Amy Bradley Radford (00:01.134)
you
Amy Bradley Radford (00:06.69)
Welcome to the Massage Business Success Podcast. I'm Amy Bradley Radford, massage therapist, educator, and the creator of Pain Patterns and Solutions Bodywork. On this podcast, we talk about sustainable business, how to successfully work for yourself, and pain management. What works, what doesn't, and why. Let's get started.
Amy Bradley Radford (00:31.246)
you
Amy Bradley Radford (00:38.54)
Well, welcome to the podcast. If you're new here, my name is Amy Bradley Radford, and this space is where we talk about building a massage business that actually works for your life. Not just your schedule, not just your income, but your energy, your sustainability, and most importantly, your long-term stability. So I wanted to say I'm a few weeks late getting this episode out to you, know, my people out there in the massage industry. I actually serve on the AMTA board for my state, that's the American Massage Therapy Association.
and we just had our spring educational event, which was actually a lot of fun. And right after that, I promptly got sick and lost my voice, which still isn't quite perfect today. And it's kind of hard to record a podcast without a voice, but you know, my motto is, all you can do is all you can do. So thanks for your patience with the big gap between this podcast and the last podcast. So I wanted you to know that my new goal is to have three podcasts a month every 10 days.
I think that'll work out best for me because I really enjoy doing this. This has been so much fun. And I've gotten to meet some new people and people from all over the world. And it's so amazing to see how something so simple as a podcast is actually helping them in their business. So my new goal is to have those three podcasts a month and one podcast will be for business. One will be for pain management. I know I've been talking about this for a while, but I'm finally ready to.
throw out this PPS bodywork into the world. And then a guest speaker that really resonates with the direction that this particular podcast is rolling in, which is to help you become as successful as you can be and happy with your work and your business because that's just as important. So as I was thinking about what I wanted to talk to you about, I decided that this was a great time to talk about taxes. And since we just passed that dreaded April 15th deadline for taxes in the United States,
I thought this would be an awesome time to talk about how to take back control of your business, your money inside your business, and be prepared for taxes. You know, I have talked with oodles of small business owners that dread this date because at the end of the day, there just isn't enough basic knowledge on how to successfully run a solopreneur style business, or better yet, how to run it in a way that you actually understand it. And I find that people kind of hold their breath and hope for the best.
Amy Bradley Radford (03:03.673)
when they give their tax info to their accountant or even do their own taxes. And sometimes it's like a sticker shock when they finally know how much they owe in taxes and they weren't really prepared. But what I'm here to talk to you about is not, it's not how to avoid your taxes. It's how to have a relationship with your business in such a way that you already know what you owe or don't owe before you ever get there. And it's the how to run your business in a way that is financially healthy that I want you to understand. And so,
You know, I always talk about how you have this relationship between you and your business. And it is a relationship that you continually have to work on and build and create communication skills. It's like, know what? It's like every other relationship out there. It's just you and your business learning to work together. So I want to take that one step further and talk about your money inside that business and how to improve all of that so that this little April 15th deadline is simply just another day.
So I'm gonna share with you my way of running a solarpreneur business. And as you are probably getting to know me a little bit, I kind of have my own way of doing everything, but it was what worked for me because I'm a visual manual learner. And if you can't draw a picture for me about it or show me how to do it, I really struggle with it. I'm no different than any of you. So through a lot of...
failures and successes, I came up with my own way of understanding how to do things. And so that's what I want to share with you about my business. And it's just a couple of pieces. I always get a little nervous talking about money and taxes and all that kind of stuff because I'm not an accountant. I can't give you tax advice. My tax advice may not be the right tax advice. So I, I'm just going to share my habits with you that created difference inside my business. And it took me a few years, some very hard and frustrating years to figure some of this out.
And what this is not going to be is an accounting lecture or it's not going to have complicated language so that you immediately shut me off. And we're not gonna talk about tax forms or anything else like that. And you don't have to have a finance degree to understand your own business. We are going to talk about something so much more simple and so much more important. And that is your behavior inside your business. We are gonna talk about the easy and consistent behaviors.
