Assets and Taxes - What You Need To Start A Business

Episode Date: July 29, 2025

If you're an aspiring entrepreneur, want to become a business owner, or are just starting your business, then this episode is going to break down exactly everything that you need to do from a legal and financial perspective when it comes to starting your business.Our Financial Wellness Tool: https://assetstrategy.com/myblocks/Our Financial Guides: https://assetstrategy.com/financial-guides/ Once you're ready, we can offer you some professional guidanceBook a FREE discovery call today to explore how we can help you: https://assetstrategy.com/contact/Call the Asset Strategy Team: 781-235-4426Connect With Asset Strategy:Website: https://assetstrategy.com/LinkedIn: https://www.linkedin.com/company/asset-strategy-advisorsFacebook: https://www.facebook.com/people/Asset-Strategy-Advisors/61573136047425/Instagram: https://www.instagram.com/asset_strategy/Legal Halp: https://www.legalhalplaw.com/ia-sc-r-a-565-7-2025

Where you're going to get into trouble is, are the right provisions included in your company's operating agreement? Do you know what an operating agreement is? Now they're making, you know, six figures and it's like, well, wait a minute, you know, dude, you haven't done an S-Corp election. You're paying 15.3% self-employment tax. You have contracts with your independent contractor, your video, video editor who's helping you out. What happens if you walks away with your IP or your trademark or your branding? You know, what do you do? It doesn't need to be a pain in the ass to engage professionals.

All right, welcome back to assets and taxes. I'm your host, Kent Fitzpatrick, managing director here at Asset Strategy, and I'm joined with my colleague and friend, corporate attorney and founder of legal help, Josh Halpern. Hey, Josh. Mr. Kent? If you've missed any of our two prior episodes, we were going to include some links below. And today, we are going to be talking to aspiring entrepreneurs and business owners. And if you're ready to get started and we're eager to jump in, Josh and I are going to riff on things from maybe tax, legal, financial ideas of what you need to be thinking about if you're on your entrepreneurial journey.

And Josh, I don't know if you want to kick us off with some thoughts, but the format today is going to be, we're going to be, we're going to, to be going back and forth. I'll ask you some questions. You ask me some questions and we'll see if we can't help the aspiring entrepreneurs out in the audience here. Yeah, you know, to kick us off, somebody mentioned something to me recently. They said, if you're going to provide value your clients, make sure it's not Googlable. Make sure it's not just something they can type in on Google and figure out on their own. So I really want to try to make this conversation not Googlable to the extent possible. And one of the questions I have for you, Kent, and your team is, is it worth it for you guys to take on a, let's just say, a 27-year-old looking to start a side hustle or some

single-member business? Is it worth it for an established professional firm like asset strategy to do that? Yeah, you know, it's a great question. And we get often asked, you know, hey, do you guys have a minimum, and a lot of advisory firms will say, oh, we only work with, you know, half million, million-dollar minimums. Our attitude is, you know, we want to work with and have solutions for everyone. Now, it may not require someone needs to open a $7,000 Roth to have them tie up a CFP for, you know, two hours to go over that, either for, you know, their time or our time, but we certainly can put solutions in place that they can either, you know, self-service or as you're saying, like, we produce a tremendous amount of white papers,

you know, educational webinars like these, and maybe just, you know, some guidance. So that new entrepreneur who's 27, hey, listen, you know, Bill Gates started as a 27-year-old out of his garage and, you know, you would have been wanting to be his financial advisor or legal expert back then. So you never know. And, you know, I've always been an entrepreneur. I love working with entrepreneurs because I can relate to them.

they can relate to me, and it's not always about, you know, hey, what's your assets we can manage or do you need financial solutions? Maybe it's just, you know, they need some coachable moments and point it off in the right direction. And hopefully there's value in that. So the honest answer is, you know, I want to help them where we can and, you know, put together support and offering that makes sense for them. Yeah, because I think one of the biggest issues I see with young entrepreneurs is they're hesitant to engage a professional for a number of reasons. You know, number one, it's intimidating. Who wants to get on the phone with a bunch of different assistants and schedulers and coming into an office and having a meeting, sit down when you're

