Author: Odette Fernandez

Profit First: Transform your Business into a Money-Making Machine

Posted on by Odette Fernandez

Profit First: Transform your Business from a Cash-Eating Monster to a Money-Making Machine

Managing finances is a challenge. Often, being a successful and profitable business owner takes a lot more than being great at making your product or providing your service. You need to be good at the business side of things.

The most crucial step for any business owner is education.

For a healthy financial future, you need to learn and understand the necessary skills needed to run a small business. 

I just finished reading Profit First, by Mike Michalowicz. It was everything the reviews said and more. If you are a small business owner or want to manage your finances more healthily, you want to learn about this system.

 

Profit First Author
Michael Michalowicz is an American author, entrepreneur, and lecturer. He is the author of seven business books including Fix This Next, Clockwork, Profit First, Surge, Profit First, The Pumpkin Plan and The Toilet Paper Entrepreneur.

Why Profit First?

At least 50% of businesses fail in the first five years due to a lack of profitability. Many continue struggling, burning cash, and accumulating debt before collapsing. Entrepreneurs start a company to do what they love and gain financial freedom. They work hard, invest their life savings, but, in the end, they still don’t make money.

Most businesses use the traditional formula (Sales – Expenses = Profit).

Profit First is a cash-management system and it proposes this new accounting formula: Sales – Profit = Expenses. 

The solution is so profoundly simple and so genius: Take your profit first!

Make profit your focus, not an afterthought.

James Clear summarized the book for us. If you don’t have time to read more, read this.

“Before you pay your expenses, take your profit first. Run your business based on what you can afford to do today, not what you hope to be able to afford someday. When profit comes first, it is the focus, and it is never forgotten.”

Summary

Here, some core ideas from the book, according to James Clear.

  • Profit First Author“Revenue is vanity, profit is sanity, and cash is king.”
  • Money is the foundation. Without enough money, we cannot take our message, our products, or our services worldwide. Without enough money, we are slaves to the businesses we launched.
  • Growth is only half the equation. It is an important half, but still only half.
  • Remember, your business is supposed to serve you; you are not in service to your business!
  • Profit is not an event. It is not something that happens at year-end or at the end of your five-year plan or someday. It isn’t even something that waits until tomorrow. Profit must happen now and always. It must be baked into your business. Every day, every transaction, every moment. 
  • Profitability isn’t an event. Profit is a habit.
  • Take profit first. You can’t grow out of your profit problem. You need to fix profit first, then expand.
  • You must figure out the things that make a profit and dump the things that don’t.
  • Sustained profitability depends on efficiency.

The System

Use small plates

 When you put all your money in one account, you feel wealthier and spend more. Reduce the amount of available cash, so you’re forced to be smarter and more innovative with how you use each cent.

Change your meal sequence.

Never pay bills first. Allocate your business income into sub-accounts in this sequence: Income => Profit => Owners’ Pay => Tax => Operating Expenses (Opex). 

  • If you get a $1,000 deposit, starting today, transfer $10 into your PROFIT account. If you could run your business off $1,000, you can indeed run it off $990. If you get $20,000 in deposits, you transfer $200 into your PROFIT account. If you can run your business off $20,000, you absolutely can run it off $19,800. You’ll never miss that 1 percent. It is a low bar. But something magical will happen. You will start proving the system to yourself. You won’t get rich overnight this way, but you will get a wealth of confidence.
  • When less money is available to run your business, you will find ways to get the same or better results with less. By taking your profit first, you will be forced to think smarter and innovate more.
  • Also, eliminate unnecessary expenses. It will bring more health to your business than you ever imagined.

Remove temptations

It’s human nature to seek convenience. Once you’ve taken your profit, remove temptation so you won’t use it for your business or yourself.

Mike suggests opening two bank accounts at a different bank.

Enforce a Rythm

Do your allocations and payables twice a month. Mike suggests doing this task, specifically, on the tenth and the twenty-fifth.

A few extra tips to stay on top of your finances.

  • Pay yourself first.
  • Have a good billing strategy.
  • Spread out tax payments.
  • Monitor your books.
  • Focus on expenditures, but also ROI.

Final words

If you apply this approach to a new business, you can make profits from day one. Set up good financial habits from the beginning and establish internal financial systems to protect your business’s financial health. 

If you’ve been losing money for years and can’t even pay yourself a salary, then it’s time to transform your business.

