Transcript
Speaker: If you want to be successful tomorrow, it's impossible. If you want to be successful a year later, it's impossible. But if you want to win 10 years later, you have a chance.
Speaker: There we go. Welcome everybody to Dollars and Cents podcast. I did it right this time. I'm your host, Jeff, and we have Sam here with us once again, our co -host with the most. Vera is dealing with, I don't want to put all her business out there, but Vera is dealing with an illness. So she is going to be out for a little bit, but she is coming eventually. She's assured me. So Sam, how are you doing today?
Speaker: I'm doing good, Jeff. How are you? Oh, you know, I can never complain. I never. So there was a beautiful day in the neighborhood. It always, you know, that's the beauty of living where we live.
Speaker: Both of us it's it what's the the coldest against is like 65 Yeah Not even here here. It's like the coldest I think is 70 And that's december and january Yeah, it's something here Yeah But uh today we're going to be doing um Well, I I had a plan and sam was like well, let's start different we're going to be talking about
Speaker: because actually I like your plan better than mine. We're gonna be talking about starting up your own work for yourself kind of thing, sole proprietorship and the pitfalls and what makes it easy, what makes it hard and what do you need to do? So, as you know, oh, and I forgot to share this out.
Speaker: So, Sam, when you're starting a sole proprietorship or want to work for yourself as a 1099 employee, wherever you go, a consultant as it were, what are the first things you need to do or look into?
Speaker: Well, you can use your own social security number as a sole proprietor. So if you end up just, you know, working for, you know, you're working for yourself in a contracting position.
Speaker: It doesn't matter if it's, it could be on, I forgot that website that's called. We actually use it too. But if you're doing a job, whatever job, at the end of the year you'll get a 1099 that can go associated with your social security.
Speaker: There are some people who decide, you know what, I want to get an LLC where nobody knows my social security. I have my own individual EIN number for the business. And so they can go that way as a sole proprietor. Depending how you file your taxes, you either file your taxes with your own social security, or if you have that LLC, you can file it through that LLC. OK.
Speaker: What would one need to go about to get an LLC? I know you have one. I'm in the process, but I'm not actually doing it because your mom's doing it for me.
Speaker: So I actually use, you know, there are many different places that you can actually like they'll do it for you. I use, I think they actually just changed their name now. It used to be ink file. Now they call it busy.
Speaker: And so I went through Inc file. They make it super easy where they get your articles of incorporation. They'll get your EIN set up, which you know getting an EIN you can just go into the IRS website and get that done too. You'll get it like instantly.
Speaker: And you just need to have a business name to be associated with it. So again, if you're going to go that route, I would think of some sort of business name that you want to be able to keep.
Speaker: the Articles of Incorporation, EIN number, and then the statement of organization they get you, business licensing, and then they'll ask you if you want to open up a business bank account, but that's also easy too. You can just go to whatever bank that you use and do it online. They'll open that up.
Speaker: They will ask you for this information. A lot of places they do ask for your articles of organization and a copy of your EIN in order to open up a business check -in account. But yeah, I went on to what was called now Busy, but it is the Inc. file and they made it super easy. It does take a couple of days, it's not interested. Right, yeah. I was always assuming it would take like a month or so, correct?
Speaker: I think it just depends on each state and also.
Speaker: Expedite the process and so, you know, I decided to expedite the process because at that time I was in the United States, you know because I was still living in Panama so I was in the United States at the time and so I wanted to get all of that organized because I wasn't sure with the bank information if I need to go in person or not and So, um, I didn't even have to I could just do it online which I finally realized so but yeah, I did everything, you know, I
Speaker: Online and the super easy super easy some states, you know, I again when I talked about the last podcast I did Wyoming because it doesn't have any state taxes and I want to eliminate the state taxes, but you can open one in any state that you choose, you know Each state has a different role in the regulation. So and and I from my understanding it's it's
Speaker: It's kind of inexpensive. I've heard as high as $500 and as less as $150 or $90.
Speaker: Yeah, again, it depends on the state that you're in. I think it also depends on the industry that you're in. Some industries require more documents. And then also, the state, the industry that you're in, I lost my train of thought, but there is something else and I can't remember it. I'll get back to you.
Speaker: the the
Speaker: Tomorrow I need to email you be like, okay. So next week we're going to talk about this. So do a little bit of research just in case. Yeah. I might be a little bit more prepared. Yeah. And I think we'll both get better at that. And, you know, and, um, so when, when you're sole proprietor or working for yourself or, or, you know, self contracting out to companies, uh, what are the benefits for yourself?
Speaker: Versus the benefits for the company that you're working for Well for the company, they don't need to if you are a w2, right? If you are an employee, right? They will be in charge of taking out the taxes from your paycheck, right? So you have a gross pay I'll take out all the taxes and then you'll have your net pay and that's what they'll send over to you as like a guy comes after you and then Fuck like is but he likes me
Speaker: And then as an employee too, you know, you can't write off things, right? Because really it's going under the company's expense. So like, let's say if you're going over to a meeting, you know, that's going to be a company expense with them. So that's going to be their write off, not your write off.