just trying to make money and set up an LLC, you know. And also talking to a lawyer just by nature is kind of intimidating. So, you know, I would probably give you a compliment because I think the way that you've approached law is number one it's accessible like you're not charging you know a huge lawyer fees and you know every you know minute of the day is you're getting a invoice for for non-legal services but you know you you do a lot of fixed fee pricing which I think that entrepreneur can budget if they say hey it's going to cost me X to to set up an LLC and I need an operating agreement I need all the the elements to it. but I don't want them to go to legal Zoom where they're just buying a document, but that document

is not well crafted for their particular situation. So that's a good point. That's a good point. I appreciate that, but that's a good point. I mean, I try to be real with my clients. When they call me and they ask me, how much is this going to cost? I do them one better. And I say, you know, you really don't even need me. You can go online and you can take the time to set up your own LLC. you could pay $99 in the state of Ohio, for example, where I'm based today, and set up your entity. And if you think you have the knowledge and you can maneuver chat GPT and get the initial steps done, you know, go for it. You don't need me. But where you're going to get into trouble is, are the right provisions included in your company's operating agreement? Do you know

what an operating agreement is? Is chat GPT bringing it up for you and you don't fully understand if that's even needed or not? Do you have contracts with your independent contractor, your video video editor who's helping you out. You know, what, what are his terms of payment? What happens if he walks away with your IP or your trademark or your branding? You know, what do you do? Well, and we've talked about, you know, people want to keep that legal veil of protection. And what if they want anonymity? What if they want, they don't want to have their personal name or their information, you know, that's where you're coaching from a legal standpoint is going to make a huge, huge difference. And it doesn't have to cost a lot of money, but it's just structuring it

correctly. The problem, though, is that a lot of these young guys think they don't need this stuff. You know, it's very easy for them to go in with the mindset of, I'm making money off my laptop, I'm drop shipping, selling courses. Why do I need to get on the phone with you and pay you $1,000, $500, whatever, to get this piece of paper in place that I'm going to sign on DocuSign and then file away on my computer? You know, why do I need to do that? Well, I mean, you and I've seen this time and time again where you have that person that may have done the legal zoom they've got a single member LLC now they're making you know six figures and it's like well wait a minute you know dude you you haven't done an escorp election you're paying 15.3% self-employment tax you're paying

1520,000 dollars in self-employment tax that we could reduce that significantly and your concern was whether you're saving 500 or 1,000 bucks on the yeah yeah yeah um so then let's let's let's maybe talk through a couple of pieces. So we're talking about, you know, the legal setup. So, you know, if you have the side hustle, which apparently over 40 million Americans do, at some point in time, maybe that dog walking service turns into a bigger operation and you're kind of saying, do I really need my day job or this thing is really taking flight? So, you know, I think some of those kind of steps are, you know, I want to set myself up in business. I want a separate checking account. I want to have that legal protection, that corporate veil. I want to have my books and

records in good order. Maybe I want to be thinking about tax deductions where I have a board of advisors or I have an accountability plan or maybe I hire my kids. So I think there's a lot more to it than just, you know, filing that corporate document. There is a lot of my clients, especially younger clients, young, new entrepreneurs, they want to partner with people. And the minute you say partner with people, you know, that opens up a whole door of what does this look like? How are we holding each other accountable? You know, as an example, I represent a number of young clients who are software developers and they're creating these really cool apps and businesses that are taking off and they're on a subscription model most of the time so

their income is super super high on a monthly basis and they have all these partners and people that work for them and with them and nothing is documented and they throw around terms like I want to give equity to this guy I want to pay this guy monthly and the da and everything's done through stripe or PayPal or Venmo and there's absolutely nothing so a lot of our business recently has been just inserting ourselves as corporate counsel to a lot of these young entrepreneurial businesses and just getting all that corporate stuff done. So it wasn't just the operating agreement to set up the partnership LLC. It's what the partnership agreements say and also what the employment agreements say

because it's when things go the other way, there's a breakup or a sale or whatnot, that you haven't clarified all that because you were too cost-conscious, you know, up front and not thinking about where this business can actually go. Right. So to kind of steer us back to the whole point of what we should cover today, you know, when if let's say that an entrepreneur, a young client has the courage to sit down and they have the foresight to start planning with respect to some of this stuff. What does that look like when we get on the phone with them, when you guys start talking to

them? Are they bombarded with information? Are they completely overwhelmed? Like, oh, shit, I shouldn't have done this. Or is it? What is it like? Well, I think, you know, you and I get on a lot of those calls, and I think it's kind of a coachable moment, right? So we talked a little bit about, you know, entity structure.