Amy Bradley Radford (05:18.819)
that set your business up so that tax time is not stressful and it's not overwhelming and it's not something that's gonna sneak up on you every single year. Because what I see over and over again, and you may recognize yourself in this, is the behavior of putting off business finances until you no longer have a choice. And my friends, I am here to tell you that your choices in business and money are everything. You just may not realize what those choices are just yet. And it's like I've told my kids when
when talking to them about money, it's not money that makes us rich or poor. It's the behavior you have with it. You could earn $4,000 a month or $40,000 a month and still struggle with the same kind of debt. It's your behavior that dictates that. So when we run our business without understanding how it works or managing our behavior within it, it becomes hard to feel supported by our business.
or by ourselves and there's a lot of times that is a huge factor in burnout. Your business doesn't feel like it's supporting you even though you're pouring your life into it. So where's that missing link? How do we create that connection between you, your business, your money and your behavior? So this podcast is for the business owner who waited until March to even start on their taxes or even the ones who waited until April 14th at 10 p.m.
to grab that box of receipts and scroll back through their bank statements, trying to reconstruct an entire year of their business in a few weeks or even a few hours. And you, my friend, are not alone. This was me for several years, but this isn't how I run my business anymore. And the worst part about the scramble to get it done is that it is just all scrambled together. You're usually missing things. You're missing deductions. You're missing mileage. You're missing any of the expenses that could actually help you. And the worst of
All of that I see is that you're making decisions with your money after a point in time when those decisions actually mattered more and you've lost opportunities. And for small businesses, any opportunity lost can really impact us. So the shift I want to present to you in this episode is this, taxes are not a once a year problem. They are actually a systems problem. And when your systems are set up correctly, taxes become something that you already understand
Amy Bradley Radford (07:41.187)
before you ever get to April. And one of the biggest mind shifts I want you to take from this episode is this, April is not when you figure out your taxes. April is when you confirm what you already know. So people, the real time to be looking at your taxes, really looking at them, is October or maybe November of the year you're in. Because that is when you ask yourself if you are going to owe.
if you have money set aside and if you want to invest back into your business before the end of the year and claim a legitimate expense that might offset what you owe. Because if you have to pay it one way or the other, this is what my dad taught me, why not decide where more of your money goes? So the deadline for that opportunity is December 31st. When you wait until March, the opportunity is gone. And at that point, your behavior has already decided for you.
So that's what's gonna be really cool about this episode. It's a chance for you to really understand how to potentially change your business and taxes and to feel like you have control of those pieces inside your world. So why does tax time feel so hard? Tax time doesn't have to feel overwhelming. And the truth is it's not because taxes really themselves are complicated. It's because most small business people are trying to organize an entire year of their business all at once and at the very end and in a mess.
instead of letting that organization happen gradually throughout the year. In the beginning, I was this person. I was this person because I didn't really understand money. I didn't understand anything other than you get money and you pay bills. And management of money felt just overwhelming to me. I felt like there were all of these ways you could run money and I just didn't know what they were. So it just felt overwhelming in possibilities and I was left kinda in my little world trying to understand how that worked for me.
And when you look at numbers in accounting and you look at numbers for running a business, in my opinion, they feel like different languages. Yes, they're saying the same thing, but it doesn't talk to you the same. What I understand in my business with money and what my accountant talks to me about money, they don't drive. It's way over my head. And so it took me asking a lot of questions, taking the time of sitting down with my accountant outside of their tax season,
Amy Bradley Radford (10:00.281)
to really learn how to run my business in a way that worked for me. And I had to figure out how to make managing my money, business and taxes speak to me in a way I could understand them. And so that my accountant could understand it when I handed him my paperwork. So here are some of the parts of my system that we're gonna talk about today. And the pieces, these are the big pieces that finally helped me understand my business and build a relationship with it and my money. So I think the most eye-opening thing about business came from an accountant I had once.
I told him I wanted the book on how to run your business. Like there had to be some step by step guide of how to run my business easier that I could just follow. And he said, there are so many out there, you could just pick one. But the real problem isn't about understanding how to run a business or bookkeeping or accounting or paying taxes. The real problem is understanding or learning your behavior in your business. That is what makes it the same and completely different for every person.
There are universal ways, required ways and required things that you have to have to run a business. And then there's personal choices, there's debts, there's income levels, there's wants, there's needs, all of those things fit into that equation. So truly there's no real blueprint. Yes, there's some legal boundaries and ethics, but the rest is up to you to understand for yourself what makes business easy to run or harder to run for you. So that's what I wanna talk to you about today.
Again, I'm not an accountant, I can't give you tax advice, but I can share what I have learned about running a business that made a difference for me. And in doing so, you might understand the container. Every business has a container. It's the limits of your business. And there's lots of different limits inside that container. But once you understand the container that you sit in, then you can be more successful inside those limits. I think the most valuable thing I can offer you is that a solarprenuer massage therapist running a small business
only has so many options and only so much money to work with within those options. It's different for bigger massage businesses or different types of businesses, but once you understand your unique parameters, the container your business is limited by, the amount of money you make that you're limited by, then you can learn the systems to run it in a much more efficient way for your specific business and personal needs. So we kind of covered this in the opening of this podcast.
