The Good, Bad and Ugly of Entrepreneurship

um please don't hire anybody that you can't fire it's super important that you do that if you please don't if you can't fire them please do not hire them and cuz you know it's a reason a season or a lifetime everyone's not going to stay forever but it's just it gets just so sticky if there's so much of a relationship and you cannot terminate people you have to be able to do [Music] that well hello everyone I am super excited to welcome you back to another episode of the Thank Me Later show with me your host ji Thornton where we help you master your money and transform your life so today y'all we're going to get a little bit more Mastery on entrepreneurship you know I hear from y'all a lot and y'all are out here navigating the economy you know you want to live your best life you want to own your own business and I get it and just want to make sure we're doing a good job of pouring into you I'm just not here as an accountant but here also just as a fellow entrepreneur to kind of give you a little bit of the game super excited to have my husband and partner David Thornton here hey David he Janai how you doing wonderful how are you I'm good I'm good good and just wanted to um continue our conversation on entrepreneurship okay you know the first episode we did together we were really helping people who were wanted to get out out there MH now I want to kind of for the people who may already be out there and kind of give them The Good the Bad and the Uglies I'm not trying to scare anybody but just kind of want to level set and we have had a lot of challenges in business oh yeah um but we have been able to clearly we've been able to navigate it 28 plus eight years out here in the the world of Entrepreneurship we're still out here standing let me high five you for that all right we've done that so I'm going to give you a couple statistics kind of see what you think about it so it says um about one in five us business es fail within the first year of operation when I say that what do you think about that uh are you surprised no no no I that's true and why are you like yep I I see that because well I think a lot of people heck even I've done it um want to start a business get a business bank account you know get the LLC tax ID start all that and then just stop so that so that's one number I think that's a lot of it but then I think also um people start a business and aren't really clear with everything that it takes to do it so um it takes them more time right and more money than they thought of course uh and life happens or whatever and they either have to stop or whatever so it it's just or they get into a business and they realize that they don't like that business the the true business right point of it I know a lot of people say you know start a business and follow your passion well you might like to bake and you might be really good at it but you might suck it cells you might or you're you know you're nervous about presenting there there all these other aspects of it that come with entrepreneur come with entrepreneur that you don't get to pick other than just baking you know baking cakes that part of it so they're just a lot of things that people don't understand and once they get into it they're like you know I don't know I can name a million other reasons why they could fail they fa so when you think about business Reign you know so problems that happen when you think about it in the context of the businesses that we've owned you don't have to give the details but give some examples of some rain that we have I'll jump in too but I'm like o we have we have had some rain yeah I mean we've even you name it just when um you want to go I mean yeah we've had um HR employee issues yeah we've had to terminate people you've had to terminate people uh we've been sued by a previous employee yep y keep going who we really looked out for you ever anyway that's you know who you are so sorry I'm still hurts I guess that still hurts you a little bit that still hurt you a little clearly clearly um we've lost clients we've lost clients uh we fired clients we fir clients fired a lot of clients oh my gosh uh just the ups and downs of you know your business also rides on other people's ups and downs yes so especially economic changes economic changes the pandemic oh my god there there are so many different ways and and don't get me wrong it's it's hard I heard um one podcaster um say or a couple of them uh say I am unemployable and um that's Neo right great guy gotta listen to Neo Davis but he says I am now unemployable because once you get out here I think the benefits oh definitely outweigh definitely outweigh oh there's no question but don't don't jump out here if you if you don't have it in you to really grind 24/7 yes really study 24/7 learn job stamina know it's going to be here for a while you don't want to do this no and I do think about the sacrifices that we've made because you know I I hear it all the time if I'm talking to one of my friends or one of our relatives first thing they're always saying okay Janai I know you're busy uh because I am busy a lot definitely now I have more freedom than everybody I know but I also work more than everybody I know too so there's that kind of strange tradeoff there cuz I I think initially people thought oh you all are entrepreneurs like we're sitting around watching Netflix and working two hours a day and we're chilling um it is not that yeah it kills me and God bless people who do is you know they can have fantasy teams and watch football all Sunday and just you know and I'm like man I I think I might have