It is also a lifestyle. 10/10 I would recommend it for a healthy financial life.

Seriously. Buy This Book. Read this book. Implement this book. You will thank us later.

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Utility Avenue’s Spotlight focuses on promoting inspiring businesses every week. For a chance to be interviewed, contact us at support@utilityavenue.com with the subject Spotlight

Spotlight: Miraya Arts

Posted on by Odette Fernandez

This week, our Utility Avenue’s Spotlight spotlights Pooja Doshi, founder, and owner of Miraya Arts. She wants to promote globally, Indian art and craft and create an ecosystem for our Indian craftsmen. Her incredible work supports many local craftsmen in India

Today, we share her own words about her journey. Without further ado.

Miraya Arts

Pooja Doshi, founder and owner of Miraya Arts

I am a commerce graduate and post that did a course in designing from NIFT, Delhi. I am blessed with a loving and supporting family. My venture Miraya Arts is an outcome of my interest in art and creativity.

“I believe that when Your Passion becomes your profession, it’s a blessing and a dream come true!”

This is true for my venture, Miraya Arts which is a bespoke gifts and gift packaging solutions provider.

My Venture is five years old and completely running on self-funding. To date, we have successfully delivered products and services to more than 800 clients globally. It feels proud to have more than 400 products in my collection and my work supports close to 25 skilled artisans who make our products.

I have a vision to curate and deliver innovative and quality gifts for our clients and organize the gifting sector. Through my work, I aim to promote globally, Indian art and craft and create an ecosystem for our Indian craftsmen.

I am an active member of organizations like the Ficci Flo-Pune chapter and other groups that help in women empowerment and to support Indian art and craft. It was a pleasure to be an active volunteer for Flo Pune Haat 2019 organized by Ficci Flo-Pune Chapter where we brought together 130 Indian craftsmen, artisans, Self-help groups, and women entrepreneurs on one platform to exhibit and promote their talent and skills.

Achievements

I won the Rising Star Award in November, 2017 in the Entrepreneurship Category by We are the city Organization (U.K based) which was organized on the National level.

I was also nominated for Nari Shakti Awards, 2018 in the Business and Entrepreneurship category.

My venture Miraya Arts won the Burgundy Achiever Award at the Digital Women Awards 2018 organized by She the People.TV.

Miraya Arts has been selected as one of the finalists in the Best Wedding Favors Category in Wedding Vows Awards 2019, Asia largest wedding related event.

Awarded as one of the 51 most influential women in Pune, 2019 in the Entrepreneurs category by Brijbhoomi Foundation.

Awarded The Digital Women Awards 2019 (Ecommerce category) organized by SheThePeople.TV and Google.

Featured in Flo National Compendium of 100 successful women in MSME sector, supported by ministry of MSME, Govt of India

Write-ups

Various write-ups published on different platforms for Miraya Arts and my entrepreneurial journey:

https://www.facebook.com/narishaktiawards/posts/876151709234001

https://www.efcink.com/poojas-dreams-became-reality-dared-believe/

http://3.wearethecity.in/pooja-doshi-miraya-arts/

An interview on my Entrepreneurship journey has been featured by Woman TV IN 2018.

 

Miraya Arts’ Contact Info

www.mirayaarts.in

Facebook.com/mirayaarts

Instagram.com/mirayaarts

https://www.youtube.com/channel/UCO9tU16qZo24mHeaSaul9ow

Email:mirayaarts@gmail.com

Call/Whatsapp:+919920181895

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Utility Avenue’s Spotlight focuses on promoting inspiring businesses every week. For a chance to be interviewed, contact us at support@utilityavenue.com with the subject Spotlight.

Leadership in Small Businesses

Posted on by Odette Fernandez

Leadership in small businesses.

As an entrepreneur and small business owner, you need to be a good leader.

But, who’s a leader?

Norge Matos once said, “When everybody is fainting, the leader is the one that keeps trying harder, even when he is also fainting.”

First, let’s define what a leader is:

A real leader

  • is a team player. 
  • is collaborative, inclusive, and team-oriented.
  • exercises leadership wherever he or she is. 
  • is always learning new skills.
  • is open to feedback and criticism and uses it to grow.
  • demonstrates a firm understanding of client needs.
  • has a clear understanding of what needs to be done and why.
  • speaks truthfully and accurately — rather than emotionally.
  • takes action and makes recommendations for the good of the organization.
  • has a vision and thinks globally and strategically.
  • motivates people to see the bigger picture and be part of something bigger than themselves.
  • will inspire action by asking the right questions.
  • cares about people and adds value to those around him/her.
  • will solve short-term problems based on its long-term goals, but values and goals are paramount.