Is it just you by yourself? You know, do you have partners? You're going to hire people? You know, what kind of revenues are you looking at? You know, are we looking at, you know, tax breaks or tax deductions, setting up solo Ks or maybe solo K Roths? You know, is that too premature? So I think every engagement is different. Again, we've had conversations where, let's say, someone's a high W-2 earner, and they're running out of bullets in terms of what they can have for tax deductions.

You know, they're max funding their HSA and they're doing some charitable and they're doing maybe some pre-tax. But where you're really going to get your bang for your buck is that side hustle in terms from a tax planning standpoint and tax strategies that will really drive down the tax expense for you. Yeah, and there's some synergy here that I'm seeing, too, that the more I practice and the more I partner with guys like asset strategy, there's so much overlap between talking about taxes and a state plan and good corporate legal planning. So the average client that I sit down with, I almost always have the same script. It's tell me about your business, tell me about your LLC that you may or may not have. Do you have a trust? Do you have a will? Do you have powers of attorney?

Do you have a family? What does your investment structure look like? Is it taxable? Is it tax-free? You know, who's your accountant? Who's your CPA? It's a team that you need. And that's why we've been so busy because everything pours into each other. So it's been really great. Well, and what you just described is when we've talked about it on the show before,

is really our trifector, what we call our asset map, where you have, you know, kind of your operations, your assets and your estate plan. And, you know, we've talked a little bit about, you know, entity structure. Well, that's only one piece of it. because I've seen people that have, you know, all kinds of LLCs and partnership LLCs and all the rest of it, and then it's flowing back to them personally. And I'm like, well, you know, do you have an estate plan? They're like, what do you mean?

Yeah, I have a will. I'm like, well, there's a lot more you can do from an estate plan. But, you know, one of the things that I'll mention, too, is that questioning at the onset is very important because people don't know if there's benefits of having a C-Corp versus S-Corp because things like, you know, qualified small business stock. If my ultimate goal is that, use your software company example, that we have something here and we ultimately are going to sell this entity, you know, maybe beyond that five-year point, well, there's massive, massive tax breaks by my entity structure election being at C-Corp, as opposed to kind of going the LLC to LLC taxes, S-Corp or partnership journey versus, well, the benefits I'm going to get, even though I'm paying a flat tax of 21% plus tax, you know, to any distribution. you know, someone might say, well, you know, my accountant said, don't do that. Well, what's the path? What's the journey? I mean, if you're, if you're going to sell this and it's going to be a

significant capital gain, well, those are the conversations we need to have early. And that's why we've had so much success. That's why you've had so much success building your practice and recruiting a lot of young talent. That's why I've been just, you know, bombarded with legal inquiries because you're a tax strategist or really, you're just a strategist. I mean, you're not just a processor, you're not a paper pusher, you're not an average CPA. And that's how I approach law. I could just talk about contracts and case law all day long with my clients, but I like to understand the whole picture and talk about insurance, talk about accounting, talk about your employees, talk about your business goals. And then I plug and play my tools as necessary.

But I think that's how you got to differentiate yourself in the market today in order to attract some of these younger clients. Yeah. Well, and I think we should have probably presented this at the beginning that this could be a two-part series like kind of what to think about or I forget the name that you you said but to call this episode but I think there should be another version of it shit you need in year one it's just it's basic it's basic shit and when these clients call it's like do you do you have a trust man do you have a oh I thought about it you know I've been kicking it on the road I even looked at that in 15 years I got one from 04 you know maybe it's I mean I just got off a call

with a very well-established CPA who asked me to help set up an LLC for one of his businesses. And I go, dude, you didn't do this 15 years ago when you started the business? He's like, I never got around. And I also need to deed the property into it. I mean, it's unbelievable. I think people still caught up in the work. You know, you're forgetting the basis. But so this is the, you know, early year conversation. There's probably the, the ongoing advisory consulting, and then there's kind of the exit side where, you know, exit strategy, exit planning, because, you know, even once they've got these things in place, they can check all the boxes, all the rest of it, like, I've seen some really bad things happen

where they're going along and they've got a, you know, an S corp, and then they buy real estate in the S corp. And it's like, do not do that because that's, that's your operations. That's not your assets. Yes, you want the veil of protection wallet off, but there's bad things that happen when you're buying real estate as an example in an S or a C corp. And so I think, you know, we want to get people started off the right way, you know, on this journey of entrepreneurism, but we want to do maintenance along the way. And then when they're at that window on the backside or they're going to sell the business and they're or they're retiring and they want to do some succession planning, like each of those are different, you know, legs of the stool, if you will,

