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SUMMARY KEYWORDS
Tax traps, business owners, wealth planning, retirement plan, diversification, financial flexibility, key man insurance, tariffs, AI integration, business succession, tax liability, financial expert, business exit, family business, investment strategies.
SPEAKERS
Damon Pistulka, John Browning
Damon Pistulka 00:08
All right, everyone, welcome once again to the face of the business. I am your host, Damon pistolka, and I am so excited for our guest today, because we have none other than John Browning with us today, and he’s going to be talking about when success backfires tax mistakes or tax traps for business owners. I was going ahead of myself here, John, thanks for being here today.
John Browning 00:35
Oh, thanks for having me. Yeah, I really appreciate it. It’s always fun to always fun to be on the show. Love watching your LinkedIn posts and everything else. All the pearls of wisdom that you put out there is awesome. So
Damon Pistulka 00:48
thanks, and I just so appreciative you can come and talk with us today, John, so for people that have not met you heard about you before, listen to you speak. John, let’s give them a little background so they understand who we’re talking with today.
John Browning 01:04
Sure. So I came from Wall Street, and I escaped Wall Street, so I was that annoying guy. You know, I actually did have the corner office. It was very nice. And I got, frankly, caught up in sort of chasing my portfolio and trying to build my portfolio to make more money, and all of that until, well, my, my the beginning of the end for me in Wall Street really started way back on 911 I was in Chicago, and I became, let me tell You, the next year, because I was an executive, and being in Chicago, I was on the team that sort of put things back together. So the next year was a blur, but after that, I started to realize I have six kids. I am spending all my time on the road, and yeah, I’m making good money, but why? And that began my thought process about this whole idea of build a life, not a portfolio. And so the good news is, you learn a lot sitting in those big ivory towers with whoever, Goldman, Sachs, Bank of America, all those guys, the smartest guys, frankly, in the world. And you know, I got to sit there with them. I got to learn from them and work with them, taking that now, and I started Guardian rock wealth. And here we are helping executives business owners who, as you mentioned, been successful, but maybe in some cases, if it’s really a thing too successful, and they maybe have forgotten to do a little bit of planning around the tax issues. They’ve forgotten that they’re not invincible. That’s another thing that happens, and one day they wake up, maybe they have a car accident. You know, we that we hope, we hope that for no one, or maybe they, they wake up and they’re they’re sick, and they can’t do what they did yesterday. What happens to that business and what happens to their family who’s left with that business? Maybe they haven’t done the planning necessary, and they’re put their whole family in a in a position they never intended. Mm, hmm,
Damon Pistulka 03:27
yeah, yeah. So when as as you’re moving through and you’ve been helping people over the years, you know, today we’re talking about tax traps for business owners, you know, what are some of the I guess, what are some of the first things business owners should be thinking about when it comes to success and tax traps?
John Browning 03:53
Yeah, I think probably the hardest thing to to think about when you’re a business owner, especially when you’re first starting out is, you want to minimize your taxes for that year. Everybody’s like, I don’t want to pay taxes this year. Yeah, when really you should be thinking about, how do I minimize my taxes over the lifetime of the business, over my lifetime, yeah, then maybe, or my family’s lifetime, it’s if it’s a family type of business. But most people, and it’s tempting to fall into is, how can I pay less taxes this year? But that might not be the right answer, so that’s probably the first thing that I tend to talk to business owners about.