A leader is defined by capabilities and not by position. Everyone knows what leadership is, but few people can articulate what it truly means. Leadership is not an administrative position. 

“What’s the most important leadership characteristic of a small business owner?”

I asked this question, and for these business owners, these are essential characteristics a leader must possess.

“Understanding that emptying the bins is just as important as landing the next big contract, and the person doing it is contributing to your success every bit as much.” Del Vincent  www.davince.net

“Adaptability. To survive long term, you’ve got to adapt to the times (Netflix is a prime example) and adapt to changes within your business, which could look like outsourcing, hiring employees, or offering a new or different product. Continue to keep up with the times, and you’ll continue to thrive.” Meghann Grah 

“Grit.” Tessa Love

“Having an irrefutable mindset to keep going after your goals while finding space to rest and recharge.” Krissy Johnson

“This is tough! There are so many leadership characteristics you need to have while running a small business both from an internal and external perspective. Something I’ve learned recently is that if you’re interested in growing, you need to be able to delegate. With that delegation comes effective communication, trust, empathy, and honesty. From an internal perspective, being a good leader means knowing when it’s time to be at the front of the line and knowing when to step back, let other people on your team shine. From an external perspective and working with customers, integrity is most important. In the photography industry, especially, it’s so important to put our best foot forward at all times. Treating peoples’ experiences with care and as one-of-a-kind (especially weddings) is everything.”– Kayla Powell. 

“Self-care is just as important for your business as grit and determination. Go after your goals, absolutely, but give yourself lots of opportunities to live outside of work. Work with endurance, but rest easy, too. You’ll lose your drive if you seek only success without rest.”– Courtney Kammers

Final words about leadership in small businesses.

Great leaders must develop crucial skills to become great decision-makers.

They understand and manage their emotions to make decisions that positively impact themselves, their employees, and their customers. They accept uncertainty and focus their time, energy, and money on making the best decisions in the face of an uncertain outcome. C’mon. It’s 2020 and the year has been a rollercoaster. We need to adapt and pivot. Leadership in small businesses is crucial.

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Utility Avenue is the youngest and most promising community of entrepreneurs and small business owners in the United States. Join our community today. Follow us and grow with us. Let’s build something cool.

Spotlight: Love for Words Book Editing Boutique

Posted on by Odette Fernandez

Love for Words Book Editing Boutique has the Spotlight this week at Entrepreneur Avenue. Her owner, CaTyra, is a  Rochester Business Journal Forty Under 40 Honoree. CaTyra is the Creator/Hostess of Editor Knows Best (an international writing and editing podcast for literary professionals) and Writer’s Paradise (a writing forum for authors and writers). She also founded Mochachocolate, a trademark brand that celebrates, uplifts, and empowers dark-skinned girls and women across the globe.

CaTyra is the author of Professionalism, What’s That, Dear August, Love August (a personal poetry compilation), Keep This In Mind: What Black Women Think About (a journal for Black women), and Editor Knows Best, a 101 guide for literary professionals/creatives interested in editing.

CaTyra Headshot
Photo Credit: Kiera Renee

What is Love for Words?

Love for Words is a book editing boutique. We specialize in non-fiction such as memoirs, self-help, poetry, and autobiographies.

How was Love for Words born?

In 2016, a friend of mine, who is also a publisher, was looking for an editor. I offered a sample edit. She loved it, and the rest was history. Then, she started referring her clients to me. As my clientele grew, I decided to launch Love for Words. I established its parent company, Polland Enterprises LLC, in 2017.

What were the main challenges?

In the beginning, I didn’t have consultation calls before starting projects, so no expectations were established. I didn’t know what my clients wanted, and my clients didn’t know what I could offer. Now I complete a consultation with each client before we begin work. We talk about our expectations and decide if we are a good fit. 

In addition, I had to learn the intricacies of editing. Being a good writer is not enough. I read books about the art and science of editing, research other editors, and ask my clients for feedback.

Who is the most supportive of your business?

My friends and family have been incredibly supportive. Some of my friends are clients!

What makes you different from the business across the street who offers a cheaper service?

