Month: October 2020

Crippled CEO Blog #054:

Everyone, including you, should own a corporation.

I don’t mean this metaphorically, like everybody should be the boss of their lives, and I’m not saying everyone should quit their jobs and become full-time entrepreneurs — that’s a path not suited to most people. 

I’m saying that you and your family should own the legal entity that is an LLC or an S-Corporation. 

Don’t leave yet!

I know.  If you are a regular mom or dad or genius who didn’t have kids with a job you like enough, you think this isn’t for you, and it also sounds kind of boring or complicated. 

But you are the exact person I’m writing this for. 

In 2019, 34 giant companies in the S&P 500 stock index paid ZERO DOLLARS in taxes. 

Did you pay more than zero dollars?

Probably. 

The difference between them and you is that you don’t have a corporation.

This country and its tax code were designed with the idea that most people would work for themselves — farmers, tailors, carpenters, barbers, doctors; in early America, most people worked had a skill and offered it to people directly. That means that if you don’t on a business, you are missing out on lots of benefits available to you.

Does anyone in your family do anything to earn extra money? Do any of your children mow lawns or babysit? Do you ever do any kind of side work? Do your kids do work to earn an allowance?

Chances are, one of these things are true. And if they’re not, they should be. Besides the tax benefits that I’m about to get into, especially if you have children, this process teaches great lessons about money, hard work, and independence. The only difference between mowing lawns on the side for extra cash and owning a lawn care business is a mindset and some paperwork, but that change in perspective for your kid could be huge.

So, if you have any of the income sources I mentioned above, you can form either an LLC or an S-Corporation. I’m not going to get into the differences between those, but essentially you’ll have a company owned by shareholders, and those shareholders will be you and your family. 

Once this is set up, any money that comes in through the lawn mowing, babysitting, cleaning houses, teaching old people how to use an iPhone, or whatever, becomes revenue for your business. 

And any expenses this business incurs are write offs that drive down your taxable income.

People are taxed by how much they make. If I make $50,000 a year at my job, regardless of what I spend, I pay taxes on that $50k. 

Businesses are taxed after expenses. If a business makes $50k a year, but spends $20,000 on things it needs, it’s only taxed on the remaining $30,000. 

If you have a corporation, the cell phone you use to schedule appointments is a business expense. The gas you use is a business expense. Part of your home can be considered a home office and count as a business expense. The Internet at your house can be a business expense. To keep using the lawn mowing analogy, when the company pays your daughter her wage for that lawn she mowed, that is also a company expense, she receives it at a 0% tax rate, and that money can be put into a Roth IRA, where it can grow, also tax free, on her behalf. 

If you own a corporation, you get to pay taxes on how much money you have left, instead of how much money you made total.

Getting it all set up isn’t hard. You can pay a lawyer to help you do it for a few hundred dollars, or you can do it yourself through LegalZoom or Rocket Lawyer for a lot less.

You are going to pay for these things anyway, why not make them tax write offs? And this is all totally legal. The government wants people starting small businesses because they contribute to society.

And the benefit of getting your child involved in this starting at an early age, making them part of the process, bringing them along as you set up this business that they own a part of, these are life lessons that are worth much more than the money you save on taxes.

But, y’know, save the money, too. 

(Do you know somebody that can use this? Please share it with them. And maybe also consider guaranteeing that you never miss my next post by sending a text message to the phone number 484848 with the word CRIP as the message.)

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Crippled CEO Blog #053:

Grilled chicken is the worst chicken.

That’s right. I said what I said.

Grilled chicken is terrible.

It’s dry. It’s chewy. It lacks flavor. It is inferior to every other form of chicken.

“You just haven’t had MY grilled chicken, Eric. When I do it, it comes out perfect.”

Yeah. Whatever. Maybe if you are a master of grilling chicken and the stars are aligned and the air temperature is correct and it is the right time of day and the moon is in the correct position and the barometric pressure is right and the DOW Jones index is up by exactly 23 points, then it’s possible you might be capable of grilling chicken and having it be at least somewhat decent. Moderately edible at best.

