Episode Transcript
[00:00:00] Speaker A: Bienvenidos and Leaders in Quebran Tables. Soy Jose Pereira. Yoy hablamos del verdadero Liderasco frente lo mayor retos estos lideres in caber antables for now media television.
Hello, welcome to Leaders in Kebern Tables where we explore the mindsets, disciplines and strategies that define resilient leadership. I'm Jose Perela. I'm your host and welcome to my show. Today we have joined by Hart and Matt. They are founders of my Prophet Gurus. Hart has a very interesting background because he was a seasoned cpa.
He was a former IRS auditor.
He has been a professor of Berkeley and also has been a financial strategist during more than 25 years. But he had worked also in corporate America, Deloitte and other companies.
He also worked with some of the major big fours.
It's a very interesting mix of career that he has.
He has been a financial strategist over 25 years, guiding entrepreneurs through a strategic tax strategies, cash flow optimizations and sustainable business growth. And he has his partner, that is Matt, that is headcount with him. Harj and Matt, welcome to my show.
[00:01:33] Speaker B: Thank you, Jose.
[00:01:33] Speaker C: Thank you, Jose. Really appreciate it and thank you for having us here. We are really blessed to be here with you on this show.
So, yeah, we'll just tell you a little bit more about what we do. You know, we've been in business for now for about two years and typically what we've been working is small entrepreneurs all the way, ranging from, you know, the smaller ones all the way up to about 10 million. We work with a lot of medical professionals. Typically what we try to do is we try to like look at the entire life cycle of a client from starting in terms of like, you know, building, getting funding, whether they need to get financing, anything of that nature. We look at that and then we also look at like how they grow, you know, from the growth stage, you know, taking to the next level, then eventually looking at their tax situation, also then finally looking at legacy planning as to how they actually want to exit their business at the end of the day. So really covers the entire life cycle of a business. And that's what we found our entrepreneur clients really enjoy because they're all at different. They're at different seasons, we call them different parts of time when they're trying to work with their business. So we find that we need to be of assistance throughout the life cycle.
And I don't know if Matt wants to say a few more words on that.
[00:02:41] Speaker B: I think you Covered it well. And I think the main impetus is really kind of understanding our customer profiles and helping them grow in a unique way.
[00:02:52] Speaker A: That's great, but let me go back a little bit because I always want to know the beginnings so hard. You begin in the irs, and, Matt, I don't know where you're starting.
Talk a little bit about your starting.
[00:03:07] Speaker C: Perfect. And I'll go ahead and start here. So, you know, I actually started with the government. I really, when I graduated from college, I felt like I wanted to give back. And I had an internship with the irs. I really felt like, you know, that was where I wanted to be. I really. I was enjoying being part of some really incredible groups dealing with tax havens, dealing with non filers. Very, very interesting groups at the time.
I decided at some point, though, that I wanted to go get my cpa.
So I moved into working with some of the bigger firms with Deloitte as well as Ernst and Young. I also had a stint with American Express in their tax department. And then I also ended up working with intel in their tax department.
So really, my. As you mentioned earlier, you know, my career has transitioned through, you know, primarily corporate America, but I made a full circle, and it came back into where my roots are, is really trying to help small business.
Especially during the time of my time at the irs, I saw many, many small business owners that were trying to do the right thing, but they just didn't have very good guidance. And I felt like, you know, that was an area I wanted to be a part of and help them sort of migrate through, sort of make better decisions. So that's what moved me more out of corporate America into doing something here where we could really help small business.
And I think just with our overall approach, I think we're able to give them a very comprehensive solution, just depending on where they are in the life cycle.
[00:04:36] Speaker A: What about Matt, how? Matt got integrated.
[00:04:59] Speaker B: Accenture and really got an idea of what customers want, what are their requirements, and how do we translate them into outcomes? From Salesforce. I'm sorry, From Accenture, I joined Salesforce, and these are the early years of what we call customer success.
And fortunately, I was in a position where the company wanted us to try several different methodologies to engage customers from this start of the sale to the renewal. So I get a breadth of experience there. From there, I moved to Cisco and really optimized my skill set of working with larger customers and more unique environments.