My ability to encourage, uplift, and empower. My sympathetic and empathetic personality. I am an author, so I can relate to my clients. Having experience as an instructor for children and adults also makes me more patient. I am open to sharing my personal experiences with clients to develop a connection.

 Why is editing essential for a business?

Editing is important for business owners to establish a credible and trustworthy brand. Misspelled words, grammatical errors, and unclear text presents an unfavorable image. 

What future projects do Love for Words have?

  • Editor Knows Best

Editing 101 guide that explains the types of editing, what to expect from your editor, the benefits of hiring an editor, and more.

  • Write, Wine, & Quarantine Magazine

Publishing a magazine that features poems and short stories about people’s experiences during the COVID-19 pandemic.

What advice would you offer to other entrepreneurs?

  • Do it, even if you’re scared.
  • Don’t share everything. Some things should be discreet.
  • Keep learning. Always.
  • Delegate.
  • Have a team that supports you.
  • Take care of yourself.

If you were to define Love for Words in one sentence, how would you do it?

Love for Words is a book editing boutique that polishes your manuscript, so it shines.

How would you describe your experience with Utility Avenue?

Utility Avenue offers the opportunity for business owners to showcase their products and services. It is an inviting and supportive platform for entrepreneurs to shine.

Love for Words’ Contact Info

Website: https://www.pollandllc.com/
Email:polland@pollandllc.com
Instagram: https://www.instagram.com/pollandllc/
Facebook: https://www.facebook.com/pollandllc/
LinkedIn: https://www.linkedin.com/in/cpolland/

Editing Packages and a la carte services are available.

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Utility Avenue’s Spotlight focuses on promoting inspiring businesses every week. For a chance to be interviewed, contact us at support@utilityavenue.com with the subject Spotlight.

Procrastination and Why Being Busy is not Productive

Posted on by Odette Fernandez

Procrastination, and why being busy is not the same as being productive.

Sometimes, we spend hours working without stopping, and at the end of the day, we cannot check a single task in our to-do list. Has it happened to you?

We idolize being busy, but busyness does not translate into successful productivity. The keyword when we talk about unproductiveness is PROCRASTINATION.

But what’s Procrastination?

Procrastination is acting against your better judgment when you delay or postpone a task or set of tasks. It is when you do one thing even though you know you should do something else. 

Alan Lazaros, from the HyperConscious Podcast, quotes James Clear often: “You will not rise to the level of your ambition, you will actually fall to the level of your systems.”

procrastination-utility-avenue

Reasons Why We Procrastinate

Now that we are mostly working from home, we know we have to write that blog post, make that sales call, or update our website, but we don’t. It is not because we are lazy. On the contrary, we usually postpone a task that is VERY IMPORTANT to us, either because it is difficult, urgent, challenging, or because it requires meticulous performance, or a lot of our time, or all of the above combined.

Our brain values long-term benefits, but it values immediate gratification in the present moment.

The real problem is not doing the work.

It’s starting. 

How You Can Stop Procrastinating Right Now

Use temptation bundling.

Bring future rewards into the present with temptation bundling. That is, “bundling a behavior that is good for you in the long-run with a behavior that feels good in the short-run.“

The basic format is: Only do [thing you love] while doing [thing you procrastinate on]. For example, only listen to your favorite podcasts while exercising (my favorite podcasts to listen to while I exercise).

Reduce the size of your habits.

If it’s easy for you to start, then you will be less likely to procrastinate. The momentum will help you carry on. In this case, just get started. Divide the big task into small ones. If you have to write a document, opening Word or Pages can be that first micro-task.

You can also use the 2-Minute Rule, which says, “When you start a new habit, it should take less than two minutes to do.” When you start doing something, it’s easier for you to continue doing it. 

Use the Pomodoro Method, and commit to 25 minutes without distractions to accomplish your micro-tasks. When you can concentrate, you will no longer want to stop there.

Be Consistent

Mastery requires focus and consistency. To turn productivity into a long-term habit, we need a system for deciding what is essential and what we should work on first.

A chaotic mind often leads us to unproductivity. Write down all your pending tasks. Get them out of your head, so they no longer occupy space on your mind. In technological terms, we would say: free up your RAM.

The Ivy Lee Method is a great productivity system, and it is so simple that it just works:

  • At the end of each workday, write down the six most important things you need to accomplish tomorrow. Do not write down more than six tasks.
  • Prioritize those six items in order of their true importance.
  • When you arrive tomorrow, concentrate only on the first task. Work until the first task is finished before moving on to the second task.
  • Approach the rest of your list in the same fashion. At the end of the day, move any unfinished items to a new list of six tasks for the following day.
  • Repeat this process every working day.