Amy Bradley Radford (12:25.946)
but it is probably one of the most important things I can tell you. You should know what your business is doing and where you are at with owing taxes each month, not sometime in April when you are doing your taxes. In fact, it would be most ideal if you understood exactly what your business was doing every month. And why is this important? Because if you want success, you need to track it. If you want to feel like your business is supporting you or you are supporting your business,
The answer is in your numbers. Some of my worst stress and negative emotions at business were when I was making a subjective decision about my business. I was feeling all the feels and was frustrated with it and emotionally making my decisions. But when I would run my numbers and see things for what they truly were objectively, it usually was a lot less of a problem than what I had come up with in my head or my emotions. I can't help it. I'm an emotional person.
But you can't control or change something that you aren't tracking. If you don't know, how do you know? You have to know what your numbers are. And I already mentioned this a little bit, but even if the only thing you do is figure out what your year looks like before December 31st and can choose to make some different decisions that then change the outcome come April 15th. Decisions like, could I take some of that tax money and make a purchase?
and will it actually count towards my business and my personal income? Can I do that? Do I have the opportunity for that? You just made one of the most powerful decisions in your small business, and that is a choice of where your money can go and what it can do for you. You you can't back up and make a difference for yourself after December 31st, because it's come and gone. And that is your deadline. That is your deadline for the year. So things like maybe selecting just one larger business expense or purchase,
or perhaps choosing not to take as much money home for two or three months if it's doable, to balance out those sides of expenses and personal income. No one taught me to think like this in business. Even my dad who'd been an entrepreneur for years, his business container was different. It didn't work that way. And so for me to learn how to offset expenses and income and even do things like just not taking as much money home for the last two months,
Amy Bradley Radford (14:49.751)
so that I didn't go over an income level for that year, those little choices create huge outcomes for you. So it's just basic math, less taken home, less taxable income, more expenses, more business deductions. That is our container right there. You have those options. And that my friend is the choice our small businesses offer us. Again, no one explained that clearly to me.
The things I had learned in the beginning of my business had to do with figuring out how to not pay taxes. And we're going to talk about this. And while I'm sure that's what we all want to do, there is nothing more certain in this life than death and taxes. So the question isn't how to avoid paying taxes. The question is, how do I make my money work better for me? Here's the truth. Money will be spent one way or the other. Taxes on your money you take home or business expenses. If you can choose to spend it
further with your life or business instead of all of it going to taxes. I'm not saying you pay zero, I'm saying all of it. If you're able to choose where some of it goes, which would you prefer and how do you make those choices? So that first one is after December 31st, you lost the opportunity to choose. And if you needed to have adjusted what you took home for a couple of months, one month usually doesn't quite cut it, three is better. And all of this again, depends on what you can realistically do when it comes to your personal needs and income.
But if you could choose where some of that money went, wouldn't you choose instead? You know, I think many of us became part of the how do I avoid taxes crowd because of our experience with being surprised by how much we owed at one point in our life. Most people I have worked with put money away each month and just hope for the best. That's what I see. Me, I prefer to know and if I can reinvest in my business, I would choose that.
And for a long time, my goal was to just reach zero, like somehow manage my business where I only took so much money home and I kept my business expenses over here and at the end of the year, they canceled out one another. And that was my goal. But however, believe it or not, that's not actually the best goal and we're gonna talk about why. The shift I would like to offer isn't how to avoid taxes. Well, maybe less if possible.
Amy Bradley Radford (17:04.464)
but it's more about how to make every dollar you do have work smarter for your taxes, for your stability, and for your future. From my experience in the solopreneur world, most massage therapists aren't sitting on piles of extra money at the end of the year. And I'm pretty honest, I'm pretty blunt and honest when I work with people. Massage therapists are not making $250,000 a year. We're not. We're working with real income numbers. We're bringing home like 40,000 a year.
or 60,000 a year or 70,000 a year or maybe six figures if things are going really well. And then after expenses in life, there's just not a lot left over. It's the truth. So the goal isn't to find some magic loophole to avoid taxes. The goal is to understand how to move the money you do have in a way that supports you better. So you're not accidentally paying more than you need to and you're not missing the opportunities that actually help you in the long term. This is the container I was talking about.
understanding what you're really bringing in, understanding what you can truly write off in expenses, understanding how much to take home. And when you take more and more and more home, how that impacts your taxes, how to understand all of those things are what creates success for you and your money. And the behavior I see all the time with clients, your finances are just kind of moving in the background without a clear structure holding them together. Money comes in, money goes out, you swipe your card, you transfer money when you need it.
