323: Understanding the Numbers – Optimizing Your Blog’s Financials with Ansley Beutler

Listen to this episode of The Food Blogger Pro Podcast using the player above or check it out on Apple Podcasts, Google Podcasts, or Spotify.

An image of a keyboard, notebook, and calculator and the title of Ansley Beutler's episode on the Food Blogger Pro Podcast, 'Understanding the Numbers.'

This episode is sponsored by WP Tasty.

Welcome to episode 323 of The Food Blogger Pro Podcast! This week on the podcast, Bjork interviews Ansley Beutler from Peach Perfect Financials about optimizing your blog’s financials to set your business up for success.

Last week on the podcast, Bjork chatted with Sarah Cook from Sustainable Cooks about what specific strategies she implemented to grow her blog’s traffic and increase her revenue. To go back and listen to that episode, click here.

Understanding the Numbers

While Ansley Beutler is well-known for sharing delicious and healthy recipes on The Fit Peach, she’s also a CPA and an expert when it comes to the financial side of running a food blog!

Through her consultancy business Peach Perfect Financials, she helps bloggers level up their business and gain control and clarity over their finances. And in this episode, she shares why you should have a business bank account, how to keep track of your expenses, how to structure your business to optimize your taxes, and more.

Whether you just launched your blog or you’ve been blogging for years, we think you’ll have a lot of great takeaways from this episode. Enjoy!

A quote from Ansley Beutler’s appearance on the Food Blogger Pro podcast that says, 'One of the biggest reasons why businesses fail is mismanaged cash flow.'

In this episode, you’ll learn:

  • Why Ansley started her food blog
  • What she does at Peach Perfect Financials
  • How she balances working on her blog and her client work
  • Why she recommends having a business bank account and credit card
  • What business expenses and startup expenses are
  • Why it’s so important to track your expenses
  • What happens if you get audited
  • How you get taxed when you run your own business
  • When you might consider making an S election
  • What an EIN is
  • How you can keep track of your receipts digitally
  • How to determine what your salary should be as a business owner
  • How to set yourself up your success in the future financially


About This Week’s Sponsor

We’re excited to announce that this week’s episode is sponsored by our sister site, WP Tasty!

WP Tasty offers handcrafted WordPress plugins such as Tasty Recipes, Tasty Pins, and Tasty Links to help food bloggers optimize their content with minimal effort.

Learn how Pinch of Yum uses WP Tasty plugins to:

  • Increase search traffic
  • Grow affiliate earnings
  • Build traction on Pinterest
  • And more!

Click here to learn more.

If you have any comments, questions, or suggestions for interviews, be sure to email them to [email protected].

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Transcript (click to expand):

Bjork Ostrom: This episode is sponsored by our sister site, brother site, sibling site, our family site. We consider all these part of the family. We are separate but together. So these sponsorships can happen, which is kind of unique, but it’s our sister site, our brother site, sibling site, WP Tasty. WP Tasty, the WP part stands for WordPress. So this applies to you. If you are using a self-hosted version of WordPress, this applies to you. WP, that’s WordPress. Tasty stands for, well, anything that’s tasty.

Bjork Ostrom: We’d like to think that the products we’re creating are tasty and that they’re appealing. They’re helpful. They’re awesome. But also tasty stands for food and recipes because that’s kind of our focus. And we talk about these as handcrafted WordPress plugins because it’s kind of boutique in the sense that we’re not shipping this out somewhere to tell them what we want developed and then getting code back that we don’t know what it looks like or how it works. We’re doing all of this development in-house. Our team is doing it. And we’re really careful to create products that we would want to use. That’s why we created WP Tasty was to create the plugins that we would want to run on Pinch of Yum.

Bjork Ostrom: And one of those plugins is called Tasty Pins. And as you can probably guess, Tasty Pins is all about helping you optimize your recipes and images for Pinterest, which for Pinch of Yum has consistently been one of the top two, top three traffic drivers for us. So we knew that we wanted to have a plugin that was focused solely on Pinterest. We didn’t really want to focus on any of the other social sites because Pinterest, we wanted to double down on the thing that was most successful for us. And for us that was Pinterest.

Bjork Ostrom: So from a social perspective, from a traffic and social perspective, we wanted to focus in on Pinterest. And one of our favorite new features for Tasty Pins plugin is called the Pinterest follow box. Now, this is a cool, unique feature, but it’s a little bit hidden. So you’d actually, I’m going to try and describe it, but you’d actually, probably be easiest to go to Pinch of Yum and pin an image or you could use a test account, whatever it is, so you can see this process happening. And whenever a reader or a visitor or a user, whatever you want to call them, pins an image on one of our recipes, what will happen is they’ll see an option after that pin to follow Pinch of Yum on Pinterest.

Bjork Ostrom: And it’s an easy way to close the loop and get our content in front of readers when they’re already spending their time on Pinterest. It’s a way to present a call to action that kind of doubles down, again, we’re all about doubling down on something that somebody is already thinking about, kind of a mindset that they’re already in. So in this case, somebody says, “Hey, I want to pin this.” So that means we know their Pinterest user and we also know that they’re interested in the content we’re creating. Why not after somebody pins something, present them with a call to action that is following Pinch of yum on Pinterest. It’s not necessarily a growth hack, but I don’t know, maybe some people would consider it that.

Bjork Ostrom: So instead of just pinning it and then not seeing anything, they’ll pin it, and then they’ll see a follow box. We know they’re already going to be signed into their account. And it’s really easy for them just to click that follow box. It’s a small thing, but as you know, we’re all about those small things that make a big difference over time. So if you’re interested in learning more about the ways that our food blog Pinch of Yum uses Tasty Pins or really the other WP Tasty plugins, you can head on over to WP Tasty, that’s the letter W, the letter P and then the word Tasty, wptasty.com/podcast. And there you can get a free webinar. It’s really just a video, walkthrough of an in-depth look at how we’re using the WP tasty plugins, including Tasty Pins to help our readers and to help our traffic and our site growth.

Bjork Ostrom: We’re focused on, is what we want to do. We want to do that personally, but we also thought, “Hey, as long as we’re creating these plugins, why not package them up so other people don’t have to spend the development money. They can just pay a small annual subscription to get access to any of these features and plugins that we’re creating.” So again, that link is wptasty.com/podcast, if you want to see how we’re using these on Pinch of Yum. And thanks to the WP Tasty team for sponsoring the Food Blogger Pro podcast. Now, onto the episode.

Bjork Ostrom: Hello, hello, hello. This is Bjork Ostrom, and you are listening to the Food Blogger Pro podcast. Today’s podcast all about money and financials and bookkeeping and accounting. For those of you who are like, “Wait, no, I don’t want to talk about that. I don’t like the accounting bookkeeping side.” Number one, I love that side of businesses and blogging. So I promise that I will not be dull in this conversation and will be engaging. And a huge reason that’s engaging is because it’s a conversation with a fellow blogger who also knows accounting and bookkeeping and financials, and that’s Ansley Beutler. And she’s going to be talking about what it’s like to run her site, run her blog, and also run a business called Peach Perfect Financials.