Speaker: So if you have your own business or you're a sole proprietor, there are many advantages to that that you can write off things. So like, for example, for me, I have my own home office. So I can actually, depending upon the square footage of what I use, I can write that off. If I get a computer, I can write that off. Anything that I use,
Speaker: in order to do my business, I can pretty much write off. If I have any travel expenses that has to do with business, I can write that off too. So there's a lot of advantages in being able to write those things off where if you're an employee, you do not have that ability. Right. And so I wonder if I can write up my cigarette, I'm just saying, but I need that. Believe it or not, and I've explained this to the wife,
Speaker: saves lives. Maybe not mine, but everybody else on the planet. I don't think they'll allow you to do that, but you know, you never know. I'm checking, figure it out.
Speaker: Hahaha, no, you can't go right off a co -host Chris Can I write him go? What kind of host doesn't plan ahead this guy should be fired As as someone
Speaker: infamous, not famous, infamous once said, it's my show and I do everything. So, what kind of businesses could you, I mean, you can't become a 1099 employee at McDonald's, let's say, but I recently just found out and kind of blew my mind that most doctors are 1099. Yes. That kind of blew my mind. I always thought they were W2.
Speaker: No, there are, you know, a lot of them are 1099, so they end up having their own corporation or LLC, like the same thing or sole proprietor. Yeah, because it depends what type of field you're in. Like, you know, who does the, you know, when you get anesthesia or no? Anesthesiologist? Anesthesiologist.
Speaker: Yeah, they end up getting. Sounds like a wise man, a great champion. Yeah, yeah, it wasn't. It was it was the fool wearing a hat with bells on them, the silly bells.
Speaker: They're contracted with different hospitals. And so that's why you know, they end up being 1099s, you know Right, maybe Monday Wednesday and Friday. They're at one hospital and Tuesday, right so they can another hospital That's why they're able to be like, oh i'm calling in a specialist from you know, what? Enter hospital here. I guess that does make sense. So so You know just like and 1099 uh to dumb it down and
Speaker: correctly, if I'm wrong, you literally just get all your money and then you have to figure out in taxes. And correct. The beauty of working where we work comes down to I just ask for her to do mine because she's way smarter than me. And and she was she's a numbers person. Well, she's a numbers numbers.
Speaker: Yeah, that's like a human calculator. Yeah, it's kind of crazy. I wish I could. I can't count to 11 without taking my shoes off. So. But so once you're once you have your 1099 or your your sole ridership set up, you can actually contract yourself out. And of course, once again, depending on your field, a lot of 1099 people are construction as well.
Speaker: I've heard that. You could start today as a 1099. You don't need to have a piece of paper saying that you're a 1099. It's basically saying, hey, you know what? You're paying me for a service.
Speaker: And I am not an official employee. So your contract, you know, you get a housekeeper, a housekeeper could be like, okay, charge me $30. Well, here in Panama, it's 30 over in the States. It's like 120. But, you know, you can say, Hey, you know, I'm cleaning your house.
Speaker: And, you know, I'm going to charge you $125. And so that person, the housekeeper, you know, it's probably a 1099 because she's doing it herself. She's going from house to house. She's kind of, she's created her own business and therefore she's an independent contractor. She does her own thing. So doesn't need any other paperwork unless how she wants to handle it on the back end is different.
Speaker: But yeah, anybody could be a 1099 and as a 1099 when you when you do if you do your own taxes, which I can't even spell taxes, but what percentage should you hold back from each payment?
Speaker: to actually put - At least 20 to 25 % of your income you should hold back. When you do end up doing your taxes, they tell you like throughout the year, every quarter you should be paying the IRS. So it's like, you should at least save about 20, 25 % of your income and save that over to taxes. And then each quarter, you're supposed to pay a estimated amount.
Speaker: And so when you do your taxes, you'll know, like, okay, I paid X amount of money each quarter. And so then when they do your taxes, they'll know if you owe or if they owe you back. Okay. So, so there is the chance of actually getting some money back. And of course you can always like what I did was I actually put away 30 % because, you know,
Speaker: And basically, I think, well, and the beauty of that is, is, you know, you put that in a high yield savings account and, you know, you might actually coming out ahead. Yeah. Maybe not, maybe not necessarily ahead, but you'll, you'll come out with a, we're like, Oh, wow. I got an extra $5 ,000, $10 ,000 lying around that I didn't know about.
Speaker: What kind of high yield savings? Well, I'm just saying, you know, throughout the year, if you're putting 30%, let's say, you know, you're putting in $1 ,000 each week or $500 or whatever the case may be, you know, and, and that 20 % that you're actually paying out is, is only comes up to, let's say 10 grand, but you have 20 grand in there, you got an extra 10 grand lying around. And that's before write off. So do right.
Speaker: Yeah, but the IRS does expect you to pay those, you know, pay ahead each quarter. So it's like really, you know, if you're going to be gaining that type of money to put towards your it's only going to be three months. So right. Well, I guess you wouldn't have a big payout.
Speaker: might get a couple hundred bucks you know if you wait until the end of the year which some people do right you can not pay it quarterly and just wait in the end of the year but they the irs will charge you interest they they will charge you a penalty for not paying it during the time during the previous quarters so um
Speaker: and I forgot what I was gonna say just now. It's been happening a lot this evening. The only problem about working all day and then doing something where we have to think is just, it's a problem, but it's a problem we're willing to deal with. So with paying that out each quarter, where do you find said write -offs?
