214 | Tax Deductions & Hacks for Business Owners with Shannon Weinstein

Hilary Hendershott: I want to welcome Shannon Weinstein to Love, your Money. Shannon is a Fractional Chief Financial Officer for growth-minded business owners. She’s also a CPA and a teacher at heart. You’ll hear that as soon as she starts talking. Her real talk and relatable examples simplify the financial side of business so business owners like you can stop stressing and start scaling. She’s the host of, you’re going to love this, the IRS’s least favorite podcast, Keep What You Earn, where she releases daily episodes. She’s also a frequent speaker in business mentorship communities and masterminds. Shannon, welcome to the show.

Shannon Weinstein: Thank you so much for the warm intro.

Hilary Hendershott: Yeah. So, Shannon, if your money were writing you a love note since the show is called Love, your Money, what would it be complimenting you or thanking you for?

Shannon Weinstein: It would say, “Thank you for giving me intention and giving me a purpose.” So, I fundamentally believe that every dollar has a purpose in some way to shape a value that you receive. So, it would say, “Thank you for giving me purpose to enrich someone, something, or you, today.”

Hilary Hendershott: Well, that’s really interesting. And it triggers a whole bunch of other questions so what are some of your favorite ways to give your money purpose to serve higher purposes? Or did you say serve people?

Shannon Weinstein: Serve people, serve purposes, like it could be as simple as giving a tip to the waiter. It could be as simple as paying someone for their help with something or paying a babysitter who came over and watched your kids, a dog walker, or really investing in your business, paying your social media team for the month, paying your team, running payroll. My money would say, “Thank you for giving me purpose,” because there is really very little fruitless spending because we try, and I try to encourage this for clients too, try to give everything a reason why you’re spending the money, and then you’ll be more connected to it and more excited about investing it.

Hilary Hendershott: Very good. And so, I mean, obviously, when you invest your money for your financial future, then that purpose is your financial freedom. The culmination of the career kind of a thing.

Shannon Weinstein: Yeah. And to not make it sound so profound, it could be thank you for investing and making your mood a little better today and buying a new pair of shoes, like whatever it is. You know, there’s a purpose to everything. So, it can be entertainment. Thank you for giving me a purpose in taking you and your husband out to the movies to see the Barbie movie, whatever it is. So, there’s a ton of different ways you could do it but I think expressing gratitude and thinking that your money is expressing gratitude is a great way to operate.

Hilary Hendershott: I love it. So, you’re on record saying that you got hooked on accounting after you took your first accounting class. What is there to love about accounting?

Shannon Weinstein: I was taught accounting in a very unique way, and my dad was a CPA. And if you know my story, I lost a bet with him, had to take this class, and he said, “If you hate it, I’m never going to ask you to be an accountant again. You can do whatever you want,” which was to be a language teacher. I wanted to teach Spanish because when we were like older millennials, we were taught, “What’s your favorite subject in school? You should major in that.” Like, that was the guidance that we got, right? So, I love Spanish and I said, “I want to teach a language. That would be fun.” And my dad kind of got between that and he said, “Hey, maybe not. Maybe you should try accounting.” And I’m like, “Ugh, accounting? Like, I don’t want to be buried in the basement for three months a year like you. What do you even do?” And he said, “Okay. You’re going to understand what I do and take this class. It’s going to meet your requirements. If you hate it, I’m never going to ask you again. You can do whatever you want. I will not bother you. If you love it though, you have to major in it.” And I was like, “Win-win. If I love it, great. If I don’t, win,” because I love beating him at bets. We used to bet each other all the time, so we were super competitive.

So, I said, “Okay. You’re on.” I had over 100 average in my first three weeks and I got bumped to honors accounting with the seniors. I was the only person in the classroom after like the end of May because they all graduated and they were like, “We don’t know what to do with this junior that’s sitting here. She’s still in class, but we don’t know what to do with her because the class is over.” And I was hooked. But it was positioned to me as the language of business. So, when my dad said to me, “I know you love language. I know you love to teach. This is the language you’re meant to teach. This is what you can explain to people because you understand it and you are 16 years old.” And he said, “There are people twice, three times your age that don’t understand this, and this is where you will be needed in the world.” That’s what he told me when I was 16 and I was like, “This makes sense.” So, I kept pursuing it.

