvy, particularly accounting firm, most savvy accounting firms have team members offshore. We do as well, and I’ve found great satisfaction in having that type of help, which is more cost effective.
Gene: Sure, sure. Where are you finding these people? Are you doing most of your work on an online job site or LinkedIn or Craigslist or something like that?
Tuesday: No, it’s interesting. So there are firms that train and situate workers, whether it’s in accounting or bookkeeping or tax or admin, virtual assistants. And we’ve been fortunate enough to connect with two in particular. One that has bookkeepers and tax people, and they’re U.S. based and based overseas, so they’re able to staff, we’re able to interview. That’s the other thing. People have to understand that it’s not like you just take what you can get and that’s it, it is some trial and error. You can interview them and decide if you want to hire them. If you don’t, then you interview others. You can do it on a trial basis, work with them to see if they’re a good fit, so you don’t just take anyone. This person or these persons become a part of your team, like any other staff member, they have the company email address and everything. And then on the admin side, we found another company that’s training administrative people, and they did a nice match for us, and that’s been our solution.
Gene: Tuesday, that is amazing advice. Mainly because I talked to a lot of clients are looking for people and they try all over. And a lot of them go to the online job sites, which are really just cold leads coming in, and sometimes they come in from all over the world, they get a lot of spam. But depending on the job position, to go to an organization that’s training people for that job. And it’s not just accountants. If you’re in the manufacturing world, there are technical schools that are training people. Same thing in construction, there’s schools that train. If you’re looking for a bartender, there are bartending schools that are putting out graduates. That seems to be a primary place we should all be looking for that new employee.
Gene: And I know we only have a few minutes left, but I’m curious also in your experience out there, have you seen any sort of hot benefits, when you’re interviewing these people or when your clients are looking for people? I mean, half of the workforce right now are millennials and Gen Zs, so it’s a younger workforce. In fact, we’re in a world right now, you and I, where I think there’s four generations that are working. I don’t even know if that’s ever happened before because we’re living longer and starting earlier and see this wide variety of workers that are out there all with different priorities and needs. But I’m curious to see, when you’ve been interviewing people, when you’ve been out looking on your clients, has there been anything in particular that people are like, we really need to have this benefit, or this is a hot benefit that we really need to consider offering to attract that worker? Have you seen anything like that?
Tuesday: Well, in terms of benefits, well, not so much… Well, let’s think about it. The firm that we work with for our bookkeepers, they have implemented benefits for the workers, so they actually get holiday time off or I think they’re getting healthcare and everything, so whatever applies to wherever they are in the world, they are giving them benefits. I think what’s more important for us is the security around the workers. We want to make sure they have a comfortable place to work where they’re working every day. They have dedicated computers. They got virtual private networks and security and all of the things that you need to do a job really well, and especially when you’re doing it remotely. So that to me is more important. And then these professionals, they appreciate the work, so it’s not much that we have to offer other than if we’re paying them hourly, good hours so they can earn as much as they can.
Gene: That’s fair enough. Yeah, compensation is important. I tell you, just last week I wrote a piece for the Philly Inquirer. I interviewed a bunch of restaurant owners in Philadelphia about retaining employees, and they said what you were saying also about the security of the workplace also as well. If you’re running a small business, it’s important to have a good place to work, and as long as you’d be so competitive on the compensation like you had mentioned, but people really want to work for a good boss. They also want to have a nice team around them, a nice, friendly, well-lit, airy, comfortable place to go to. It’s important to a lot of people.
Tuesday: And even on staff that’s here in the States, some of them are remote. We got in Virginia and other states, and I think what’s important to them now is just autonomy. I’m not micromanaging anybody’s time or anything like that. As long as they’re getting the work done and they’re available for us to communicate, we set up meetings. We got a regular schedule for meetings and stuff. If you’re very organized in that way, just in terms of having your regular meetings and them being clear on the time that you need them available to do certain things, other than that, it can work really, really well. You don’t have to micromanage or be concerned about them. You’re losing money because they’re not where they’re supposed to. That’s not important. I think at the end of the day, the quality of the work and the fact that it’s done, the timeliness of it is what’s important.
Gene: Tuesday, great insights on how you started your business and how you honed in on the type of clients that you wanted to work for. Insights on cashflow and estimating, being up to date on your taxes, and managing your employees, and again, providing that workplace, good benefits, autonomy, it’s really, really great stuff. I’ve enjoyed our conversation a lot. Thank you so much for joining me.
Tuesday: Likewise. Thank you.
Gene: Everyone, Tuesday P. Brooks is an MBA and a small business profit and tax advisor, and the founder of AJOY, ajoy at ajoymanagement.com. That’s A-J-O-Y management.com. My name is Gene Marks. You have been listening and watching The Hartford Small Biz Ahead podcast. If you need any advice or tips or help in running your business, please visit us at smallbizahead.com or sba.thehartford.com. Thank you, Tuesday. Thank you everybody for watching and listening. We will see you again next week. Take care.
Gene: Thanks so much for joining us on this week’s episode of The Hartford Small Biz Ahead podcast. If you like what you hear, please give us a shout out on your favorite podcast platform. Your ratings, reviews, and your comments really help us formulate our topics and help us grow this podcast. So thank you so much. It’s been great spending time with you. We’ll see you again soon.
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Hello, I am in need of tax planning advice…. currently I am retired and work part time and rent an apartment in a senior community …for the last two years I’ve rented. My income is $3,400 retirement, $2,150 from my job a month, currently I do not have a write off and I’m paying an enormous amount in taxes. For the 2024 tax year, I plan to become a small business owner; I am planning to purchase a car and place it on the Turo platform to earn passive income. Here is my dilemma… I’ve always had a home to write off, I no longer have that write off… would it be better for me to purchase another home or purchase a car to place on Turo….. also, I am planning to work part time, so that will cut my income to about 1,200 a month but my taxes are still high, I’ve calculated paying $700 a month according to the tax bracket.
You should consult a tax planning professional for specific advice. But here are some general thoughts for you:
-You should be maximizing your IRA contributions and taking advantage of any additional deductions allowed if you’re over the age of 50.
-Although not deductible, you should be maximizing your Roth IRA contributions because any income earned on those going forward would be non-taxable.
-You don’t purchase a house to save money on taxes. Yes there are deductions for mortgage interest but that shouldn’t be your primary reason.
-You can purchase (or possibly better to lease) a car for Turo and deduct interest/depreciation or lease payments against your income. But your income above any expenses would still be taxable. If you create losses you may be able to deduct against your ordinary income but that shouldn’t be the reason why you’re doing Turo because in the end you’re still losing money.
Hope this helps.