Speaker: when you do your taxes. So at the end of the year, right, it's tax season, about the end of January, beginning of February, all the companies that you ended up working with, or if you know that you like, so with us, you know, we will get a 1099 from the company. It's probably coming soon. I think I actually received mine. I haven't got mine yet.
Speaker: So for me, I worked in insurance. So I'll get a 1099 for the insurance company that I work for because I did get commissions from there. But this company, I'll get a 1099. And so they'll start sending that out at the end of January. And same if you have any investments, if you have student loan interests, even your bank and savings account or checking account if you earn interest from there.
Speaker: they'll send you a 1099 if it reaches certain thresholds. So at that point, you're going to start collecting your 1099s. And then once you receive all your 1099s, you'll start doing your taxes, right? And then from there, you'll be able to see, OK, how much? I don't know if anybody uses QuickBooks. Like I use QuickBooks. I always itemize every expense that I have. And I log it to see, OK, what category does it go to? Is it a personal expense? Is it a business expense?
Speaker: You know, is it utilities? Is it phone? Is it internet? You know, you kind of categorize those things down. If you hired somebody to do work, like I had an assistant last year, so you know, I consider her labor, you know,
Speaker: You know a labor contractor, so she's a write -off So I can like itemize those things down and then you total it up and then you know exactly how much expenses that you have There's other expenses too like health insurance if you have insurance for your business Licensing like I have a California insurance license that I keep up And so any education that I have with that that I pay for you know for my CE credits You know that could be a write -off too. So because that's
Speaker: you know pertaining to your business when I travel to the U .S. and for business you know I can write off you know the travel expenses on there any meals that I had car rental taxi uh flight hotel you know so those can be a write -off as well so as somebody that works from home how much of your utilities can you write off though
Speaker: So if you are using, I mean, I do 50 -50 because half the time I'm working, half the time I'm watching TV. So you could split it. Sometimes if you only think that you're using 30%, maybe you have a family or something like that, then maybe you're not using all of it. So it really just thinks that the percentage that you think that you're using. But you could split it by percentage. Oh, I see. OK.
Speaker: if and and you as you said you don't necessarily need a an LLC or or a sole proprietorship or a c -corp or b -corp or whatever to actually start a business you do need a business license correct now you don't need to have a business license again a 1099 you don't need to have you could just but like if i wanted to start let's say a lawn care business
Speaker: Hmm. Okay. So if I wanted to do like a lawn care business, I don't need a business license. I just need to Align up at 99 everything
Speaker: you get 1099 everything. I mean, you could go both ways, but you can really, if you know, decide, Hey, I'm going to mow a lawn and I'm going to charge you X amount of dollars, you collect that. Of course you're going to have to show that income. I think in, in the U S it's 600 you, you have to, uh, show, you know, you have to pay your taxes. If it's, if you've earned over $600 in the year. In the year. Okay.
Speaker: Well, that was going to be my next question. So because I heard it was as high as like, like if you made less than 10 ,000. OK, so maybe like, yeah, I honestly don't know. And because because my first year working as a 1099, technically I started in November, so I didn't make a whole lot. But it was it was less than 10 grand. And when I asked her about it, I was like, hey, how do I handle tax on this? She's like, you made under X amount.
Speaker: You don't have to pay. I'm like, hey, hey, hey. All right. Yeah, they just defile taxes for the 1099 for self -employed individuals need to make over four hundred dollars in income a year. So it's actually four hundred dollars. That's so four hundred dollars. But I like if you make five hundred dollars, I doubt the IRS is going to come after you for making, you know, for taxes on that. But, you know, you never know. They could be spiked. I mean, let's be honest.
Speaker: Interesting. So if you wanted to start a business, and we kind of touched on this before we started, and I know you said you haven't done it since college, but if you wanted to start a business, and whatever said business is, obviously there's all sorts of niches,
Speaker: And you didn't want to do everything yourself. You wanted to actually have employees, a traditional business as it were. And I kind of want to get into the whole business planning. One of the main things you need before you actually start hiring people, obviously you're going to need income and enough work to keep everybody busy, but what else would you need besides those things?
Speaker: Well, definitely need to start with the business plan, right? Because you want to be able to have some sort of structure or road map.
Speaker: So, you know, and the business plan would contain like having, you know, exactly what is your business, right? How do you think that you're going to be being able to get customers or get people to want to get your business? You know, how do you want to be able to grow, you know, maybe put a five, 10, 20 year plan down the line to say, okay, you know, what markings are we going to be able to hit?
Speaker: How much is it going to cost you in order to run this business? So pretty much creating what's your gross profit, and then after all these expenses that it's going to cost you in order to run the business, what your net profit is going to be afterwards. So you'll do a profit and loss. And see, do you need to have employees? Where is the location going to be? If it's brick and mortar, how are you going to take payments?
Speaker: getting a business bank account online, you know, what is it that you need to invest in? How much is going to cost you to invest in stuff? So like, you know, for example, like, I don't know, let's say you open up a restaurant, right? You're going to need to have a stove, a refrigerator, you know, I don't know if you need a bar, you need the food, utilities, like, you know, dishes, you need all these things. So there's going to be a lot of expenses, of course, you know,
Speaker: What kind of money do you have in order to be able to pay all of this first? And possibly a lot of people will need to get a loan in order to start up the business.