And from Cisco, I joined DocuSign and Intuit. And in these roles, I was more on the strategy and planning side, having a background of the execution, how can we help customers support them better? And, and so my customers ranges from the enterprise to the mid market to the small business. So I've seen several different iterations of those customers and I've been very fortunate in my career and I wanna translate that now with my brother with harsh and really, really give some customers clarity and a good vision on how to execute.
[00:06:08] Speaker A: You know, it's very important what you're saying because one of the biggest challenge in the small business in the tax side is that maybe they take wrong decisions and they affect the business. I'm going to talk in my personal life I was unfortunately a political prisoner, as you may know.
And during those years my wife was running a small business and when I came back I found that she had taken bad advices in the tax side and it took time to help that. So I really believe it in firsthand.
So let me say something here.
What is the main mindset shift that you recommend to a business owner today in the tax side?
[00:07:03] Speaker C: So I can say like the first mindset shift I would recommend is moving from reactive survival to intentional leadership. Many business owners wake up every day reacting right, especially in today's world. Reacting to cash flow surprises, reacting to clients, reacting to economic headlines, reacting to fear. When you live in reaction mode long enough, everything feels uncertain and overwhelming because you are constantly responding instead of deciding. I think the shift I encourage our clients to do is to stop asking what's happening to my business and and start asking what story is my financial data telling me?
Uncertainty doesn't come from not having answers, it comes from not looking at the right information consistently. When leaders treat their numbers like judgment instead of a tool, they avoid them. But when you reframe financials as a, maybe as a dashboard or not a report cards per se, everything changes. I tell leaders your job is not to eliminate uncertainty. Your job is to manage with clarity. And clarity comes from rhythm, weekly check ins, simple forecasts, understanding cash movement, not just profits on paper. And once a business owner realizes that uncertainty is not a sign of failure, but a signal to lead more deliberately, they stop feeling powerless and they move from fear to focus. And that's the moment they stop running a job and actually start running a business.
[00:08:31] Speaker A: Let me tell you, for you, being IRS auditor really gave you the opportunity to see both sides of the picture. So that really can help the perspective that you can give to entrepreneur, correct?
[00:08:46] Speaker C: That is 100% correct. Because you do see that other side of maybe how the Government looks at a taxpayer versus maybe how a taxpayer might experience the government. There's almost like two sides to the same, same coin. So yes, seeing that side of it allows me to give them much more strategic advice on how they might want to structure their businesses to maximize their tax savings.
[00:09:09] Speaker A: So let me make you a question for any of both of you.
So what is the financial belief that entrepreneurs must unlearn to succeed today?
Economy.
[00:09:24] Speaker C: Matt, you take that.
[00:09:25] Speaker B: Sure, I'll take that.
I think when you look at financial beliefs, it's really outcome driven. What is your revenues telling you? And I think it's an important metric to really understand and to work backwards towards that metrics. Right. So if you. One thing that we've done along my career is to analyze our customers that are retaining, analyze our customers that are growing and adopting to more products and what are the variables along that journey that's making that happen? What it leads to is operational efficiency. So you can see the, the activities, the high value activities that you're doing with your customer, whether it be marketing and sales or follow ups or adoption of your, of your, of your service. But you have to understand what's working and what's not. And the financial outcome is a strong representation of that. So using the metrics, understanding the metrics, and then aligning your operations to, to
[00:10:23] Speaker A: optimize that and talk about metric, what should be that metric that the leader should monitor on a weekly basis?
[00:10:33] Speaker B: So from my perspective, your funnel is very important.
Yeah. And not only your funnel or your incoming, but what is generating your funnel? Sometimes your leads are warm leads, sometimes your leads are, they're not as effective. But really understanding what's impacting the funnel.
The second thing is how are you prosecuting these leads? What is the sales enablement or methodology that you're using? How are you interacting with your customers? Getting a very intimate understanding of that is important because as Harsh mentioned, the business climate and your customers are constantly changing. So if you're not adapting your processes to those change or recognizing those change, you will lose the funnel without even knowing where you lost the funnel. The second thing I'll just add is a lot of us focus on net new business, new customers, but it's very important to keep focus on the customers that you have and making sure that that journey from when they bought your product or service to when they utilize it and when they renew that service, they're seeing value. And how are you reaching out to those customers and how are you establishing that data is a very strong indicator of that. Your number of outreaches that you have, how fast are they using your product?