This method fosters single-tasking. We might believe multi-tasking and busyness are synonyms of success and productivity. Focus on a single task, and you will have better results.

Use Visual Reminders

You can overcome procrastination by using visual cues to trigger your habits and measure progress. Using a calendar, or a journal, to track your progress will help you take action

When we perceive that we have made progress towards a goal, we will commit more to it. Behavioral economics studies refer to this as the Endowed Progress Effect. 

Consistency is a critical component of success. A visual reminder will prompt you to take action and motivate you to finish the task. Seeing your progress triggers your next productive step.

Final Words on Procrastination

The faster you complete a productive task, you will feel more productive. Also, do the most important thing first each day and let the momentum of the first task carry you into the next one.

Sometimes, many of our tasks depend on third parties for their fulfillment. And when we get ready to fulfill that task, we realize we have to wait for someone else’s call, for someone else’s message, for someone else’s confirmation. The point is that, for one reason or another, we have to put that task on hold. Be proactive. Making plans is okay, but life happens.

For more on creating habits, decision making, and continuous improvement that will lead to peak performance, check  Atomic Habits .

Leave us in the comments which one and if you have any advice to improve productivity.

#SupportYourLocalGirlBoss with Karma Bath & Body Co.

Posted on by Odette Fernandez

#SupportYourLocalGirlBoss with Karma Bath & Body Co.

It is a fact. “Empowered women empower women”.

This time, female-owned local businesses teamed up in their first #SupportYourLocalGirlBoss event in Coral Springs, Florida. Hosted by Karma Bath & Body, the first part of the event was very successful. In our weekly Spotlight, let’s know more about it.

 

#SupportYourLocalGirlBoss with Karma Bath & Body Co.
#SupportYourLocalGirlBoss with Karma Bath & Body Co.

Who is KARMA BATH & BODY CO?

Karma Bath & Body Co is a small family-owned, cruelty-free, handcrafted skin & body care business. We are passionate about creating products that are good for you and your pockets!

Where can we find you?

We are located at 11471 W Sample Rd, #2, Coral Springs Florida, 33065. Directly across the street from Pizza Time!

#SupportYourLocalGirlBoss with Karma Bath & Body Co.
Karma Bath & Body Co.

What’s the most popular Karma product?

Aside from our Whipped Soap Scrub, we’d have to say our #CreateYourOwnKarma line! In-store, we carry various unscented & uncolored products such as Sugar Scrubs & Body Butters that you can personalize on the spot! With over 300 fragrances that rotate every other month, you can create over one thousand different combinations!

#SupportYourLocalGirlBoss with Karma Bath & Body Co.

Can you describe KARMA BATH & BODY CO in one sentence?

A unique, fun & personalized experience to fit all your body care needs!

KARMA BATH & BODY CO

 

What is it like to run a local small business in times of Covid-19?

Definitely interesting! As challenging as this Virus has been, it has allowed us to form new and strengthen existing relationships within our community.  With the support of our wonderful customers, we have been able to grow our business during these difficult times, and we look forward to being a part of the Coral Springs community for many years to come.

#SupportYourLocalGirlBoss with Karma Bath & Body Co.
#SupportYourLocalGirlBoss with Karma Bath & Body Co.

What can you tell us about the #SupportYourLocalGirlBoss event?

This is an event we created to bring all Female Owned businesses together to support one another. It’s essential to work together, especially during a time like this. We had a blast at weekend one and plan to make this a recurring event!

#SupportYourLocalGirlBoss with Karma Bath & Body Co.
#SupportYourLocalGirlBoss vendors

Which were the main takeaways of the first part of the event?

The love and support that our new & existing customers showed not only us but to each girl boss that attended that day. We are so fortunate to be surrounded by such talented & creative ladies.