that need maintenance and oversight. Yeah, that's interesting because how do you manage a client on an ongoing basis from a CPA's perspective? Because normally when my younger clients contact me, they view a CPA as somebody you're just touching base with to file tax returns. They're not thinking of you guys as someone that's going to provide ongoing maintenance and coaching. Well, and again, you know, our role is not, you know, we have CPAs on our team, but we're

not doing the compliance. We're not doing the tax preparation work. What we're doing is more the tax strategy. So I think, you know, we do regular reviews with clients, you know, if we're doing wealth management, advisory, any insurance planning, estate planning. So I think it's, you know, and include you with some of the legal aspects of it. So I think on those regular reviews, it's not just talking about what's going on in your portfolio or the market. It's let's take a step back, you know, where are we at in that entrepreneurial journey and, you know, tell me what's new, what's different. Oh, yeah, I'm thinking about buying a building. Well, you know, do I need a material to participate? Well, is it the building for yourself? Is it for an investment? So I think that's

where a lot of these things come out. You know, we do discovery calls for new prospective clients to kind of learn a little bit about them and tell them a little bit about us. But I think, you know, if six months or a year goes by, you still need to do those reviews with clients to say, you know, what's changed? Well, you know, I'm getting married or I'm getting divorced or, you know, we had a baby. You know, so all of these different things have an effect. This is my sound bite for today. Brandon, you can clip this, okay?

This is the new way of doing business, especially for younger generations. And this is why I wanted to showcase just how we communicate internally and how we would approach onboarding a new client, for example. It doesn't need to be some burdensome costly process. We just want to get to know you and we provide the service that you need within the budget that you need. And it's important to approach it from a strategic standpoint, not a transactional standpoint. I think in the past, you're paying big legal bills to meet with a lawyer to give you one document or to go over one contract, but they're not advising on all different aspects of your estate plan holistically like, you know, a guy like Kent, his team would be doing.

So that's been the big differentiator. Well, and again, I think people need to understand that, you know, when we offer a discovery call, it's free. It's to have that initial conversation. And if there's a fit, you know, in terms of what we can provide to them and vice versa, then we can kind of go down, you know, do an engagement, lay out exactly what we're looking to achieve. And then we're on a path. But have that initial conversation, you know, because we always have situations where I got a guy, I got a gal. here's a situation, you know, you and I will collaborate from, you know, a legal financial

standpoint will loop in the CPA as well. But I think that's important that you have your VFO, your virtual family office, you know, team. Yeah, I like that. You're getting dangerous with AI and your, every time I read your intros, it's like, it's got a new illustrator, author behind us. I don't know. Well, we'll credit Brandon for that. Yeah, that might be Brandon. Oh, yeah. All right. Is there some other things that you wanted to kind of talk to our audience today about

as we're thinking about this kind of the early rise of my entrepreneurial journey? I think the main point I wanted to get across today is that it doesn't need to be intimidating to engage professionals to help you. And as a young entrepreneur, you also need to just, you know, one of the first things I learned in law school or that they teach you in law school is that you don't know. which you don't know. And you have to acknowledge that. You can go online and set up an LLC yourself 100%. You don't have to pay me $600, $700, $700 to set up your entity. Go for it on your own. But keep in mind that 80% 90% of the business on my side on the legal side is incoming

clients who need help cleaning shit up that they did themselves or that another lawyer screwed up. So, you know, if you want to take that risk, go for it. And I think the same applies for, you know, your side on the accounting and tax and estate, you know, strategic plan. Well, I think, yeah, I mean, you know, people, like you said before, people will Google all kinds of things and, you know, but it doesn't necessarily mean that they're going to implement them or have a strategy because, listen, I can talk about the home office deduction and why, you know, you may or may not want to do that, you know, or an accountability plan or, you know, people talk

about the 28A, you know, Augusta rule, like those are all great ideas. But again, it has to make sense in terms of, you know, are you there yet? Great example. Great example there. I have a niche set of clients that are in the baseball coaching space. So they develop content and they coach collegiate athletes, high school athletes, even even younger, online virtually. And one of them is very, very successful. He's probably making 100, 200 grand a month in just recurring fees for his program. And he'll just call us out of the blue and say, hey, there's this new tax law that allows me to move to Puerto Rico. If I relocate my whole family to Puerto Rico, I think it's called Section 160 or something like that. You know, I won't have to pay federal taxes. And a lot of