Is there any dips in utilization of your product or service?
So those things combined, I think, makes for a strong customer experience. And again, these are your testimonials for your future. So you want to make sure that those customers are happy, engaged and referenceable.
[00:12:05] Speaker A: Okay, we're coming to the end of the first segment, so when we return, we'll break down about cash flow mastery and how resilient leaders protect the business during volatility.
Stay tuned. We're coming back.
And now media, You're watching leaders in quebran tables on Now Media TV.
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So cash flow is not just accounting, it's the oxygen of your business.
Revenue may look impressive on paper, but cash flow determines when your vision survives and grows.
So many entrepreneurs focus on top lines revenues. But the true financial leadership requires understanding the profit margins, liquidity and operational efficiency. Let's explore how leaders can strengthen these foundations.
So let me make you a question, Harge. What is the most common mistake business owners make when they're managing their cash flow?
[00:13:59] Speaker C: That's a great question, honestly, Jose. And I think the most common mistake that I see is when entrepreneurs confuse profit with cash. A business owner looks at their income statement and sees a profit. Then they go to their bank account. It doesn't look like the same amount of money is in there. That disconnect creates some stress, creates some confusion. The reality is that profit is an accounting concept and cash is all about timing. You can be profitable and still struggle because cash is tied up in receivables, inventory, payroll cycles, loan payments or tax obligations. But many leaders don't actively manage those timing gaps. They assume if stale sales are strong, everything will work itself out. Another mistake is looking at cash where there's a problem.
Cash flow should be reviewed proactively, not reactively. Waiting for the account when it's low. That force sort of rush decisions, where you rush into decisions of doing bad financing, maybe discounting too aggressively, delaying your investments. Cash flow management is really about rhythm. It's about visibility, weekly awareness, clear receivables, follow up, understanding that you're fixed versus variable obligations. And when leaders treat cash like oxygen rather than a quarterly report item, they move from survival mode more into a control mode.
[00:15:24] Speaker A: I see many business Owner entrepreneurs that they handle their business combined with their personal finance. So they don't distinguish between both.
And maybe they take it, as you said, as oxygen. So when they have a personal need, they take the money from their business. So what do you think about that?
[00:15:47] Speaker C: I like what you're saying, and I think that's one of the things I discovered from my IRS days, believe it or not. I found that many people commingle their business and their personal. And then when it came to trying to verify expenses or, you know, try to prove that or substantiate a certain type of expense, they couldn't do it because the IRS agent can easily say, hey, look, this looks like it's a personal expense because it's being paid out of your personal account. So how do you make me believe that's a business expense, Especially if it's something related to meals and entertainment or something like that, where it could really be a gray area. It can go both ways. So I think your point is very, very well taken. And that is definitely something that, for our clients, we're very clear, especially if they have an entity like a corporation, S Corp. Llc, that they have separate books, separate bank accounts, separate transactions. You know, everything is documented in the proper way that the IRS will find is legitimate and actually will believe them when they go in case they run into an audit.
[00:16:46] Speaker A: Yeah, it's more common than you can think.
And how should Leader then differentiate between the revenue growth and the real profitability?
I don't know, Matt.
[00:17:00] Speaker B: Oh, yeah, I could talk to that.
So when we look at profitability, I. I think it's very appealing when we start to focus on how much profits we can get in the short term.
But what I've seen in my career, which is very unique, is, and I'll tell you, a pricing strategy that, that's been developed in the corporate world, and that is not to overprice the product to gain profits. That is to be very realistic on the margins that you can expect from that product. What we've seen is if you price correctly in the beginning, customers will come back to you. And that's an opportunity to increase your.
Your profit at this. At the iteration of a renewal or a subscription, because now you've proven the value of your product. So it's important to segregate between the short term, which is very appealing, and the scalable business, which is how do you increment profits over time?
And one of the other things that's. That's very important that you need to keep an eye on is the customer, how are they interacting with your product? How are they seeing value? It's important to define that value because at every iteration that you talk to your customer, customer or you engage with your customer, you want to give them feedback that they've, that they're receiving value.
