Written content is a transcription of the video below:
Hey, what's up everybody? My name's Rob. I own Feedback Wrench, we do websites and advertising for construction and home services, businesses and real estate, and a couple other niches. But I want to talk about four things that you can do for your seal coating company that will be absolutely game changing. Now, just a quick pretext here so that you can understand where I'm coming from. So I've been doing Feedback Wrench where we do websites and advertising and SEO for four years now and before that I owned Nuance Financial Tax and Accounting. Now I do videos in the car because I want to create while I'm in the car, I get some of my best thinking going on here, so that's where I do it. But before I had this company, I started Nuance Financial Tax and Accounting out of Lakeville, Minnesota here and basically we served as a proactive tax planner.
I have my series 7, series 66 life and health insurance and investing. I was a financial planner, but I'm a tax planner and a tax strategist. Now I'm not a CPA, my business partner was, but long story short, I know how to help businesses in most core ways. In ways to maximize your wealth, mitigate your taxes and grow your business and that's what gets me excited. So if you have a seal coating company, whether you're a small ma and pa shop or you're a little bit bigger franchise, I'm going to share with you, four things that will absolutely transform your finances, transform your growth and your business and they're going to be super practical. Give us a call, if you need a website and you want to do proactive advertising, if you want to make sure that of all the search volume you have for parking lot seal coating, which is huge, seal coating companies near me, you want to make hay while the season is right, give us a call.
And I promise you just go check out some of my customer's sites and check out our testimonials you'll see that we will fill your sales funnel and we will help you to totally maximize your staff and maximize your capacity. But here are four things that will absolutely transform your business.
Maximize and Mitigate Your Taxes
Now the first one is that I want you to maximize and mitigate your taxes, so here's how you do that. If you're making more than about $60,000 in net profit, which means you're not a very big company, but as long as you're north of about $60,000, I want you to go find a good proactive tax planner or look into becoming an S corp. Now the bottom line of the S corp is that right now, before you become an S corp, you take all of your net income or all of your profits and those profits are subject to first, you have what's called your self employment tax, right? So you're going to pay up to 15.3% on the first $125,000 of your income, 15.3%.
Now that's social security and Medicare, right? And then after that amount that's the social security limit of $125 or $128 or whatever and then after that, you only owe Medicare. But you do the math on that, that's the first tax that you owe on everything and that's huge. So 100% of that income up to the social security limit is subject to that 15.3 and then after that it's only the Medicare tax, but that's a huge amount, so that's when you're taxed and you have a schedule C. So when you're just a simple LLC and you haven't filed to be a corporation, an S corporation. Now, if you were to file to become an S corporation, what you would do is you would take that net profit and what you'd actually do, and I'm simplifying this, there's much more nuance to it, but long story short, you take, let's just say you made $100,000 and instead of just taking all that on a schedule C you would pay yourself a salary and then you'd split the other part into an owner's dividend or a distribution.
And just to keep things simple, you would declare what's called a reasonable salary. And maybe you do the math and find out that, hey, my reasonable salary would actually be, maybe $50,000, if I were to replace the work I do in this business. You have to talk to a tax professional, you have to get some insight on this. So let's just say originally you had $100,000 all of it subject to 15.3%, now you switch it over and you say, "I take a $50,000 salary and maybe a $50,000 owner's distribution or dividend." That dividend part is not subject to the self employment tax. So right off the bat there you save $7,600 bucks. You save big time money when you start using an S corp. Now, when you become an S corp there's a couple of things you've got to watch out for.
Watch my other videos on that, but I'm telling you if you're starting to make profits, most of you guys, you go out you start hustling, you grind, you hustle, you grind, you hustle, you grind and the first couple of years, you're just trying to break even. But as soon as you start making money, that means your operations are more complex and your busier and life gets a little bit harder, but that's when it's incredibly important to start doing this proactive tax planning, okay? So that's a free one. I just want you to know, you need to be working with a tax planner or with somebody that will help you do this S corp thing and it's not perfect for everybody. Some of the trade offs are you have a little bit more bureaucracy, you have to run a payroll for yourself. Now the dirty little secret is, there are three ways to do this.
