My Fence Life Podcast

Dan & Cannon sit down with a 26-year veteran of the banking industry and learn some mind-blowing stuff that every business should know to succeed!!

Check out the show's Google Docs notes below!

•

CLICK HERE - To learn more about Dan & Cannon AND the Software / Industry Tools they talk about.

⤵️SHOW NOTES⤵️

Showing income at the end of the year

1. Why should I show income?  If your ultimate goal is to grow your business it is important to show your income. I’ve never met a business owner that told me they started a business just so they could pay their current personal expenses. 
2. Bottom line is a bank is only able to give a business credit for what you actually claim on your taxes.  The business has to show after the day to day ordinary expenses are paid, they still have enough to pay their additional debts.
3. If I show income then I have to pay taxes... I don't want to pay taxes. I want to pay the least amount as possible

Why is going out and spending all of my profits at the end of the year to avoid taxes a bad thing for my banking future?

1. This is one of the biggest decisions or let’s say traps that a business owner falls into.  While it is your CPA’s job to save you from paying taxes at the end of the year, as a business owner you need to show income if you ever want to qualify for credit in the business’ name.  The biggest issue for most startup companies is initially a business owner  has to use their personal assets and or credit cards to fund business expenses.  When you go that route it affects your personal credit scores and your debt to income.
2. This is where banks and tax preparers clash. Your tax preparer's job is to show the least amount of income so you pay less taxes.
3. If you're looking to grow and utilize a business line of credit, purchase equipment etc. from your bank, this hurts you more than helps you. 
4. If you show income and pay taxes, then that tells the bank you're profitable and makes you more appealing to them.  
5. Business owners need to look at their bank as a partner or financial adviser.  Just like a consumer needs to show income to be able to finance things like a home or a vehicle, a business will only be able to obtain credit if they show the business has income to pay the debts.  Otherwise, you will be financing the business’ needs on your personal credit which in the long run will affect you being able to purchase your personal needs.

How do Direct Liabilities and Contingent Liabilities affect my business AND personal life?

1. What are Direct Liabilities =  Direct Liabilities are debt associated with your SS# and appear on your credit bureau.
2. What are Contingent Liabilities = Contingent liabilities are debts that you personally guarantee if the business is for any reason unable to pay. Contingent liabilities do not show on your personal credit bureau.
3. Example - You're about to buy a house and a truck breaks down and you end up having to go buy a truck and then the underwriter for your home loan says, "Looks like we can't approve the loan for your new house because you just bought a truck." Imagine telling your wife this and it's because you're dealing with Direct Liabilities and Contingent.

That’s a great example…In this case a bank will do a soft credit pull within 72hrs of a mortgage closing.  If the business financed the trucks and can show a 12 month history that the note on the truck is paid out of the business, the new purchase will not affect the loan.

What should I expect from my bank during tough times like Recession or Depression?

1. Are they going to stick with me when things or times are challenging? Or are they going to run for the hills?
2. Banks develop relationships with their business clients.  A bank looks at the business’ historically when making decisions in any credit situation. For example:  Let’s say you have had your business for 3 years and are applying for a line of credit,  we don’t just look at year 3’s income.  We need to understand what has changed in the business and where the increase in income actually came from.  Example:  Has the business been able to streamline expenses, is the additional income coming from a new contract, is this a one time contract or will it be an ongoing relationship adding to the business’ annual revenue?  This all comes into play.
3. This goes circles back to your relationship with your banker like we talked about at the beginning of the show. 

Every business owner needs a team of individuals to advise them.  This should include a CPA, a banker, bookkeeper etc.  I know some of you are saying to yourself right now I can’t afford to have a CPA or maybe an attorney on payroll…Know that there are other options.  There are now companies called Organizational performance firms that specialize in helping small businesses tap into these professionals on a needs basis.  You can customize your current needs and make changes as necessary to support your business.

⤵️More about the hosts of the show⤵️

Dan Blanc - Fence King

Fence King, the Northshore of New Orleans's leading Wood Privacy & Picket and Aluminum Installers, is the premier fence contractor of Mandeville, Covington, Ponchatoula, Madisonville, Robert, Goodbee, Hammond, and Abita Springs, LA

We’re the Certified Postmaster Plus Contractor for the Northshore of Lake Ponchartrain / New Orleans servicing from I-55 and East to the Mississippi/ Louisiana State Line. Dan Blanc, CEO, and Founder of Fence King is also an instructor of Marketing at the Mr. Fence Academy based out of Evansville, Indiana in 2021

⤵️More about the hosts of the show⤵️

Cannon Johnson - Jackson Fence Company

Jackson Fence Company is West Tennessee’s preferred fencing contractor. We deliver quality fence solutions to Medina, Jackson, Lexington, Brownsville, Dyersburg, and Union City.

We're proud to serve its local community, but also the greater national fencing industry. We are active members of the American Fence Association, Mr. Fence Academy, and we also supply our local market with fencing materials.