So through all of this analysis which has been consistent in the corporate world, it's keep your pricing realistic, you can get short term margins, but scale that business because you'll see down the line you'll make way more profits from a scale business than trying to achieve the short term profitability.
[00:18:34] Speaker A: Let me make you a question. What do successful entrepreneurs do different than, than normal entrepreneurs? What, what is something that you can see, oh, these guys are doing it great
[00:18:46] Speaker B: actually, I'll take that.
[00:18:47] Speaker C: Yeah, I can take that. So I, what I see is one thing is that they're very proactive in what they're doing. They're not going to take a reactive stand, they're not going to let their business drive them. They're way ahead of their business, willing to take risks like no guts, no glory. One of the other things I do, I do see the most successful entrepreneurs that we work with is they are very good managers of data. Especially with AI. It comes into a really handy way of collecting data in a nice way where you can leverage that information to be really strategic in how you run your business versus kind of operational tactical on an everyday basis. So that strategic vision I've seen many of my best clients implement dashboards, for example where they will have collect information either through their accounting systems like QuickBooks or Xero, but they will also collect it even from a simple Excel spreadsheet. And they collect the most basic information that drives decisions every day so they can see it every morning. They know exactly what they need to do for the rest of the day and what they need to accomplish.
I think that that vision is what really gives most of the most successful entrepreneurs the edge of when compared to their peers.
[00:20:02] Speaker B: I'll add one more thing to that Harsh is I think a lot of founders tend to take on a lot of responsibilities and the business should be bigger than the founder. The ability to hire the right people and delegate work out is really going to be important to maximize their time in the right places.
[00:20:23] Speaker A: That's a great advice because sometimes entrepreneurs become solopreneurs. So I want to do, you know, as a single man band.
So what is the principal mindset change that you can see in a successful leader beside a struggling leader? What is the main thing
[00:20:45] Speaker C: I think that you know it's probably experience. For me it's been experience because I think, you know, like for us we've, we've both been blessed with corporate background. So we've seen this type of activity happen in a large corporation. So we know sort of from a big picture standpoint what big corporations are doing. That's not always the background for an entrepreneur. They may be coming out from straight out of school or maybe they had a layoff and they're trying something different or entering a new field. That experience is what we need to gain over time to make sure we can execute better with our decision making process.
Many of the other thing I see too is that sometimes, believe it or not, entrepreneurs are too conservative. They're not willing to take the necessary risk to grow and that becomes a problem. They feel like the status quo is okay. I'm earning a certain amount of income. I feel very comfortable.
It's almost like nothing is going to change. I can live in my bubble and I'm fine. But that's when it becomes very, very important to expand your horizons and think about all of the potential issues that could strike your business, whether it's internal or external. And that's where I see the most experienced entrepreneurs doing well is they have that strategic vision where they're thinking ahead and really being able to predict more than react to things that are potentially going to happen in the future for their business.
[00:22:08] Speaker A: In hearts and math, if somebody wants to find you, where is your web page where the people can find you?
[00:22:16] Speaker B: Yeah, our personal webpage is my profit gurus.com and harsh and I linked on there. Harsha, any of the resources you can elaborate on?
[00:22:27] Speaker C: Yeah, so we have our LinkedIn pages. It's the best way to contact us if you want to know a little bit more about us. Personally I think our website is our best connection. We have a bookme page if you need to have any questions or you just want to just talk about business in general. We love talking.
So our website once again is www.myprofitgurus.com.
[00:22:52] Speaker A: okay, great. Okay, we're coming to the end of the second segment. In the next segment we're going to talk about resilience because we believe that a true leader need to build resilience. By the way, my podcast name is Building Resilience. So that's another show. I do the podcast. Building Resilience is going to be the next topic coming back.
Stay tuned.
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We're coming back to leaders in queue on tables. We're having Harge and Matt here. They're experts, irs, former auditors, corporate America.
They work also the big fours, a mixed experience. And now they are taking care of entrepreneurs. They have myprofitgurus.com so we're going to be talking about resilience. Resilience is not about reacting to the problem, it's about anticipating them. Strong leaders don't just hope for favorable markets. They prepare for the volatility.
So I'm going to make you a catchy question here.
Why do intelligent leaders sometimes struggle financially?