One, if you're doing your own books, QuickBooks online, along with QuickBooks Payroll or Intuit Payroll make life pretty easy. One of the functions of a payroll is that you're going to be paying in your payroll taxes that you actually owe proactively, and that's filing your paperwork. So I have QuickBooks online, I have Intuit Payments or Intuit Payroll and then Intuit Payments, so I bill my customers through Intuit products and QuickBooks online, and then I run our payroll through Intuit Payroll. And what's beautiful is you could just say, "Hey, every week I want $500 to go towards my salary," and that's also where you can pay in your taxes because the whole goal would be, you don't want to overpay so you get a tax return and you don't want to underpay so you get dinged, you need to make sure you're paying in your estimated amount.
So the payroll is the good way to do that, and you can do it yourself. Number two, I've got a link in the description, there's some services out there that you can use. Xendoo is a one stop shop for bookkeeping, accounting, and payroll, they can help you out. I get a little spiff if you sign up for that, but they're an outsourced accountant team that's really good or you can work with a good outsourced accountant that does proactive tax planning. A friend of mine would be Asnanicpa.com, and they're out of Hayward, California. Good, humble people that know how to help, that's a good firm, I would definitely check them out. And I tell you what, mitigating your taxes like that, can drastically change your tax situation. So that's point number one, look at being an S corp and consider whether or not you can save a ton in taxes.
Consider Retirement Planning
Now, number two is if it's just you and your family or a couple of people, or even if you have employees, you should really look at retirement plans and the reason why is because you get to use pre-tax dollars at a big rate as an employer, okay? Now, if you have a bunch of employees, it's really hard to set it up where you would get way more benefits in a retirement plan than what your employees would do. However, if you have no statutory employees, so that means anybody that's not a family member or an officer of your corporation, I would go to Vanguard and what I would do is I would look at their SEP IRAs or their solo 401k plans. Now the solo 401k is only available to business owners, S corps and LLC's that do not have statutory employees, but it's a simplified 401k or you could do a set buyer rate and I'll just keep this simple and keep moving on to three and four, okay?
What you get to do is you get to do the employer contribution to yourself. So remember when you worked for a company and you could put up to $18,000 into a 401k and the employer would do some sort of match? Well, that employer match you get to do and it's not just that you match for up to 4% you can do up to 25% of net income and there's some different rules depending on what you do. But the bottom line is the corporation can take pretax, so it's essentially before self employment tax, before state, before federal and give it to you, so it's about the most efficient. You're buying $100 worth of investment for $.60, $.70 cents on the dollar or $60 or $70. So you get to use these pretax dollars to benefit yourself big time. If you're an individual business owner or maybe it's just you, your brother and your family doing it, look at that.
But even if you do have employees, maybe look at the set buyer rate and what you can do is you can provide a percentage as a bonus at the end of the year to people and do it with pretax dollars, it's just super efficient, or you could connect with there's a guy named Mark Booth out of the twin cities here that I really like. Mark Booth is part of a group that knows how to concoct retirement plans and retirement plans can be a tool that you use to keep people around. So maybe you do these profit shares and they have a vesting schedule. Not only can you equip 401k plans with a vesting schedule, but you can equip them to have special plans for your officers, which you took all the risks. So if you can find some ways to do a special pension plans or whatever it is, it's worth looking at. So Mark Booth out of Minneapolis here, he's worth giving a call. I'd recommend checking him out.