Hilary Hendershott: And I think the linchpin there is not only do people not understand it, but nobody knows how to teach it, right? I mean, it’s incredibly difficult because you start as a professional. You start speaking the language you speak in the office with a customer and you’re going to lose them. And I don’t do taxes, but our businesses are next to each other. And it is hard to teach people.

Shannon Weinstein: It is because you’re around the language. It’s like teaching English to someone who’s never spoken English and you forget. You’re like, “Oh, I forgot that was even a rule.” Like, I forget we say was and has and those don’t rhyme even though they’re spelled the same. Like, I totally forgot that that makes no sense. So, you have to remember that your common sense is other people’s complete confusion. And you brought up something interesting, too. It’s really hard to teach it to someone who doesn’t understand it. Absolutely. And that was one of the hardest things I had to grapple with was getting out of being in the room with other accountants and speaking the language and feeling like I had to sound smarter around them and instead embrace a skill set in breaking it down for the person who wasn’t in that room, the person who wouldn’t understand it, someone who was like 12, 13 years old and teaching it the way that I was taught it. And I truly believe that this is a subject that people don’t like. And I understand it. And everyone always disclaims like, “Well, it’s a subject we don’t really like or it’s not that exciting,” or like everyone is that, “How did you get into this?” Like, I’m this outlier, right?

But keep in mind how much of the subjects you liked in school were because of your teacher. Like, how many of us really, really liked chemistry or really liked science because you happen to have a really good science teacher in sixth, seventh grade? I think there is a lot of shaping in the influence that really good teachers have on you. And I just think that we’ve been surrounded by a lot of people who maybe haven’t served us the way they could have in the financial space.

Hilary Hendershott: I like your metaphors. Let’s talk about something if it’s okay that I think is overwhelming, if not disabling for some people, and that’s income taxes as a business owner. So, I recently listened to an episode you published about the things to beware of, an Instagram tax advice. And I think that we should cover that but I also think there’s much, much, much more to cover. So, I think people have this idea. So, first of all, they get confused about the difference between a bookkeeper and a tax preparer. And I see you refer to yourself as, well, fractional CFO but you use the word ‘bookkeeper.’ So, which word do you use and what does that person do?

Shannon Weinstein: I use all of them because they’re all different. So, when you say, I’m going to clarify the language, when you say like CPA or accountants, you’re saying doctor or M.D., right? But in what? Or with what specialty? What problem do they solve? What do they actually do? How do they treat their patients? So, if you went on Facebook in your local community and you said, “Hey, I’m looking for a doctor,” the next question that should pop up is primary care physician, podiatrist, dermatologist, brain surgeon, plastic surgeon. Who? What are you trying to do? What are you looking to have done? And I have the exact same approach with business owners. The problem is that most business owners are not well-educated on the specialties or the professions. So, a bookkeeper is the person who will take your transactions and compile data that will become useful to turn into decisions later. And the data is really your journals, your financial statements. It’s telling you how your money is spent the year or the month or the week. It’s giving you a historical look at – it’s like a food journal if you’re trying to lose weight.

It’s you tracking what’s going on, the ins and outs, what’s happening in the business. And then your tax professional shows up at your weigh-in. They’re your Weight Watchers person, whatever they call it now. And they’re like, “Okay. How’d you do? Let’s put you on the scale and let’s go submit your numbers in.” All they’re doing really is filling in a bunch of boxes, not to minimize what they do because it’s not easy, but they’re filling in the tax forms for you and submitting them to the IRS and state agencies. They’re typically not involved in compiling the numbers. They’re just reporting them out for you if they’re a tax preparer.

Hilary Hendershott: It’s more like creating a report than being strategic. And that is where I think a lot of people also get not just confused but frustrated and really disadvantaged because they don’t understand that tax prep is backward-looking and strategy is forward-looking and can be done by a completely separate professional.

I have often said to people the first job of your tax preparer is to make sure you don’t get audited. And if you do get audited, the second job is to defend you in that audit. Is that correct?

Shannon Weinstein: I go the other way. The first job is to you can’t prevent an audit. There’s nothing I can do to make you not get audited. It’s somewhat random. I can’t stop them from rolling that little thing up and picking your little ping pong ball and saying you’re audited, but I can set you up for success if you ever were to get audited. I can give you a bulletproof vest but I can’t guarantee you won’t get shot is my metaphor, which I know is rough. I know I can’t guarantee someone won’t aim at you, but I will give you the vest so you’re safe.

