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The Truth About Entrepreneurship Part II: Finances


When it comes to entrepreneurship, money flow is something I understand, but haven’t yet mastered. That said, I’m turning it over to two women whose money mindset and business growth led to admirable cash flow and sustainable businesses.

Meet Sonia:

Sonia is CEO of the first African American & woman owned student loan repayment company in the country. Her business, the Student Loan Doctor LLC, assists clients nationwide with student loan repayment issues on anything from affordable payment options to wage garnishment options.

Meet Erica:

Erica is an author and CEO of Erica Booth Tax & Accounting Services which provides a broad range of financial and tax services to small businesses and independent professionals.

How were you able to determine your initial pricing?

Sonia: After a few weekends of helping people for free after church and at Corner Bakery, I wondered what people would pay to sit with me for expertise and advice. That’s what happened. People started paying me $25-50 initially to sit with them.

To be honest, I just wanted to be paid what I got paid at work. I will say what we get paid at work is in consideration of taxes and benefits, so really as an entrepreneur, it should be three times that. I really should have charged $75 to start, if I wanted to hit that $25.00 mark. I know that now in hindsight.

My costs started going up as the demand increased. In six months, I started making part-time from 6-10 p.m. what I was making from 9 a.m. to 5 p.m.

Erica: In the beginning I was preparing returns for family and friends for free. Since the amount of people increased and it was taking up time, I decided it made better sense to charge. I determined my pricing by doing research.

Luckily in my industry, I could review demographics and fees in different states for the same service. I was able to come up with something in the middle. I didn’t go too high or too low.

I wasn’t always comfortable with setting a price for myself. As a woman and business owner you’re trying to attain and retain clients. You want to set an attractive price, but you don’t want to short change or undervalue yourself. That’s why I think it’s important to research, because once I saw the average, I became very confident with my numbers.

What advice can you give about when to invest in yourself and when you know you’re ready to take the leap?

Sonia: I always tell entrepreneurs, you need to understand your business’ financial analytics. I understood what I was making on average over a six month period. I was comfortable with that. I always say don’t take the leap until you know you have three to six months without any major fluctuation of business.

In terms of investing in yourself, I knew there was no "right time" to make a move, so I had to put myself in the best position possible with the most knowledge. To this day, I’m very selective about what I buy and who I let speak to me as an influencer; they need to have tried and proven concepts behind them that work. Someone will say “Check out so and so,” but I have to check "so and so" out first. We often want to figure everything out quickly, but sometimes we’re too quick to let someone minister to our lives. Every book and podcast isn’t for you and how you want to do business.

I need to take the advice that's going to make me money. Right now, this is a season of leadership for me, so I don’t want to read or listen to anything other than leadership because I have a team of six people. I need to be prepared to manage.

Erica: I think as entrepreneurs are beginning to put their plans into actions, they will have to begin looking at the cost for certain things. If it’s training that would be beneficial to the business, software, or office appliances, start purchasing the items. This would be a first step.

I prepared by researching and asking questions. Before I launched, I spoke to different people in the field. I spoke to one person who was had no actual office, so I learned the online process from him. I spoke with another person who had a physical space and from her I learned how to run an office, the purpose of an assistant, and who to use for phone or internet.

I knew I was ready to take the leap when I could no longer mentally go into work every day. I had to trust myself and that was an internal thing; I had to make peace with myself. It’s very scary having money then leaping not being sure if someone is going to pay an invoice, when you still have to pay those bills. That leap came when I was confident I could do it.

How do you manage time and money (balancing quality over quantity, bringing someone in, and knowing when to spend your time on lucrative tasks)?

Sonia: If it’s going to take me too much time to develop, I can’t do it. I really think about my day in the increment of hours. If it’s going to take me too long and put another money making activity off, then I don’t want to do it. Ask yourself, “What would it be to have someone else do it, so I can still have my time?”

