Why Debt Isn't Your Enemy
Download MP3Hello, and welcome to the Service Based Business Society podcast. I am your host, Tiffany Ann Botcher. On our weekly episodes, we will dig into everything you need to know about scaling your service based business without losing sleep. With my experience in creating over 7 figures per month and a passion for marketing, finance, and automation, this show will provide tangible tips and techniques for scaling your business. Let's get started.
Tiffany-Ann Bottcher:Welcome back to another episode. Today, we're diving into a conversation about growth, business financing, and the strategies that can fuel your success. Whether you're just starting out or looking to expand, understanding how to leverage the right financing options can make all the difference in long term wealth. That's why I'm thrilled to have our guest, Vexteen, joining us today. Bo has over twenty seven years of experience in the lending space, specializing in SBA financing, which is a game changer for business owners looking to scale without the typical barriers.
Tiffany-Ann Bottcher:Although SBA program is USA specific, similar programs such as the BDC in Canada make this episode relevant for entrepreneurs on both sides of the border. Bo's expertise spans in residential mortgages, real estate, investing, business lending, making him a wealth of knowledge for entrepreneurs. Beau is here to break down how smart debt management, leveraging SBA loans, and even business acquisitions can unlock new opportunities for business growth. Whether you're transitioning from a corporate job or expanding your current business, his insights will help guide you through the process of making strategic financial decisions that will set you up for success. From understanding credit to mastering tax strategies, offers a unique perspective on how business owners can optimize their financial strategy for long term wealth.
Tiffany-Ann Bottcher:If you're ready to level up your business operations and learn how to effectively utilize financing to grow, you're in the right place. Welcome to the show, Bo.
Beau Eckstein:Thank you. It's good to be here.
Tiffany-Ann Bottcher:So Bo, I got to tell you, this is such an important topic. And I feel like I say that often, but we choose our guests so carefully. So it's one of those pieces, though. I literally just got off a call with a client and we were talking about growing business and leveraging and being able to really utilize these resources. And I thought as I transitioned from that into here, was super excited to talk to you.
Tiffany-Ann Bottcher:So first, let's start off, how did you even find this part of the world and how did you know that you were passionate about helping business owners with this? Kind of let's dive in and start.
Beau Eckstein:Yeah. So I've I've been in financing since I was 20 years old. I'm now 47. And and I started as a residential mortgage broker, then I got into doing a lot of real estate investing deals, and then I got into more commercial multifamily, office buildings, and so forth. And then I really found my calling with SBA financing.
Beau Eckstein:And I like the fact that I can do owner operated real estate, but it's mostly like business lending. Right? And and it's a government guaranteed loan program. So banks, credit unions, and non bank SBA lenders make these loans. We work with PLPs or preferred lenders for the program, and they actually underwrite the loans in house and they it doesn't have to go to SBA for underwriting.
Beau Eckstein:So I help navigate and find the right bank because banks, even though they underwrite the deals off of the SOP of the SBA, they're completely different what they will and what they won't do. And my expertise is placing the deal to the right lending institution.
Tiffany-Ann Bottcher:Right.
Beau Eckstein:So that's, yeah, I just kind of stumbled into it like eight years ago with a twenty seven year track record in lending. So that's
Tiffany-Ann Bottcher:Yes. Yeah. Now there's some very interesting stats I was looking at. Was kind of down the rabbit hole recently about leveraging. And so often I think business owners who are newer to business often come with a more personal finance kind of way of looking at it.
Tiffany-Ann Bottcher:They come in with like, debt is bad. We can't be doing that. We must be able to grow our business enough to be able to pay for everything that we want to do. And so lots of business owners don't even ever explore even applying or don't think of that as kind of a resource, kind of one kind of camp of business owners. Other business owners go in and they start borrowing every penny that they can often from things like, well, hey, you know, my payment processor offered me money, my bookkeeping software offered me money.
Tiffany-Ann Bottcher:You know, as soon as I started selling, everyone was like, hey, do you want money? And they say yes to all of it, sometimes crazy interest rates. And and other people are are just really of the, hey. I I want to do this, but I have no idea where to start.
Beau Eckstein:Yeah. Okay. So it's I consider it good debt debt if you're, you know, investing in the right business and you're gonna make a return. So for example, I work with a lot of people transitioning from corporate into their own business. And so they're they're making let's just hypothetically, they make $200 a year w two.
Beau Eckstein:And then they they wanna get into business, but they might not have that many that much in reserves. So that's why we use SBA. So on a business acquisition, for example, you can finance let's say it's a million dollar business. You can finance up to 900,000 with the SBA loan program. So it's pretty high leverage.
Beau Eckstein:You know? And that could that business might not have collateral either. So, like, you're not gonna find financing there any anywhere else like this high leverage. The point I'm trying to make is this person needs to find a business that's gonna come close to replacing their job. And by by leveraging SBA financing, maybe you you invest into the right business, which is netting you 200,000 or $300,000 on this million dollar deal.
Beau Eckstein:Now you gotta come up with a hundred grand, and so you have to have a hundred grand. But there's ways of actually reducing that equity. We call it a down payment. We call it an equity injection. So, you can get the seller to carry back some of that and so you could really, I've made this reference a few times.
Beau Eckstein:If you can structure the deal right, you can close in that million dollar business really for only $25 out of pocket. And I I teach people how to do it. Not saying you should be fully lever levered up. But the point is is if you could find a good business to invest into, somebody's retiring. It's been their baby for years.