Damon Pistulka 04:40
So give me a for example on that, because, you know, there’s there, because, I mean, I don’t know who I would talk to that would say, Well, I don’t want to minimize my taxes today,
John Browning 04:52
right? Well, and that’s true. I mean, there’s a balance, right? And, and one of the, one of. Things that business owners absolutely tend to hate doing is w2 ing themselves, you know, because then you’ve got to pay, I got to pay Medicare, Medicaid, I got to pay all of this stuff, plus the employer’s portion. It’s a really painful thing to do, and you can do things a lot more tax efficiently, arguably, but if you don’t w2 yourself at all, that can actually increase your taxes long term on a personal basis. So there’s a happy medium in there about how much you w2 yourself versus how much you take as a draw. And there’s a, there’s that spot in there on the seesaw where you don’t get far in one direction or the other. So that’s, that’s one thing. And you know, another one is paying attention to your cost basis of the business. And that’s, that’s a really hard thing to think of, because most business owners are saying, well, I’m going to do this forever, right? But the reality, the reality is, at some point, either you’re not going to want to do it anymore, or your body’s going to tell you you’re not going to do it anymore. The other inevitable it’s gonna happen, and when that happens, are you going to have things that offset that tax, or are you going to not have any cost basis and everything’s going to be a profit? So the way you do your accounting, the way you do your bookkeeping, your CPA is extremely important, having the right person. I think that’s probably another thing. People just go get a CPA and they’re all the same. That is very much not the case. Yeah.
Damon Pistulka 06:58
So if you were, well, let’s, let’s stay, let’s stay. Back at taxes. We’ll talk about CPAs in a little bit. What are some of the whether the specific mistakes you know that you see when, when a business owner, they they start hitting it right, they’re starting money is starting to come in. Their product or service is really becoming popular. The work that they’ve put into their their lovely business is now starting to pay off more than they probably may have thought they could have. What are some of the things that they really need to be thinking about at that point?
John Browning 07:39
Well, one of the things that I think a lot of business owners don’t think too much about is creating, creating their own retirement plan. They think, well, my business is my plan. I’m going to sell the business and I’ll live off of that forever. And that that could be true. Yeah, is it the best tax planning? Probably, probably not. And, you know, we talk a lot about, when we talk about wealth management, we talk about diversifying your assets, and I’m a big fan of investing in yourself. I absolutely believe in that. I also believe in diversification. And no matter how wonderful you are, things happen? Yeah, things happen that you didn’t expect. Maybe a maybe a tariff, or some political somebody makes a change to the law, and suddenly your business doesn’t make any sense anymore. Or maybe there’s a massive innovation, yeah, that starts to decrease your value in the marketplace, and you don’t have any way to compete any longer. There’s all sorts of things that can happen, and that’s just the case for diversification. So essentially, the idea of taking some of your profits off the table and investing them, say, in the market, in real estate, whatever it is, in even in Bitcoin, that that is an asset class now, but taking some of that off the table, creating a there’s different ways to do it. You can if you’re if you’re not, don’t have the cash flow yet you just start what they call a simple IRA. If you have a lot of cash flow, it’s really hitting it really well. You do maybe a 401 K for yourself and your business. If you are really, really hitting it hard and things are going amazing, you can create your own pension plan, and you can put hundreds of 1000s of dollars away per year in a tax deferred account. And even there you have to, you really should talk with a professional that understands what that means, because, as you put it in these deferred instruments, you. You could be setting yourself up for a tax trap later on, too, because every dollar that you if you do well with your investments and diversification, those dollars become bigger, and then we have the bigger tax bill at the end. So there’s a there’s a lot of math that really isn’t all that hard, but it is math that needs to be done to determine which one is right for you. But I would, I would dare say most, I’m going to say most small and mid sized business owners don’t really think about that, unless maybe they have a lot of employees that are clamoring for and need that, you know, a 401, K or something like that. But if they’re, yeah, you know, if they’re a smaller in terms of number of people, they tend to really forget about that and just think, Oh, I’m just, I’ll always have this business. It’ll always be around. And they don’t consider maybe it won’t be,
Damon Pistulka 11:01
yeah, yeah. Well, that’s a good you bring up some good points here with diversifying beyond the business, because I think that is a a trap that can really catch somebody like you said you could. You could wake up tomorrow and the market changes and your business are no longer viable. And that’s, that’s a that happens, and people just,
John Browning 11:23
I’ve seen that happen, yeah. I mean, things were going great now all of a sudden they weren’t. And it happened, not quite overnight, maybe, but within a year, I’ve seen it happen,
Damon Pistulka 11:35
yeah, yeah. And that’s, that’s a good point, because it is something that you can go a long time and maybe never see it, but then all of a sudden it hits, and you’re like, wow, it and it’s hard to come back from, yeah, so, um, you know when, when you’re talking to business owners, what are some of the things that you are discussing with them. Okay, we’re having a great year. We had a great last year. What are some of the new things that I should be looking at? Or are there certain when you get to a certain size are there things that we should be changing? Or what are some of the the questions you’re talking with someone about these stages?