Everything feels fine in the moment because nothing is forcing you to slow down and really take a look at what it's doing for you. But then March and April come around and suddenly you're being asked to look at everything all at once and now you're trying to figure out what was on a receipt, if it was business or personal or what actually counts as an expense or what you spent on your office or what you forgot to track or how many miles you drove and forgot to track and whether you missed anything that could have helped you. And at that point, you're no longer making decisions. Unfortunately, you're trying to remember your decisions.
So you're just working backwards and you're just doing the best you can with whatever information you can piece together and whatever you miss in that process, that opportunity is gone. So let's talk about the easiest system you can start with to begin to change what you do and that is separating personal and business. So the foundation of setting up a system for taxes starts with separating your personal and business accounts. And if you've already done that, I want you to keep listening because there are still more ways
Amy Bradley Radford (19:32.123)
to look at your business behavior as we move through this particular podcast. So if we're gonna make any of this easier, if you want tax time to feel manageable, if you want to stop guessing, and if you actually want to see what's happening inside your business, this is the first step. You have to separate your personal and business finances. That means, and this is my recommendation for people, that you have a business checking account and a business savings account, and you have a personal checking and a personal savings account.
and you want those four accounts because that helps you set up your life for your business and your personal in order to manage your money best for you. I'm not gonna go off on the personal side. You can do what you need to there. We're gonna stick with the business checking and the business savings account for right now. And you you don't have to be an LLC to do this. Again, I told you I wasn't gonna talk about all of the terminology, but that is a question I get all the time. You don't have to have an LLC to do this.
you can use your DBA, which is doing business as the name of your business on your business checking account, that will work. It just allows you to start to create some separation between your business and your personal life. Because the biggest issue I see when everything gets run through one account where business and personal are all mixed together is that it becomes so hard to track everything and it takes so much more time to separate it out.
you're looking at your bank statements, trying to figure out what was a business expense, what was a personal expense, then you're pulling up your receipts, you're trying to figure out what was a business expense and what was a personal expense, and you're trying to split everything. And now you're trying to clean up something that should have already been clear. So what we're doing instead is we're just changing when the sorting happens. You're not sorting after the purchase, so you're not sorting out your bank statement. You're literally sorting everything. So as you're doing it,
it's automatically done for you. You're not even sorting at the end of the month. We're sorting it as we spend. At the moment the purchase happens or at the moment the money has gone out towards covering your expenses. And it's already categorized for you by which account it comes from. So if it comes out of your business account, it's going to be business. If it comes out of your personal account, it is personal. As long as your behavior continues to do that with every decision you make.
Amy Bradley Radford (21:51.813)
And here's that business behavior we talked about. This one shift removes almost all of the confusion that you have to deal with later. So when you go to the store, you have business items and personal items to purchase and you make two purchases every time. I don't care if it's one item, you are making a purchase with your business card and your personal card. And just be that person. Be the person no one wants to stand in line behind because you have to make two transactions.
And I know that this sounds simple, but this is one of those habits that will save you hours of work later. Because when you separate those purchases right in the moment, everything's already done. Your receipt is clean, your transaction is clean, and you don't have to go back and figure out anything later. Then you take that business receipt and you put it into a simple system. Whatever works for you, a folder, an envelope, a photo on your phone, a receipt app that you download that photo to, just something organized by month.
and it's handled, voila, all done. And the other piece that starts to happen, which is really helpful for budgeting, is that you begin to see the patterns. Your business expenses are not random every month. There is a rhythm to them. You start to recognize what your normal operating costs look like. And when something is outside of that, it stands out right away. And this gives you awareness without having to dig for it. It also allows you to be more intentional.
with how you run your errands. And this was something my accountant trained me to start thinking like. He said, if you're already going out to purchase something for your business, that becomes a business related trip, including tracking the mileage on your car. And while you're there to get something for your business, you may as well get the personal items you need. People ask me all the time how they get their business to support them more or how to get more expenses with this limited amounts of money.
that you have to work with without being unethical. And I tell them to look for ways their business can support their personal life more. An example of this, people do this with educational events. They plan a family trip around a class. Does that mean the entire trip and everything to do with that trip costs are completely deducted through their business? No. But even a portion of your money being spent that way is how you get to choose what your money does. So for an example of this with shopping, you're making a clear
Amy Bradley Radford (24:12.581)
business purchase, you're separating the transactions, you're documenting it cleanly, you're also creating a paper trail for mileage at the same time. The only thing you have to do is leave your office to run the errand and go back to your office to deliver your purchases to count the mileage. So you are learning to organize your life around what is required to have the deduction work for you. And this isn't pushing boundaries or trying to get away with anything. It's about understanding
how to operate your business in a way that supports you and then structuring your time and expenses to be tracked inside your business correctly. So one of the things I do is I choose to purchase locally instead of online if I can. And I count the mileage and also support my community at the same time. Even if I pay a few dollars more, the opportunity to have the mileage means more to me on my taxes. And I'm able to make my personal purchases while I'm there purchasing something for my business.