Hilary Hendershott: But there’s ways to minimize the chances, right?

Shannon Weinstein: Yeah. We can minimize the chances to some extent by what I would say is I can avoid things where you would raise your hand a little bit more. But like I said, it’s really hard to find audit triggers or there’s really no such thing as an audit red flag or an audit trigger. There are just certain risk factors in the likelihood of getting audited, and it can be as simple as what type of return you file, which is not in your control because it’s based on what you actually are. So, there are certain factors that we work around, but at the end of the day, when you have solid documentation and everything that you’re trying to deduct has a business purpose and is in the lines of the law, then you’re fine. You have nothing to worry about.

Hilary Hendershott: Okay. So, what are some of the bigger misconceptions you see out there about taxes? And if we need to step back a minute and talk about entity type, tell me.

Shannon Weinstein: So, some of the biggest, like, misconceptions around taxes?

Hilary Hendershott: Yeah. And, again, I’m wondering if you would have forks in the road for S Corp versus C Corp versus partnership. Tell me what you think about that.

Shannon Weinstein: So, those are really like, I mean, what entity you are depends on how you’re structured. So, like if you have multiple owners, you’re probably a multi-member LLC or a partnership. You can choose to be a corporation or an LLC. And all of these are very strategic individual decisions based on a number of factors I could never cover in one single episode. But we look at it holistically. It’s like diet advice. It’s like health advice. We’re like, “Okay. You are a insert gender, height, weight, ethnicity, origin.” Think about all of what makes us us. The same goes for your business. There’s a lot of factors to look at and to see who’s a good fit for these different entities. But I would say one of the misconceptions is that there’s like this cookie-cutter one-size-fits-all like, “You should be an S corp.” Not necessarily. An S corp doesn’t make sense for everybody. It typically, like a big bold on typically, makes sense for folks who are making over $50K in profit. But even then, it depends what state you’re in because there are certain states like I think New Hampshire, maybe Tennessee, if I’m not mistaken, there are certain states where an S corp actually can present a disadvantage to you because of how they’re taxed locally because they’re not recognized at the local level. And it kind of negates a lot of the tax savings.

So, you really have to look at it holistically to see if it makes sense for you and it’s worth the time and energy. I think people are quick to jump on tax advice. They hear like, “Ooh, I should be an S corp,” or, “Hey, I read about this thing on the Internet,” or, “I thought I can hire my kids,” or, “I found that I can rent out my house to my business.” And I say, “Yes, you can, but let’s figure out if it’s worth it.” And I think that’s the piece that gets left out a lot is, is it worth it given the time, given the documentation, and the additional responsibilities you now have to document all this? Is it worth it to you? And the answer might be no and that’s totally okay.

Hilary Hendershott: And I do agree with you a lot. I hear a lot of people saying, “Oh, should I be an S corp? Should I get an LLC? Should I incorporate?” Right. And I think these questions come from fundamental misconceptions about what those entities or protections actually are and what they do. Then the answer, tell me if I’m wrong, is you need a consultant. You need someone like you, someone who’s trained in it to look at the checklist of things that make up you and your company, your locality, potentially.

Shannon Weinstein: Your goals. You have to look future-focus too. Where are you heading? Where are you going? Because you don’t want to make a decision today that affects your tomorrow in a drastic way. So, you could be saying, “Hey, based on the history, I think this is a good fit for me,” but I go, “Yes, but are you planning on selling the business? What’s your exit strategy? Are you planning on taking more owners? Are you planning on taking on investors?” Things like that. “Where are you going to be getting your capital from?” And these are questions that a lot of business owners will go, “I don’t even know yet.” So, then my answer to that is always, “Then let’s not commit too soon to something that will sign you up for a restriction later on those types of things.” So, that’s a factor like how much flexibility do we need if we haven’t decided these things yet?

Hilary Hendershott: And so, once entity type is determined, then they’re off to the races making money. And so, how does a good, ideal tax minimizer behave all year long? How do we think about taxes so that we’re maximizing our tax savings? But I don’t ever want to hear someone say to me in December, “Should I spend $50,000 on this contract so I don’t have to pay the tax bill?” It makes me ill.