But that’s rare. 

And also only true for 27 seconds after it is off the grill. Order grilled chicken at a restaurant, or even worse, have it delivered, and expect only sadness and despair.

Even when the temperature of the ocean is correct and it turns out less than terrible, it’s still not as good as all of your other options. Have you ever had a bad rotisserie chicken? Rotisserie chicken is amazing every time.

Baked chicken? Solid. 

And here is the secret one that only a few people know about: boiled chicken. Your instinct is to think that boiled chicken is gross, but it’s not. It’s amazing. Juicy, soft, tender, bursting with flavor. Boiled chicken is the best chicken.

We need to stop pretending that grilling chicken is the best way to cook it. 

Because it’s not. Not even close.

Grilled chicken is the worst chicken.

(We will be back to regular stuff next week. This just had to be said. The people have to know. If you want to make sure that you never miss a post, send a text to the number 484848 with the word CRIP. I will send you one, single text every Sunday with a link to the latest blog.)

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Crippled CEO Blog #052:

My primary business manufactures and sells removable mesh pool safety fencing to dealers who then resell and install it for homeowners. We have about 90 dealers through the US and in 15 additional countries worldwide. Every dealer services the local area that they are located in. So, Life Saver Pool Fence of Atlanta handles — you guessed it — Nebraska. I kid. He does Atlanta. And also the surrounding area. But you get the idea. 

In order for a person to be our customer (or, more accurately, our dealer’s customer), with a few exceptions, they need to have a pool in their backyard. 

The logical conclusion you can make from this, and one I made for a long time, is that dealers in warmer areas with more pools will be more successful. Following this logic, Los Angeles should be #1 and somewhere like North Dakota should be at the bottom, with everyone else ranking logically in between.

Wrong. 

For almost a decade, our best dealer in the country was in Long Island, NY. While not #1 now, they’re still in the top 3. 

Another dealer consistently in the top five takes care of a portion of New Jersey.

Our dealer in Oklahoma does better than San Diego and Tampa combined. COMBINED. 

When I’m setting up somebody new, especially if they are in a location that doesn’t seem ideal, they immediately put limits on themselves. They decide that they can’t be great because of a factor outside their control, in this case their area.

And the logic they are using to come to this conclusion makes sense. It’s just 100% not true. It’s not the area, it’s the person.

If Long Island, New Jersey, and Oklahoma can crush it, then anywhere can. 

Your circumstances don’t dictate your capacity for success. Only you do. But it’s tempting to give away our power to things beyond our control.

“You don’t understand, Eric. My area really is different.” I’ve heard this from people all over the country, all of whom legitimately believe that they face a uniquely challenging set of circumstances that prevent them from being a top performer. 

We should be liberated by the idea that we can succeed regardless of our circumstance, but that’s scary. We don’t want to take away the power from our circumstances and put it in ourselves. That means that if we fail, it was only our fault. If we get rid of the excuses, there’s no one to blame but us. 

But that’s true whether you realize it or not. You are the captain of your ship whether your hand is on the wheel or you are letting the waves push you around and decide your direction. 

You can be scared that there is no one else to blame or you can be emboldened that there’s no reason you can’t succeed.

People in worse situations than you have gone out and made it, and people in better spots have failed.

It’s not the area. It’s the person.

—

Also, real quick, before I finish, this post marks one full year of writing this blog every single week — without missing one — and some of you reading every single one. 

Most of the people I tag each week have been here since the beginning.

Some of you like, comment, or share every single post. A chunk of you have even signed up for the text message reminder. 

Thank you. So much. Seriously. It means the world to me. Even if you just read it and never say anything, thank you.

After a year, clearly this hasn’t exploded into something wildly popular with a huge following, but I am really proud of the people who are here each week, and the impact people have told me they experienced. 

I really appreciate all of you for sticking around, and I’m looking forward to doing this for another year. It seems hard to imagine that a full year has passed, but that’s the key to doing anything important: A little at a time, consistently, for a long time.