Beau Eckstein:They're trustworthy. They're not trying to, you know, to pull the wool over your head, and there's a good opportunity. I do recommend before getting into any sort of business ownership, you learn, like, it's not easy to own a business, and and sometimes revenues decline. What we find, which you'll you'll probably acknowledge this, is that a lot of the sellers, like, their books are a mess. And so what happens oftentimes is they they prior to selling, they spend three years trying to make their books look as pretty as possible.
Beau Eckstein:And so, like, what you have to be careful about is, remember, they've owned this business for fifteen years, and now they spent the last couple of years knowing they're gonna sell it. So oftentimes what happens when you buy an existing business is that you might lose two to 5% of the customer base. Right? You might have a dip in revenue, and that happens more times than not. So I would urge people to be very, take it very seriously as you're doing your due diligence.
Beau Eckstein:But what SBA financing enables somebody to transition strategically from a w two job, many people that I talk to wanna own a business. And SBA financing was created to help more small business owners become small business owners. So I love the product. There's nothing out there like this that we can utilize. And then once you're an existing business owner, you can actually use SBA to do expansion.
Beau Eckstein:So let's just say you owned an HVAC company or a CPA practice and your competitor is retiring, you can do roll ups and you can get up to a % financing to buy that same type of business line. So that's how these companies grow quickly. So if you want to create a lot of wealth, I would say, look at SBA financing. It's going to get you there quicker if done correctly.
Tiffany-Ann Bottcher:You know, it's interesting. So, I mean, I left the corporate space and so I'm in Canada, so it's slightly different. The similar programs exist in Canada. But the verbiage that you're using is kind of that American side. But when I left, I was a partner where I was.
Tiffany-Ann Bottcher:And so I negotiated a buyout. And so I was able to use that money to kind of get my business going. But had I not been a partner, that would not have been possible. Same thing. Now you're like, hey, I want to move in that direction.
Tiffany-Ann Bottcher:But if you are in kind of a different positions where you are earning those top dollars, that's not something where you're be able to start a business or whatever and immediately replace that income. So if you are younger or you don't have that kind of nest egg to say, hey, I can totally perhaps not take any income for the next year, These are great ways to be able to say, Hey, I want to move that direction. I have a great vision. I want to do these things, but be able to do it in a way that you can still, of course, continue to kind of make it financially.
Beau Eckstein:Yeah. I mean, I think as business owners, we need to really understand credit, the credit market. And then so, like, what I tell people what I see commonly happen is that people use their personal credit cards, and then they they use it for business. Then they they get charged up and and your scores drop. Right?
Beau Eckstein:And because credit card utilization is a third of your credit scoring system here in the state. So I see this time and time again. So understanding how to build business credit that doesn't reflect on your personal credit. And then that is how you can able to move faster. And oftentimes, there are people that are very conservative.
Beau Eckstein:I especially see it in real estate where they, you know, they won't leverage and they wanna be, you know which there is some safety factors around that. But but, typically, most of the businesses that really grow take on lots and lots of debt because that's how they're able to grow substantially in in a in a quicker manner than not taking on debt. And so I would just open your mind to, like, using debt in a good way because it can really grow you quicker or it can leverage you into buying a business or buying out a partner, doing partial buyouts or starting a business from scratch as well.
Tiffany-Ann Bottcher:Yes. And and I have the conversation often with people saying, hey, debt is not bad. And a lot, you know, businesses who are growing are leveraging their equity, they're getting financing, they're doing all these things. To kind of go back to one of the things you said about buying, if you have an HVAC company and now someone, maybe a competitor, maybe they're retiring, or maybe you're expanding into a larger region and they already have an established location. We did an episode a while ago.
Tiffany-Ann Bottcher:It's called Selling More Solves Most. We were talking about how you're kind of in this valley of death and you need to hire another person. Maybe you have grown to the point where you're like, I really need like an operations manager or I need like another lead salesperson or whatever. And you're like, hey, that's really tough to maybe you're at the point where you need that person, but maybe in your own business, you don't really have the space and the budget to hire the top talent that you want. But perhaps now this competitor that's retiring, maybe they already have that person and that person's cost has already worked into their budget.
Tiffany-Ann Bottcher:And so you think, Hey, if I buy that business up, now I can add their team. Maybe they have more field staff. Maybe they have that great operations manager and you're create some savings as well. So maybe instead of having you having a marketing person and them having a marketing person, well, now one marketing person can maybe go up a little bit, but not so much as double. And so now you're creating some cost efficiencies.
Tiffany-Ann Bottcher:You're hiring some great people that you really need to grow both businesses. And so it it really opens up the opportunity.
Beau Eckstein:Oh, yeah. I mean, the the entrepreneurs that I see that really win are are people that, like, they get that and, like, they understand that there's, you can grow quicker in many different ways. And, you know, I understand that sometimes companies grow too quick, right? And they fail, right? And so a lot of small business owners do fail.
Beau Eckstein:And most of the reason they do fail is because they're undercapitalized. I think it's something like 38%, if that's a real statistic I pulled, but I did read that somewhere. So I think, but absorbing, there's all these baby boomers that are transitioning from owning a business to retiring. So there's definitely a there's very a huge opportunity to get in on these business owners who who love their business. They built it.
Beau Eckstein:It's their baby. And they wanna they wanna they wanna sell it to somebody who's gonna take care of the business. That's really important. It's not always about the money. And also you can offer partial buyouts.