Speaker: See how they're going to do and what, you know, when are they going to be able to make investors? Yeah. And then it comes down to like, how long are you going to pay off the loan or the investors? You know, how long is it going to take you before you're actually not in the red, but you know, in the clear, right? You're in the black. So, so yeah, you have to put a business plan first because you need to kind of have that all, you know,
Speaker: I mean, it's not going to go 100 % according to plan, but at least you have to have a roadmap for right now. Where do you want to go? As Benjamin Franklin said, if you fail to plan, then you're planning to fail. I just found that. So obviously, you're sitting on a plan. Should that be when you're doing a business plan? And I've never seen one. I've never made one.
Speaker: Is that like, are you writing a little short story? Are you itemizing a Venn diagram? Again, I did a bunch of business plans when I was in college and university. Strangely enough, the college that I went to, I went to a couple of colleges and then I ended up getting my, I got several degrees.
Speaker: Went over to my first college was over in Vermont and so bed and Jerry's is over there, right? So we were very close to the bed and Jerry's Corporation they actually came in gave us a bunch of free ice cream And they showed us their business plan now business plans could be you know, I
Speaker: you know, you're probably going to be just writing the basics, like, you know, where you want, you know, how you want the business to be, you know, what's the structure of the business, the profit and loss, you know, just the whole how you're investing stuff, items that you need, etc. Right. That could be very, you know, a couple of pages, right, if you're going to just be very simple. But when I saw Ben and Jerry's, they were like, it was this thing, a small book. Yeah, it was a small book.
Speaker: It literally was, I mean, it was a colorful book, but it did show agency, like, you know, how many stores they wanted to have. What locations did they want to go? So they plan. They plan years ahead. Well, it's that changes over time. Right. So as the business grows, your business plan is going to change. I see. Right. Like maybe you could be like a small business, you know, mom and pop business.
Speaker: Um, you know some mom and pop businesses don't even put a plan unless you need to get a loan normally if you're going to the bank they're going to ask you for a business plan, but for the most part like Probably going to be really small but let's see you're like, you know what? I want to turn into a chain like maybe I want to have you know my You know sam grocery store unlike every corner, you know in new jersey and then go to the tri state and then hey Let me try the west coast now. So yeah, that's going to change
Speaker: good examples in and out in and out over in california is huge and that's still family -owned that's not a um yeah it's a family -owned business um and so you know they branched out into vegas uh but for a long time they were in california and you know and their business model right everybody wears the same uniform
Speaker: only there's only three, three options, right? You know, you don't know the secret ordering thing unless like you hear from somebody else, right? So you want a protein burger. So like they they've created that marketing lingo every place looks the same. So that's going to be part of your business plan. So I'm pretty sure you want to go you want to go as detailed as possible on your even if you're doing mom and pop or you're doing you know, if you want to be I want to open up
Speaker: you know, 500 employee business, you want to go as detailed as possible when it comes to things like the, like you said, the uniforms, the way you greet the customers, depending on if you're, you know, manufacturing versus customer service.
Speaker: But you're going from like, you know, that was an example of what was a small business that grew out into a big business. And so, of course, you know, that changes over time. Right. So it's not wholly writ. Right. It's not wholly writ. It's mostly a guideline that is ever changing. Yeah, correct.
Speaker: And really, the basis of that business plan is really, what is the vision for the business? What type of business are you having? What's the vision? And then you go from the details. It's really working like the overall big picture, and then actually working down to go to the details of how you're going to be able to get there. That's why they call it the moment.
Speaker: start to expand you start to let you know my brain shut off again um you know the one thing about that everyone needs to understand about business and this is something that i've learned for a long time you you look at somebody like Jeff Bezos Jeff Bezos's business is massive and he makes millions and millions of dollars however the first what six eight months he was by himself
Speaker: And huge risk. He did not work for that six, eight months. And he was probably losing money. Oh yeah. Most businesses don't make a profit until then that like, I think it's like the seven or eight eighth year is when they start making a profit. So it's like, that's why you have to have that five, 10, 20 year, you know, vision of where it's going to be because a lot of startups, they're not making money in the first five to seven years.
Speaker: It's going to be a loss. Well, you know, and that's the one thing that that, you know, you got to mentally prepare yourself for that. And, you know, it's cliche to be like, I look at look at somebody like Elon Musk or Jeff Bezos, they got money falling off their ass. Well, yeah.
Speaker: but for that first five, seven, 10 years, they were going, well, I'm sleeping in the office today because I don't have a house. I don't have a place to live. I'm eating ramen every day, but your employee, because even if your business folds, the times that your employees work, you still have to pay those. There's no getting out of that. Bankruptcy does not cover that.
Speaker: Right and so and that's why like you know it's always good to do that profit and loss right because you're going to do you know what kind of profit you know what kind of profit are you aiming at how much is it going to cost you how many employees do you need you know what type of pay is that so you have to do the profit you have to see what the expenses are I mean I know a lot of owners business owners in the beginning if they do need to have you know several employees to be or you know need to have
Speaker: You know a group of people working for them in order to be able to run their business I mean a lot of business owners they don't pay themselves for several years. It's all going back to the business And and you know whether it be advertising or just like hey, we need new pencils, you know Because every expense ends up on your plate as the owner um And we got about 30 minutes left. So I wanted to kind of
Speaker: Play a little scenario game with you. If you could open a business tomorrow or start opening a business or start planning to open a business, what would be your ideal, I want to open this. Do you know what? I think honestly, I would like to have a simple business where I did not have to run it.