So the next time you are at the store to purchase your laundry detergent for work, just realize it's okay to pick up some groceries for home too, run your purchases back to your office and count your mileage. Now I wanna walk through something that is actually very simple once you understand it, but it changes how you think about your business completely. And this is the idea of when money actually becomes taxable, when you pay income tax. I hear a lot of confusion around this and it usually sounds like people...
feeling like everything they make is automatically taxed or they're unsure what really counts as income or they're just moving money around hoping it all works out at the end of the year without really knowing what's happening underneath this. So let's just slow down and I'm gonna make this as clear to you as possible. And because it was kind of a tangible thing for me, it started to make sense. So now that we've separated out your personal business into separate accounts, when money comes into your business, you simply put it into your business account
and it's your business's money at this point. It's not automatically your personal income. It only becomes your personal income when you move that money into your personal account. And once it's in that account, it is considered your personal income and all of that money will be taxed. Yes, your business expenses will offset taxes and a series of other things that again are unique and different to everybody like dependents and deductions and all of those things.
Amy Bradley Radford (26:37.155)
And again, that is where those universal and unique factors all come into play for each person. But the point is, if you move it into your personal account, it will be taxed. This is again, where your ability to choose comes into play. And this is the part most people don't realize they actually have some influence over, because you are the one deciding how much money crosses that line. And I just want you to become aware that there is a flow happening and you are managing that flow.
instead of just reacting to it after the fact. When you do understand it, your questions start to change and you start looking at your business differently. You begin to ask what you actually need to bring home to support your life, what your personal budget looks like, how much can stay inside your business to support it, what expenses you already know are coming up and what you actually want your income to look like this year. I know those are all crazy questions, but truly those are the things that govern the flow of your money.
And the last question is one that people don't spend enough time thinking about. And that is, what do you actually want your income to look like this year? There's this idea that the goal of a small business owner is to write off everything so you don't owe anything in taxes. And I understand why that feels like a goal because nobody wants to write a big fat check at the end of the year or on April 15th. But my dad gave me some of the best advice around this when he said that if you have tracked your
expenses correctly and managed your business well and you still have to pay taxes and you took a good amount of money home, it's because you made more money and that's actually a good thing. It's okay to pay taxes. And on the flip side of that, and I learned this, sometimes not paying taxes at all can create a different problem for you. Because if you expense everything out inside your business that you possibly can and you show very little income going home,
On paper, it starts to look like you don't make much money. And when that happens, it affects things like wanting to buy a house or buying a car or qualifying for loans or even how your business is viewed from the outside because your cash flow and your numbers don't reflect the actual work that you're doing. And this is where people start to get frustrated with self-employment because they feel like they're working hard, they're bringing in money, but on paper, it just doesn't look that way.
Amy Bradley Radford (28:57.285)
and that starts to impact your personal life in ways you didn't expect. And over time, that relationship you have with your business can begin to suffer because it doesn't feel like it's actually supporting you the way it should. You feel poor and unable to make large life choices because of your business. So there has to be some kind of balance in all of that. You don't want to overexpense to the point where you disappear on paper. I have done this. It is not a good thing.
and you don't want to underuse your expenses and end up paying more in taxes than you need to. I have done this. It's not a good thing. And this is where when you figure out your taxes for your year really starts to matter because when you're looking at your numbers in October and November, not March, you're in a completely different position to manage your money. And especially at this point, you're not guessing anymore. You could actually sit down either on your own or with an accountant. And I highly recommend finding an accountant that will
that will actually teach you what you need to know and say, where am I at right now? Based on what I've done this year, what does this look like? Am I going to owe and if so, how much and what are my options? How do I offset this? How can I change this or can I change it or what should I be doing? And what does that look like? Can you spend more money inside your business and have more deductions? Can you withhold money from being taken home and spend it inside your business? And does that impact how much you owe in taxes?