Beau Eckstein:So in The States here with SBA financing, you can buy them out and get They can own less than 19% and then you could own 81% and they don't have to guarantee the new loan, right? So they get their, some of their money now and they still stay on for additional revenue and to be kind of consulting in the business. So I think that's a tremendous opportunity, Like, wherever your company is, whatever company what you're doing, what the business does is how do you bolt on more. And I've like, I was just talking to somebody yesterday, and he and he works with e ecommerce businesses. And then one of the companies he's working with, they outsource their digital marketing to an agency.
Beau Eckstein:And that agency wants them to buy them because they're they wanna get out of business. Right? And they're like, well, we now we can buy this digital marketing agency. Not only can we get services done internally, but we can now have it create another revenue stream. So I think there's a lot of verticals.
Beau Eckstein:And if you can do like vertically integrated businesses, I think it makes a lot of sense.
Tiffany-Ann Bottcher:Yes. And I think that, you know, there's kind of that empire building phase. Often the question I get because entrepreneurs love to collect. So the true entrepreneurs, that's everybody, they like to do lots of different things. And so I always laugh because I think that one of the things entrepreneurs collect domains because they get an idea, they go and find out if the domain is available, they purchase the domain and then it sits in their domain list and they may or may not ever do anything with that business.
Tiffany-Ann Bottcher:Then we see it on the financial review side where you're like, how come your domain renewals are so expensive? And they're like, oh yeah, I got my next 20 businesses. All the domains are purchased. I've been holding them for years. And so it's kind of that like, when is the right decision to add additional things?
Tiffany-Ann Bottcher:And so what you were just talking about there, buying the marketing agency, I think when you go and you add additional businesses, either you need to be serving a similar market. So maybe you offer service A and so now you're going to expand into service B. So it's the companies that maybe are pressure washing the driveway, but now, hey, while they're there, they can quote on doing the gutters or we're going to do a soft wash on the side of the house. So you're expanding similar stuff. And then there's the second kind of flip side of that is, hey, we're going to do the things like the digital marketing agency where it's something that you need to use.
Tiffany-Ann Bottcher:So we work with a client who they have a really huge fleet of vehicles. And so what is one of the biggest costs of having a fleet? Well, fleet maintenance. And so they have gone and expanded in the direction of, hey, well, we're going buy the shop that basically maintains our vehicles, which then we can, you know, basically be able to sell to others, the maintenance, but also keep our own costs down and really kind of manage the schedule a little better. You know, maybe it's better for our company to for them to start at 6AM because then we get our vehicles faster.
Tiffany-Ann Bottcher:Okay, well, now you own the shop. You can say, Hey guys, we start at 6AM. And so there's definite opportunities in both. And so being able to say, Hey, that's going to save us our own company $100,000 over the year in fleet maintenance. And so being able to make those decisions, but very rarely in today's day and age, if you go back a long time ago, a lot of people had huge amounts of savings in the bank.
Tiffany-Ann Bottcher:You could make decisions and, I want to buy a business and people would buy things in cash. It's not it's not super common these days for people who, hey. I wanna start a business and just go buy something in cash. It's I don't think as in today's day and age, it's just not as common as it used to be a while ago.
Beau Eckstein:Well, yeah, I think I think part of it is is is inflation. Right? And, I mean, I I talk with people that make tons of money on their w two here in The States, but they don't they really don't have any savings, which is a shame. Like, I remember I had a conversation, a couple in California, husband and wife are both doctors. They make a combined salary of $5.50 a year, which is pretty good.
Beau Eckstein:And they don't have much to they at the end of the day, they they haven't been able to save much. They have small children. They're taking care of their parents, and their tax is so high, especially in California. And I'm like, man, this this this is a broken system. So I think, like, also, if you understand all the benefits of the the tax code here in The US was not written for W-two employees.
Beau Eckstein:It's written for small business owners. So if you understand tax strategy, you're gonna win versus if you just follow rest of the sheep, you could win if you get a high paying job and you are good with your money. There's a lot of people win that way. But the middle class, you're not gonna win because you're taxed the worst and you don't have any you don't have any strategy. What we try to do with people is give them a little strategy, not that I'm a CPA, but I can refer them to a CPA.
Beau Eckstein:Right? But give him some ideas of like, hey. This is how you might be able to offset some of your income by owning this. Or here in The States, we have section one seventy nine, which if you buy, like, equipment, you can offset against your earned income. Maybe you still have your w two while you start another business.
Beau Eckstein:So, like, we try to give people, like, some ideas and go, hey, go bring this to your CPA. Make sure this is good. Right? Because I'm not a CPA disclaimer. I'm not a tax attorney.
Beau Eckstein:And most people don't even know the basic strategy. They don't teach it to you in school. They don't teach and I I came up with this. I call it the triangle the triangle method. It's basically tax strategy, operating business, and then with the extra excess cash flow, buy long term assets like real estate.
Beau Eckstein:That's how you're gonna get wealthy. Right? And then taking it and then being dialed in with your business. Because I think a lot of people, they get like me, I'm not very organized. So, like, I would never do my own books.
Beau Eckstein:Right? Because I just couldn't do it. And like, you just like, you got to find the best people to do the things in your business to help you strategically grow. And I like, once you realize that, it's going to be a game changer for you.
Tiffany-Ann Bottcher:I feel like the books part of of businesses and from from a number of different standpoints. You know, we kind of talked about a business being for sale and the effect on the books. Often, and I always say, you have to remember your objective. So if people will do their books and they come in with this, we want to save as much. We want to hide all the money.
Tiffany-Ann Bottcher:People come in and they're like, yeah, I wash it like this and I hide it like that. Then they say, it looks like my business has made no money for the last seven years. I've paid barely any taxes. This is amazing. And I'm like, okay.