Speaker: I'd actually like to buy somebody's business, somebody who's already established and maybe just wants to retire and doesn't have anybody to give their business to, I would like to buy that business. So even if it's as simple as like a car wash, like you know,
Speaker: Because if I knew some guy who is like, you know, working over at the car wash and pretty much ran it and knew exactly what need to be done to run a car wash and he still wants to do the same thing and he didn't have the funds to buy it.
Speaker: I would like to buy that business if I have the funds to do that make that person like ceo or something Yeah, and then they can have a little stake in the business and then we can both make Money, I mean car washes you think about it's like water, right? Um, you're not the power is not on every you know every hour unless it's 24 seven, right? Um, and you just have some soap
Speaker: You have maybe some things that you have in the store like freshers and whatnot But it seems that like it doesn't need to even be that big, you know, there's I saw video today a Guy was he owns the self -service car wash. He owns one of those and he says each one of those bays Makes about sixteen thousand dollars a month. Yeah You know after expenses and that's that's profit line. I
Speaker: And the one he was looking at buying, they wanted a million dollars for. And he did the math and he's like, yeah, even if you drop the million dollars tomorrow, you're at a loss for 10 years because you got to pay back that million dollars.
Speaker: the
Speaker: There's different ways. So if you buy a business, right, there are different ways. They don't know all of them. But I know there is no, you don't have to say, OK, I have a million dollars. Here you go. I'm buying your business. I mean, there's if you have a million dollars to do that, that's freaking fantastic. But you can. There are some people who, you know, you say, hey, I want to buy your business, but I don't have the money right now. How about this? Let's make an agreement.
Speaker: Or if I hit this certain milestone, then I can pay you this much. So you can go on increments and say, OK, I'm going to, with every profit that the business has, I'll give you a certain percent until my loan is paid off in buying the business. Or you could say, I can hit a certain milestone. Say, if I don't reach this milestone, then you know what? I owe you X amount or have a penalty to the person that you bought it from.
Speaker: So there's different ways in order to buy businesses. You don't necessarily need to have the funds. Well, there's always, of course, loans as well. What about a franchise? You know, a lot of franchises, you know, I heard McDonald's, it's like a million dollars to open a franchise. But I've also heard like Chick -fil -A is only like 30 grand.
Speaker: Well, McDonald's, you know, is kind of they're they're not really fast food. They're more like real estate. Oh, yeah. They're definitely a real estate company. Yeah. They're a real estate company for sure. And yeah, that's why they become so successful because they can use that business model to do it.
Speaker: And they also, you know, again, they have a whole structure. I mean, McDonald's is set up the same, you know, in the back of the McDonald's. So they have a huge structure, whereas Chick -fil -A, I think with a lot of, you know, I think with a lot of them, it just really depends upon the, you know, how to vet. Like, I think for Chick -fil -A, like, you have to be fed in, like, five years.
Speaker: You have to work there a certain amount of time first. Yeah. Like you have to be vetted in. So I think it's like, you can't just get a check filet. Like you have to go there for five years. I think there's certain standards that they actually require, you know, to, you know, be upon. Like if you don't meet those standards, then they're not going to give you a check filet at all. Right. So, well, like a friend of mine in high school, when, when, when she turned 18 and she was graduating high school, I actually dated her for a while and
Speaker: And she was, her parents asked her, what do you want for your graduation? You want a new car? She's like, no, I want a subway. And they bought her a subway franchise. No way. She works at it to this day. I don't remember exactly what it was, but she now has nine. That's fantastic. Yeah. Fantastic. And it's like, you know, the, uh,
Speaker: The reason why I think she picked that was because at the time she was working at a subway. And so there is, with any business you want to open or work for, or even a job you want to do, you got to have a, in order to be quote unquote happy in life, you got to have a minimal, minimal amount of passion for what you're doing.
Speaker: Like you can't just, you can't be like, I'm going to open up a McDonald's. And then 20 minutes later, after you've opened it, you're like, I fucking hate McDonald's, you know, because you will be miserable. So, you know, the passion has to be there. The joy, the wanting to do something like myself. If I could open up a business tomorrow or start opening, I would love to do manufacturing of something.
Speaker: You know, of course I do want to open a bar, but once again, I don't want to run it like you, you know, I want to purchase one or it'd be like, yeah, you know, one of my favorite lines and I'll get flack for it from the weirdos lefties. But Donald Trump once said, hire the best, but you never trust them. You know, you find somebody that is
Speaker: good at what they do and say, I want you to work for me, make my business. And then you can sit back and relax. I mean, there's still minor things you need to take care of. There's still more to it because if you go to business, right, you want to know exactly what the business. Right. Right. So and that's where, you know, my idea of getting somebody who's already worked in the business because they can teach me how that business would be. I would even go or how to improve it.
Speaker: Yeah, I would even if like, let's say I was interested in, I don't know, like a mailbox, etc. And like, so what it's, you know, a post office, like you give it, you send out shipments, you get a bunch of boxes, you know, I would actually go to somebody like that and be like, Hey, you know, how the hell do you run this business?