seen two whole NFL games and those it was only because it was a playoffs and I made myself stop and then I think I was have my laptop in my lap the whole time right so um it's a it's a lot of work it's a lot of brain space because you're always thinking you're always trying to figure something out the trade-off is big though you know if if you know how to manage money and grow like it it could be so worth it and it does it also you know I've had people who and I apologize to all of my friends I'm going to say that out here is I owe a lot of people a call right um I do better with communicating with people than you do much better but sometimes I'm like you know from just talking and managing so much I just don't have the energy right you know one thing that I thought about in the context of reain in business I think about as a woman the amount of conflict I've had to learn how to manage and how I I think that's just part of business but working in the entertainment space where there's really no rules you know there's certain behaviors that are more acceptable in my area that just could never fly in corporate right and so I really have had to learn and really lean on you um managing conflict with men in particular and just having to get comfortable with conflict very very quickly and I think that's one thing that we Overlook like not like physical fight but you have to learn how to fight and stand up and pin people very quickly and professionally and and also not not so professionally you know I'm thinking about one of the we had a client whose manager was completely out of line with one of our employees and he used profanity you know when he talked to her and I had this very specific response I wanted to say you know to him and David was like oh no uhuh when you call him I need he said this I need you to say exactly this and I was like for real I have to say it like that um but it was a game changer and I was able to immediately take control of the situation but conflict is a big part of business that people don't talk about right 100% yeah because you think if you're you have to deal with so many PE more people with business that it's just the percentages yeah you're going to it's it has to happen it has to happen and you have to be prepared for it evaluate whether you want to keep that business and fight for what you believe yes fight for it it's a part of it y um one thing that I want to talk about when I think about rain that we've had is just this whole thing about um when transition because I know that's difficult for people when clients whether you fire them because people don't realize that needs to happen right you're not the one always getting fired and how that has been you know challenging for us you know running a business but but necessary though I mean it it it is challenging especially when um they're a source of revenue for you right um or you've built a relationship I mean there have been clients that we've held on a little bit longer than I thought we would because a relationship it was it it was tough right but it it ultimately and I think we had to have this conversation you have to ask yourself what's best for the business yeah especially when you have other employees that depend on that business that you know if somebody at some point is doing something that's going to ultimately hurt the business right it's time part ways right and and knowing how to break up you know and what that looks like it's funny um we have a client here who um fired their attorney and the attorney called me like like boohoo crying and all I could say is I could tell this is your first breakup you know you I'm like you need to do this you need to do this you needed to do this because now through a lot of practice with transition in life and all of that like I I like let me just give you the game on how that works and I think so many people just are thrown off particularly when you're a smaller business and that client could be a significant part of your Revenue we don't understand that that revolving door is always revolving yeah you know you you have to be prepared for that so you are not your business is not you're not financially devastated when you begin transitioning clients yeah and on that and I don't know if this is your next question not only transitioning clients because and you're talking about you know it's it's good when you can transition when you have the power and you can transition a client off right but it's not cool when a client is like and it doesn't happen often right when a client is like you know what right yeah think I'mma take my business elsewhere can I can I tell the first story about when that happened to us can I name names for that you think no you don't think so we don't want to get sued you don't want to get sued it's a friend no no no no but but we have a good relationship now I think I think I could tell this story you I don't know you're talking about okay let me tell the story so this is this is a while ago so I can't remember maybe like this is like 2005 2004 this is the first major breakup we had that was yeah we're GNA edit that next why can't I tell the story because we yeah we have a client who was really hot at the time super hot um at the top of the game at the time oh my God like this was like the year of the year of the year right and everything was was clicking I mean we we were printing money this year yeah we always say wish we were back to the client name inserted Dave we were doing so good I think we could mention the day because we was throwing away money we was we were living and this that was a big year because so many things were