Tiffany-Ann Bottcher:But then they're like, okay, so but I found this piece of commercial real estate I want to buy. You know, it's like, and the bank won't even they won't even like look at them because it's like, hey, your business is not making any money. Or they say, hey, I want to put my business up for sale. And then they're, you know, they start working with someone and they're like, hey, well, let's look at the, you know, the multiplier and how much money you're making. They're like, oh, it doesn't look like I'm making.
Tiffany-Ann Bottcher:And so there's these pieces of, if you want to sell your business, you want to get financing, you want to do these things where or you have a partner is another one where you need some transparency about what's actually going on in the business and whatnot. People don't emphasize the books or they'll worry about it later. You miss out on the ability to work on those strategies you just mentioned because now it's everything's in the past. So instead of being able to say, hey, let's set up the books correctly and make sure that we're showing the true amount so that my business, when I want to retire in five years is worth something so that I can actually sell it for something. Sometimes it can really make the difference between resale value or tax strategy or financing availability.
Tiffany-Ann Bottcher:Sometimes you're closing off opportunities that you don't even know are there yet because you've made a decision to either just not keep track of things very well or trust someone. A lot of times people give bad tax advice based on, oh, I've done it like this for twenty years. You've got to do it like this. It's the only way. You have to be so mindful of who are you getting those pieces of information from.
Tiffany-Ann Bottcher:If a professional you're working with is not giving you any kind of strategy advice, if you're going to your accountant and all they're doing at the end of the year is taking the numbers that you've given them, put them in some boxes and say, you owe this amount, carry on, and there's no strategy or planning. A lot of times there's a better option out there and strategy is the difference between that long term wealth building strategy on either side of the border, whether you're a business owner, whether you're doing commercial real estate, strategy is that piece that can make such a difference long term.
Beau Eckstein:I a % agree with you. And and it's funny because people people don't they always try to, like, shortchange everything. They always wanna get the best deal. They'll never like and then like just talking about a bookkeeping service, right, and accounting, like you're so much better off paying for a knowledgeable person because what you'll save on the other side is gonna be so much, somebody that's proactive and says, hey, this is what you can do to pay less taxes legally, right? Like if you're not having strategic conversations and you're just giving your paperwork, you're probably not going to be maximizing your savings opportunities.
Beau Eckstein:So, like, I talk to people, even my brothers, he works in the financial service sector. Super smart guy. He's an has an economics degree. Pretty wealthy guy. He makes a lot of money on his as an employee of a large financial service company, but the guy does not understand or nor take advantage of any strategy.
Beau Eckstein:So, you know, somebody like him, if you make a million dollars in a year, you're paying probably about 400,000 to taxes. Right? And there's a lot of strategies he could be doing. Right? And that's why I'm so passionate about getting even people like him to owning some sort of business.
Beau Eckstein:Doesn't mean that he's actively working in it. But if he had an operating business, he could potentially offset some of that. And a lot of people don't get it and that's fine. Try to tell him he's an older brother, so he doesn't listen to me.
Tiffany-Ann Bottcher:Of course not. It's interesting because, so I think that when it comes to money, lending, finance, numbers, really. I feel like people love it or they a lot of people just shy away from it and they say, I don't really understand it. And some people say, I don't know enough, so I don't want to ask questions and seem silly or whatnot. And so in the end, it's just missed opportunities.
Tiffany-Ann Bottcher:It's that piece where you're like, Hey, if we just change this a little bit, we could make such a big difference. And if you start to really think about a little bit here and a little bit there over an extended period of time, that can be a huge difference in your retirement, your kids' futures. Terms of if you're going to do the work anyway, why not get the maximum benefit out of the work that you're doing? Being a business owner, you said at the beginning, it's not easy. There comes with highs and lows and some super stressful points and some, you know, people talk about, you know, the flexibility of the schedule.
Tiffany-Ann Bottcher:I always joke because I say, yeah, I'm flexible enough to work all the hours that I want. You know, it's like, sure, I don't work at specific times because I'd rather be at my kid's sports. But does that mean I'm going to be working later, getting back to an email later? Yes. There's so many perks and negatives to being a business owner, but if you're going to do that anyways, if that's the life that you've set out on, if that's the life you enjoy, you you may as well get the maximum benefit out of doing it.
Tiffany-Ann Bottcher:And it comes down to that strategy piece and being able to be in the right spots to take advantage of some of these pieces. People shy away from things they don't know. Things like buying up a competitor. People say, I don't have money for that. I can't buy another business right now.
Tiffany-Ann Bottcher:I don't have a bunch of money. They assume right out the gate that they need to have hundreds of thousands of dollars in the bank. And so being able to structure a deal, and maybe you talked about the business owners staying on. The current staff and business owners staying on is often so key to that transition going successfully and minimizing the loss of customers. Sometimes people come in and they say, Oh, I have some ideas.
Tiffany-Ann Bottcher:I got this new business and they want to change everything out the gate. But now you're like the new guy who owns the business, who's changed everything and you have a successful customer base and you may want to add to them, but you definitely don't want to lose them because if you're buying a business, ultimately, what have you purchased? You've purchased the team, the processes, the brand and the customer base. I mean, so if you start kind of being like, well, I don't want the customers and I don't want the team and I don't want, I mean, perhaps not the best investment overall.
Beau Eckstein:Yeah. And, you know, I also work a lot in the franchise space, so that's why people, like, from corporate world, they get into franchising because it's processes, systems, you're buying into a brand, whether it's a resale franchise or a startup. So we help people fund and find those type of opportunities. Sometimes they're they're good for people because they get coaches and they get processes. Because I do think there's a business for everybody, but I think some people would would stumble and struggle doing, a business acquisition of a mom and pop without good infrastructure.