[00:24:38] Speaker C: Very good question. And I will say that, you know, financially resilient leaders don't necessarily have better businesses, but they do have better habits. The first habit is consistent financial rhythm.
Resilient leaders review cash margins, key metrics weekly, not just when something feels wrong. Reactive leaders, on the other hand, wait for pain before paying attention. By the time they act, their options are really limited.
Second, you know, resilient leaders separate emotion from data. They don't make decisions based on fear, headlines, or intuition. They let numbers inform the decisions and then they apply judgment.
Reactive leaders tend to do the opposite. They feel first and then they rationalize later. And then third, resilient leaders plan for volatility instead of hoping it won't happen.
They maintain cash buffers. They diversify their revenue streams when possible, and they do a fair bit of scenario planning, like good scenarios, bad scenarios. Reactive leaders assume stability is a default, which we know in today's society is not really true.
[00:25:47] Speaker A: Well, that's a great advice. Let me tell you something here that sometimes you have people that are smart, but they fail in their business.
Because it's very important that you mentioned before about the AI, the importance of the AI today in taking data, because data is the king.
So how can you make that your finest move instead of being a simple scoreboard becoming a strategic tool?
[00:26:19] Speaker B: I could take that one. And Jose, I just wanted to comment on your last question. I mean, resiliency is such a key key component. And I want to talk a little bit about the mindset. Like what is, what is resiliency? It's really persevering through obstacles. So I think as a business owner, as Harsh said, you have to anticipate that. And the way to overcome that and understand your business is always going to be changing and obstacles can happen. But how do you pivot in a very agile way?
I want to make that clear because it's not only about operations, but it's about a mindset as well.
In terms of your question, Jose, I Think the resilience. I'm sorry, can you repeat that again, Jose, Just, just for clarity.
[00:27:02] Speaker A: So how you can turn your finance instead of a simple scoreboard in a strategic tool.
[00:27:10] Speaker B: Okay, okay, got it. So I think you mentioned data also in that, in that equation.
So I'll tell you one thing. Out of real life experience, if you don't have good data, it could mislead a lot of your decisions. So it's very important to be very hygienic about your data, very diligent about what you put into a system.
And data is not just telemetry, which is number spaced, it's also sentiment. So every modern company today uses a mix of sentiment and utilization data. What is sentiment? What is your customers telling you? Are they happy? Are you engaging with them and saying, well, what part of this process did you do the best? Are you surveying them? That's very important because there's this concept of false positive. Your data can be telling you all the good signs, but in reality your customers can be unhappy. So how are you engaging with those customers? And in terms of the AI, I think right now AI is a very powerful tool, but you have to handle it very carefully as well. What is it that you're looking to gain from that? Is it productivity with your employees? Is it a faster sales cycle?
You have to be able to curate that data and make it customizable to the decisions of your business. And. Harsh. I'll pass it to you if you have more insight on that.
[00:28:33] Speaker C: I was just going to say, Jose, one of the things we do do is we actually offer an AI readiness assessment for our business owners. I think the struggle is right people, I mean, business owners know they need to incorporate some level of AI, but they don't know where to start. They don't know which tools to use. And most of the time they don't understand, like which business processes can be aided by AI.
So one thing we do is we do a readiness assessment where we actually work with the business owner to understand each of their process flows, whether it's in marketing or accounting or distribution. We understand really where they're having problems, you know, where there's issues where it could be improved. And then we try to see if AI could be a potential solution for that. But it takes a lot of work. This is not like, you know, this is not something where it can be done in a day. This is usually a process that could take upwards of a month. Because if you really need to do it right, you need to figure out what tools are the best tools for that business owner to incorporate into their business.
I think one of the other areas, there's a lot of tools out there, so picking the right one becomes a little bit difficult sometimes. So, yes, the readiness assessment is something we are incorporating. So I. I really thank you for the question.
[00:29:48] Speaker A: Yeah. As we mentioned, the topic is talking about building resilience. As I mentioned, I have a podcast that is called Building Resilience, because one of the things that I discovered when I came back from my captivity is that resilience is something that is not only a world, is really when you discover that no matter what you have gone in your life, you can bounce back and become better. Become better. And something also that today is part of my coaching, is that the true leaders are those that are adaptable to the situation in today's world. The leaders that are adaptable are those that are going to really be successful. So how can a leader balance their investing in their growth, but at the same time preserving the stability?