Bjork Ostrom: So one of the things that I’ve found in this world, and I just had one of these calls yesterday, is there’s a lot of explaining that goes on. Like, here’s technically what we do. I’m trying to figure out when I have a call with, is this an accountant or a CPA and maybe we haven’t worked with them before, how do I describe what it is that we do? One of the great things in this conversation is that Ansley knows, she understands because she is a blogger, she’s a creator and she has been through this building her own site.

Bjork Ostrom: So she knows what it’s like to do sponsored content deals and what that means and work with an advertiser and affiliate marketing and affiliate payments. So all of these are, not only things that she understands by doing them, but she also understands it because she has a consultancy where she does the bookkeeping and helps with accounting and tax. And all of this stuff is important because once you get into it, you realize strategy around how you’re doing your books, how you’re approaching taxes, that’s one of the most important pieces of building a business. It’s your understanding of the numbers and how those impact your business.

Bjork Ostrom: So even if you’re in the early stages, even if you just got started, it’s important that you understand this because there are strategies that you can employ, that you can use that will make a big impact. We’re going to talk about what some of those are. So I think you’re going to love this interview. I loved the conversation. So let’s go ahead and jump in to this conversation with Ansley from Peach, Perfect Financials, and also from her blog, The Fit Peach. Let’s jump in. Ansley, welcome to the podcast.

Ansley Beutler: Hi, thank you so much for having me.

Bjork Ostrom: Yeah. This is going to be fun because we’re going to be talking about really one area, but it’s two of my favorite things. It’s business building, blogging, which obviously we talk a lot about. You do that yourself, but it’s also finances. It’s bookkeeping, it’s accounting. And those are two areas that I love. And you do both of those things. So tell me a little bit about how you got to the place where, not only are you doing bookkeeping, advice around accounting, business best practices, but also blogging yourself and what did that journey look like getting to that point?

Ansley Beutler: Yeah. So I started off with a food blog. That’s kind of how I got into the food blogging industry. I was juggling that full-time job, which happened to be as a CPA. I was working in one of the Big Four public accounting firms. That was my first job out of college. And I got into food blogging more as just a creative outlet. I’m sure you can imagine.

Bjork Ostrom: Totally.

Ansley Beutler: Public accounting is very much, I like to call it a square box.

Bjork Ostrom: Yeah. Which is interesting. I feel like we have a lot of conversations with people who have a job as an attorney or an accountant, or these left brain, to use the left brain, right brain. And it’s like, “Hey, it’d be really nice if I had a right brain thing that I was able to do as a complement to that.” So is that kind of essentially what you’re saying?

Ansley Beutler: Yes, absolutely. I’ve always been kind of a more creative person and fell into this accounting major in college. I actually majored in accounting. I’m a little stubborn and I majored in it because it was the hardest major in the business school. And I’m like-

Bjork Ostrom: “I’m going to prove that I can do this. I’m going to get through it.” That’s awesome.

Ansley Beutler: Yes. So I did not go into college thinking I was going to be an accounting major, I kind of fell into it just because I wanted the challenge of accounting. So that’s how I got into it. And then out of college, I’m in this Big Four public accounting role, it was a very, very work hour intensive job. It was a lot of hours. And again, like that square box, I’m like, “I need something to just use the right side of my brain. I need some creativity in here.” So I started this food blog while I was still working at that Big Four firm. Obviously, the food blog didn’t grow very much because food blogs need a lot of time to nurture and all of that.

Bjork Ostrom: Totally.

Ansley Beutler: So was kind of working slowly with the food blog and then actually left public accounting and went into forensic accounting which is what-

Bjork Ostrom: Can you explain what that is for those who aren’t familiar?

Ansley Beutler: Yeah. So what I thought forensic accounting would be was kind of a more glamorous side of accounting. It’s more of, you hop in when there’s fraud. So if an auditor catches fraud, they back away. We’re not going to touch it. And then the forensic team is supposed to go in.

Bjork Ostrom: Interesting. It’s like CSI Accounting.

Ansley Beutler: Yes, yes, exactly. What I found was that it was a lot of anti-money laundering, clauses that you’re developing for other businesses. It’s a lot of insurance claims. So it’s a lot of figuring out the value of something is if they’re going up against an insurance company that they may have not said, “Hey, we approved this claim.” So it was a lot of that. Obviously, that was not what I thought it was going to be. I actually ended up applying for the FBI because that was more of what I thought that forensic…

Bjork Ostrom: Sure. It’s like, “Let me see how close I can get to something super exciting, thrilling in the accounting world.”

Ansley Beutler: Yes. Yes. Yes. So as you can kind of gather, I was struggling to find something that was going to really ignite me. That was going to give me some passion with this accounting background that I had. And I’m like, “I don’t know how much more interesting you can get than working for the FBI as an accountant. I don’t know how much more interesting you can get.” Little did I know how long of a process that FBI application was going to go? And I did end up getting a role as an accountant at the FBI. I did turn it down. It was right before COVID hit. And at that point my blog had grown and I’m like, “This is what I want to do. I want to do this food blog.”

Bjork Ostrom: And the name of your blog for those… We’ll mention it at the start of the podcast, but the name of your blog?

Ansley Beutler: Yeah. It’s The Fit Peach. So I’m from Atlanta, Georgia. That’s where the Peach comes from. And then it’s a lot of-

Bjork Ostrom: And the Peach is down in Georgia?

Ansley Beutler: Yes. It’s a lot of gluten-free and dairy-free type of recipes. But had that had grown by the time that I had actually landed a job at what I thought would possibly be something that I would be interested in. And I’m like, “I already know that I like food blogging. And I already had looked around the industry and knew that there was this gap in the market of people needing some financial help with their growing business. That’s what a food blog is a growing business. And I figured out a lot of people are kind of missing that gap. And so I’m like, ”I’m going to go after that.” And that all started about January of 2020. And I’ve been doing that for a little over a year now.

Bjork Ostrom: So did you run those as you do the bookkeeping, accounting. Is it accounting as well? Are you using your CPA? Are you applying that within the blogging world, would be a CPA for bloggers?

Ansley Beutler: So yes. So a CPA is a certified public accountant. So what that gives you the ability to is to sign off on public financial statements. So any company that has IPO can be a CPA. You can still be an accountant and not be that CPA. You just can’t sign off on public company financial statements. So I guess, technically I’m not using that, what a CPA is supposed to be for, but that’s industry-standard of, people don’t view as an accountant unless you have that credential. But yes, I do that. I do do the bookkeeping piece, but I do do some more high-level stuff as well. I’m working with some clients that may be looking at incorporating and making, I’m sure we’ll get into, some more S-corp elections and different accounting nuances. So there is more than just bookkeeping.

Bjork Ostrom: Yeah, I got it. Just out of curiosity, do you run those as two different businesses then? So you have one business which is your blog, The Fit Peach and then another business, which is, what’s the technical business name for your accounting?

Ansley Beutler: Peach Perfect Financials is the second one. So yes, I treat them as two different things just for liability purposes.