Grow Your Business with Google Reviews
Number three, what I would do is you have got to grow your business. There's one thing you can do that will impact you more than anything else and that is getting more Google reviews than your competitors, okay? Just so you know, parking lot seal coating and residential seal coating and asphalt repair, line striping all of your services that most asphalt repair or seal coating companies do are part of Google Small Business, or the GMB, Google My Business that trigger a local snippet, a local three pack, which means it basically uses two things to determine who's going to pop up, right? If I'm sitting in Elko New Market here in Minneapolis, and I searched seal coating near me, it's going to take proximity and then your overall SEO indicators, which is super big and super deep, your authoritativeness, your expertise and your trustworthiness, the rating your website gets along with your Google My Business, but here's the dirty little secret. If you have a good thought out site and you build up some backlinks, and if you have more reviews than your competitors, it's going to be huge.
Now you already know this, our customers, we set up an automated drip system where basically you go to your website and you can just put in customer's names or we create an automation out of your QuickBooks, or a variety of different automations, where as soon as you tell us, you give us their name, we do a gentle follow up through texting. We use an SMS (text) system that's not spammy and an email system. We build this automation so that people are getting two things. One they're getting "rate us on a scale of one to five". One, not meeting expectations, three, meeting expectations, five, exceeding expectations - and that's on one to three different categories and then we follow up with "would you recommend us"?
If they would recommend you, then we slap them into another little campaign that's going to ask them for a series of reviews. One, your Google My Business is critical, okay? Google My Business is huge. Number two, if you work with a firm like us, or you can also do this, but you'll want to make sure you set up your Bing Places (Microsoft Bing Places). And Microsoft Bing right now in 2020 uses Facebook reviews as their reviews. So I would also build up your Facebook reviews. I've neglected that at our company, because up to about a year ago, Facebook and Google weren't talking much and I was pretty biased towards Google. Like I said, you should get Google reviews. So the third thing that you should do is focus on getting reviews, focus on Google My Business reviews, and then focus on Facebook reviews, but make sure you set up that Bing Places account as well.
And then what you'll want to do is if there are other platforms you'll want to grow those as well. So it could be Thumbtack, Home Advisor. I don't recommend using them for leads, but I recommend using them as a review platform, right? So the deal is, is that's number three, get reviews, get more reviews than everybody else set up a system, call us, we'll help you. And we can set up a website. I'd even add onto that is we can build a website that has your own reviews as well. So you have a testimonial/review that pulls from all of those different areas, but also houses them yourself so that you have more control over your review platforms. So we give you a tool to ask for reviews, we give you a tool for people to actually give you feedback of how things are going and get real insight. Plus we'll have them housed on your website so that you can actually get those reviews.
Paid Advertising - Google and Bing
So here's the last one. If you get more reviews than everybody else, and if you're running a good shop, call us, we'll help you with this, but Google ads and Bing ads. So search based advertisements that attach what's called your location extension. What that does is it allows you to use your Google reviews and your Bing reviews or your Facebook reviews to get in front of people. Now, what you'll want to do is set up Google ads in your area. You'll want to go after your core commercial keywords that actually trigger the local map pack and if you win on that setup, your Google reviews will show. So if you have more reviews than everybody else, most people shop similarly, you can really get your reviews in front of people, but Google ads just commit to a spend and there's a way to optimize ads so that they are superior to everybody else's.
And if you have a good landing page experience with optimized landing pages, our websites, we all create a landing pages so that you can be hyper local and go after cities, in cities so that you get what's called a high quality scored, an ad rank score and then we set up all your conversions so that they work really well. And all that means is if you're going to run ads, you want to run them for conversions, you want to have a high optimized score so that Google understands that you are a great solution to that search query. And when it does that, it gives you a higher score, which lowers your bid. Long story short, you start doing the homework and you'll find out that in peak seasons and even non-peak seasons, not winter, but you'll see that there's 1,400, 2,500, 5,500 searches a month going on and boy, you can make it rain.
This way you can make sure that you are filling your capacity to its fullest by using Google ads. You spend $1,000 bucks in a month on Google ads and it will pay off big time.
So those are the four things, look at being an S corp, look at benefit plans, get more reviews on Bing and Google and then use paid advertising to get those in front of people. Guys, head to our site, feedbackwrench.com. We'd love the opportunity to serve you. God bless you and I hope things go well for your business. Take care.