[00:30:41] Speaker B: Great.
[00:30:41] Speaker C: Matt, you want to take this one?
[00:30:42] Speaker B: Yeah, yeah. So I believe in a couple of things. I think it's very important to build an infrastructure in your company, right? What are. What are the roles and responsibilities of you and your colleagues or your teammates? What are the outcomes? I think it's very important for a leader to establish a vision. What is it that we want to do? Is it all based on profits? Is it based on scalable customers? Is it based on being just the best in the industry?
That vision has to be defined and it has to be disseminated to your folks.
I think collecting data. And it doesn't necessarily have to be from a single source. It could be from surveys, it could be from your systems, it could be from your employees.
It can be from colleagues in other industries. But you have to curate this information in order to mature your vision.
If your vision constantly changes, that's not the best thing. You have to have an outcome that you want to achieve, but you have to be able to be agile enough within that process to change the mechanics of your business to hit that outcome. So that's what I feel about resiliency and a mindset for that.
[00:31:53] Speaker A: I was talking before about coaching. You know that I have a coaching program and you also do your coaching.
So what is that?
The key role of mentorship in the entrepreneurs? Because sometimes, as I said, the people become a businessman, become a solopreneur. They want to do everything, and sometimes they make mistakes.
So how you see that role of mentorship in the business world, Jose?
[00:32:26] Speaker C: I think you said it. Well, in terms of the fact that the coaches bring wisdom, at the end of the day, we've probably done it, We've seen it. We've worked with folks who've actually had the same types of issues. Right. So we can bring, we can cut their learning curve in more than half by being able to provide that information so they can save on costs, save on expenses, and save on time. Primarily, I think in my mind, I look at mentorship and advise you. Support are often the difference between learning the hard way and learning the smart way. I think entrepreneurs are isolated by default.
They are expected to have answers, make decisions, carry risk, often alone. Strong advisor creates kind of space for better thinking. Good advisors, they don't provide answers. They challenge assumptions, they provide perspective. They slow leaders down when emotions run high. They help leaders see patterns they're too close to notice. And then advisor support also accelerates the company's maturity. And instead of repeating common mistakes, leaders can now adopt proven frameworks for cash management, pricing, growth.
And I think most importantly, mentors help leaders shift identity from an operator to more of a strategist. That shifts strength is not just the financial leadership, but overall confidence and clarity. So I think the overall, the strongest leaders aren't the ones who know everything. They're the ones who know when to ask for insights.
[00:33:54] Speaker A: And not only that. You mentioned about the strategy. Strategy means planning.
So what is the most blind spots that you can find in the planning process in the leaders?
[00:34:07] Speaker C: Very good, Matt. You want to take that?
[00:34:09] Speaker B: Yeah. I think one of the blind spots is and will continuously be a blind spot are the changing business environment.
So that is a constant. Your business environment will always change. So how do you adjust to that?
[00:34:23] Speaker A: Right.
[00:34:23] Speaker B: If your operations and your systems are scalable and you set them up in a way, you can make those pivots within that industry. I think another blind spot is do you understand your customers?
Your customers always have some sort of expectation out of your product or service.
Is that expectation continuous? Is that expectation changing? How are you engaging with your customers to understand where they see value? And the last thing I'll say is within your employee base, you know, these are the, the, the engine that's driving your business.
Are they motivated? Do they understand your vision?
Do they understand the values that you have for your company?
It's important to engage with them and ensure that there's complete alignment. Harsh. Anything else to add to that?
[00:35:15] Speaker A: We're coming to the end for the segment, so let's continue next segment. So in our final segment, we can finalize that question, but only that we're going to begin to talk about tax strategy compliance and long term legacy planning. Stay tuned. We're coming back.
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Welcome back to this show. We have Harsh and Matt in our show so we're going to be talking a very interesting topic, taxes and compliance. People when talk about taxes are beginning to get scared.
So often they feel intimidations. The entrepreneur really sometimes feels some fear when they're talking about taxes.
But there are powerful strategic tools that can be handled correctly.