Speaker: and maybe pay them to be able to kind of get like an apprenticeship, like how much does this, you know, so I'll be able to ask those questions, like, you know, how much for supplies, you know, how much are you leasing for this place, what are the things that they need to have, you know, are there things that I'm not thinking about that, you know, I should consider, you know, so, you know, like postage stuff, machinery,
Speaker: You know, right, whatever. So like security, you know, it's good to be able to ask those questions for someone who's already done the business. So this way, you're not figuring out yourself and wasting time. Yeah. Fons as well. Yeah. Well, even though you learn from mistakes, you don't you want to make as little as possible. Actually, I believe and I could be wrong, but I thought Dave and Vera own a tattoo shop.
Speaker: I was a tattoo shop and also a bike motorcycle. That's actually coming to YouTube soon. I just built the intro video.
Speaker: You definitely want to look at something like like for myself I think I would love to own a tattoo to do not only do what I get free tattoos, but I've seen the I've worked in them. I've seen the profit margin I've seen the the equipment is not really crazy expensive the the clip with cleanliness is the hard part of any tattoo shop The I don't have any tattoos I've never been oh It's it's
Speaker: Chris, Chris mentioned on, on when he got his, he felt no pain and I don't believe him for a second. You know, I'm sure he has a high pain tolerance as he says, but holy hell, it's, it's a pain like no other. Um, but like I, the one thing I, you want to be a patron of your own business as well, you know, because
Speaker: The one guy, I knew a guy, he owned a tattooed body barrier shop. Dude had no piercings and no tattoos. And people would ask him, does it hurt? They'd ask him, does it hurt? And he's like, no. And they're like, and I would look at him and go, how the hell would you know? So what made him go into that business to begin with? Was it because of the profit margins? The profit margins are huge. So was he a partner or did he? No, he owned it.
Speaker: he owned it. And then he hired a bunch of tattoo artists that are 1099 employees. I know because I work for it. And like, um, the thing is with a tattoo, a tattoo costs in material at about maybe 12 bucks. It's mostly time. So you're not paying for the tattoo. You're paying for the artists time. And, you know, the higher quality they are the, and,
Speaker: Like my smallest tattoo took 45 minutes. My largest tattoo took like 12 hours.
Speaker: Yeah question because now that you bring so, you know It's kind of tying all this in from what we begin, you know, just like beauty salons I would assume tattoos Tattoo salons are the same where they have 1099s who actually rent the seat of the tattoo place and you know get part of that They're not even renting they they're they're
Speaker: I like to joke that a tattoo parlor is more of a hang for the tattoo artists. Of course, you'll get people come in and say, hey, my buddy got a tattoo from Bob over here, and Jim's sitting over here going, we don't know what to do today. You'll get walk -ins. Well, Jim will get the walk -ins that day.
Speaker: and the the other person bob is sitting there he's got appointments because people he's tattooed said oh you need to go see bob go see bob go see bob so they they they obviously there's no hourly wage um the main part of a tattoo artist's job is to make sure the area is clean and but that's what you have apprentice for apprentices when you're learning to tattoo you actually pay the artist to hang out
Speaker: and they teach you things so you know they watch you watch they they give you second uh a fake skin to tattoo with um apprenticeships are the greatest scam on the history of the planet yes jim and bob the tattoo artist so that's what i'm going to call my tattoo studio jim and bob
Speaker: Do they buy that? Does each tattoo artist buy their own equipment or are they actually so business owner doing the equipment? Like, does it matter? Business owner, the business owner would usually buy like the inks and like it sounds funny, but every tattoo artist uses Vaseline or some sort of gel like you take a tongue depressor.
Speaker: And you put a little Vaseline on it and then you set little bitty cups that hold the ink. And that way they don't fall over and you got them there and they don't move. And then of course, most tattoo artists will buy their own gun. The tattoo gun, you know, my tattoo artist, he's got like nine different ones because he's, you know, the old style one that he has is so loud. If he turns it on right now, I can hear it from five miles away.
Speaker: the new one that when he did my forearm recently, less than a couple months ago, like less than six months ago, that thing's so quiet. I didn't know it was on until he started stabbing me with it. But they're the biggest expense when it comes to a tattoo studio comes down to like an autoclave to sterilize your your
Speaker: it sounds funny but a lot of statue studios buy gynecological chairs because it's a night it's a bed that can be folded up and cleaned really easily because they're they have a metal base and then the weather or leather uh or they'll you can actually go get a really nice heavy duty table and have it wrapped in leather
Speaker: with cushioning in it so that it almost like a massage table so it can be sterilized and then of course saran wrap is key to every tattoo uh you know you like if even if you have a stand where i'm sitting my arm to so he can work on my arm underneath it is the stand and in between the stand and and my arm is saran wrap right
Speaker: And so is the business owner responsible getting all that stuff? Or again, I think things like the Saran Wrap, the inks, it could be a 50 -50 thing with inks. Mostly the business owner takes care of the big things, the chairs, the printers, all that fun stuff. The artists. Yeah.