Bjork Ostrom: Yeah, yeah. Which is really interesting. One of the things that I think is so great about that is, I think it’s, people who listen to this podcast, people who do similar things to what you and I do, which is build a thing that we’re excited about that’s a match for how we want to live our lives, it’s important to think creatively about how we can achieve that. And I think sometimes what can happen is you can see somebody and you’re like, “I just want to replicate exactly what they’re doing.” When I look at what you did. It’s like, “Hey, what are the skills that I have? Where is their need in the world that I’m interested in being in and how can I create something that serves that?”

Bjork Ostrom: And so for you, it’s like, hey, you have the blog. You’re able to do that and you also have skills as a numbers person with a deep experience in that and you’re able to say, “Great. Now, how do I build a business or businesses in your case that serves the thing that I want to exist within the world?” Which my guess is autonomy, being able to focus on the things that are most interesting to you. So I think just as an aside, it’s important to point that out for people listening, think about what are the ways that you can be creative in applying your skills and expertise and maybe it’s a combination of building your blog, but also having clients and creating another business.

Bjork Ostrom: So we’ve seen people who have done that with video, we’ve seen people who have done that with photography. And sometimes what they learn is, “Actually I want to build this as my main thing.” services business or maybe they get into software or design while also doing their blog. So I think it’s really cool to see that. How do you balance the two of those? Is there a priority where you say, “On Monday, I’m going to focus on my blog. On Tuesday, I’m going to focus on client work,” or do you split your day? What does that look like?

Ansley Beutler: So right now, they work on opposite seasons, thankfully. So the food blog is really Q4 heavy obviously. And then when that kind of dies down, tax season is coming up. So I can dedicate more time. So I feel like it kind of flips right here in the summer. My food blog has kind of taken a little bit of a step back and I’ve been putting more into the accounting piece of my business. So it’s kind of works really well there. Whereas, I do try to do it more in day chunks just because you are very hard to switch left brain from right brain. That takes a little bit.

Ansley Beutler: So I try to do more, two days here and two days there, but obviously right now I’m doing more weeks into the accounting and just doing the blog kind of on the side because it’s just kind of nurturing it and letting it grow.

Bjork Ostrom: That’s great. The other thing that’s great about it is there’s a little bit of a safety net on either side. And so one of the reasons why we created a site like Food Blogger Pro, it’s a different way of creating business income. We have Pinch of Yum, it’s advertising, it’s sponsored content. It’s kind of the primary avenue is revenue. And then we launched Food Blogger Pro, which is membership recurring fees. And it allows you to build some diversification to, if something happens, COVID, right?

Ansley Beutler: Yes.

Bjork Ostrom: And advertising income goes down, sponsor content opportunities are dry up at least for a season. Then in your case, you have these clients who still need help with their books and accounting. So let’s say somebody comes to you, they’re a blogger, they’re a creator. And they say, “Hey, I need help bookkeeping.” What are the first things that you’re going to look at as the low-hanging fruit and the opportunities to level up? And why does that even matter? What is a blogger getting out of that if they do come to you and say, “Hey, I want better books.” Why would anybody want better books?

Ansley Beutler: So two things that I would first look for is one, a business bank account. That’s the first recommendation I would have is set up a separate account so you can easily separate that personal finances from your business finances. That’s the first recommendation I would have. The second is a business credit card or a debit card so that you can have all those transactions just in one place. That’s bookkeeping 101. I feel like that’s, it’s so difficult, especially with food blogging because so many of our expenses are the same. You’re going to a grocery store and you’re not going to be able, six months down the road to look back and say, “Hey, yeah, Tuesday in April, that grocery one was for my blog.”

Bjork Ostrom: Right. And point being then when you do go to the grocery store, you separate those out and you’re like, “Great. I’m going to run this transaction. This is a recipe I’m developing for the blog, checkout.” And then, “These are my double stuff Oreos, which are not for the blog. I’m just going to eat these tonight.” You run that as a personal transaction?

Ansley Beutler: Yes.

Bjork Ostrom: I think a lot of people would have a question around when can I… Let’s say I make a recipe for the blog and it’s published on the blog, but then, hey, my family eats it that night. Is that still something where you can consider that to be an expense for the blog?

Ansley Beutler: Yes, 100%. I would categorize that as a business expense. That’s probably one of the most common questions I get is there’s a ton of different scenarios. “Hey, I made this lasagna recipe and we ate it after I took photos of it and put it up on the blog. What do we do with these expenses?” And that type of question, it’s for business purposes. That’s a business expense. Where things can get a little weird, I like to use an egg carton analogy. So if you buy eggs for your blog, maybe you make cookies and you only use two eggs for the cookie recipe and your family eats the other 10, that’s where things kind of be like, you would have to basically get it down to an individual egg cost and then just take two of those.

Ansley Beutler: So it can get a little shady there, but kind of a little tip I have is to actually buy different brands for your food blog and for personal. So I have specific type of eggs that I buy for, they’re the really cheap huge pack of eggs that I just buy it for my food blog. And that way I know that I’m not going to eat those personally and I buy other eggs for my personal self. So that’s a good way to differentiate between the two if that’s an issue.

Bjork Ostrom: Sure. And in the case of Pinch of Yum, it’s super easy because we have an office. And if we do Instacart or Shipt, they show up and it’s just everything that we do that ends up in the offices is an expense, even if, like last night, Lindsay brought home three different recipes that should have been tested and we have those, it’s like, the ultimate life hack, the efficiencies of creating a recipe and then bringing it home. But for those who don’t, figure out some way to separate it. It’s almost like you have to imagine that you’re back to having a roommate or maybe some people do have roommates and you’re writing the name on the food so your roommate doesn’t eat it.

Bjork Ostrom: It’s almost like you have to view your blog as a roommate. And you’re like, “Hey, this is my blogs eggs. This is my blogs milk.” And kind of separate those out. So one of the things that I think is interesting with expensing items, whether it be a computer or blog food, traditional expenses like hosting, obviously those are all business expenses, is in the early stages of any business, but creating a blog, creating a following online, you’re going to be purchasing a lot of stuff. You’re going to be purchasing cameras, computers, maybe you already have a computer, which will be an interesting question to cover, but you probably don’t have a lot of revenue. This a little, getting into a little bit of the weeds in terms of accounting and classification, but if you have a lot of expenses, but no revenue, technically all of those expenses would be startup expenses, is that right?

Ansley Beutler: Yes.

Bjork Ostrom: And the thing that I’m interested in is, maybe this is getting too nitty-gritty details, but if you have expenses and no revenue, it’s a startup expense, which if I understand that right, has to be, you have to draw that out over a period of time and depreciate it. And until you have revenue, in which case you can count that as an expense right away. So I’m wondering, this is me thinking about tips for early creators, do you want to technically try and make like $1 as quickly as possible with your blog so you can start to count all of those things as expenses and deduct those against your personal income or your spouse’s personal income if you’re married or in a relationship so those expenses can reduce your taxable income? That was a lot of rambling.

Ansley Beutler: Yeah.