Thanks again. You all are the best.

(Was this useful for you? Maybe you know someone who could really use this right now? Please share it with them. And if you want to make sure that you never miss a post, send a text message with the word CRIP to the phone number 484848.)

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Crippled CEO Blog #051:

Why do people buy your product?

What makes you choose what to buy?

Chances are, you think the answer is quality, price, or maybe features.

And if this is why you think you buy, this is what you are going to focus on when trying to market and sell your offering.

However, none of those are the actual reason why we buy things.

We buy things because of the story they tell and the story we tell ourselves — both about the product and about ourselves. 

Jocko Willink is a well known Navy SEAL commander. Every morning at 4:30 AM he posts a photo of his Timex Ironman watch — a rugged, no nonsense, digital time piece. 

I wear a yellow gold Rolex Day-Date with a presidential bracelet and diamond hour markers. It was my dad‘s dream watch. He bought it late in his life and gave it to me a week before he died.

Jocko would never own a gold Rolex Day-Date. It would not matter if it was bulletproof, waterproof, fire proof, and shot out laser beams, he just wouldn’t do it. The features and quality do not matter. The story of that watch conflicts with the story he tells himself about who he is. Meanwhile, the story of that Timex aligns with the story he tells himself. It fits. He might tell you about the features and the quality, but those are just parts of the story. He might mention the low price tag. That is also part of the story. All of those things build toward the image he sees when he looks in the mirror. Tough, hard-working, logical, no frills.

In fact, I really would not choose this watch either. My tendency is towards something more subdued, less well known, probably on a brown crocodile leather strap. But because of the story attached to it, because it was my dad’s, I wear it anyways.

You can probably also guess what kind of vehicles Jocko DOESN’T drive. Even with just the little bit I told you about him, you already know the kinds of cars he would never consider owning. Because the stories of those cars don’t match who he is, or more specifically, who he tells himself he is.

The Omega Speedmaster is an amazing time piece. You could write a book about the movement, the case, the crystal, and so on. But if you go to their website, you will have to dig for that information. There is one main thing they want you to know about this watch: it went to the moon. It was the watch chosen by NASA to be worn by the first astronauts to ever set foot on the moon.  

You are probably never going to the moon. This fact should have nothing to do with you. But they know that the story matters. When you show it to your friends, you’re probably not going to drone on about the details of the internal mechanisms, as innovative and impressive as they are. You are going to tell them that this is the same model worn by Neil Armstrong and Buzz Aldrin when they landed on the lunar surface. This is the chronograph they used to time their emergency landing when the equipment failed on board their ship. THAT is what you’ll tell your friends because that’s a way cooler story, you want your story to be connected to it, and so you buy that watch. 

Why do people buy Tom’s Shoes? Are they nicer than other sandals? Not particularly. People buy from Tom’s Shoes because they donate one pair of shoes to a child in a third world country every time a pair is sold. People who buy Tom’s Shoes think of themselves as generous, caring, and thoughtful world citizens. And when they wear the shoes, they know that other people might recognize them and also see how kind and caring they are. The quality of the shoes barely matters because the quality isn’t part of this story. In fact, part of the story might be that the shoes aren’t even all that great, but you bought them anyways because you care that much.

If you own a business that sells a product or service, or you’re a marketer, or you do some kind of sales — pretty much if you’re involved in any part of people buying things from your company — you have to keep in mind the real reason people are buying from you. It’s easy to get caught up in your amazing features, your super low prices, or your incredible quality, but that’s not it. People are buying from you because of the story that comes with your product. And there’s going to be a story. You just have to decide if you want that story to happen on accident, if you want the customer to make it up for you, or if you want to choose it and tell it the way you want it to be told. When you know the story behind what you do, the features, the price, the marketing, and so on just falls into place. 

Since you have to have a story, make sure it’s a good one.

(Did you find this helpful? Please consider sharing it with somebody you like. And if you want to make sure that you never miss my next post, send a text message with the word CRIP to the phone number 484848.)

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