Speaker: Right. The artists take well, some some of them like certain brands of needles or some some like certain brands of guns. They take care of those things. They make sure everything sterilized. The expense comes in for the owner of the rental of the location or owning the location. And then you you hire your artist, your artists come in and and the first couple of days, everybody just cleans like crazy. When we opened up
Speaker: Project X here. Project X was a tattoo studio I worked for here. Day one, all we did was clean. Clean, clean, clean. And then we came in and said, OK, now let's bring in the autoclave. OK, let's clean the autoclave. Now let's bring in the chair. Let's clean the chair. Yes, if you have a cling filled fetish, 100%, it is the place to be.
Speaker: but the expenses usually the building and but you'll get tattoo artists that that will the one guy the one guy he he was a he did body piercing tattoo the guy that I actually first hired me ever uh to apprentice on body piercing was uh he showed up day one in a Ferrari
Speaker: And he's head to toe tattoos. I'm like, how did you get a Ferrari? And then day one, some lady comes in and in a four hour session, she spent nine grand. Wow. And like I said, the total cost of the tattoo was maybe
Speaker: a hundred bucks with Second Skin. Second Skin is it's the old model when you get a tattoo they wrap it cellophane until it starts to scab over. The new thing is they have this stuff called Second Skin where it's almost like a it's like saran wrap with tape on one side.
Speaker: but it covers the whole thing and seals it and all that fun stuff. Second skin is inexpensive, but you need a lot of it, you know, depending on the size of tattoos, it can be cut and whatnot. Those things, the owner of the shop would actually have or purchase or have on order at all the time. But like I said, four hours, this guy made nine grand. Now, even if 50 % of that goes to the shop for,
Speaker: booth rent or whatever that's a that's a big one you know yeah um where barber shop you hear about the tattoo shops i didn't even think about it barber shops it's it's kind of the same concept your your barber like if you go into like the movie barbie barber shop with with ice cube each barber has their own equipment
Speaker: And they rent the booth in the booth. There's a mirror, a little bitty table and a chair, everything else you put there. That's your stuff. You know, your Clippers, your, your thing. The, however, what I've learned and only because I talked to a friend of mine, it has a, she, I dated a lot of girls that, that took cosmetology in, in, uh, building trades or in the, uh, career center that I went to.
Speaker: A lot of the money that's made at a barbershop is in products.
Speaker: like you get your hair done and then and then you got a rack of beat out so soon over here you're like good to keep it so get smooth we buy this you know and you know you hawk that stuff uh there is money in the booth and booth rent but it's not a ton you're not you're not you're not pulling up an evently in in six months you know the the hardest part of any
Speaker: The best way to open up, let's say, a tattoo shop, which is one of the things I've looked into is by the location at the very least. Everything goes to shit. You can sell the building. But if you buy the building and you get decent artists in there and a lot of people, what they'll do when they hire a tattoo artist is they'll get your soul glow on. You saw where I was going with that lady.
Speaker: A lot of the things that they'll do is they'll be like, okay, you're going to do a tattoo on my cousin or whoever. And it's going to be the design he wants. You change it however you want. It's going to cost him nothing. It's going to cost you your time. I'll pay for all the equipment. And you can judge that artist on his work. There are
Speaker: tattoo artists that only like to work in black and black and gray. Right. I'm not a black and gray guy. I have one black and gray tattoo. And it's it's a word in Japanese. And it's my daughter. It's my daughter. I don't even think it's Japanese. I can't remember what it is. But it's my daughter's name. I found a website that you put in a name and it gives you the spelling in Japanese and kanji. Yeah, I believe so. I got it. OK. Can't really see it. There it is.
Speaker: Oh, I see it. OK, yeah, that looks Japanese. Yeah, I don't. But. All my tattoos have color, you know, all Tanya's tattoos. Tanya's got a dragon on her leg. That's the dragon from Dragon Ball Z because she's a giant bird. The girl that did that. She has the heaviest hand. And I'll explain what heavy hand means in a second, but
Speaker: It is flawless, but it's also her most expensive tattoo. And heavy hand is like the guy that did my forearm, and you can't really see it, my forearm is a bear in the woods with a little wolf, a clock and a rose for my grandmother. Do the lightest hand I've ever felt. Like he did my cardinal,
Speaker: And I. The whole time, this goddamn dude, you're hitting bone, brother. But when he did this one, it was like. Oh, you're fucking done with the bear head already? OK, there are certain parts of the body that hurt. So much like when I got my ribs done, I have a Winnie the Boo losing a balloon for my sister when she passed. How many tattoos do you have? Three on my back. One on each forearm.
Speaker: My Winnie the Pooh, my daughter, my Superman logo, and my Deadpool and Harley Quinn. How many is that? Lost count. I lost count. Three, four, five, six, seven, eight, nine? Yeah, nine. Right, wow. And I have plans for war.
Speaker: I'm constantly looking up tears. Maybe that's also good for being part of a tattoo business is because, you know, once the person gets one, they always want more. Well, that's really addictive. But but the beauty of it is, is like, if you if you're a good tattoo artist and you, you know, you do good work, like my, my, my dude, Danny,
Speaker: does amazing work. The design I had for this looked nothing the way this does. But when I got there, Danny's like, we could do your design, but it will wrap around to here and look weird. And I went, oh, I didn't think of that. He said, or if we do it the way you want it in a spot where you can see the whole thing once, it's going to be about that big. And I was like, but I want, you know, the whole thing. He's like, OK.