Shannon Weinstein: Yeah. Don’t spend a dollar to save $0.20.

Hilary Hendershott: No. It makes no sense. So, for example, how do you set your clients up to make sure that their daily routine is maximizing tax savings, but also keeping their eye on the prize, which is always profits?

Shannon Weinstein: So, I’ll take it in the form of a calendar year and be like, “Okay. Mark your calendars. This is what you should be doing like in any given season,” from let’s just talk about post-tax season because that’s kind of the beginning of the tax cycle we’ll call it. So, if we’re looking at May forward, obviously, recovering from a tax hangover, totally fine, but all year round you should be working with your bookkeeper. You should be looking at your financial statements for your business monthly and just looking at your overall performance. You should have somebody doing your transaction categorizations, your bank reconciliations. You should be like, you know, looking at maybe you have sales taxes, maybe you have certain other things to worry about if you’re a product-based business. So, little unique things about your business and you should be looking at that to see how your performance is doing, setting goals, making sure you’re tracking your progress. And that’s really key. So, having your eyes on that and building up a process to be able to look at that through the spring and the summer. Well, the extended tax season is right now, which is September-October, and that’s going to be your extended deadlines but I’ll skip that for now.

And you want to be heading into like a tax planning season between August and November. And that should be when you’re thinking about what are the ways that I can slightly change the outcome. Can I get a little closer to the bull’s eye in terms of my tax savings? Do I have a realistic expectation of how much I’m going to have to pay this year? Am I set up for success in how much I’m saving? Am I on track? So, this is a great chance to kind of recalibrate, I call it, over the summer, your tax savings. Ask your accountant if they will do a pro forma tax return for you. We do this for our clients and that is basically a dress rehearsal is using with the past year software because it’s not available yet but you’re using, for example, right now we’re using 2022’s tax software, dumping in 2023 numbers on a rough estimate and painting scenarios of if this happens, then this will likely be your tax liability and plan accordingly. So, if we tell them, “You’re going to owe $60,000 next April,” and we’re telling them that in October or even August, they’re like, “Okay. Cool. I’ll just save up that much money between now and then. I got it like I understand.”

Hilary Hendershott: I can wrap my arms around that $10,000 a month.

Shannon Weinstein: Exactly. So, now I’ve given you your saved, if they’ve saved nothing, right? So, if they haven’t paid anything. So, you have to look at, well, what’s the remaining amount that I need to be saving up to be able to pay or should I be paying my tax estimates which are due during the course of the year like an installment payment? And you may or may not make these. We recommend making them if you’re planning on becoming profitable and you’re planning on owing at least something in taxes. But those are due April 15th, June 15th, September 15th, and January 15th, or if it’s on a weekend, the following Monday. And they make no sense in terms of the intervals. Don’t even try to make sense of it, guys. It’s April, June, September, and January. I can’t even say it without wanting to say the quarter ends but that is key because they just give you those like payment installments to make. And a very common misconception is that you have to pay your taxes every quarter. You don’t have to. It’s designed to help you manage the cash flow of paying your taxes if you feel like you’re going to owe. But we advise clients on a one-by-one basis on whether it makes sense to pay their estimates now or later, how much to pay based on their actual performance in their business, and figuring out what actually makes sense for their cash flow. And then tax season rolls around, then it should be…

Hilary Hendershott: But one question. Isn’t it true that if you don’t pay estimated quarterlies, it’s possible that the IRS could get mad at you and send you a penalty bill?

Shannon Weinstein: You’ll get it on your return. Yeah. You’ll get a small underpayment penalty but here’s what’s funny for business owners. This is my fundamental belief and this is unique to me, and this is not tax advice to anyone listening in particular, but it’s a different perspective. And it’s, is that money better off in your pocket to invest in your business to grow in the next eight months or six months? Or is it better off to let it go, lose control of it, and give it to the government? Sometimes the perspective is…

Hilary Hendershott: It depends on what the penalty percentage is.

Shannon Weinstein: Exactly. But if the penalty is going to be a couple of hundred bucks, I go, “Eh, take the couple of hundred dollar hit, make your payroll, hire that person, do the thing, and you’re going to grow your revenue tenfold by having that extra money in the bank, than giving it to the IRS.” So, it’s very unique on a situation-by-situation basis. Yeah.

Hilary Hendershott: Got it.