Bjork Ostrom: But could that be a tip that we could give to people and can you help explain that because I don’t think I do a great job of it.

Ansley Beutler: Yeah, no, absolutely. And yes, so much of that was very correct. So startup expenses, I’ll give an example, actually, helped one of my good friends that’s developing a brewery down in Florida. And they had all of the startup expenses, obviously much more high dollar than food blog.

Bjork Ostrom: Totally. Thousands and thousands of dollars.

Ansley Beutler: Yes. Yes. And they’re like, “Hey, I want to take this as an expense on my tax return.” Well, the issue was they weren’t open for business yet. And that’s an issue with accounting. We call it a revenue recognition principles. So you want the revenue to be able to match the expense in the same time period. I know that that’s a very foreign thing to kind of grasp, but you want those expenses. For a food blog, those ingredients that you’re purchasing to create a recipe to go up on your blog, you need to be able to match it to a revenue that it’s creating.

Ansley Beutler: And yes, unfortunately with food blogging that can take years for you to actually create revenue, with something like food blogging, because as the brewery, they know that they’re open for business when they open their doors, when they have the first customer. With a food blog, I would view it more as when you’re trying to create revenue. So if you’re trying to get on an ad network, if you’re reaching out to brands to try to get some type of sponsored content, to me, that’s when you say you’re open for business, and you may have $0. Even though if you have $0, you can still deduct those expenses as long as you’re trying to create revenue.

Ansley Beutler: Now I say that, but the IRS does give you a three-year timeframe to say, “Hey, if you haven’t made money in three years, then we’re not really going to call this-”

Bjork Ostrom: It’s a hobby.

Ansley Beutler: Yes, it’s a hobby.

Bjork Ostrom: I’m ultimate Frisbee player and I spend $10,000 a year on gear and training Frisbees, but I’ve never signed a sponsor agreement for a Frisbee company. There’ll be like, “This isn’t a business. This is just you liking ultimate Frisbee.”

Ansley Beutler: Yes, yes. And of course there are ways around it. Amazon went years before actually turning a profit. So they were technically a hobby. I’m sure, it’s Amazon, they have ways around it to say, “No, we’re actually trying to produce revenue. We’re trying to turn a profit,” which is the thing…

Bjork Ostrom: Well, and then in that case, they had revenue, but not profit, right?

Ansley Beutler: But not profit. Yes. Yes.

Bjork Ostrom: Yeah, yeah. Got it.

Ansley Beutler: But the IRS gives you a three-year period. If you look at a five-year time span, they want a few years to actually be producing profit there.

Bjork Ostrom: Sure. I see. So that was with a three-year rule, point being, if you don’t have profit for 10 years and you’re just always at a loss, then it’s going to be an issue. And this gets into the kind of nitty-gritty details again, with Amazon, part of it probably had to do with their, you would know more than I would on this. With the type of company that Amazon was, a C-corp, those losses would technically carry over. Is that right? So they just continue to have-

Ansley Beutler: Yeah.

Bjork Ostrom: Which is, people don’t need to understand that, but it’s an interesting observation and growth to say, “Hey, I’m just going to delay profitability as long as possible and maybe, if you are a creator, if you are a blogger and you don’t need the money, not a lot of people are in that situation, but if you’re lucky enough to be in that position, you might be able to say, ”Hey, I’m going to delay profitability and just try and grow as much as possible.”

Ansley Beutler: Yes. Yes. And that’s why I’m big on those expenses. I know that a lot of newer bloggers don’t want to see a deep red, but I’m like, “No, if there are any more expenses…” If it comes to the end of the year and you’re not going to turn a profit and you’re going to be in the red, see what other expenses that’s a kind of a little tax move there because you’re going to be able to deduct them on your personal tax return depending on how you’re set up.

Bjork Ostrom: I think that’s a huge takeaway because I think some people think, “I’m early stages, I’m not making any money, I don’t need to track this stuff.” But I think one thing that people don’t often realize is, if you are really diligent in tracking the expenses, tracking your mileage, tracking when you buy a computer, that it can go against your personal income and you’ll pay less taxes in general. Can you explain that conceptually, because I think that’ll be a big takeaway for a lot of people.

Ansley Beutler: Yeah. So if you’re a sole proprietor or an LLC, you’re viewed as, what we call a pass-through entity is the technical term. And basically your business is viewed as you personally. So your business income or loss is displayed on your personal taxes. And so when you fill out your tax return and you lost $10,000 with your food blog, that’s going to be deducted from whatever other income you have. So if you have a W–2 job or what other job you have, say that you made $60,000, that’s your salary when you have a full-time job and you have a loss on your food blog of $10,000, you’re only going to pay taxes on that $50,000.

Ansley Beutler: So it knocked down how much you’re paying taxes on by that loss. So, which is why the IRS says, “Hey, you can only do this a few times if it’s trying to get it in the green.” But that’s a huge thing that newer food bloggers, and I see this all the time that they need to take advantage of. And that’s, it’s not a bad thing to be in the red. Every business is going to be in the red on those early years. And especially with the food blog, because it does take so long to find a way to produce revenue and stuff.

Bjork Ostrom: And it’s one of the great things about starting a business is some of the things that you might otherwise purchase just to have personally could then become a business expense that puts your business in the red, but then deducts income from your personal income that you’re getting in other places. So how do you know, “Hey, I’m buying a computer, I’m buying a phone.” I’m trying to look at the things on my desk. Computer, phone, scanner, microphone, light on my desk. How do you know when something is an expense? And what if you already have something and you start to use it for your business, can you go back and retroactively, say, “Wait, this is now a business computer. I can take this as an expense, even though I bought it three years ago.”

Ansley Beutler: Yeah. I would use more of a, is it for a business purpose functionality. I think of my printer. I bought a printer for business purposes. I work with a lot of brands that want hard signatures. And so I have a printer. But yes, I do occasionally use it maybe to print off something personal, but I bought it for a business purpose. And more times than not, I’m using it for a business purpose. So it was an expense was when I brought this printer. Same with the desk. So a desk actually is one of probably the most beneficial expenses that you can invest in because it allows you to have that home office expense that you’re probably well aware of if you’re a food blogger, but you can’t use it for personal use.

Ansley Beutler: So I have a business desk that I purchased in a year that I was already deep in the red. I’m like, “Hey, I’m going to go even deeper and I’m going to go purchase this desk. And this desk is actually making money because I have that home office deduction on my taxes, because I have this setup as my food blogging space and I get a home office deduction. So I get to deduct a portion of my mortgage. I won’t get into the details on it, but yeah, that’s been making me money. So I highly recommend food bloggers go out and buy a desk if they can.

Bjork Ostrom: Yeah, yeah. And what about a computer or a phone? I feel like that would be an example where phone might be personal and work, especially if you’re a creator, a blogger, you’re using it a lot for business, but you’re also using it for personal. How do you know even the cost of it? So you have $150 AT&T bill. How do you know how much of that should be divided between personal and business? Should you split it up? Is it like, “Hey, once it gets to 75% business, then it tips over into just being able to expense all of it.” Any advice for people who are like, “Oh, this is kind of right in the middle. It’s not just business.”