these young clients, they like hyper-focus on little tidbit ideas. They get off at Instagram or online without any strategy whatsoever. It's a very common thing. Yeah, Infinite Banking. I wouldn't get your virtual family office team by different people that are posting on Twitter. I guess we should do another, we should do a video on Infinite Banking, debunking a bunch of people talking about Infinite Banking. Yeah, yeah. That's an interesting one. Anyhow, so I guess just a couple of final thoughts too, would be, you know, a lot of people that are on this entrepreneurial journey, you know, they're either doing themselves or they may be doing it with a spouse or maybe they're involving their kids. Maybe they stepped away from, you know, a 40-year career and they want to

help their children get launched. So there's a lot of things about, you know, thinking about, you know, you talked about partnerships, but there's also family dynamics too, where if I'm hiring my children or if I'm trying to create tax deductions or like we talked about before, you know, should they be on my board of directors because there might be additional tax benefits to doing that. So I guess the repeat I'll say is it's not just about setting up an LLC as cheap as you can and going out and making widgets. I think it's good comprehensive counsel. Yeah, good example is this board of advisors that you keep bringing up. That is a hot item with clients. I say for some reason, but I mean, I know why, but it's just for some reason that's resonating with clients.

I think it's because they can understand it's a good way to get a tax benefit and it's perfect interplay between your team members. You know, if you take the time to establish your professional support, you know, because you advise on what the benefit is of that tax right off. And then you also push it to legal and say, and here's what you need to have in your file for it to be legitimate. So a lot of clients are coming over to us and we're putting together that board. advisors agreement to name your kids as advisors and get qualified for those tax benefits. Well, and listen, I tell clients all the time, don't do it half-assed. Don't do it half-baked. Like, do it legitimately. Have an agenda. Have a scheduled meeting.

Make it look legit. Well, it needs to be legit. And have a purpose because, you know, if I'm adding family members, well, maybe I've been an entrepreneur and I want to instill that entrepreneurial, you know, spirit in them. And, you know, be a guiding framework. So yes, I can get some tax breaks from it, but there may be a larger purpose. And it's not always about money either or tax deductions. I mean, that's certainly, you know, a nice thing no one needs to pay more than they need to. But, you know, how do I pass on my knowledge or my insights as an entrepreneur and guide that next generation? So if I schedule a family board meeting, you know, every six months, you know, great we can, you know, get a vacation and

call the board meeting and there may be some deductible expenses there. But there's It should be a purpose, and it's helping that, you know, myself as a business owner, but maybe I'm helping that next generation, too. Yeah, 100%. That's my altruistic saltbox for today, Josh. That's your sound bite. All right. I like it.

I like you. I got to give you props, man. You got a young team over there. I mean, I don't know. What's your secret sauce? I mean, you could be having all old farts around you. You could have all suit and ties. No, these guys are way more fun.

And they love technology and I'm a technology geek and love educating. So this is a great, great opportunity. I love it. I love it. Well, Josh, as always, I really appreciate you joining us on the show. Great conversation. Hopefully there's some entrepreneurs or emerging entrepreneurs that will listen in. They'll take us up on some of the thought process.

Don't just dive in for the cheapest entity structure. Have a conversation. Again, we offer a discovery call that there's no cost to it. In the show notes, we'll include. links for follow-ups. We have a tremendous amount of white papers and resources that I encourage, you know, anyone to go in and download on a number of things we talked about today. But thank you again, my friend, and I look forward to the next episode, and maybe we'll talk

about the exit side of this entrepreneurial journey. I like it. I like it. And just remember, it doesn't need to be a pain in the ass to engage professionals. If you need help, just ask for help. We make it, this is how we operate. it's as approachable as Kent and I are. So, you know, if you're a young entrepreneur out there

and you're considering calling somebody up, but you have a bad experience or you've heard shitty things about lawyers or accountants or tax strategists, you've got to throw that out the window because we can help you out. And the old entrepreneurs too, you know, so. Yeah, yeah.

The old ones are all right. I haven't spent too much time on the old farts, though. They're pretty needy. They're pretty needy. Sounds great. Well, thanks again, Josh. We'll see you next time. Thanks, guys.

Thank you. Thank you. Thank you.