Shannon Weinstein: But there is that perspective and I think it’s important to head into the end of the year with a good plan in place and a good set of expectations of what you might owe so that you’re not going to get blindsided in April and then have to react.

Hilary Hendershott: Right. And Profit First is a way to reverse engineer having enough money saved for your tax bill. Are you a fan?

19:19 Shannon Weinstein: I’m a fan of the concept of it. I have not implemented it literally to the T for my clients. I do have clients who have implemented it. I think it’s a great structure and I think the concept of it is key. I do agree with this, which is the higher-level concept of allocating your pay to yourself first and your profit first, and then working backwards from there if you want to have a margin. I think that you have to prioritize the money that you want to keep in the bank, the money that you need to use for other purposes. Otherwise, you’ll be tempted to spend it. It’s like eating. It’s like putting the cookie jar right on the counter and not wanting to snack on it. It’s right there. So, I think it’s like a psychology trick. It’s like if you move the money away from the core banking account, you’re kind of fooling yourself into thinking you have less to spend and that will affect your behavior. So, I love that.

Hilary Hendershott: Well, I found and I haven’t been able to sell anything based on this promise, but I have found that when our business owner clients can pay their tax bill for the first time in years, they’re so proud. It’s a huge freedom moment, right?

So, however you manage that, make sure it happens. Okay. So, the way that you’re talking and we’re doing tax estimates for our clients as well, but of course, we’re only doing them for our clients. So, if someone has a tax preparer and they can’t get that person to offer them tax strategy, in other words, the person won’t talk about estimated quarterlies or make recommendations on additional deductions, are they working with the wrong person or are they just asking the wrong questions?

Shannon Weinstein: It could be either. It could be either. It could come to a, what’s the issue? Is it a mismatch in the professional overall, or is it just a miscommunication because you’re not speaking the same language? So, it’s like going on a blind date with someone who doesn’t speak your language, like, is this not a match or do I just not understand them? And it could be a bit of both. Well, first of all, your tax estimates should be on a letter you received. They should be giving you that. If they prepare last year’s taxes, they should be giving you your quarterly estimate amounts and vouchers. So, you should have access to that information and they should be able to explain that to you. This is a key thing I look for is, are they willing to explain your tax return to you, your call to action, make sure you fully understand what you’re reading, that they are available to answer any questions. That’s very important to me when I’m recommending tax pros that they be willing to kind of approach it with that heart of a teacher and not just go like, “Here’s a PDF, sign, send.” They should want to walk through it with you. And if they’re not willing to and that’s something that you value, then maybe you want to find someone else.

And then on the tax planning front, I think that a lot of accountants, it’s really funny, they have the most confusing menu on the planet and they expect you to know what’s on the menu and order from it. But they never post it above their store. They never actually send you the menu. They’d make you figure out what to order. And that’s a huge gap in communication we have as professionals is that we have business owners who are like, “I need an accountant. I don’t know what I need. I don’t specifically know what I want.” It’s like going into a restaurant saying, “I’m hungry. I have no idea what you sell here, but I need food. Can you help me with that?” And then you’re leaving up to the accountant to go, “Okay. Well, we do bookkeeping. We’ll do that for you, or we do taxes. We’ll do that for you. That’s what you ordered.” But you may not realize that what you really wanted was tax planning and strategy. And if you really want that, I would say don’t get mad at the professional you have. Just realize that you’re in the wrong restaurant for the appetite you have and you need to go somewhere else.

Hilary Hendershott: And are you doing tax strategy work with your fractional CFO clients?

Shannon Weinstein: Yes.

Hilary Hendershott: You are. So, you don’t have to get it from the same person who’s preparing your taxes.

Shannon Weinstein: Right. We do everything. We do the tax prep, the tax strategy. We do fractional CFO and bookkeeping in-house for our clients end-to-end, partially because I’m a control freak who wants to own the whole process end-to-end, but also because we find that when we have control over the timeline and we don’t have to pass the baton in a long relay race for the year, it makes it a lot easier on our clients to just know that it’s all getting handled.