Speaker: Let me try something. And he messed around with it. And what he came up with was way better than what I wanted. And a lot of people don't understand when you go to get a tattoo, you may say, I want this exact thing. The artists can do that, but they will never recommend it because you don't do tattoos every day. You don't see tattoos every day. Right. The way they do. So, you know, and that's why they're the expert. Exactly.
Speaker: It's it's literally the least professional business but extremely professional on one like the cleanest people I've ever met are tattoo artists like OCD cleaning I Think it is a professional business. I mean, yeah, and but yeah, but they don't look they're not showing up in a tie. Let me tell you
Speaker: But you know what now like nowadays it's like every like I feel like as though I'm a minority now I think the majority of people in the world now have tattoos where you know growing up, you know You know because I'm you know
Speaker: grandma compared to you. Tattoos were not as popular. Most people who had tattoos were musicians or artists, but pretty much everybody now, I think, has a tattoo, with the exception of me. As the author once said, if you want to be different, don't get a tattoo.
Speaker: You know, they are mainstream now. Some of the designs, when you go into a tattoo studio, the first thing you want to do is ask your tattoo artist, A, to see their flash. Every tattoo artist does it. As soon as they do a tattoo, they take a picture. And then the next time you come in, they take another picture of the same tattoo they did a month ago because
Speaker: They want to see how it turned out, you know when you first get it it's swollen whatnot. Um You don't have any either leggy You you leggy what you need. Wow, I thought somebody else who doesn't have it Leggy needs a blackout where so she can tone down her brightness of skin She needs a permanent tan tattoo Excuse me but Like there
Speaker: there's all sorts of different ways to do a tattoo. And though I actually saw there's a there's a place I can't remember what it is. It's a it's a Polynesian island, I believe, where it's not I don't think it's Polynesian. I think it's it's somewhere like it's not Asia. It's like over where Everest is, you know, stuff. And
Speaker: Uh, the only tattoo artists, you know, tattoos are big thing in the culture, blah, blah, blah. But the only people that can be tattoo artists are female. The males are not allowed to do tattoos. And they do with the stick and the, I don't know if you've ever seen it. It looks like a little hammer with needles on it and they hit it with a stick. Um, and a single session will last like 12 hours. Yeah.
Speaker: And you got to have a lot of patience to be 12 hours sitting there. I mean, I'm pretty sure they do it like an increment. Well, like what went right. Well, like, for instance, when when Danny does a tattoo on me, we'll do the outline and then I'm like, OK, smoke break. We go outside, smoke, cigarette or we'll go down to the store and pick up a drink. You know, because the one thing when you're getting a tattoo that you need, it sounds silly, but you want a little bit of sugar because you're bleeding.
Speaker: The, you know, the outline, then there's shading, then there's color. So it's, it's, you know, like, uh, I have a Superman that is like this big on my back. And it is the traditional Superman. It's still not even done. Or is it done? I don't remember. One of them is not done. I have two Superman on my back. I have a precious moments. You remember the precious moments dolls from Hallmark?
Speaker: No, there are statues that Hallmark stores sold and they look like little kids and grown up clothes. OK. And my a buddy of mine drew it. And my sister, when I when she had a tubal pregnancy, I drove her to the hospital, saved her life, according to her. And and she she's always called me Superman. And so and she loved Precious Moments doll. So I have. The Precious Moments.
Speaker: Superman that is literally a foot big by eight inches. Wow. Seven or eight inches. And it is full done, full color and hell on earth. To get tattooed. Because it took I have a traditional Superman that's roughly the same size, not as wide. It's just him standing in his pose. And that one took
Speaker: about 12 hours as well, but it's super detailed, colored and shading. The shading hurts like a motherfucker. But you get close to the spine and you're just like, I'm going to kill everyone in the room. Well, Jeff, I feel like you said we've changed this podcast to the tattoo podcast. I know. Well, we need to learn how to
Speaker: We've got to talk about that. We've got to prepare what the subject will be, not five minutes before the podcast. Give me a couple of hours at least. Yeah, that's my bad. No, but I think like I said, the phrase of today that we learned that when you're going to start a business, the phrase of the day is once again, if you
Speaker: If you fail to plan, then you're planning to fail. Yeah. And and that's pretty much it for this episode. You know, we're going to go ahead and wrap it up. I know we kind of went off subject, which I'm sure we'll do multiple times, especially on here. And then Dave pops in because I forget about it. It would just be a whole new thing.
Speaker: I'm a lot more structured. Well, and I want to say, Sam, thanks again for coming up and kind of giving us your opinion on and your expertise on starting a business, starting an LLC, or whatever the case may be of how you want to go about bettering your life where you're one of my favorite phrases. And I say it all the time is no one ever got rich by working for a salary.
Speaker: And that's my vision is I never want to work for a salary because yeah, there's going to be hard times, but the good times are that much better when you know, nobody could have done this, but me. Well, that's nice being your own boss. Oh man. And to that, we have a boss, but not really here. Vera, you want to give Vera mad color boss. She gets so mad. I love it.
Speaker: So that is it for tonight's show. Sam, did you think of an outro for yourself? No, I have not. So once again, this is dollars and cents podcast. And as always, if it doesn't make dollars, doesn't make sense. Have a good night, everybody. Good night, guys.