Ansley Beutler: Yeah. I would definitely use a 50% threshold. And yeah, if you’re on all sorts of social media apps, if you edit photos or emails and stuff on your phone, that can be a business expense. And it’s really, I’m going to throw out there that use your best judgment kind of term here. With these expenses, what you want is just to be comfortable defending your thinking if the IRS were to ask a question about it. So if you say, “Yeah, I use my computer for personal use. I have all these personal photos on it and all these videos on it and I deducted the entire thing on my return.” IRS is kind of going to be like, “Well, why did you deduct the whole thing?”

Ansley Beutler: But if you say, “Hey, I deducted 50%.” The IRS may say, “Okay, that sounds reasonable. How did you get to that 50% kind of threshold?” Which is what I personally would view for both phone and laptop just see how much you’re using it for business purpose and how much are you using it for personal purpose should definitely take advantage of it.

Bjork Ostrom: Yep. So I almost imagine it like speeding in your car, a spectrum in terms of, when you talk about kind of personal judgment. It’s also feels like personal comfort with how aggressive you are. And it’s like some people are always going to drive five miles below the speed limit and they will never get pulled over for speeding. And some people will drive like the speed limit and it will be really, really rare for them to get pulled over. And then there’s some people who drive 20 miles over the speed limit and they’ll probably get pulled over. They’ll probably get a ticket, but also like they’re getting places faster and they’re comfortable with that.

Bjork Ostrom: In terms of where we stand, we’re speed limit people. Like, “Hey, if we have a computer, it’s a business expense. I’m using it for, I’ll check my personal email on it, but 90% of the time, even at home, I’m using it for business-related stuff.” And so we’re comfortable with that. But does that actually happen then? When you talk about talking to the IRS, I think for some people they’re like, what does that actually look like? And what are the chances that somebody does come to me and say, “Hey, you expensed your water bottle, but that’s actually, and not an expense.” Do they look through every line item, they talk to you about it. And then what if you have expense something that they’re like, “That’s not an actual expense?”

Ansley Beutler: Yeah. So what they’re going to do if you do get audited, they are going to look through all of your books. This is also why it’s important to have good books is because the IRS is going to ask to see them. When you fill out your tax return, you fill out different business expense categories is how I classify them. The IRS is going to want backup of that. They’re going to say, “Well, what makes up this $10,000 of groceries that you’re saying that you have as an expensive of your food blog?” And yeah, they’re going to ask for sometimes receipts, if it’s large enough, they’re going to ask for receipts or ask for credit card statements. All of the backup to prove that you have actually incurred that expense and that you’re not fudging the numbers there.

Ansley Beutler: The likelihood of that happening, I’m going to be honest, it is slim just due to how many people that are submitting this tax returns. I have heard though, just through the grapevine that I do think a lot of online businesses are becoming more of a target for an audit and it’s going to be sometimes a random thing.

Bjork Ostrom: Do you know why that is?

Ansley Beutler: Yeah. It’s because there’s not… When you work a corporate job, you’re typically paid via W–2. And if a standard person that has a W–2 income and then they may have a few different deductions on there, it’s kind of a cut and dry tax return, but you talk about someone that has an online business that doesn’t have a W–2, the IRS is going to say, “Well, they’re going to have more room for error. We need to make sure that that’s actually correct.” And if they do find something that they’re going to say, “Hey, that’s not actually an expense,” they’re going to figure out how much of a tax liability that removing that is going to create and then they’re going to charge you interest, maybe a penalty on that as well if they do find out that that’s actually not a business expense.

Bjork Ostrom: Yeah. So they look at it and say, “Hey, this shouldn’t have been an expense. You should have paid taxes on this. You didn’t. And because you haven’t paid taxes for this amount of time, here’s the amount of interest that also goes into that because we should have had that, that money would have been growing.” So there’ll be a penalty above and beyond that. Plus, I would imagine going through an audit is just an intense time suck. It’s just a lot of time to make sure that you go through the process of doing it.

Bjork Ostrom: And thinking of an example of somebody we know who got audited and they were doing piano lessons, but they didn’t record that as income. I don’t think it was super substantial, but I think what happened is the auditor probably looked through their bank statements. So they’ll get their bank statements and see like, “Hey, we saw a deposit here, where is that from?” And he was like, “Oh, that was piano lessons. Oh, you need to record that as income.” Now, the interesting thing is they probably could have, if they wanted to, run that as a business and created a loss. It could have been the opposite where, if they wanted it… I think it was just this casual thing where like a couple of times a week would do piano lessons and would deposit that money.

Bjork Ostrom: So hypothetical situation, I’m curious, let’s say somebody has saved up some money to start a business and I’ll just use easy numbers here. Let’s say they saved up $50,000. They’ve done a really good job of storing money away and they have this money to start a business and they want to start a blogging company. And they say, “Hey, I want to really make a lot of progress in a short amount of time.” So they hire somebody. They invest in a really expensive redesign and development of their site. And in a year they have $50,000 of expenses. And let’s say they also had a W–2 job where they earned $50,000 in a normal job. In a situation like that, would they get to the end of the year and have zero personal taxes? They wouldn’t know any taxes in that year?

Ansley Beutler: Yeah. If they were qualifying business expenses. So if they have personal money, $50,000 that they’re going to throw into the business, that’s going to be an owner investment. That’s what it’s called. And if they use all of that money for business-related purposes, contractor costs, like I said, website redesign. And all those are expenses, their net income would be, their taxable income would be zero.

Bjork Ostrom: And depending on how they had their W–2 income taxed, at the end of the year, you would probably have a pretty substantial-

Ansley Beutler: Refund

Bjork Ostrom: … refund that you’d have. Which is just an interesting, not that anybody will do that, but just an interesting way to look at it and to think about it, to be strategic. If you do have money to invest in your business, know that it’s important to track that as an expense. One of the things that you talked about was this idea of, and becoming an S-corp and the S-election. That’s another kind of 201 strategy that people should consider that will save them taxes and we don’t have to go super deep into it. But I think it’s important to mention and to take some time to talk about it because I know there’ll be somebody who listens to this and be like, “Oh, I could do that.” And it will probably save them, I don’t know. Thousands of dollars maybe.

Ansley Beutler: Thousands, yes.

Bjork Ostrom: Can you talk about, and, and it’s really easy and it doesn’t really impact anything. Can you talk about what that is and how people know if they’re at the point where they can make an S-election and then what that actually does?

Ansley Beutler: Yeah. So an S-election it’s a subchapter S-corporation. So it is viewed as a corporation. It’s a tax election. So it’s not a change in business structure. So you may be an S-corp or an LLC taxed as an S-corp. So you still have that LLC business structure, but in the eyes of the IRS, you’re going to be taxed as an S-corp. So it has some of that corporation tax tendencies, which are the good corporation tax tendencies. So without getting into it, what an S-corp does, is it removes a large chunk of that self-employment tax that you get hit with if you are a self-employed business or if you are a sole proprietor or if you are an LLC. You get hit with, it’s up 15.3 self-employment tax and that’s on top of federal and if you live in a state that has an income tax. So it can creep up there.