ask the questions, find out the answers. You know, there was this coaching client of mine that did not realize she had tipped into a different tax bracket by the end of the year. And the truth was she honestly didn't have to take more money home, but since it was there, she did. She could have reserved that money inside her business and bought that new massage table she'd been putting off getting or updated her computer system she'd been putting off as well. She could have set up a retirement account and started making contributions.
there were lots of choices she could have made that would have benefited her business and her personal life and kept her tax load lower. But since it was simply taken home, it crossed that line from business to personal, she was left with the choice of paying more in income taxes. And the difference may be, and it might only be the difference of two or $3,000, but wouldn't you rather pay it, would you rather pay it in taxes or have it further your business? See, again, the choice isn't about
Amy Bradley Radford (31:23.025)
paying taxes, it's choosing what your money can do for you. And since we're on this topic, I'd like to offer you another choice to think about. And this one's a little different, but it's very important because again, it's another choice. There are also times in your life where you might want your income to look higher and paying taxes will be the requirement to have that income level. So let's say you're preparing to buy a home or maybe a newer car.
and you may choose to move more money into your personal account so that your income reflects what you need it to reflect for that next step. This might also require that you reduce your business expenses to as little as possible so that more money goes home to you personally, and you will pay more in taxes, but you will make more on paper. And that's what you've got to have. That's what you've got to show in order for those larger purposes. And then once that season is over,
you can actually shift more back into your business and take less home again. And this is what I mean by there's an ebb and flow. Your business is not static, your life is not static, and your money doesn't have to be handled exactly the same way every single year. But the only way you can do that in a way that actually supports you is if you understand what's happening as it's happening. If you wait till March, all of those decisions are gone.
You don't get to redirect anything. You don't get to plan anything. You're just responding to what already happened and hoping you saved enough money to pay your taxes. So I want you to start thinking about your business in a slightly different way, because instead of money just coming in and going out, I want you to see it as something that you were directing, where there's a path that money takes from your business into your expenses, into your personal income. And when you understand that path, you start to feel a lot more grounded.
in what you're doing, you feel like you and your business are working together. And my friend, it's not that the taxes go away, it's that you understand them well enough that they stop feeling unpredictable.
Amy Bradley Radford (33:25.325)
If you've ever listened to this podcast and thought, okay, but what would Amy tell me to do about my situation? That's exactly what coaching is for. We take everything you're learning here and apply it directly to your business. I love to help therapists who are ready to take what we talk about and put it to work and find their own massage business success. If that sounds like you, I have a coaching request form linked in the show notes. So there's another piece,
I want to bring into this and it sits a little bit kind of underneath everything we've already talked about, but it has a much bigger impact than people realize and that's cash. And not everyone is going to agree on what I'm going to talk about and that's perfectly fine. But I'm going to lay this out so that you can observe if your behavior is helping you or not. And in our field, it's very normal to receive cash and it's also fairly normal.
to put that cash into your pocket and not into your business account and walk away. And you know, we also believe that when we do that, that nobody knows, nobody knows what we're doing. But you know, I had a friend who worked for an accountant for years and then went on to become an auditor for the state. And we were talking about this exact theme and she kind of giggled and she said, Amy, we know businesses hide their cash and they don't claim it. And they think they're hiding it.
And the fact is they're not. And it's so obvious when you start getting into their financials or simply looking at their life and how they live, at some point you can see they are making more money than they tell you. So just realize you may or may not be pulling the wool over someone's eyes, but even beyond that, I want to talk about the behavior itself because this is really where that impact happens. If cash stays in your wallet, it typically gets used here and there.
and it fills in gaps throughout the week. And before you know it, poof, it's gone. But it was never actually accounted for. And when cash doesn't move through your business, when it's not tracked, when it's not deposited, when it's not included in your numbers, your business starts to look like it's making less than it actually is. And that loose budget you have in your mind, you know, I've got to have so much for rent, I've got to have so much for a car payment, and I've got to have so much for this. The one that you have set, and everybody does this,
Amy Bradley Radford (35:42.225)
the one that says I need to see 18 clients to make $1,200 this week to then have the money for both business and personal needs, it ends up being wrong because you can't see it. So let's say you saw those 18 people and you made that $1,200, but 300 of it was in cash and you didn't deposit it. Now you only have $900 to pay expenses in yourself. And if you pocket 300 two or three times a month and not put it through your system, well, at the end of the month, you might be a thousand dollars short.
and then have to work more because it's not in your accounts to pay your bills. And then you have to work more to make your car payment because it's most likely, I've done this, I've done this. No, I didn't. I'm not going to say that live. Just kidding. Because that thousand dollars might get used on groceries or something that you needed, but more than likely it was spent on something you didn't track. Like going out to dinner, which could have been used as a business expense, but you didn't cause you can't track the money. Do you see what I'm saying? It's such a dilemma.