Beau Eckstein:Right? Mhmm. And so maybe somebody with better operation skills. And also knowing the self. I just recently took an assessment.
Beau Eckstein:It's called the Colby. It was created by Kathy Colby, and and it's like I was a seven two eight three. And I understand now I knew what I was without knowing what a Colby was, but that just it showed me, look. It's okay to be how you are, but know that you're not gonna be the follow-up person. You're not gonna do these types of things.
Beau Eckstein:And what what Kathy Colby says is that's okay as long as you understand it and you get the right team members around. So that's going forward, I'm thinking more and more like that. Like, I'm not gonna do things I dislike doing because usually things I dislike doing, I'm not good at anyways.
Tiffany-Ann Bottcher:So true. There's always this balance of, Hey, I don't really like doing that because I'm uncomfortable and I need to be willing to show up and be uncomfortable. And I think when I first started my business, I was like, Oh, there was lots of things that made me uncomfortable showing up on camera, like reporting audit. These were things that I was like, I had never done. And I was like, Hey, don't want do them.
Tiffany-Ann Bottcher:And so part of me is like, Hey, actually now, one of my favorite things that I do. And so I'm like, Okay, showing up and being willing to be uncomfortable in order to stretch the mind and the comfort zone, very important. But then there's this flip side of like, hey, if we're doing things that we're not good at and we're just doing it because we're willing to, a lot of business owners are resourceful, they're gritty, of people. So they're like, Hey, I mean, if I got to do it, sure, do it. But there comes this point where it's doing the things that are actually preventing you from being successful.
Tiffany-Ann Bottcher:The fact that you're willing to show up and do it if you're not good at it and it's costing you money is actually the now we've gone the other way. It's like you have to be willing to be uncomfortable long enough to figure out if you perhaps can be good at something, even though you've never done it and change sucks. But once you've figured out, hey, okay, now it's like, let's take that a step further and say, am I the best person for the job? So it's the person who has endless amounts of sales that they could be working on, but instead they're trying to catch up on their books. And it's like, hey, but we could a bookkeeping company could do books in one eighteenth of the time that it's costing you.
Tiffany-Ann Bottcher:And if you took that time that you're wasting on that and went and served the customers that are calling you that you're not getting back to, could you get out five more quotes in that time? Could you close three more jobs? Could you perhaps make a better connection for a referral partner? And so those are the kinds of things where really kind of taking your time. Now, whether you have a $100 business or a $1,000,000,000 business, you're still twenty four hours in a day.
Tiffany-Ann Bottcher:And so deciding, hey, what is the best use of my time and where can I create the biggest impact? Where can I grow the business while staying in my lane? Because no one's good at everything.
Beau Eckstein:I agree 100%. And some of us, myself personally with my business, I don't want to have a lot of employees. So what I've done really well is I've I for a lot of, like, my marketing and things that's outsourced, I have four full time virtual team members in The Philippines. And so $1.01 American dollar is 58 pesos in The Philippines. So I'm able to, you know, run a team of four full time, and it cost me about $4,000, American per month.
Beau Eckstein:So you can be pretty strategic even if you're either bootstrapping or just don't want to grow a huge local team. So I really like, I've been working with virtual team members for like fifteen years and it gives me a competitive advantage amongst people in the space I'm in because I can be omnipresent in different marketing capacities. So my face and my messages is everywhere, right? And then it just attracts clients or candidates into my ecosystem. So every day now I don't do any outreach.
Beau Eckstein:It all comes inbound. So I've utilized VAs in a really cool way. And I just measure everything is if I hire this virtual team member, what's my either going to be my ROI or my ROT return on time. And right? Because a lot of it is too.
Beau Eckstein:It's like leveraging automation now with AI. And I I think if you compare AI with virtual team members, it's like a beautiful thing for small business owners. Right? I don't Mhmm. And and most of the big companies like Chase and all these places, they all have they have call centers in other countries and different things.
Beau Eckstein:So everybody's doing it. So it maybe you don't have the budget to do it, but you can, you know, you can you start with, like, small tasks like the marketing component for your business. Like if you're a home service type of business, service based business, they could be doing stuff like for the lead gen. That's where you're going get the quickest ROI in the beginning, I believe.
Tiffany-Ann Bottcher:Yeah, I absolutely agree. It's, At the end of the day, you have to protect your time. I have not, obviously I come from the business data metrics. So ROI all the time, ROI is like constant, but like ROT more important when you are a growing business, that return on time, because you only have so much time. And so often we see people wasting time on things that in that moment, sometimes you feel like it is so important.
Tiffany-Ann Bottcher:It's like the must do no matter what. And sometimes someone else from an outside view, it's like the expression, you're in the forest, you can't see the trees. And so it's taking that kind of look and saying like, and evaluating every single piece of, is this really moving the needle? Is this actually contributing? Is this perhaps something that I could train someone else on?
Tiffany-Ann Bottcher:And I think that the same confidence that gives people the like, I can be a business owner, also gives the same piece on the flip side. Always that kind of pros and cons is the like, oh, it has to be me. I have to do it. Someone needs it to be me. I have to be doing the outreach, the market, and those types of things.
Tiffany-Ann Bottcher:There are certain things that at this point have to be you. There are those AI avatars that can show up for you as video. I don't think we're there yet. Personally, I think if you're going to show them, it's got to be you. But there are other things that definitely people can be trained to do and create additional time.