clicking that year and um because you know he was part of you know a that particular label um the team and he had made a decision he not only fired me us he fired everybody right and just I mean it was I was emotionally traumatized by it like emotionally tore up by that and it's interesting years later to talk to him you know he's you know I've talked to him last year you know when he needs help or advice he still reaches out but it just just wasn't even emotionally prepared for that but just having to be able to recover very quickly and and get back on track because like you said a lot of things are just beyond your control it had nothing to do with us and the work that we were doing came out of nowhere it came out of nowhere and he had hired um a new team and they like cleaned house you know which happens a lot so anyway I don't want to D ress but just basically want to emphasize the point that those things happen and this sad person you are so crazy you are so crazy said he wish he had not done that never done that yeah because he was he didn't realize you know a bad breakup but we not mention saying I just want to throw that out there nothing but love you are crazy so we're going to go to the hotline I'm going to transition from your craziness right now because we have we have a caller who needs some advice on the Thank Me Later hotline hey Janai my name is Courtney and I'm from Houston so I started a social media business three years ago and last year we gross 3 million this year we're projected to gross 5 million I want to get my mom a house but is it too soon at what point can I start making purchases to reflect the growth and success of my business thank you DK Courtney I know like I have to talk I know right she needs to be a client of ours or something what the what is happening need to to buy me no listen you know it's interesting when I hear people I don't know if it's cultural where we have this love for like our mothers and our grandmothers I'm a mom I I have all the respect in the world for people who want to do that but I am always very very cautious of people making these big permanent decisions and people think oh you're only talking about people who work in the entertainment industry no I know people I have a colleague who's an accountant who essentially wanted to retire her mother and do the same thing and couple years later the math wasn't mathing anymore so what I like to tell people to do in these situations is a one-time gift is fine like you pay it and then you're done but the gift where you have to keep on giving and giving and giving retiring your mother or your grandmother or your dad buying a house that you have to maintain and keep up sometimes the math is not mathing and you David it's interesting to me people are like I want to retire my mom well how much does that cost like how can you make that decision like you wouldn't go buy a car and just drive off the lot and you don't know how much it costs how can you make a financial decision that big especially when um your mom could live to and not trying to put her in the grave early that's why I'm saying you have not done the math we have a client who um has done essentially that retired their mother and you know now the pain is beginning to happen a little bit said mom is like early 70s I'm she could live 20 more years like easy yeah we would have needed to fund an account for25 years to make sure that we could continue to make that commitment that that requires math so I I'm not an advocate of that now if you're going to give your mom uh $50 $100,000 down payment on the house and then you're done she got it from here I'm I'm 100% cool with that but if you have to keep paying the mortgage deal with the repairs no and it you know that's subjective it it also depends on how much money you're making now Courtney if if that continues um could be in a position to take care of her mom certain aspect of her mom buy her mom house or car or something like that but I don't understand I don't think she said that a lot of people who want to retire they you know their parent right because you do take on that responsibility for a while and then what I also notice is a lot and we're talking from the standpoint of Entrepreneurship um is and it happens a lot with athletes and and and uh entertainers is now everybody sister niece nephew everybody got get retired at that point right and um and and it's not just an entertainment or Sports yeah yeah yeah it's business success it's success and you just have to be careful that you know those two years might be they might be great but what happens if something happens to the economy to your business to your business base and then yeah can they sustain on their own can they sustain now your mom's going to end up losing that house or whatever and and that has happened a lot yeah that's that's tough to to do that right yeah position them for that good intention good intention right um so yeah you definitely want to help your family members out if your business is doing well but just keep it mind and I think what a lot of people do is they might based that on what they see com in the door and then they really haven't done the accounting that's gross right they're they're they're basing this off of what gross yeah income is yes and not after you've all your expenses all those expenses you realize man I can't even buy myself a house right so that's where you have to be careful right for sure um let's just share a couple resources that I think might be helpful for people um I definitely think people on your entrepreneurship Journey um lean into you know David you're Avid podcast