Bjork Ostrom: It’s a lot.

Ansley Beutler: It’s a fairly large chunk.

Bjork Ostrom: Yeah. And that is essentially covering what the… Can you explain that? So that 15 percent-ish is kind of covering what the business, if you were employed, the business would be paying that? What’s the idea behind that self-employment tax?

Ansley Beutler: Yeah. So self-employment taxes are going to be Social Security, Medicare, that type of stuff. And when you’re employed with the W–2 job with maybe a corporation, that employer pays for half. So they pay for half of those so it’s about 7% and then you pay 7% as well as an employee. So it’s cut in half if you work for an employer that runs payroll. That’s the benefit. They’re also called payroll taxes. And so if you’re employed, half is you pay 7% and the employer pays the other half, but when you’re your own business, when you’re self-employed and when you’re a sole proprietor or an LLC, your total taxable income gets hit with 15.3%.

Ansley Beutler: And a lot of those deductions that food bloggers may be able to capitalize on, they don’t fall into the bucket when you’re calculating self-employment tax. So that’s why it can be really high. I do encourage people, “Just go look at it.” I know people have no idea where their tax return is, but if you actually look at it, I’m sure people are going to be like, “Wow, that was a lot of money because it can be thousands of dollars.” So what the S-corp-

Bjork Ostrom: And so the basic idea, just to make sure I’m tracking, the basic idea is you’re working for yourself. And so what the IRS says is, “Well, if you’re working for somebody else, you’d be paying half of this and the company would be half of this. Right now, you’re just working for yourself. You are the company and you still have to pay the seven-ish percent that you would’ve otherwise. So you just got to pay all of it and you have to pay federal tax. And if you’re in a state where there’s state tax, you have to pay that as well.” So a lot of these, when you have a W–2 job, you don’t really see that because you have your statement and it’s just kind of all done automatically. It’s taken out. But now you’re running your own business and you’re like, “Wait a minute, I have to write out a check for these things?” And it just feels different, which is part of it.

Ansley Beutler: Yes. Yes. And this may help people kind of stand. So with a sole proprietor or an LLC, when you own your own business, in the eyes of the IRS, they see whatever you make, whatever your net income is at the end of the year, they think of that as your salary. So that could be $250,000 or something.

Bjork Ostrom: Potential. Yeah.

Ansley Beutler: And that may not have been all income that you used to pay your mortgage or some bills, but in the eyes of the IRS, that’s the only way they know how to view it. And that’s why they’re going to say, “Hey, if you worked for a corporation that issued you a W–2, you would’ve had a $250 salary.” So that’s how it’s viewed. And that’s why they’re going to say, “Hey, this is going to be taxed at 15.3% plus all those other taxes.”

Bjork Ostrom: It’s essentially, they’re just looking at it as a really big salary.

Ansley Beutler: Yes. Yes.

Bjork Ostrom: “Hey, your business made $250,000, but the way we see it, your business is essentially just a really good paying job.” That’s what it is. It’s not two separate things, it’s just your salary. So let’s say somebody is at that point, or maybe a better question is, at what point of earnings should somebody say, “Hey, I should look into this S-election thing and what goes into actually making the S-election.”

Ansley Beutler: Yeah. So to continue with the examples to say that your business makes $250,000, which is a pretty substantial amount for most people. What you would want to go do is create an S-election for tax purposes, and then you would define a salary. So that would be much lower. You want it to be as low as reasonably possible. So maybe you decide, “Hey, I’m going to create a salary of $50,000.” So that way you take that 250, that salary piece is the one that’s going to get hit with that 15.3%. So now you have shifted $200,000 away from that 15.3% and it’s not going to get hit with those payroll taxes. So basically you’re telling the IRS, “No, out of this $250,000 that my business made, I only got $50 as a salary.” So, to answer your question…

Bjork Ostrom: $50,000.

Ansley Beutler: 50,000. Yes.

Bjork Ostrom: Yep, yep.

Ansley Beutler: Kind of as a salary. So there is a stipulation with making this S-corp you are going to need to run payroll in order for them to see that salary piece. And that’s going to be through a payroll processor. It’s actually a lot easier to set up than you might think. But what I would recommend is once you reach about, I would say 50 or $60,000 in your business income, I would start looking at this S-corp election. And like you said, it is very easy to fill out. It’s probably one of the most simple forms you can. It’s form 2553 and you fill it out with your name and your business. You do have to have an EIN to make the selection.

Bjork Ostrom: Talk about what that is.

Ansley Beutler: Yeah. An employer identification number. So that’s, you register with the IRS. So that typically, if you are sole proprietor, you are going to use your Social Security number. I actually highly recommend people go get an EIN so they’re not using their-

Bjork Ostrom: Just in general.

Ansley Beutler: Social Security number. Yes.

Bjork Ostrom: It’s like a businesses Social Security number?

Ansley Beutler: Yes. Yes. Yes. So it separates the two. So you are going to need one of those to fill out an S-corp election form, but it’s so easy to fill out. And once you submit it, you do have to submit it I think, the due date is March 15th of the year that you want to make the election. And there’s a section where you can say, “Hey, I forgot,” Or, “Hey, my accountant forgot to tell me.” And the IRS may review it and say, “Hey, we’ll let it pass.” If you do happen to go past that due date. But you just mail that form in and you’ll get a form back from the IRS if it’s approved and then you’ll be taxed as an S-corp in perpetuity. There’s nothing else you need to do unless you want to revoke that election.

Bjork Ostrom: Sure. And the great thing about this is nothing else changes, right?

Ansley Beutler: Mm-hmm (affirmative).

Bjork Ostrom: It’s just literally checking a box and saying, “Hey, I’d prefer to be taxed as if I’m an S-corp.” If you’re an LLC, you’ll still be legally an LLC. You’ll just have this S-election, but you’re just saying, “Hey, I prefer to be taxed this way.” And it could save you thousands of dollars just by opting in to do this. There’s many be a little bit more involved with it from the accounting perspective because you mentioned payroll. So can you talk about that? What does it look like to do payroll and then what if you want to get other money out of your business?

Bjork Ostrom: So in the example, let’s say a blog is making or online business is making 100,000 and you say, “Great, I’m an LLC. I’m going to make an S-election and I’m going to pay myself a salary of $50,000. So I can section off that additional 50 to be taxed without the self-employment tax.” You’re saving thousands of dollars. But then what if you’re like, “Yeah, but I really actually need that money that I’m not paying myself for day-to-day living.” Like, “I need to get that money out of the business.” Can you still do that? And if so, how do you do that?

Ansley Beutler: Yeah. So that’s called an Owner Draw and you literally, you just transfer it from your business checking account to your personal checking account if you have the funds available. It’s not going to be an expense. It’s not going to come off on your businesses P&L, profit and loss statement. It’s just going to be transferred into your account and it will be taxed once you report your net income from the business. But you just transfer the money out. You take, it’s called distributions into your personal account whenever you need it.

Bjork Ostrom: And when you say it will be taxed, it won’t be taxed as personal pay, W–2 income.