Hilary Hendershott: Okay, perfect. I’m glad you said that because I must have misunderstood something you said earlier. So, I think that people have this idea that there’s this mysterious laundry list of things they should be doing as a business owner, that they’re never going to really know the entire comprehensive list of deductions they could take advantage of, and that if they hire the right we’ll say sort of man behind the curtain, someone who’s willing to share the real secrets or the things other people don’t know, that they could get some advantages that they otherwise won’t have. What do you think about that and what are the core deductions that you make sure all your clients are taking advantage of?

Shannon Weinstein: I mean, so deductions will be subjective, obviously, based on the business. There are lots of clients who come to me and say, “Hey, Shannon, can I deduct my clothing? Can I deduct my groceries? Can I deduct my (insert anything)?” Can I deduct my Botox? Can I deduct…?” I have heard it all. I have heard every pretty much every possible thing on the planet to be deductible. And the answer is always maybe. Also, if I want to be super literal, they say, “Can I deduct it?” I say, “You can deduct anything. How good do you look in orange, though?” And I just joke around about that. You can deduct anything and roll the dice, right? But to really master tax deductions, you have to understand what makes something deductible and then you have to build a case as to why it should be deductible based on your story. It’s all about being able to tell a really good story. So, I have a client who speaks on stages, uses particularly costume-type apparel to speak on stages. I looked at the cart of what she purchased, and I was like, “There’s no way you are out on the street walking in this stuff.” It had glitter on it. It looks like something you would wear to the Met gala.

And I said, “Okay. It’s wardrobe for photoshoots and video shoots and for speaking. It’s only used for those things.” You’ve never seen a photo with her in those dresses outside of that. And I said, “This actually makes total sense because this is part of the promotion. This is part of a business activity. You never would have spent this money on these outfits had you not been conducting business. So, this actually makes sense that the business triggered you to purchase these things.” So, I look at the reason why you’re purchasing it, and is it primarily for a business activity of sorts? Is it something that’s generating income? Is it something that’s going to help broaden your business or help you grow as a business owner? And if so, then it’s probably a deduction. But a lot of people will try to sneak in some personal expenses without much of a case for the business. And we try to kind of play this, “Well, how good of a story can you tell? Can you justify it without kind of smirking if the IRS agent is sitting across the table from you? Can you explain it without smirking? If so, it might pass.”

Hilary Hendershott: I think a lot of people get confused because you can deduct uniforms. And so, it just sort of became all my business clothes. And I say to people, “No, no. That’s not a thing.”

Shannon Weinstein: If it’s logo branded, but it’s so funny because I imagine somebody walking around with like every piece of clothing has like the little brand on it just to be extreme. And I’m like, like, “Yeah, I guess you could do that but it’s not really…” Like, calling it a uniform, especially if you’re like a digital creator unless it’s specifically a wardrobe for photo and video shoots, you’re not wearing streetwear, it could work. But it’s all very nuanced and that’s my point is it’s all about the situation, the context. Everything about it. So, when people ask, “Can I deduct _____?” it’s like, “Can you? Sure. But I need the context to understand if it would actually pass the sniff test and nod it.”

Hilary Hendershott: Right. And one of the things you were talking about in Instagram tax advice that I thought I had actually asked my team to proactively mention the Augusta Rule because I read it so much on social media. And I said, “We know as a team, only a very small number of people are going to get to use the Augusta Rule. But I read about it at least once a week. So, we have to let people know that we know about this.” Right?

Shannon Weinstein: Yeah. We know about this stuff. I put it on threads. I said, “For anyone wondering, all the CPAs already know the strategies. So, if you’re reading it from a creator who’s like, ‘Your CPA doesn’t know about this,’ oh, we know about it. We just don’t think it’ll actually apply to you.” And the difference is we’ve done the evaluation and realized like this isn’t going to apply to you. And I get it. The creators only have 30 seconds to grab your attention and to make you aware of something to educate you. But there’s also a lot of fine print that they can’t fit into those 30 seconds. So, I would always say approach any type of tax advice you see on the Internet or ideas that you’re getting, “Hey, I support seeking out education 100%,” but bring them to me and say, “Hey, I saw this thing. I want to talk about it and better understand if I qualify and why or why not.” That is much better than, “Hey, how come we’re not doing this?”

Hilary Hendershott: Yes, I get the articles in January every year from USA Today. People send me the list of the top-performing mutual funds from last year and say, “How come I don’t own these?” And it’s like, “Because nobody knew they were going to be on that list last January.”

Shannon Weinstein: Right. Because my crystal ball is in the shop.