you love a lot of different business podcasts I don't know if you had any in particular that you wanted to shout out to people or you're like um my first Millions I love um and it really depends on different aspects some some podcast I listen to well I listen to Marketplace every day okay and that just gives me a general understanding of what's going on in the economy as a whole and that's NPR y'all um I highly suggest that CU it's quick but you can get a real good sense of what's Happening you need a strong awareness as an entrepreneur of what's happening in the bus a great Bas you don't know how what's going on the com or some law that's going to be passed or whatever can affect your business and it's quick short in and out it's quick short in and out I also listen to podcast um a big fan of David Shan's um podcast social proof because because sometimes when you listen to those they also you might get a tidbit from someone and then you can be like man I can use that in my game changer uh so different it's it's a number that I listen to um and members of my team listen to always we swap them right but it's it's really about what that need is and where can I learn right and and what I love about podcasting plug is is um you know I don't have time to read a book people say you should right uhen but you can listen right and podcasting a lot of times can help you depending on the guest or whatever um can help you skip the line right when you don't have that Mentor right yeah because mentorship is huge um I would also suggest um checking in with our community the thank meater Community go to um thank meat. money and check in with us and then was interesting a lot of people just Overlook it if you just want some quick information the SBA actually has some decent information that's SBA small business administration sba.gov so I would certainly check them out for sure all right I want to talk about a couple other business challenges that we've had all right um HR employees tough very tough hiring firing being sued by like you the gamut we we have seen it all for sure tough yeah cause F first of all um you know employees don't understand and I've been an employee so I don't get it they think oh this person this business is making all this money right and they don't really understand all of the expenses of the business has you know you for a lot of times as a business owner you pay an employee more than you make it before you or even before you're pay even before you get you pay yourself um because you have to keep continuing to reinvest in the business that's that's another thing that people don't understand when they start a business is you can't count on that money coming in the door as a part of your income yet because you have to pour a lot into that business to get it going so and employees are a major typically a company's biggest expense and it is difficult if someone's not working for a major company like cocacola or UPS nothing wrong with that but a business owner people don't understand that's their life yeah so how they approach it is very differently so working for a small business but um one thing that I advise our entrepreneurs on um please don't pay with play with payroll like do it pay your people rights above board legit cuz you don't want any of that to come back on you you can't afford one of the big Payroll Services you can run payroll through QuickBooks or something please run actual payroll please please don't play with that okay um and that whole there's a reason all those HR rules doing reviews and documenting people super super important that you do that and you're like I got 25,000 things going on it's easy to say that's not important and then it becomes important when something happens um and that happens all the time so want to make sure that you are you know you you're focusing on those things and not again like um it's not a big deal it is a big deal and just even the process of finding the right employee oh my gosh cuz you just like a relationship you can go through a lot of time trying to find people train them yes spend a lot of energy into them and then they're not the right fit right or they're not who they say they are or whatever and you've that's money gone yeah for sure uh one thing in the role of um being a business manager uh I've done a lot of firing for other people yeah yeah because a lot of people don't want to do it they they don't have they're not built for it um please don't hire anybody that you can't fire true it's super important that you do that if you please don't if you can't fire them please do not hire them and because you know it's a reason a season or a lifetime everyone's not going to stay forever but it's just it gets just so sticky if there's so of a relationship and you cannot terminate people you have to be able to do that right yeah um another situation um what I've noticed people David in entrepreneurship I think people don't understand your business has two jobs your business is supposed to support your life today you know pay the business pay your bills give you the money that you need but it also has the job of financing your tomorrow meaning your retirement and I see people spending all their money on today then they get our Ag and I'm like so now what y'all going to do yeah and so what that means um the basics is you have to be funding your retirement that's your that's your business's job your business is not doing a good job if it cannot fund your today and your tomorrow and I give you um 100% credit for really making sure that's something that we've done that's always been your thing as far as making sure that