John Browning 12:20
Yeah, yeah. I think, you know, aside from what we we’ve already talked about a little bit, you know, with the 401, K, or the pension plan, or things like that, another thing that gets overlooked often, and it can, it can be really devastating for a business, is to have something in place. Because normally, once you get to a certain point, there’s another party to the business, or if there is no other party, like, not a not a business partner, there’s a family, yes, involved, yeah. And, you know, especially with the families I, I have actually seen this happen, and it’s just heartbreaking. You’ve got a good business, everything’s good, but there’s been one guy at the top bad, maybe right or or maybe the big brother. It was somebody was at the top that was really making it happen, and the rest of the family did some things, but maybe they don’t quite have the skills to really be the CEO, or whatever it is, or maybe the sales side, or whatever, and the business has gotten to a point where it’s large enough to be if you have a buyout, there’s it’s a lot of money. So the first thing that can happen is, oh, we need to sell this thing. And we need to sell this thing right now, which creates, first of all, you have to sell it for a a lower price than you thought you were, because it’s a fire sale. Now the other thing that can happen is, all of a sudden, we’re all going to get this big capital gain, and we may not get cash. That happens quite often is that you don’t get cash for the sale, so if you don’t get the cash to at least pay the taxes. I’ve actually seen a family darn near go bankrupt. And they were a wealthy family, and they did great. You know, everything was going great, but when they had to sell, it was a huge capital gain. They didn’t get all they couldn’t do a deal that had cash enough to pay the taxes. That’s another thing, and there are things you can do to prepare. You can get key man insurance, and it is not all that expensive, and it really does depend on how you set it up. But you can have have it so that the partner is the beneficiary of the key man, key man, and then when the person unfortunately passes away the life insurance pays that guy to pay out the rest of the family or to pay off whatever, whoever they need to pay off, and then owns the business. The business continues, and the rest of the family is doing fine because the benefits of life insurance tax free. So there’s. Just and that’s just one way that you can adjust and and plan for that. You know, there’s a lot of other different things you can do, but a lot of times when you’re being successful and things are going great, those are not things you think about, and they’re not things that you plan for.
Damon Pistulka 15:16
Yeah, so when, when you’re talking with people that are really doing, well, what are some of the, I mean, what are some of the challenges, or some of the the pushback you will get to not really get into this longer term, taking a look at things. I mean, what are some of the the things you hear people say,
John Browning 15:38
probably the the most used one was, wow, that’s really expensive. I don’t really want to take our profits and pay for protection. It’s hard, yeah, because it, because it is, it is an expense. I mean, even if you do everything the right way, there is an expense to it. You know, nobody really likes to talk about life insurance seems expensive. Even if it has a cash value component, it still seems expensive. That’s probably the biggest thing that I reason that I hear the number two, and it’s a close number two is we are busy. We don’t have time to we don’t have time to do the paperwork involved. We don’t have time to do this, that or the other things. And really, it doesn’t take that much time, but they think about it does, they’re convinced that it absolutely does. Yeah, and yeah, probably the, you know, the third thing really is, Oh, that’ll never happen to me. That’ll never happen to us. And then it does,
Damon Pistulka 16:52
yeah, and then it does. And so as you’re helping people doing this long term planning, doing the financial work alongside them. What are some of the things you really enjoy about what you do? This
John Browning 17:09
is going to sound cliche ish or something, but when, when you see somebody kind of get it, and you see, like, a group of people, especially like if there’s a management group, and they, they get the benefit of it, and it literally, for lack of a better term, it literally changes their whole perspective and kind of their whole lives. And there’s a even if they didn’t really know it before, when they do know that they were carrying that, you know, heavy burden. It’s lifted. I don’t have to worry about that anymore. And a lot of them actually do realize that it’s there, but they just, you know, the ostrich effect. You know, you bury your head in the sand, and it’s easy to do that when things are going well, but when you have that burden lifted off. It’s it’s just a lot of fun to see and and then there’s also that component of, I didn’t realize that I had no idea. And if you can show somebody something that they didn’t know before, and it makes a huge value difference in their lives, that is so fun for me to see. And if I could be part of that, I do that all day long. It’s, it is just, it’s just fun. And sometimes it’s with a spreadsheet, sometimes it’s with a story, you know, an analogy that just makes it click. It’s different things for different people, but you know, especially that, I especially like the family businesses, because, yeah, part of the family will get it, and the rest of the family won’t. And eventually, you know, you figure out what works for each one, to get them to the point where do you see how this could make a difference for you, and then for the whole family, and when they get that, that that light bulb, is just a lot of fun.