That's why guys like you are here today. Leaders who think long term approach the tax planning, do it intentionally so they do it in a strategic way. So that five minute segment, we're going to focus on that thing tax planning, compliance and the competitive advantage of aligning the financial strategy with your legacy goals. So my question goes now, how can neither refrain tax strategies from burden to opportunity?
[00:37:44] Speaker C: Wonderful question. I think that'll fall in my camp here. And what I find is that most leaders see taxes as something that happens to them.
That framing alone turns taxes into a burden. The reframe is recognizing that taxes are actually the outcome of business decisions, not a separate event.
Tax strategy becomes an opportunity when leaders stop asking how much do I owe? And start asking how do my business choices affect my tax position?
Every decision, entity structure, pricing, compensation, reinvestment, timing of income and expenses has some tax consequences built into it. When business leaders integrate tax thinking early, they unlock some level of flexibility. For example, reinvesting profits strategically can support growth while improving tax outcomes. Structuring compensation thoughtfully can align incentives to reduce leakage. And then you can plan timing to allow leaders to smooth cash flows rather than react to a surprise liability.
The real opportunity is alignment. When tax strategy supports business strategy, leaders stop feeling punished for success. Taxes become a design variable versus a penalty. That shift alone reduces the anxiety increases confidence because leaders feel they're back in control with their financial narrative.
[00:39:11] Speaker A: That's a very good advice.
So let's talk about compliance because compliance is something that is, you know, in top of the mind and people don't understand about it. Please, first talk, what is the compliance that the people can understand? What is that and the importance of it?
[00:39:28] Speaker C: Surely, and it's interesting you ask, is part of our practice is actually tax resolution? So this is the fact, this is when business owners get audited or they have collections, you know, from one of the different types of government agencies. We are actually the group that goes and defends them, actually. Being a former IRS auditor, I have a really good understanding of how the IRS inner workings work. So I'm able to provide them some of that insight that you might not get working with maybe another CPA doesn't have that experience.
Much of the time it's about relationship driven, where you're working with auditors that you've known, you've worked with collection agents that you know. Basically from my prior experience, I think that relationship piece of it is what's missing. Sometimes even as we're developing tax strategy and sometimes even as you're working with the CPA or your tax advisor, the relationship of really understanding what your ultimate goal, that becomes probably one of those discussion items you need to have early so everybody's on the same page, and then you can do a fair share of plan planning. When it comes to compliance, I'll be honest, that is probably an important piece in terms of providing, you know, obviously you want to be compliant with government regulations, but with better tax planning, the compliance automatically is part of that. Because you're going to plan, you're going to structure your events, make sure you're taking advantage of every potential tax loophole. At the same time, you know, you're planning for your legacy. You're making sure your corporation is actually built for success in the long term.
[00:41:05] Speaker A: That's a great advice. Let me tell you something. Those leaders, even if you're in a small business, but you try to take care of this from the beginning, those business will be more successful in the future because you're planning in advance.
So let's talk about something that for me is very important. That is that the legacy. The legacy. Because when you're doing a business, it's not only to make money, it's to leave a legacy.
When you decide to become an entrepreneur, it's because you have a passion. Sometimes you do that. You know, you come from corporate America like you, and you decide to start a business because you have that passion inside to help others. And that's the same thing when you Start a business, you begin to do something because you feel the planning. So you're not doing that for a short term, you're doing that for a long term. What do you think that's the difference between the legacy view and the short term planning? And what will be your advice for entrepreneur on that?
[00:42:11] Speaker C: Pretty good. Matt, you want to take that?
[00:42:13] Speaker B: Yeah, I'll take the first part. Harsh. And you can add on to it. I mean, if we first define this right, what is short term? It's optimization and immediate results.
What is legacy? Its endurance, impact and sustainability. Right. So they're completely different philosophies.
I'll give you a softer approach to this. I think when you look long term, I think your investment in leadership and systems is very, very important.
Systems that can scale, collect data help you make the right decisions. But I also think that culture is very important.
In corporate America. They have a gold standard, and that is standardize, simplify and automate. Standardization means everybody's on the same page and doing the same work. If everybody's doing something different, then your data is going to be unclean. So you want to make sure that your processes are aligned with the actions.