we're preparing for the future for the future right and I think I've been you know I'm naturally kind of paranoid about a few things Financial things but I think I got that way just being in a family where I've had too many relatives who've outlived their money right and I'm like that is not going to be us and so like and money just doesn't fall out the sky one day like you have to save and prepare for that and invest and invest saving is just not it yeah and so I've just seen people who just blow that off and then you know the days become turn into weeks weeks turn into months and now here we are in our 50s now we can see the light at the end of the tunnel but I do I have a lot of colleagues who are our age and I'm like so what y'all GNA do now because in your 30s you wanted to spend all your money now or in your 40s you have to commit to your retirement you cannot live on Social Security right now and a b and y'all young people y'all probably not even gonna get none if y'all if you have a three or four in front of your age I don't even know if y'all G to have any money as an entrepreneur if we're going to keep it on the entrepreneur side is you know when you work for a business there are things in place that help you retire or help you or might match you if you work for the right company yeah and it's becoming less and less cuz pensions don't exist anymore yeah those that's the thing of the past so a lot of company benefits they're gone they're gone so as an entrepreneur you really have to be careful about separating some money and putting some to the side and um yeah and just manage it until yeah you can it can it can take care of yourself or whatever you have to treat it like a bill and not like a bill that doesn't matter like your mortgage or rent or your car insurance level of importance you have to build that into your budget it's not optional any other business challenges you want to talk through and you think about o i mean they're just there a lot um even I remember the first time I left the company and then all of a sudden insurance was 100% hour oh my gosh insurance cost how much what Cobra only last H long are you serious oh my goodness so and those prices go up I mean what we for a company of our size what we spend on benefits I'm like why does this cost so much this is insane and good for you because you uh you you are one of the few businesses that really want to make sure the benefits are good a lot of small businesses like oh no I don't play about that yeah we're not paying that I'm like no we we going to have like Lexus like Cadillac level benefits and but also that comes from that's something I really learned when my mom was sick before she passed away that her level of benefits is why she got such good health care and I was like that will never be us but no but but not only you you know some people would do that protect themselves but you do that to protect no I make sure everybody if I have it that means everybody's going to have it now if we have it everybody has to have it yeah no I do I believe in that and again it a lot of it comes out of paranoia and fear that's why I'm like health insurance is important but I'm like no like we pay short-term and long-term disability for everybody we pay 100% of that because I know what that means to have that life event a lot of young people are like oh I'm fine nothing's GNA happen till something happens so I'm just like no we're going to make that investment for people so please don't ever skimp on those benefits you know there's nothing more devastating than when someone's been working and then they have a life event a illness or an accident life is going to continue to happen I think we've been able to you know withstand some of the the the storm of that um last thing that I want to talk to you about we we talked I know reaching our limit I know I know I know but um in our last episode we alluded to um when it's appropriate to upgrade your life like when that happen never I'm just kidding you're a fun killer you're a fun killer but people I think that's something people don't know like how do you know you know as an entrepreneur how do you know when it's time like oh I I can afford a new house like I'm I'm flying I can get that new car or I mean I think it's all within it it it depends and an upgrade to one person is an upgrade to that's fair you know it it it it's different it's relative if you've done all the math and you and and it makes sense at the end and you just you drive in a Hyundai and now you want to drive a Lexus and it makes sense then upgrade right but if you're driving a you know a Honda and nothing wrong with Hondas no um and you do all the math in the M it's not clear but now you want a Bentley then you can't you it it doesn't make sense right A lot of it is you upgrade truly as needed that you and and make sure it's an upgrade that I I I think that people should upgrade on assets rather than you need the new Louis Vuitton purse or whatever things that are 100% liabilities right don't appreciate right yeah yeah and if you can figure out a way how to get that at a deal or I I don't know what for whatever marketing reason it's truly a marketing reason not just something for you to floss out that then maybe or if it's a business write off depending on the business truly a write off but other than that um it's it's about doing the math and taking small steps right right yeah only thing I can say about that is the rain is coming and and I think a lot of people just think things are going so well they're always going to go well no they're not and how much rain can you take so how much runway do you have