Hilary Hendershott: Exactly. So far, it’s cloudy. Okay. Anything you really wish people knew about taxes or does it all come down to this: what makes sense for your business really common sense narrative?

Shannon Weinstein: It is kind of a commonsense narrative. I think that anything in life, it’s not flashy. It really comes down to the basics. It’s just like I always use fitness examples because of my background, but it’s just going back to the basics of like eat your vegetables, go for a walk. It’s not that sexy. You don’t have to be doing burpees on Instagram to lose weight or to get strong. You don’t have to be doing these fancy tricks to save money in taxes. You just have to have really good, strong record-keeping documentation, have a good idea of what’s going on in your business. Use your numbers as a tool, not as something to restrict you or as something that will just be a burden to you come tax time. These are tools to help you make real decisions in your business on a day-to-day basis. Use them because they’re trying to tell you something if you’re willing to listen.

Hilary Hendershott: That’s a great segue for me to ask what you do as a fractional CFO. So, what do those services look like?

Shannon Weinstein: So, I would then say, “I give the numbers a voice,” is how I love to phrase it. I give the numbers a voice because the numbers speak their own language and then most people can’t read them. It’s like hieroglyphics. So, picture this because I know you kind of speak the same language, Hilary, that I do but I experienced this recently where I got my blood work back and I looked down at the numbers and I was like, “I have no effing idea if any of this is good or bad.”

Hilary Hendershott: I’m going to need a decoder ring. Thanks, doc.

Shannon Weinstein: Am I going to die? Like, do I have a disease? I have no idea. So, I was reading this and then I actually sat and I think this is something I’ve cultivated over the years was like this kind of skill to sit back and go, “This is how my clients feel with a P&L.”

Like, I sat in the relation to that because, in my mind, I’ve never had a difficulty reading a P&L. I learned it like I learned my ABCs. So, for me to say, “Oh, I am now living an experience,” I can now relate to my clients on this because now I go, “Oh, this makes total sense now. Okay. Now, I know why people are confused,” because it’s like this. So, I consider myself a decoder. So, we will go through with our clients and look at their past financials and look in the rearview mirror to see how far we’ve come 100%. We do wins and celebrations on our calls. We like to say, “Hey, what did we accomplish? What are we looking for?” Like, project managing some stuff, right? In terms of the things that will drive revenue or the objectives that we have, the goals that they have set for themselves. We try to help turn their goals into financial metrics and decisions that will really move the needle. And we’re looking at cash flow forecasts. We’re looking at budgets and projections. We’re looking future focus.

We’re looking at your sales pipeline and saying, “Hey, this is what’s going to be coming in. And I know that you want to hire this new social media manager. We think that a good month to do that will be X because you’ll have saved up a little bit of runway to pay them before they start really generating revenue from the paid ads and the stuff that you want to do. Those things take time. So, we got to give them 3 to 6 months to make them worth their weight in gold. So, in order to do that, we have to build up a little bit extra cash X, Y, and Z.” So, we start having those conversations with our business owners to really hone in on the strategy around managing their money but how to make more of it and keep more of it.

Hilary Hendershott: Is there a particular kind of business you work best with?

Shannon Weinstein: I will indulge myself and say the easiest ones are service-based businesses because they are super simple. They are easy or simpler in the sense that it’s a little bit more predictable, especially if they have recurring streams of revenue. But I do have a special place in my heart for product-based businesses because they have a unique challenge of sales not always being consistent unless they’re on some type of subscription model and their marketing is pretty direct and clear. What’s interesting with service-based businesses is that their offer can change and be nimble. They can change their offer at any moment, whereas products, they can’t really change the whole prototype very easily. So, it’s a very different strategic look, a different window that we’re looking at through. And I love both equally, but I would say really a rapidly growing service-based business is really our cup of tea.

Hilary Hendershott: Lovely. Where can people find out about you?

Shannon Weinstein: You can head to Keep What You Earn wherever you listen to podcasts. Wherever you’re listening to this right now, we have a show called Keep What You Earn. If you look on your search engine, you’ll be able to find it.

Hilary Hendershott: Great. We’re two peas in a pod, you and me. I would love for people to keep what they earn. Thank you for being here. I really appreciate you being on Love, your Money.

Shannon Weinstein: Thank you.