You want to be able to be worth more on paper, but you don't want to pay the taxes on all the money you make. And I'm not going to tell you what to do, but I will tell you this, because again, I'm speaking from personal experience. Lifestyle tracks your money just as much as your bank account. Financial planning, retirement, savings, all of those things that create a backup plan for you. None of those things work unless you're willing to make the most of your money. If it's in your pocket, it will get spent.
and not usually in the most beneficial way. Usually it's on a want, not a need or an unplanned expense. This is simply another form of burnout because you might have to work more and you will have to work more to make up for what you already spend. And really you're taking away your choices from your money not working the most for you. Because when you're working, you're seeing clients, you're busy, and it doesn't feel like what you're earning matches the effort you're putting in.
that can turn into this underlying belief that your business isn't supporting you, that something isn't working and that you need to make more money. And because this cash never fully enters your system, it never gets to do the job it's supposed to do, which is being part of your monthly budget, contributing to your savings, supporting your expenses, or being part of the income you need at home. And it's almost like you're stealing money from yourself. And no wonder your business starts to feel like it's taking from you. So this is one of those shifts.
Amy Bradley Radford (38:09.02)
that can change how you experience your business pretty quickly once you actually see it. Because it's not about stopping cash. It's about bringing all of your income into your awareness and into your system so that it can actually work for you. So my approach to this is simple. Just track everything. Cash, credit, debit, even tips. Everything that comes in gets written down in some way that you can see consistently. And then that money is accounted for inside your business. Because once you start doing that,
your numbers start matching your reality and your relationship with your business gets better. You're no longer guessing what you made, you know what you made. And over time, you start to recognize your patterns in the way that gives you a completely different kind of confidence because you see what a normal week looks like. You see what your consistency actually is and you see what your real income is, not just what you made in your account. And it's from that place that your decisions get easier
for the next level of your business structure. Because now when you're thinking about your pricing and your scheduling and your workload, you're not operating from frustration or guesswork, you're operating from something that's very tangible and real. So my people, once your income is fully visible, everything else we talked about, your expenses, planning decisions, believe it or not, they start to line up in a way that actually supports you.
and that feeling of this isn't working starts to shift because now you can finally see what is working. Just some food for thought. Now we're gonna go from that place where your income is actually visible and you can see what's happening inside your business. I want to bring in one more area that most people don't pay attention to, but it matters more than you think when you start looking at the big full picture of your business and your personal finances working together and that is mileage.
I recognize that not everybody drives a car, but most of the people I work with drive a car. So this fits into their business model substantially. This is one of the easiest places for people to lose money simply because they're not paying attention to it. Or as I hear, I just don't want to bother tracking it. It's just a pain in the butt. But you know, most people I've talked to are driving for their business in some way. You're going to pick up supplies, you're running errands for your office, you're doing things that maybe are directly connected to your work, but it doesn't always feel like
Amy Bradley Radford (40:30.47)
business driving. So it just gets absorbed into your normal routine and it never gets tracked. And what I want you to start seeing with restructuring your purchasing behavior and intention for being at a store is that it doesn't have to be separate from your life in order for it to count. It just has to be reorganized in your behavior and how you think. So instead of thinking of mileage as something extra you have to remember, I want you to start thinking about how you're already moving through your week.
and how you can make those miles you drive apply for business related activities. If you know you need something for your business, that becomes the anchor for the trip. If at all possible, you are going out for a business purpose that your life fits into and not the other way around. And while you're at the store, you're making a clear business purchase. You're using your business account for that portion. You're separating your purchases like we talked about earlier, and you're tracking that trip.
And when you leave your office, you mark down your mileage. And when you get back to the office, you mark down your mileage. How you do it again is up to you. Because over time, mileage matters, especially for small businesses. And this is not something that can be easily recreated when you're trying to find deductions in April. Mileage is what has made a difference for my little LLC every single year of my business. I also have a story to tell you about mileage and taxes. And this was about four or five years ago.
I had someone reach out to me that I had met through teaching at a school. he said, Amy, I, of course it's always the same. Hey, how are you? I'm great. What's going on? Hey, I have a question for you. And he says, I have a real problem with my taxes this year and I was wondering if you could help me. And when we started talking through it, what had happened was he owed more, a lot more in taxes than he had actually planned for. So this instructor had earned more money from teaching classes. And at the same time, his table practice peaked like,
fully booked, peaked for him for the first time that year in terms of income. And as we walked through everything, his expenses were actually really well tracked. There wasn't anything he was really missing because, know, like most massage therapists, we have pretty low overhead for our businesses. And when we got to mileage, he says, yeah, I tracked some of it. And I asked, did you track all of your mileage driving back and forth to the school to teach? And he said, not really. I just didn't take the time to write it out. I didn't think it would matter that much.