Erica: I realized quality over quantity was important from the clients. I had some individuals who were great clients and others who were just shoppers looking for the best price and biggest refund. I had to explain how we do business and let them know "I’m okay with you walking away because we aren’t doing this based off what you want." It’s based off how we know it has to be done. We’re in compliance, we’re ethical, and we have integrity.

I also realized I needed to work with small businesses because they had a need for my services throughout the year and not just one time during tax season, so I changed the wording in the advertising of my business to let people know we specialize in small business. It was wording and understanding the best clients.

You know you need help when you set deadlines and are unable to meet them. Also, if you have no life because ALL you're doing is working, you need help. You want to be able to pay someone but you have to look at your budget. Take a step back and realize if you have an additional $300 a week, maybe you can pay someone for a set number of hours. Every little bit helps because more help means you can bring on more clients.

What financial struggles have you faced as an entrepreneur?

Sonia: Understanding the ebb and flow of money. No one prepares you for fluctuations. You have to let go of the safety net of having a paycheck too. There’s a week where I’m like “Ohhh yea! I should have been left my job.” Then, there’s a week where I struggle. It’s so high and low, but now I’m aware of my analytics to know we’re always going to average it out.

Learning how to pay myself correctly was important; understanding what I wanted to make and what my non-negotiables were helped me get in tune with what I spent my money on. You have to cut the fluff so you can continue to invest in things that will make you more profitable. I could have a higher payroll, but then I wouldn't be able to travel for business, so I pay myself a just wee bit more than what I made at work.

In your first three years, you’re still developing. Some people think because you had a good year, you’re good. No! Keep doing the things it took to get to the point of success.

Erica: A struggle would be not having enough money to pay for unknown expenses. For instance, my printer just stopped working. I need a printer for my office. Was I prepared to pay for it, yes. Did I want to pay, no. I make a habit of always having money on the side, but I think a lot of people assume that just because they sent an invoice, it’s going to get paid. If you are bringing in more money than what’s going out, it’s your responsibility to put that money to the side and not just spend it. I think everyone should have a buffer account. It’s an account that you need for miscellaneous expenses. Ad you should always replace it as you use.

Another struggle is not being prepared to pay taxes on that profit. If you haven’t paid a quarterly tax payment or put money to the side, then you’re going to get hit with a bill that you’re not prepared for.

Not understanding your full expenses is also a struggle. It’s easy to forget phone bills or utilities. People don’t write out a budget, list out their bills or keep a checklist. People don’t have a budget prepared. It may seem so small because a lot of people don’t realize that your personal and business budgeting works the same way. You have to pay your personal bills and do the same with your business.

What do you have going on, how can we keep in touch, and any final advice?

Sonia: I would say my instagram (@thestudentloandoctor) is where all the fun happens. We have a lot of webinars and events. We are revamping our website and our podcasts.

In the fall we'll be launching live events all across the country, so I just ask that people support when we come to their city because it will either be free or a nominal charge and everything is self funded! People can drop by our website thestudentloandoctorllc.com and know that we aren't selling anything, you'll see that you either need our services or you won't.

Final Advice: Stay ready. Stay ahead of the curve. You have to figure out your learning deficiences and what areas you need help in. The ability to self assess is crucial.

Erica: Everyone can always contact me via my webite ericaboothtaxes.com. I have facebook, facebook.com/EBTaxLLC/ and instagram (@ericaboothtax). All my contact information is on those sites.

We're always preparing for tax season. Right now we're trying to bring on more clients or small businesses. We aren't onboarding during tax season because people come without having a full year of book-keeping done. We're encouraging small business who struggle with book-keeping to work with us, so we can get on par now and be prepared. We service clients all over the nation.

Final Advice: 1. Entrepreneurship is hard. It's like raising a baby from the fetal stage through college. You will have a lot of unknowns, self-doubt and comparions. Don't compare, your businesses are different and you have to learn what works best for you.

2. Stay up to date with your industry. Put the time in to be more efficient.

3. Make space for opportunity. Get things done, because you never know what's going to come down the pipeline.

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