Tiffany-Ann Bottcher:And some people say, I love my business. I don't want to work any less. And you know what? I'm of that same thought. I love and I work tons of hours and I automate and I do all sorts of things.
Tiffany-Ann Bottcher:And all I ever do with that time is I don't go sit on the couch with it. I take on something. I find a new opportunity. I dive into using that time to build out a new process or a new automation. It doesn't mean that, you know, you have to take that time and go on another vacation.
Tiffany-Ann Bottcher:You can use it whenever you want, But it's sometimes people say like, I don't mind working so much. I really like it. It's like, that's good. That's awesome that you love your business, but you could be doing more, more of the things that are your brain, your passion.
Beau Eckstein:Yeah. When you free up time, it allows you to think and work on the business. It's such a cliche kind of saying, but it's true. You work on the business. And when I have that time to do deep thinking, sometimes actually on treadmill, I come up with or the shower, you come up with really good thoughts.
Beau Eckstein:And those are the times that you make the big moves in your business as well. Like I'll come up with an idea and then I'll implement it. And so the more automations and team members you have, whether they're virtual or in person, now it lets you do what you're supposed to be good at, which is the visionary of the business. How are you going to drive it forward? And now what I've realized, I just come up with an idea and I'll implement it.
Beau Eckstein:And like, you know, of them work awesome, some of them don't, but overall you tweak it and that's how you grow because I'm always looking, really what I want to know is like every time, how do I leverage my per hour price? Meaning, you know, when I started in business, was $50 an hour, twenty five an hour. Then I went to $500 an hour. You know? How do you make it so every hour you spend, it's like it brings in $2.03, 4 thousand.
Beau Eckstein:Right? That's how you start making millions of dollars is collapsing time by leveraging. And I like this. I heard this the other day. When you have good team members too, it's the $10.80 10 rule.
Beau Eckstein:This is a good one. So, like, I'll come up with an idea now, which is, like, 10% of the time. It goes to my team. Hey. This is the vision.
Beau Eckstein:You guys do 80% of the getting the vision done, and then I come back at the the tail end at the 10% and, you know, tweak a few things, and it's done. So you have to to start think as a business owner, you have to start thinking of that. And also strategically going back to financing. Think about three, four years from now when you're growing and like how are so like right now for me, for my business, I have, you know, a couple hundred thousand dollars of available credit. Am I using it?
Beau Eckstein:No. But when there's an opportunity, I'm going to use it. I'm strategic.
Tiffany-Ann Bottcher:I love that. And so often I, you know, because I say to business owners, I'll say, you need to, you know, be looking at your funding and financing options when you don't really need them. Because when you desperate for cash, no one's going to lend you any money. People are like, Okay, well, let's look at the numbers. Let's look at the bank statements.
Tiffany-Ann Bottcher:So it's like if you're having a great year and you're doing that, those are the times where you can be getting some funding and perhaps you talked about business owners using their personal credit card from a record keeping standpoint, bookkeeping standpoint. Worst thing, I always cringe as soon as business owner says, yep, we use our personal card for everything. Getting those things set up, even when you don't really need them, because then you're set up so that when you do come across that perfect opportunity, you know that it's possible. You're not thinking like, Oh, I love this opportunity and I'd love to explore it, but I have no idea. It's not much different than deciding you're going to go and buy a house and first talking to the broker of some kind, making sure that you're in the neighborhood of being able to afford that mortgage.
Tiffany-Ann Bottcher:There's no point in getting the realtor and touring and following in love and then trying to get the funding at the end and then laughing at you and you saying, okay. Never mind. And and going back home. It's, there's business is no different.
Beau Eckstein:Yeah. Totally. Yeah. It's it's it's a it's a wonderful thing to there's something about entrepreneurship and, like, how it unites people. And I found this too because I used to do a lot of real estate investing, and I'd go to a lot of real estate investing meetups and things.
Beau Eckstein:There's a certain energy of entrepreneurship within the that, like, people are more ins it seems like they're more inspired. They're they're wired high energy. They're they're, like, they're really thinkers. A lot of times, they're they're unconventional in certain ways that they do their business, and that's what's gotten them to be more successful. And I'd like, I always go to different workshops.
Beau Eckstein:I'm always educating myself. Like, even though I don't know much about taxes, I'm still, like, learning, like, okay. Can I like, I the strategy so I can then bring it to, like, the my tax person and be like, hey? Can I do it this way? Like, I just bought this big truck for my business, and I wanna write it all off.
Beau Eckstein:Can I do it that off of this? And, like, because I know that and I just like, I'm always keeping myself in the right rooms. I had I had a friend of mine. I'll I'll kinda tell a story. He's a very successful real estate investor, and he buys, like, apartment complexes and and does syndications and raises money.
Beau Eckstein:But I remember, like, eight, nine years ago, we were at lunch, and he's like, yeah. I did about I made about 4,200,000.0 this year, but I had 5,400,000.0 of write off because I was doing taking the depreciation against the buildings. And there's that's like people get mad in the media because they hear about all these, you know, wealthy people. But, actually, that rules are for everybody. So it's just that most people don't know how to take advantage.
Beau Eckstein:Right? And so the so the wealthy get penalized because they know how to take advantage of it. So I would urge everybody to really get in the right rooms with the right people, listen to the right podcast, and, like, move that needle 1% every day because that's how you're gonna, like, okay. I'm ready to now I can get financing for a business. Now I can get working capital for my business.