Amy Bradley Radford (42:56.146)
And that's the moment right there because that's what most people think. However, this instructor was driving about an hour and 45 minutes each way every day he taught. So roughly three to three and a half hours of driving in a single day. And he taught somewhere around, I want to say it was between 20 and 22 classes throughout that year. So he went back, so we went back because it was legit and we reconstructed it. We calculated his travel, his routes, his teaching days and the additional mileage he
tracked along with it. And when it was all said and done, his mileage bridged that gap significantly on what he owed in taxes. He ended owing up significantly less, even over what he had originally saved and planned for. So track your mileage, reorganize your life around your mileage, make your mileage work for you instead of letting those miles slip by because you don't want to take the time to put that information somewhere and you don't think it matters. It does matter. It matters a lot.
just figure out your system and start tracking. So as all of this comes together, I want to reiterate what we have talked about and bring it back to something that feels really grounded and very doable. Separating your accounts, tracking your income, understanding how money moves between business and personal, being intentional with your expenses, thinking about mileage and looking ahead in October.
And what this is meant to do is taking something that already exists inside your business, your money, your spending, your habits, and give it just enough structure so that it starts working for you instead of creating more work for you later. And the amazing part is that this is all about very small acts of consistency. That's it. That allow you to stay connected to what's happening in your business. It is all about your behavior inside your business.
Because once your accounts are separated, once you've shifted how you're making purchases, and once your income is actually being tracked as it comes in, most of the organization is already happening in real time without you having to go back and fix anything come April 15th. So what you're left with is not this huge tax, it's more of a rhythm. You know how fun it is? Of course, I guess that's relative fun to pull up your business accounts and there's your 12 months of expenses. And the only thing that was different was you purchased a new table
Amy Bradley Radford (45:17.37)
and maybe some rocks or something at a conference and that's it, there it is. There is all of that information you need to know all done for you and it's so simple. And I would recommend setting aside a small window of time each week or once a month where you sit down and you really look at your business, not to figure it out, not to sort things, but just to stay aware of where you're at. It always amazes me when I talk with coaching clients,
and they start tracking their income and they're like, oh, that's why I'm feeling this way or oh, I didn't realize I had that much money or oh, I didn't realize I could earn that much every week if every appointment was full. And then we shift to the power of the arrow we've talked about, making sure every appointment is full so that they have a real paycheck, a real amount of money to work off of. You won't know any of that unless you have your numbers listed out for you to visibly see them.
And here's the other part to that. I can't tell you how many people I've talked to, myself included, myself included. All of us that run a small business, we want a paycheck, don't we? Don't we want to have that paycheck feeling where we put in the time, we get this nice hefty check or, you know, a larger check at the end of our two weeks that we can put into our account and do what we need to do? When you learn how to do this inside your business, you can actually pay yourself every two weeks. You don't have to transfer funds every other day to pay a bill.
You can actually set it up so that your money is flowing in such a way that you can pay yourself that check, that amount that feels so much more like the real world instead of just plopping money over to pay a bill inside your personal account. So how would it feel to be able to pay yourself every two weeks? It starts here. It starts here with separating out your income, separating out your accounts, understanding what's coming in, tracking what's going on.
to be able to know how you can do that. When you learn to run your business with these systems, it lets you start moving into that feeling and that framework. There is nothing more fun than when your little business actually pays you one amount every two weeks, a good solid amount that reflects the work you have done. It feels pretty amazing. And that's also when the relationship between you and your business feels really, really healthy. And that's a topic for another podcast. I wanna thank you all for joining me today.
Amy Bradley Radford (47:43.516)
Hope this podcast has given you some new tools to help you with your business. And since we just passed that April 15th deadline and you don't want to feel the same way next year, now's a great time to start implementing some of the things that we talked about today. So stay safe and healthy out there, my friends, and I'll see you next time.
Amy Bradley Radford (48:09.554)
Thanks for spending this time with me. If this episode was helpful, subscribing or leaving a review helps other therapists find the show. For classes, resources, and ongoing education, you can visit amybradleyradford.com or join my email list if you'd like to stay connected. Take care of your body, your clients, and your business. I'll see you next time.
Amy Bradley Radford (48:38.29)
you