The simplification of it is being expeditious. Every time you run a process or a workflow, are you analyzing that and making sure that that's the most expeditious way to get to your results?
Time is very critical and you can't afford to lose it. And the last thing is automation bringing in the right technologies into your company, whether it be AI or workflows, workflow systems, whether it be a system of record, really understanding what the right technology is. Marshall, I'll hand it over to you.
[00:43:38] Speaker C: Great. I would agree. I think the one point you mentioned was about systems. I think that's a real critical piece that I think entrepreneurs should think about. I mean, when I deal from the cash standpoint, the tax standpoint, one of the short term planning questions that most of our entrepreneurs ask is how much money can we make this year? When you're thinking about legacy, you're thinking about what will be standing when I'm no longer here.
Short term planning is optimized for speed, efficiency, immediate returns. Legacy planning, on the other hand, is optimized for durability, is transferability and resilience. I think when leaders focus only on short term profits, decisions tend to concentrate on power, knowledge and risk of the owner, which is very dangerous. That can boost, you know, temporarily create some fragility. If the owner is, for example, disabled or hurt anything like that. When it comes to legacy planning, as Matt mentioned, we are thinking more about systems, people, governance, culture, all those things that are going to remain after the owner is no longer there. It is very hard, it is very hard for hands on owners to let their business go with, you know, even if they have competent, you know, staff, you know, helping them out, it's very hard to let go. But if you really want to have a legacy and you want to be able to transfer it, that's what your future buyer is looking for. They don't want you in the business. They want to buy a business that's self running, that's running optimally, that's got really good cash flow, really good profits behind it without you being part of the business. So I think that's probably what I would add to that.
[00:45:12] Speaker A: Okay, we're coming almost to the end. I'm going to give you some quick questions to have quick answers. Okay. One, the first one is that what is the biggest financial mistake you can see? Repeatedly,
[00:45:28] Speaker C: I think for me it's like the lack of long term strategic thinking. I think just in the world of entrepreneurs, they're reacting every single day just to survive. But to think long term, that's not always a skill set that I see.
[00:45:43] Speaker A: Okay, one tax strategy. Everybody should know.
[00:45:48] Speaker C: I think depreciation is a great strategy. Accelerating your depreciation. When we got bonus depreciation here in the US we got section 179. These are like well thought out, wonderful strategies to accelerate depreciation. Take advantage of the tax deduction immediately so you can increase your cash flows immediately. I'm a big fan of depreciation.
[00:46:09] Speaker A: Well, let me tell you, I agree with you. In my years in the oil and gas, depreciation was key in every tax planning.
I certified that.
Worst IRS situation you can ever see.
[00:46:24] Speaker C: Oh boy, that's a tough question. I've seen many, I've seen many.
I think the tough ones I've seen are actually that has to do with collection activity. It's really, really tough when you see an entrepreneur not resolve their tax situation with the irs and all of a sudden they come up one day and they see a padlock on their business where they can't open up the doors of the business anymore.
Completely gone. Usually that could be solved pretty easily. Tax resolution, great opportunity to actually work with the government and settle your solution, settle your issues. Usually the government is pretty good as long as you respond. And many people will take that envelope they get from the IRS and they will bury it under their pillow and never to be seen again. But I think we have to be very, very open and be able to deal with the IRS in a nice, productive manner.
[00:47:10] Speaker A: Well, this was a wonderful conversation and we're coming to the end again where the people can find you.
[00:47:17] Speaker C: You can find us at our business site, our website. It is at www.myprofitgurus.com. that's probably the best place to get ahold of us. You can also find us on our LinkedIn profiles.
[00:47:29] Speaker A: Well, harsh and Matt, thank you for this wonderful conversation. Thank you for your insight today.
And let's finish this conversation. Insane that the people have to take care of their taxes, their planning. And if you want to find solution, contact Hart and Math. Thank you for being here.
[00:47:52] Speaker B: Thank you, Jose.
[00:47:53] Speaker C: Thanks for having us.
[00:47:54] Speaker B: Very nice.
[00:47:55] Speaker A: Okay, we're coming to the end.
Well, that was a wonderful conversation that we had with Hart and Matt. Thank you for being connected to the end.
So if you want to know more, continue looking leaders in Kevin Tavern until the next time.