GIRL BOSS WEEKEND ONE

Destiny Aquino, Floral arrangements
Destiny Dixon, Custom Wire Wrap Jewelry
Kyra Poulos with Sunday Southern, custom masks & zipper bags
Sarah Lovelady with Fancy Pants Clothing Co 
Jennifer Polito with Color Street Nails
Kim Kam with Karpe Diem Travel

GIRL BOSS WEEKEND TWO 

Kyra Poulos with Sunday Southern, custom masks & zipper bags
Crystal, with Riley Black Designs, custom gifts & creations
Danielle Marsh custom jewelry with Sandbox Shoppe
Stephanie Masselli with Lady Eleanor Co, hair accessories and bows
Jackie Tomestic with Lite Infusions Aromatherapy, soy candles & melts with essential oils
Sarah Lovelady with Fancy Pants Clothing Co 
Karma Bath & Body Co.
Karma Bath & Body Co.

What future projects do you have?

We are always working on something! To share a few, we have a huge line of Halloween themed hand-painted bath bombs coming soon, as well as a Trick Or Treat event, more #GirlBoss events sprinkled throughout the upcoming months, our Holiday line, and our annual fill your own Bath Salt Christmas ornament party!

 

What message would you send to your customers?

We are forever grateful for your support and your business. Without you all, we would not be able to follow our dreams every day. Thank you for everything. We appreciate you all.

Karma Bath & Body Co.
Karma Bath & Body Co.

Is there anything you would like to add?

We want to let the community know that we are providing a safe space for you and your kiddos to come & create their very own bath bombs, with a private entrance and bathroom. We are adhering to all of the social distancing guidelines and sanitizing all utensils and molds used. Our employees will be instructing your group on how to make your experience the bomb! We have over 25 fragrances, 12 colors, and ten shimmers to choose from to make each bath bomb personalized. It is a fun way to get creative & work together with your group. It is an excellent experience for kids, teens, and adults!

Final words about #SupportYourLocalGirlBoss

So, the invitation is made.

Make sure you #SupportYourLocalGirlBoss with Karma Bath & Body Co this weekend, and for your local skincare needs. They want to offer a special code for you and your readers. Use coupon code YAY10 to get 10% off each participating person in your group.

 

Karma Bath & Body Co.’s Contact Info

KarmaBathCo.com
954-263-7340
IG @KarmaBathCo
FB @KarmaBathC
Email: MyKarmaGifts@gmail.com

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Utility Avenue’s Spotlight focuses on promoting inspiring businesses every week. For a chance to be interviewed, contact us at support@utilityavenue.com with the subject Spotlight.

Best way to save and pay for college?

Posted on by Odette Fernandez

Jack Wang is a noted expert in helping US-based families with middle to high school age students lower the cost of and pay for college by navigating the complex, stress-inducing financial aid system while still being able to retire. He’s helped hundreds of families and students (including his own two children) navigate financial aid, student loan options, and payment strategies in the context of overall family finances and retirement plans.

He has joined the Entrepreneur Avenue family and today, he is going to share the best way to save and pay for college.

Read on.

You will be happy you did.

And Welcome to Utility Avenue, Jack!

 

best way to save and pay for college
Photo credit: Odette Photo+Art LLC

Best way to save and pay for college? Start a business!

Or…how to get a scholarship from the IRS. No essay required!

Disclaimer: This article is for educational purposes only and should not be construed as tax or financial advice. Please consult your own tax and/or financial professional to discuss your specific circumstances.

One of the most expensive things we buy as a consumer may be college education for our children. I’m sure you’ve seen the headlines about the record $1.54 TRILLION student debt burden (Federal Reserve Bank of NY, Household Debt and Credit Report, Q2 2020) as well as spiraling tuition, now over $80k at the most expensive universities.

I’m not joking (that much) when I ask clients if they would rather buy a Ferrari instead of sending their kid to college. The Ferrari may be cheaper!

As entrepreneurs and small business owners, we have a decided advantage in paying and saving for college – the IRS! More specifically, the tax code. This is probably the only time you’ll ever view the IRS or the 70,000-page tax code in a positive light.

What most people do

When thinking about saving and paying for college, most people think of 529 plans. These savings vehicles are popular for many families to save money, tax-deferred, and then upon using the money for either college or private K-12 education, tax-free.

Think about the money that goes in. It’s after-tax. Meaning, we earn income, have taxes and various deductions withheld, and hopefully have something left over after our bills to put into these accounts.

Some states do offer a state tax deduction or credit for savings. For example, Massachusetts offers a tax deduction for the MA income tax for saving in the MA 529 plan. Other states provide a contribution at birth or a matching contribution. Maryland offers a matching contribution for low-income families.

As good as some state tax incentives are, there is nothing at the federal level.