do you have like three months of money put away have six months if something happens business-wise how long can you last that's true too and so that's what I've always been thinking about because a business is always a cycle it's up and down it's never always this perfect straight line and it's certainly never just up up up up up up up up up so the rain is going to come are you prepared for for that rain um that's a good point yeah so not only doing the math but making sure in that equation that you are putting enough us to the side or building that that pot yeah or building those assets that generate continuous income and then and then live off that so if that's the case then yeah I there's nothing wrong with treating yourself your for no you should be your hard work no and you should but again you you can't make a financial decision without understanding the impact of it right Y and I think that's the part that that we're really trying to stress here I think one reason too as I was listening to your answer I was thinking about part of the reason why I think we were also so conservative part of it I think is a function of our personalities but I also think working in the entertainment industry taught us exactly what not to do oh yeah I was like oh my God like you seen it come and go so I seen so much money come and go um and just the extreme I can tell a million stories on clients who I knew when spring came that we were going to buy a new car or two no cars and the car was never enough then you had to have the car before everybody else I mean I have literally paid $200,000 more for a car because someone needed it off the boat because they had to have it first so you you name it and it's just never enough there's there's never enough of it so when you get into that you you can't compete with it because it never stops there's never enough shoes clothes you win that game you cannot win that game and I just remember um literally as we began working in entertainment literally praying saying Please Release us from that because you can't you can't compete in that right so let me just I don't even want to be in any of that at all let me get over here and just focus on my life and have the stability that we want and let's just save this money and keep going right so again have your fun but plan please please please plan for cuz the rain the rain is coming that's not us being haters and the last thing I'll say cuz we're wrapping up I believe yeah we are um you know I we were poor I was yeah I was too yeah but you know you don't want to go back to that oh my God I it's a lot of pain in that so if I got to skip a few things that are so-called upgrades or whatever so that I don't as so you know to make sure I don't ever go back there right then I'll rather skip a few of those those things I don't need to eat out of the top I don't care about any of that right because I need to make sure I ain't like not eating at all right right yeah and that pain is real and there's nothing worse you know it's one thing to have been broke but to have been broke and then had money and then lost it oh yeah that is the worst pain I've ever seen in people yeah yeah that's the and we've seen that multiple times in the business that we have especially when especially when you're image or your self whatever the word is selfworth or image is that I'm this super successful fly fly and I have all this stuff when that's gone and that's all that you are known yeah what you think you're known by super painful it's hard to yeah it's hard to recover for that so I'd rather look broke yeah act you know I'd rather that then cuz then when you're really broke then you have to you know what I mean yeah but um it it's it's you haven't built up this thing that people see you at or whatever right yeah I'd rather yeah I don't have any money yeah but you you have you have to live below your means if there's no other advice that I can give you if you live below your means um you no one ever complains about oh man I saved too much money no one ever says that yeah have fun oh oh no doubt we have fun now yeah yeah we definitely have fun so don't get me I'm not saying that okay all right so as we wrap up um I want you to fill in the blank um if you blank you will thank me later if you what in the context of Entrepreneurship if you prepare for the rainy days or you prepare for for the storms you will thank me later I think you just stole mine sorry I don't think you're really sorry first I know it I don't think you're really okay um if you understand your numbers okay so if you understand your accounting you will definitely thank me later all right David I'm not even going to bother because again you don't have any social media I'm not even going to bother to tell people to do that coming soon okay no it's not it's definitely not um so just a couple things um couple call to action um be willing to Pivot we talk be willing to Pivot your circumstances and please create a budget personal than business that's your homework assignment from this episode right it ain't got to be real fancy but I need you to do that um please engage with me on social media at tml money and at Janai Thornton and you can learn more about us at thank meaters show.com and please watch our other episodes and thank you thank you for tuning in to the thank meater show with me your host Janai Thornton where we help you master your money and transform your life we will see you next [Music] episode

Channel: Thank Me Later Show with Jini

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Id: KahvZFL1i_o

Length: 38min 51sec (2331 seconds)

Published: Mon Apr 22 2024