Ansley Beutler: No.

Bjork Ostrom: It’s taxed, but at a lower rate than what your personal income would be. Is that generally accurate?

Ansley Beutler: Correct. Yes. There’s going to be no payroll tax involved. It’s going to come over as business income because it’s not going to deplete that net income. So if you have $100,000 dollars and you have a salary of 50, you’re going to be left with 50. Say you transfer $40,000 over to yourself, you’re still going to have that 50,000 income that’s going to show up on your, if you’re an S-corp on the form 1120-S.

Bjork Ostrom: So takeaways here for people who are like, “Wait a minute. So many things and so many numbers.” Number one, business bank account have that separated. That’s a great first step. All expenses using your expense debit card or credit card, all receipts documented and saved. We use a service called Shoeboxed for that. But I think QuickBooks has the ability to send email receipts in, but someplace to have those stored. Can you do that digitally? Is it okay if you take a picture, send it somewhere and then shred the receipt? Is that okay?

Ansley Beutler: Yeah. I recommend just taking a picture and you can email it to yourself and either have a little folder in your email or save it to a Google Drive folder.

Bjork Ostrom: Yep. Just so they’re somewhere.

Ansley Beutler: This is…

Bjork Ostrom: And the reason that you’d want those to your point earlier is because, if you ever are audited, you can go back and say, “Hey, here’s when it happened and here is what it was for.” Should you write on the receipts or put notes on it or is it just enough to have the receipt?

Ansley Beutler: So with receipts, the IRS has given us a threshold. So if it’s over $75, if a transaction is over $75, then they want you to have a receipt. So if you spend over $75 at the grocery store, you do want to keep the receipt. If you want to write on them, you totally can. That’s good record keeping. You don’t have to. I do recommend if you’re doing more of a meals thing. So if you have a company outing and you buy lunch for your employees or something, I do recommend writing on that because they’re kind of stingy on that. But with grocery receipts, I don’t see any benefit in writing everything on there. You’re just going to have a detailed list, but you just take a photo with your phone just to capture what exactly it was that you paid for.

Bjork Ostrom: Cool. And so to continue along the lines there, you’re doing those things, you might be early on. You’ll have expenses. Those are great because even if you don’t make a lot of money in the first couple years, you’ll be able to deduct that against your personal income. So there’s a win there. And when you get to the point where you’re making 50, 60,000, that would be the point where you say, “Hey, I should probably look at making an S-election and pay myself a salary.”

Bjork Ostrom: The big takeaway for me there is you as the creator don’t need to know how to do that. That would be somebody like you, Ansley, who would be able to step in and say, “Let me help you. I’ve done this multiple times.” But just as little trigger points along the way for people to be aware of bit. What about somebody who continues to be really successful, their blog grows, their business grows, they’re making $500,000 or $250,000 and then they’re like, “And I’m paying myself a salary of $12,000, $1,000 a month because I don’t want to pay those payroll taxes so I’m going to be really strategic about this and just pay myself a little salary and then take everything else as distributions.” Where does that look like in the speeding analogy and how do you know what the speed limit is in regards to salary as your business grows?

Ansley Beutler: Yeah. So if you’re taking a $12,000 salary and you make couple $100,000, you would be very much speeding. You would be going 100 miles an hour. That would be very bold of you. So the IRS, unfortunately, they’ve given us a little bit of a weak term to go with when it comes to defining what the salary should be, they have said it needs to be reasonable. So they are going to leave that up to your judgment. To me and what a lot of other accountants will view as reasonable is going to be around $40,000.

Ansley Beutler: I have seen some as low as $30,000. This is also going to factor into where you live, cost of living. $30,000 in New York, maybe if you live in a high-rise in New York, the IRS may say, if you are audited, may say, “Hey, that’s not a reasonable salary. We know that you can’t live off of that.” So that’s why I like to say, if you’re anywhere between 50 and $60,000 that you’re making out of your business, you probably want to look into it because you may live in a low cost of living area and maybe you can say, “Hey, $30,000 is going to be a salary and the other 20, 30 is going to distributions or other, reinvesting in your business or what have you.” So I wouldn’t really dip past $40,000, you may be able to go down to 30.

Bjork Ostrom: Is there something to be said about, as the income in the business goes up, your salary should as well? If you’re making 500,000, could you still pay yourself a salary of 50,000 or would it depend on what the actual function of the job is? Should you look at it like as, “Hey, if I had to replace somebody else, what would they cost?” Or is it okay in your opinion to stay at that price point indefinitely. You make a million dollars, could you still pay yourself a salary of 50,000?

Ansley Beutler: Yes. I personally would keep it. I would say, “Your business income can be as high as it can go.” And you can still have a salary of, I mean, maybe if you’re at that $30,000 mark, maybe you bump it up and say, “Hey, it’s going to be more like $50,000.”

Bjork Ostrom: Sure.

Ansley Beutler: But the more money you make, your salary doesn’t necessarily need to go up either. And the best case scenario I can give is with a lot of these bigger corporations, a lot of those C-suite people, they don’t make a million dollars in a salary. They’ll make more like 200,000 and then they’ve got all those stock options,

Bjork Ostrom: Stock options and-

Ansley Beutler: … and all that other stuff going on. But their salary is not going to be a million dollars.

Bjork Ostrom: Yeah, yeah, yeah. Right. That makes sense. One of the things that we’ve thought about with the… So TinyBit is the parent company that we have which oversees it, is, as we’ve started to add team members, I’ve thought about, “Okay, if I was in the role of CEO of this company, what would that look like? And should we match my salary to what that is?” And the other thing that I’ve thought about is, my salary probably shouldn’t be under what other hires are if I’m the person who’s leading this. Is there anything to that in regards to IRS auditing and you have team members and you’re like, “Wait a minute, you’re leading this company, but you’re paying yourself a salary of 30,000 when somebody on the team is making, whatever, 50,000, even though in the org chart you’re above them.” Would that be a consideration?

Ansley Beutler: So in that a case, I would consider that a consideration. And yes, I probably wouldn’t go beneath someone else. I probably would try to be at that level if you can. Obviously, if there’s any other benefits that you yourself are getting as the CEO. So if you have health insurance or some other kind of non-dollar benefit, that could also weigh into that decision as well. But I wouldn’t go any lower than your employee.

Bjork Ostrom: That makes sense. In terms of wrapping it up, one of the things that we had talked about as a potential conversation is, you had mentioned talking about how does set yourself up for success, 10, 20, 30 years down the line, which I thought was a really interesting and intriguing thought. And a lot of us are thinking like, “Hey, maybe we’re lucky if we’re thinking about quarter four in 2020 versus 10, 20 years down the line.” What does that look like in regards to our finances, our bookkeeping, our accounting and setting ourself up for success 10 years down the line starting today? What are those things that we can be doing?