 

Using business to save/pay for college

It’s about understanding the tax code. This is really in the category of tax planning instead of tax preparation – which is what most people think of. These strategies below really require working with tax and financial professionals BEFORE you implement.

Hiring your kid

The most basic strategy is to hire your student “on the books” in a business owned by a parent. Meaning, make them a legitimate employee, run payroll, etc. and not pay them under the table. They have to be paid a reasonable wage for good work that is within the capability of the student. In other words, you can’t pay your 5-year-old to perform advanced accounting work at $100/hour!

Let’s suppose you hire your student and pay them $100 (on the books). That salary is now a legitimate, deductible business expense and earned income for the student. Let’s further suppose that your tax rate is 20%, and the student is 0%.

 

Business Student
Wages Paid / Earned $100 $100
Taxes save / paid $20 (20% of $100) $0 (0% tax rate)
Net expense / income $80 $100

Now, your student can use the $100 earned to pay tuition. Think about where that money initially came from – a tax-deductible expense. In this example, the business got an indirect tax deduction for the student’s tuition payment. You and your student got a $20 “scholarship” that didn’t require an essay!

While there’s no age limit on how old your student has to be, the work to be done largely defines the age. Generally speaking, you’re likely considering young teenagers and older for most businesses.

Please note that while FICA taxes are not due for those under age 18, and Federal unemployment (FUTA) for under age 21, there may be state tax obligations that would still be required. Check with your tax person or payroll services provider.

Income earned by the student is tax-free up to $12,400 (standard deduction for 2020), but anything more than $6,970 (FAFSA guidelines, 2020-21) earned will, potentially, impact their college financial aid negatively for the majority of schools in the US.

Where to save the money if your student has a few years before college

Once your student has earned income (i.e., from work, not interest earned on a bank account or similar), your student is eligible to open an IRA. Since their tax rate is 0% for income under $12,400, it pays for the student to save in a Roth IRA up to $6,000 (2020 contribution limit) or a similar tax-free vehicle.

A question I often receive is whether or not someone under age 18 can open an IRA. Yes, the IRS does not stipulate on minimum age, as long as the requirement for having earned income is met. As a parent, you would sign the account documents, but the student would own the IRA.

I also get asked about saving in a traditional IRA for the tax deduction. But why do it? With income under $12,400, their tax rate is 0%, so you aren’t saving any taxes by using a traditional IRA.

When paying for college, the student can then withdraw the Roth IRA contributions anytime tax-free and penalty-free. Or borrow for college, and then withdraw to pay off the loans after graduation, depending on financial aid specifics.

Think about the potential – if you hire your kid at age 13, paying them $6,000 per year and then save, you’ll have $30k of tax-free money by college time – that’s a nice amount and a bunch of taxes saved!

Section 127 benefit

Otherwise known as the educational reimbursement benefit companies can offer workers. This works better for graduate school if your student is over age 21, no longer a dependent, and is not an owner of the company.

This benefit of up to $5,250 per year would require offering the same to all employees, but that can be an excellent strategy for recruitment and retention. Payments would be deductible to the business and tax-free to the employee.

The recently passed stimulus package, the CARES Act, expanded this program to allow employers to provide benefits for student loan payments, not just educational expenses incurred in the current year. This provision expires at the end of 2020.

Section 132 Fringe benefit

Similar to a Section 127 benefit, though, the difference here is that the education typically has to be job-related. Some companies offer this reimbursement if an employee takes courses to further their career directly or is directly applicable to their job.

Paying for college can be daunting and stressful. Parents and students alike have questions about admissions and financial aid – and both aspects of college planning are extremely complicated.

Final words about the best way to save and pay for college

One of the most common questions I’m asked about is how to get more scholarships and financial aid. Being self-employed or a business owner, the answer is Go to the IRS. The money is there – it’s up to you to get it! No essay required!

 

Jack Wang’s Contact Info

Website – www.longhornfin.com

Facebook – https://www.facebook.com/longhornfin

LinkedIn – linkedin.com/in/thejackwang

Youtube – https://www.youtube.com/channel/UCGvxjS_uLUIPnHKelqSLaHg

Quora – https://www.quora.com/profile/Jack-Wang-231

Spotlight: Lotus Wellness Center with Uma Alexandra

Posted on by Odette Fernandez

When there is a will, there is a way, even when people doubt you. Uma Alexandra Beepat is an example. She is the CEO and Owner of the Lotus Wellness Center and The Lotus and The Light Metaphysical Center. Today, she shares her entrepreneurial journey in Utility Avenue’s weekly Spotlight.