Beau Eckstein:Now I know that I need to keep my personal credit good, and I need to get a business credit card that's not a personal credit card. Because one is it doesn't reflect in my credit report or whatever the scenarios are. And then you're like, now you start understanding tax strategy. And then every every day, you're getting smarter and smarter. And then when opportunities come, you're able to take advantage of that.
Beau Eckstein:And the one thing that's really moved the needle the most for me oh, wait. That was maybe your last question you were gonna ask me. But let me just give the nugget right now. Yeah.
Tiffany-Ann Bottcher:Go for it.
Beau Eckstein:Because because I've I've I've been talking about this a lot. The biggest change in my business, the biggest change in my business and in my mindset recently happened. I got very clear with my mission. I never really thought about it because I always thought mission statements were stupid, to be honest with you. I'm like, yeah.
Beau Eckstein:That's, like, cheesy. But I thought about it, and I first started my our initial mission statement was to help 10,000 aspiring entrepreneurs become successful business owners over the next ten years. Then I scratch it out, and I go, well, because I'm on podcast, people's podcast secures, and it's gonna be a hundred thousand. It's not me one on one maybe helping somebody, but it's me one to many helping people with some advice I've given on podcasts and or some encouragement. But I really just scratched it out and said, actually, I can do a million people.
Beau Eckstein:So my goal now, and now that I state this mission in public, you're committed to it. It shows the if you guys follow doctor Raubert Cialdini, I study some of his. He he wrote the book influence. Like, if you say something in public, you're just it's like, you're more likely that it's gonna happen because you're now committing to something. So, you know, I said now my mission is to help 1,000,000 aspiring entrepreneurs become successful business owners.
Beau Eckstein:So part of what I'm doing today is being on your show is I'm sharing a message. It may resonate with only one person, maybe a thousand, maybe, you know, 10,000. Who knows? Right? But that's part of my journey every day.
Beau Eckstein:So now that I'm clear on my mission, then money actually comes in my way, right? Because I'm helping more people. The more people you help, the more money you happen to make, and it's a beautiful thing. And if you're excited about doing this, which I'm excited about helping aspiring business owners and existing business owners expand the business, then you're probably doing something that best align with you from a business perspective.
Tiffany-Ann Bottcher:Absolutely. There's something that comes from kind of clarity on what you want to be doing. And I agree with you because I always thought of the mission statement more as the kind of, a lot of people use them as that fluffy marketing piece where it's like, I'm on a mission to do this, but it doesn't actually resonate with any of the true what's going on behind the scenes. And so it doesn't really drive any passion or whatever. Sure, you see it in corporate, people put it on the big wall in the office and whatnot, but it's usually written more from a perspective of kind of that motivate the team, touch on the clients.
Tiffany-Ann Bottcher:But when you really actually get clear, when your mission becomes something that fuels you, where it really is part of what you're doing, a powerful piece, but really for the person who's operating, it has nothing to do with the others. It becomes about, you know, this is why I do things. This is what drives my passion. And ultimately, business ownership from any angle is passion fueled. You can't go through being a business owner and not have some kind of passion about what you're doing because there's just too many ups and downs.
Tiffany-Ann Bottcher:People will be like, this is crazy. I'm going to stop if you're not passionate about what you're doing. So I think that the message here is super impactful and powerful. I truly, you're talking about being in the right rooms and whatnot. Have worked with, because we have so many clients that work with similar vendors.
Tiffany-Ann Bottcher:And so we have worked with a vendor multiple times and I've seen this play out where they've worked with two different business owners and where maybe our bookkeeping agency doing the books for both companies were sitting in on strategy meetings. And one business owner goes in with kind of the vibe of, Hey, I don't really know. Whatever you think. It's whatever. And another business owner goes in and maybe they've listened to a podcast or maybe they've read a book or seen something on social media strategy, a couple of things, they don't know how to implement it.
Tiffany-Ann Bottcher:They don't necessarily know all of the specifics, but they can say to the CPA, Hey, does this apply here? I saw this thing and it sounded like it could maybe work here. And almost vendor, the CPA in this case will say, this person's really taking that initiative. They want more strategy. They're taking this seriously.
Tiffany-Ann Bottcher:And the actual service that those two business owners are getting two very different things. One business owner is like, I'm showing up with the bare minimum. I don't really know anything and I don't really show an interest in knowing anything. And they're getting kind of bare minimum. Nothing's wrong with what they're getting.
Tiffany-Ann Bottcher:But the other, when you're showing up as a, I know enough to ask a couple of questions and whatnot, that in turn, they're getting a completely different conversation around strategy. They're perceived to be taking things more seriously. In the end, sometimes it's snowing enough just to ask a few questions and really kind of show up as a person taking that seriously can really have a different effect on what you're getting in return.
Beau Eckstein:Well, perfect example here in The States, if you bought a vehicle that's over a certain amount of pounds, gross weight, you can and you use it for your business at least 50% of the time, you can use that section 179 here. So, like, my tax preparer is not gonna ask me that. Like, they might not know I bought that vehicle for my business. Like, they might not know it was over the gross weight that it needs to be. So that's like it's super important.
Beau Eckstein:You know why? Because that bonus this year in The States is that I can write I believe write off the whole purchase price, which is, was $80 for a Ford Expedition. So that's an additional that's like, okay. Like, that's $80,000 that can offset some income. Like, if I didn't know that and my tax person didn't know that, then right?
Beau Eckstein:So, like, you can't so the one is get somebody who's gonna work with you that's gonna be dial like, meeting with you and, like, you have a relationship with. And because I like when I go to sit with my tax preparer, I'm like, hey. Can I do this? Can I do that? Why can't I do that?
