Systems For Investors To Save Time With Sylvia Inks

Sylvia, Thank you for joining us today. Thank you for making me well today. I’m hoping that our listeners can learn some business ownership and entrepreneurship skills as they relate to running a real estate investment portfolio for our listeners out there who don’t know about you and what you do.

Can you tell us a bit about yourself and your background and how you help people become better entrepreneurs in business? 

Yes. So I’m a business strategist, a finance expert, and a speaker. I love helping small business owners know how to make sense of their numbers so they know what to do differently and also build multiple profitable income streams.

I see so many small business owners who are really good at what they do, but they just have a hard time keeping the money that they’ve earned and scaling their businesses. 

Nice. Nice. And yeah, today we have a few topics that we want to cover here. First off, let’s kick it off by talking about expensive financial mistakes to avoid as a business owner.

The first rule of investing right is: don’t lose money. And the second rule is referred to as rule number one, in case you’re ever confused. So let’s talk about that. Let’s dig into the expensive financial mistakes that entrepreneurs can make. I love the data and numbers-driven approach that you’re taking here.

So tell us all about it. 

Yes, so the biggest one that I see so many small business owners make, even those who have been in business for a few years, is co-mingling their business and personal money. And what do I mean by that? It’s putting all the money coming in from your business into your same personal bank account. Check your personal checking account.

All of a sudden, all your personal money and your business money are all commingled. Then you have no idea how much the business has made or how much the business is spending. And it also translates into an IRS nightmare because, all of a sudden, if the IRS needs to audit your business, they’re going to have to go through all your business and all your personal transactions.

And that’s very costly, especially if your CPA is doing your taxes and has to do things on your behalf. They’re going to be charging you per hour to go through all those transactions. 

So oftentimes in real estate, when we hear folks mention that in particular, they’re talking about piercing, the corporate veil, liability and all of that, and it sounds like the angle that you’re coming at it from is more managing cash flows, knowing how much you’re spending and really knowing how much you’re making. Is that right? Am I getting that right? 

Yeah, It’s two-fold but yes, absolutely. You’re going to lose money, right? If you co-mingle, you’re going to accidentally spend either the business is going to accidentally spend more money than it should.

I had an example where I had a colleague who was running her business out of her personal family joint account. And she didn’t think anything more of it because it was a side hustle. And all of a sudden, she didn’t realize that when she signed up for some coaching program, she actually spent her daughter’s dance money, the money that was set aside for dance money, as well as their upcoming vacation.

So all of a sudden, like you’re there, they can create resentment in the family. So if you’re overspending or over-investing in your business, you’re not spending the money that the business earned. Then your family is going to suffer. They’re not going to have them. You’re not going to have the money for the goals that you set aside for your family.

So, in that case, is the answer as simple as walking into your local bank branch and saying, “Hey, I need a business account, and it’s fun to get”? Is that really what it comes down to? 

Yes, it’s just that simple. go to a local bank. I’ll always love community banks over big national banks.

Because a lot of times, the big national banks tend to have maintenance fees. So you have to keep a certain amount, or I’ve had clients that didn’t realize they were getting charged $25 a month for their bank accounts when they could just go to a local branch and get a free checking account. Yes, absolutely.

I just go to our local bank and open a separate business bank account. You’ll want to attach it to your ER, the business EIN number. So make sure it’s not attached to your personal social security number. So again, make sure the liability is on the business side, but do an EIN number. And actually, I also recommend people have more than one business bank account.

We’ll get into why that actually goes into mistakes number two and three but definitely have at least a business bank account separate from your personal bank account. 

Awesome. All right. On that note, let’s move on to numbers two and three. I like that we found a problem and there’s a relatively straightforward and simple solution to it, but it is a mistake that a lot of folks make.

So let’s move on to the next one. 

Yep. So, mistake number two. I see people don’t have an emergency fund for their business. So everyone here is so much about, oh, you’ve got to keep three to six months of emergency for your personal life, but people forget that you should have one for your business.

And I’ve had a few folks tell me, “Oh yeah, I’ve got an emergency fund.” I’m like, “Okay, great.” Where, where is it? And then come to find out, they’re just saying that their personal bank account is there an emergency fund? I’m like, “No.” If your personal life and your business both have an emergency at the same time, who gets to use the money?

So your business should have its own business or emergency fund. 

So, as much as possible, treat it as a separate entity from yourself, so that if it, or this entity, has a problem, the entity must be able to deal with the problem. Yep, absolutely. So, that equates to having more cash in the bank, just in multiple places as well, right?

Yes! So, once again, an emergency. So if, for some reason, you have a tenant that’s not paying rent, right? Or something happens like you have money set aside, but otherwise, you don’t want to have to dip into the family fund and say, “Oops, we can’t pay for Susie’s dance lesson or Bobby’s soccer lessons because we have a tenant that can’t pay.”