Lotus Wellness Center's CEO Uma Alexandra Beepat
Photo Credit: Julie Socher

What can you tell us about yourself?

My name is Uma Alexandra Beepat. I am the CEO and Owner of the Lotus Wellness Center and The Lotus and The Light Metaphysical Center. Also, I’m the President of the Manassas Holistic Chamber of Commerce and a Premier doTERRA Consultant. I have owned my center for the past 11 years and have worked on over 10,000 clients in personal sessions. I teach a wide variety of self-development, spiritual and psychic development classes. They are geared mostly to women in their late 30’s to early 60’s who are experiencing a shift in consciousness and desiring more quality in life through service and community.

What were the origins of your business?

While I have always been a psychic medium, my origins in this field started as a licensed massage therapist in 2009. It was through massage of clients that my psychic abilities developed and took my career down a different path.

What were the main challenges at the beginning?

The main challenges at the beginning were all me. I fought this and didn’t want to be in this field. However, I am what they call a natural medium and have had these abilities since birth, so either I learned about myself, or I continued to fight who I was. I, of course, chose the former. Once I committed, things became easier.

Who was the most supportive of your idea?

The most supportive person of my idea of opening a metaphysical wellness center was myself. My friends and family were concerned and didn’t see it thriving. Honestly, I am not mad or upset about it. The lack of support, in the beginning, is what pushed me to succeed. I needed to show everyone that following your calling, however crazy it may sound, is the right path to success and happiness.

What is the primary target audience of your business?

The target audience for my business is specifically men and women between the ages of late 30s to early 60s who are experiencing a spiritual awakening. Spiritual awakening comes to us all when the material things in life no longer soothe or excite us. We want more and desire more in life. That is where I step in as a guide, helping people rediscover themselves, their joys and passions to create a life that is happy, peaceful, and meaningful.

What makes your offer unique?

What makes my offer unique is the nature of the business I am in. Whereas most coaches focus on mindset, I focus on the spiritual aspect of a person and reconnecting them to their soul purpose.

Do you have any other passions?

Honestly, my job is my passion. I can easily work 60-80 hours a week without feeling it or thinking about it. I love helping people, spreading awareness, and creating classes and events that bring joy to people! When I DO have free time, I like to read and spend my days at the beach soaking up the natural energy of the environment.

If you could go back in time, what would you do differently?

If I could go back in time, I would not let those of my past who were mean to me or tried to put me and my business down affect me as much. I would give them adequate attention and no more, choosing instead to focus on my business and what I create.

What future projects does your business have?

Currently, I am working on my second book, Chronicles of a Spirit Walker, which details some of my experiences as a psychic medium, including my recent near-death experience in January.

What challenges do you see ahead of you?

Currently, the challenges I face as a small business owner are the same as those who COVID19 affected. As a non-essential business, I face the dilemma most face. My business brings great assistance to the communities we serve. People are suffering, and helping them through this is my main priority. However, as a non-essential business, my doors can be closed at any time as required.

What message would you send to your followers?

I want to tell them that it is my absolute honor and gratitude to serve them. Every time a person books me for a service or attend my classes, I give thanks to them and God for the ability to share joy, peace, and happiness. It is truly what I live for.

Define your business in one sentence.

The Lotus and The Light Metaphysical Center offers classes and services in metaphysical, spiritual, and psychic development to the local Northern Virginia community and online attendees due to our expansion into the online community.

Is there anything you would like to add?

I have two events coming up in October I would love to mention.

  • Living the Awakened Life Retreat is a local retreat held in Manassas at my center on October 16th-18th, and it is based on the principles in my book The Awakened Life.
  • 6-week online mentorship program starting October 11th for those who want to develop their psychic and mediumship abilities.
Lotus Wellness Center's CEO Uma Alexandra Beepat
Photo Credit: Julie Socher

 

Uma Alexandra Beepat’s Contact Info:

Facebook www.facebook.com/groups/thelotusandthelight 
Instagram www.instagram.com/thelotusandthelight 
Youtube www.youtube.com/thelotusandthelight 
Website www.thelotusandthelight.com 
Email info@thelotusandthelight.com 

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Utility Avenue’s Spotlight focuses on promoting inspiring businesses every week. For a chance to be interviewed, contact us at support@utilityavenue.com with the subject Spotlight.