Beau Eckstein:Right? And that's how I learn. And then I'm friends with a lot of CPAs and different things. And, like, and a lot of my people I roll with are way more successful than I am, so they're pretty smart when it comes to these these strategies. Those are the types of rooms you wanna get in because now I just got, like, like, not whenever it comes out to be 60 to $80,000 of tax write off that I can potentially offset some of the other earned income that I have, which is a substantial amount of tax savings.
Beau Eckstein:And then understanding, I own a I'm a part owner of a of a business in the in the Midwest here, and I own well, actually, my wife owns 19% of it, and it's a real estate business. So we're able to here, we could do accelerate the depreciation. So I like, last year, I got a extra hundred and $75,000 carryover. But if people didn't know this, they would just straight line depreciate it over whatever the 27 or whatever the rules are here. And they wouldn't take advantage of being able to get that full write off if you need it right now, which I did.
Beau Eckstein:I do this year. So although I don't I'm I would never you know, I'm not a like, even though I'm in the lending business and I I have a franchise consulting company where we we help knowing enough and getting the right person that's an expert and then being intelligent enough to ask the right questions because they're not gonna know everything unless you portray it. And then also most of us, you know, entrepreneurs, we got a million things going on. So that's what I encourage everybody to understand. That's going back to the triangle method, which is tax strategy, because that's usually a third of where your money goes.
Beau Eckstein:Right? And a lot of people forget that and that's important. That's why we talk about keeping good books, understanding personal credit, business credit, financing, creative financing, seller financing, right? When you're acquiring businesses, how to be a good deal engineer, right? And that's constructing deals.
Beau Eckstein:You don't necessarily need money when you close deals. People do it all the time without closing the deals. Matter of fact, the deal that my wife's not part owner of or is part owner of, the the main borrower has none of his own money in the deal. Now he signed a guarantee for the loan and did all that stuff. But there's a creative finance deal.
Beau Eckstein:There's a lot of ways to be creative. So even if you're watching this right now and you're an aspiring entrepreneur, there's a lot of ways to get in. You can bootstrap a business. You can get in, partial buyouts. You can get a gift for your down payment or your equity injection.
Beau Eckstein:You can do a, like, a lot of ways to get in with low equity. But the first thing is, like, understand your credit score, get your finances in order, because then you're ready to play ball. Because I see it time and time again that people don't understand personal credit. Everything derives off of that initially. So even when I get a business credit card, they're pulling my personal credit and that's how they're determining.
Beau Eckstein:Even on a startup business now, because my credit's good, I go in and they'll give me $1,020,000 credit line off the bat even with no revenue on a new venture.
Tiffany-Ann Bottcher:Yes. Which really can be the difference between being able to really go and build out that business and having to take a very timid approach. Sometimes that line of credit, credit card can really help get things off the ground and get some cash flow going. So thank you so much for all of that valuable input. I think that it's so key and a lot of people just say, Hey, I don't want to get any funding for my business.
Tiffany-Ann Bottcher:I don't need it right now. I'm fine. I haven't needed it so far. And I think that that is just such a kind of misguided approach and it's always worth exploring and really looking at what opportunities they could potentially be realizing. So where do you like to hang out online?
Tiffany-Ann Bottcher:Where can people get more information about this? You've given some great pieces here. So where can where can people connect and learn more?
Beau Eckstein:Sure. Usually, if, you know, wanna talk, I I let people just schedule a call on my calendar, at least. I'm gonna do it for another few months. It's getting a little busy now. Like, that's kind of not the smartest thing to do, but it's just easier.
Beau Eckstein:You can go to book with Beau, b e a u, Com, and I can help people. I can't I don't do much financing in Canada, obviously, but if you're watching in The States, that's my forte, SBA financing and and financing businesses in The States. But I do work with a lot of Canadians that buy franchises as far as helping them find different franchises. So if if you're an avatar there or just wanna say hi, I'm happy to say hi too. You can go to bookwithbo, b e a u Com and schedule a call.
Tiffany-Ann Bottcher:Fantastic. Yeah. We operate on both sides of the border and some of the things are very different, obviously specific tech strategies and whatnot, but there is so much that crosses over that, and sometimes it's finding the equivalent or deciding. And sometimes there is and sometimes there isn't. But I think it's always valuable and knowledge is power matter where it's for.
Beau Eckstein:Yeah. And I I I'm starting to work with a lot more Canadians too. And they're like, some of them wanna come here on an E2 visa. So getting into a franchise makes a lot of sense. So I need to learn a little bit more because I do deal with a lot of people in Canada.
Beau Eckstein:It's just like, or somebody lives on the border and they wanna operate a business in whatever the, you border states are. There's a lot of them. But like, so like understanding that dynamic, but it's great that you work with both because you're gonna have people that, you know, operate businesses in Canada, operate in The States and that sets you apart from many people out there.
Tiffany-Ann Bottcher:Well, thank you so much for being here, Bo. I think so many valuable pieces and like we've touched on, just taking some of those pieces and putting them in the memory bank and even knowing that they're possible, Maybe they're not something that you need right at this moment, but, you know, a lot of times as businesses shift that there's, there's room for all of these things. So thank you so much.
Beau Eckstein:Thank you. It was fun.
Tiffany-Ann Bottcher:We're all out of time for today, but the fun doesn't stop here. Make sure to subscribe to Service Based Business Society podcast on your preferred podcast app. If you're hanging out over on YouTube, search for Tiffany Ann Bottcher. Your likes, shares, and reviews really do help the show. Until next time, have a great week.
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