Ansley Beutler: Yeah. So number one is bookkeeping. I think one of the biggest reasons why businesses fail is mismanaged cash flow, which means that people aren’t paying attention to where they’re spending their money and making sure that however they’re spending their money it’s being replenished. So that’s number one, it’s just really staying close to, looking at those reports. That’s why I think bookkeeping is so important because you need to be looking at that profit and loss statement to see, “Hey, how much am I actually generating?” And not just looking at your bank account. That’s not what you want to do. But on the flip side, another thing with food blogging, if you are doing it full-time, something you probably don’t have access to is an employer-sponsored 401(k).

Bjork Ostrom: True.

Ansley Beutler: And so something that I’m a big proponent of is finding a way for you as a self-employed business owner to create something similar, whether that be an IRA, there’s a bunch of different options. I’m sure you’re well aware of with employees and all of that. You can have a solo 401(k) which I think is actually more beneficial than an employer-sponsored 401(k) because you can contribute so much to it. That’s just something to keep in mind. Oh, I know a lot of people are so excited to hop into food blogging full-time, but I’m personally as the accountant in me am wary of, “Hey, I lost health insurance. I lost my W–2 and I lost access to a 401(k) plan.”

Ansley Beutler: So you lose a couple things when you choose this world of self employment. And that big one is retirement. And that is something that is going to be going to be on you now that you are self-employed.

Bjork Ostrom: That’s great.

Ansley Beutler: So finding a way to set aside money into a retirement account, even though you’re self-employed.

Bjork Ostrom: That’s Awesome. I remember when we were early stages, the first thing we did was IRA, just because it was a little bit easier. And then did the solo 401(k) or I 401(k), and just, maybe same thing, but it was just… Technically, I owned Food Blogger Pro. Lindsay owned Pinch of Yum. And then we transitioned to TinyBit. Lindsey and I share that 50–50. But at that time, I could have a I 401(k) and Lindsay could have an I 401(k) because I think one of the rules is that you can’t have any employees at that point. Is that right for a solo I 401(k)?

Ansley Beutler: Mm-hmm (affirmative). Yeah, for us.

Bjork Ostrom: So we each had these and we could fund them to, I don’t remember the amount, but it was a substantial amount If you pay yourself a certain salary and we don’t have to get into it. But that’s the world where it’s like, “Oh my gosh, there’s all these kind of cool things that you can do. And here’s my transition into plugging the work that you do. You don’t have to be the one listener who knows all of that. You need to get somebody on your team.” We talk about it and I think about it as a personal board of directors. We have these small companies, we don’t have an actual board of directors, but we have what we consider to be personal board of directors. Who do I go if I have a personal finance question, if I have a business, CPA, bookkeeping question, who do I go to? Who do I go to if I have a existential spiritual question? There’s somebody on my board of directors.

Bjork Ostrom: So what I want to campaign for, for anybody listening is you think about building out that board of directors of people that you go to with the questions that you have, and that’s what you do, Ansley. So if people are interested in doing that and taking that step forward and getting somebody that they can go to with any finance, bookkeeping questions, accounting questions, one of the great things is you understand the world of blogging, which is so rare for somebody who does accounting and bookkeeping because these are kind of unique jobs that we have. So a benefit there. What does that look like for somebody who wants to reach out and connect with you and potentially take the next step?

Ansley Beutler: Yeah. So I have, thank you for bringing this up, but I have a separate arm of my business. So The Fit Peach is my food blog and Peach Perfect Financials is the company that I created for helping other bloggers with accounting related, and yes, finance related aspects. And I call that kind of my white-glove service. So that’s when you’re looking to outsource bookkeeping, that’s when you’re looking for someone to help you with that S-corp election. I also will do the payroll setup. I have an in with one of the common online payroll processors that I love. And so I can easily set you up on that as well. As well as tax preparation. I did, I think a handful of bloggers taxes this past season, which was fun and insightful to, in itself to see and help them out.

Ansley Beutler: But I do that as well, if you’re just, it’s over your head and you don’t even know where to begin with taxes. And then I do offer consultations. I’m not going to lie, I had an influx of people wanting these consultations with me. And so because of that, I made this Blogger MBA School, which is a course that’s coming out this fall actually. And that’s more of my, what I talk about in my consultations, kind of what we just talked about throughout this podcast in a more in depth sense with lots of helpful resources and all that stuff. I am creating that course for that purpose, for people to just learn everything that we just talked about.

Bjork Ostrom: Totally.

Ansley Beutler: And if they want to kind of DIY some stuff over there. And that’s going to be over on the Peach Perfect Financials website as well.

Bjork Ostrom: Cool. That’s great. In my additional plug, my plug after the plug is, as a business owner, the most expensive thing that you have is taxes. And the best way to manage that is to be aware of all the strategies that go into bookkeeping, accounting, financials. And even if you don’t love doing it, find somebody who is good at doing it and can do a good job with it because it’s one of the most important strategy considerations that you can have as a creator, as a business owner. So I think it’s really important and I’m glad that we were able to talk through it today. So thanks for coming on the podcast, for sharing these insights.

Ansley Beutler: Absolutely.

Bjork Ostrom: Fun for me, I love talking about this stuff and I know it’s beneficial for others. So thanks for coming on, Ansley.

Ansley Beutler: Yes. Absolutely. Thank you for having me.

Bjork Ostrom: That’s wrap for this episode. Thanks to Ansley for coming on and talking about all things income and revenue and expenses and accounting and bookkeeping. All of those things, like we talked about are so, so, so important to line up to have really running well. And one of the things that’s so great when you do get to that point where you really understand your numbers, you understand your income, you understand your expenses is that, not only are you able to make better decisions, you’re able to forecast, you’re able to understand where you should spend your time, but it also ties into other areas.

Bjork Ostrom: You remember the conversation that we had with Joe Valley from Quiet Light Brokerage. And he talked about some of the most important things for businesses that are valued well is to have a really clean set of books. So if you are in the group of people who think about building your site as a valuable product that you might eventually sell someday, one of the best ways for you to set yourself up for success is to have a great track record of clean, easy to understand books.

Bjork Ostrom: So whether that’s you, whether it’s not, whether you want to hold onto your site, build it, grow it forever, that’s kind of the category of content creation in business building that we’re in. We’re not interested in the near future and we’re not looking to sell anything that we’re building, but we still really spend a lot of time investing both time and revenue in making sure that we understand and have a really clear picture of where we’re spending money, where we’re earning money and how that all plays out both at the TinyBit level, but also with each operating company.

Bjork Ostrom: It’s one of the rhythms that we have for anybody who runs a company at TinyBit is every month, we’ll comb through the books, we’ll look through every line item and make sure that we understand where it’s coming from, why it’s there, if it’s correctly categorized. So this is something that you should be doing as well, but you don’t have to do it on your own. And that’s why solutions like Peach Perfect Financials exist to help you do that.

Bjork Ostrom: So thanks again to Ansley for coming on. And thank you for listening to the podcast. We wouldn’t do this without you. Make sure to subscribe or follow if you haven’t yet so you can get notified whenever we launch a new episode and we will be back here next week. And the purpose of this podcast is we want to help you get a tiny bit better every day forever. We hope that this podcast did that. It’s the reason why we show up each and every day. Make a great week. Thanks.

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