So again, treat it as a completely separate entity from your personal life. 

Okay, nice. Nice. I like that. and then moving on to number three. What is the figure?

three? Number three is having a separate bank account for your taxes. So I see a lot of times when people will get that big check or their rent check, and they think that’s all the money that they can spend all that money.

But really, you’ve got to make sure that when your IRS tax bill comes, and whether it’s your property taxes or your income taxes, you’ve got money. Set aside to pay the tax bill. because you can’t put that on credit. If you don’t want to, you’ll get penalized. So just go ahead and make sure you factor in, talk to your CPA, and make sure that you know how much you should be set aside.

So that you’ve got the cash ready on hand. When you get the tax bill, you’ve got to pay it off. 

So, in the end, It comes a lot down to, in that case, the planning, right? Hey, this is what the bill is probably going to be for this year. We can set that money aside, maybe over the course of the year, really, whatever works for us in our individual case.

And then when the time comes to pay up, if it’s a property tax bill or whatever, it’s ready to go. And it’s not a problem. It’s not a big surprise or crunch. 

Yeah, absolutely. That way, you can plan for it. And you’re not having to scramble and figure out where to pull the cash from. 

Yeah, okay, okay,

Interesting. So are there any others in the list that we need to go through of mistakes that folks are making? 

Another big one is probably just trying to do everything. If you’re trying to grow a business or scale a business if you’re trying to do it all yourself like you are the doer and the leader of the company, something’s going to give, whether it’s your personal life or your health or your sleep, something’s going to fail.

So figure out what the tasks are that you’re consistently doing, like a recurring task that you’re always doing for your business, and figure it out, price it out, and figure it out. Is this something I could pay someone $10.15 an hour to do and gain back that time for whatever you need, whether it’s a personal life, family, exercise, or sleep?

Because I will say, the biggest thing that I hear from small business owners is that they don’t have enough time there. They’re sacrificing sleep in order to run their businesses. 

That one really rings true for me. That’s a mistake that I made for a long time as I was doing a lot of these tasks that had varying degrees of difficulty.

But I can get it done. I can make the time. I can make it happen. But if you’re working on those tasks, then you can’t be thinking about higher-level activities to grow the business and really, move upward, whatever your business is. And at least in my case, hiring people to handle those things has really been an investment in the business.

So it does impact your cash flows. It helps you really get to the next step in your business, whatever that is. But it’s tough at the beginning.

It can be tough. And that’s where I always encourage people. Keep a list of the tasks that you’re doing for your business. What are the things that you enjoy doing versus what are the things that you don’t like doing?

And it takes you 10 times as long to figure out what your yield per hour is. That’s another exercise I have. I like to give clients what to do, which is to figure out what’s Can you earn more in an hour than you paid for this task? So if you could earn $150 an hour, it’s like paying somebody $15 to do a task. It’s like a no-brainer, right?

That’s because you’ve got an immediate ROI. If you could just spend that one hour on money-generating activities. 

So we’ve seen it over and over again. and. I dunno, over a decade, right? With the growth of the virtual assistant industry, I have a number of assistants who work in my business and do listen to this show throughout the course of doing their job.

Are you of the mind that virtual assistants can be used for virtually any business? We hear that a lot. But sometimes having someone physically present is an advantage. So what are your thoughts about it? 

I love having my virtual assistant. She’s given me back.

Gosh, I would say over 800 hours a year easily. and allowed me to focus on things like building an online course for my business and earning that. I made so much more money by having her do the tasks that I didn’t need to do. Those were administrative tasks. So definitely, there are ways that you could hire a virtual assistant to do it, whether it’s follow-up emails or even just emails.

I have my client and may be able to send emails and reminders to my client. So something. I didn’t need to physically be there to send the email. She’s got the notes. She can send it or she can say, “Hey, here’s a reminder that you’re meeting with Sylvia in two days.” Here are the action items that you were supposed to get done.

These are super simple tasks that somebody doesn’t need to be present for. We meet virtually once a week on Zoom. They create their presence and relationship there. And then, sometimes, honestly, you can hire a virtual assistant to help with personal tasks. Because if it’s, if you’re free if you need to free up time that you would normally need to do for a task in your personal life but you need to spend that hour in your business, it probably makes sense to hire, have your VA do that research so that you don’t need it.

So sometimes I will get into a crunch where I need to do some research. You know, it takes three hours to do some research on my personal life, and I don’t need to do it. I could work in my business for three hours and make money. So I’ll have her do some of those tasks as well. 

Interesting. So that one, in particular, is something that I’ve personally the personal tasks angle.