Damon Pistulka 19:06
Yeah, that’s really cool. That’s really cool. So as you’re as you’re working through these things with people, and looking, looking at their business owners, they’re like, Well, my profits are growing, but it doesn’t feel like I’m getting wealthier. What are some of the things that you’re you’re talking like that, because it happens a lot in business. I think that success doesn’t necessarily bring that instant kick start that people are thinking it’s going to
John Browning 19:39
Oh, yeah. I mean, you know, frankly, I struggle with Steve. You know, it’s like you forget to celebrate the wins. You forget to celebrate those small wins, especially, like all that didn’t matter that much. But you know, those small wins add up, yeah, and when you can, when you can show us, especially when I’m talking. Wealth and management, yeah, yeah, as a whole, when you can kind of tear things down and show them hey, I realize like it, it’s not translating to maybe money in your park pocket, or your goal of that Ferrari in your in your garage, or whatever it is for you, or that, yeah, ability to travel, or whatever it might be for you. There is, there is this profitability here, and there’s profitability that didn’t happen today, but you’ve set yourself up for some continuing revenue and showing people the numbers involved with that. And what I always encourage people to do if they’re starting to feel that way, and this doesn’t sound like a wealth manager, but I will encourage them to take a little bit off the table, go do what you love to do. Yeah? And I will sort of give them that permission, because if they are doing well and just don’t feel like it, because they’re so busy that that happens a lot, I’m so busy I don’t get to enjoy what I have, right? That’s a whole build a life, not a portfolio thing. Yeah, I’ll give them sort of that permission. Hey, how have you set things up so that you could step away for a week, a month, whatever it might be, and go to Spain, go to wherever you said, parents, whatever it is you want to go, yeah, and enjoy that time with your family, with whoever I end up talking about that more than you would think actually telling people go spend money, because most of the business owners that I talk to are very passionate about what they’re doing, and that’s kind of why they’re successful. And they for they forget to go golfing or whatever it is they like to do. Yes,
Damon Pistulka 21:43
yes. That’s, I think, that that is pretty common, like it’s, it’s said in in people that are really driven because they probably love what they do first of all, because otherwise you’re not going to work that hard, hard enough to to make, you know, we’d be very successful at things.
John Browning 22:02
That’s true. What is it? Elon? Elon Musk says it’s starting a business is like chewing on glass and staring into the abyss. You’ve got to really love it.
Damon Pistulka 22:14
That’s for sure. That’s for sure. So what? What are you seeing as opportunities. I know there’s some things that are have changed with some recent legislation. Always, that’s always changing. What are some things that business owners, you know might want to refresh themselves, may want to, you know, go back to their CPAs and be talking about,
John Browning 22:38
yeah, I think, well, a lot has actually changed. It changed a couple of years ago, but a lot of business owners aren’t, aren’t up to date, and they’re actually not compliant, is the ERISA laws, and that happened under the Biden administration. But a lot of changes happen there, and whether you have employees or whether it’s just you and maybe some family members, it’s important to understand that, especially if you got 10 employees or more. Yeah, so a lot of that’s getting overlooked. Of course, the tariff, the tariffs, actually impact a lot more businesses than I think the average person on Main Street realizes because whether you are a direct importer or maybe you’re a roofer or maybe you’re an HVAC guy or a plumber, a lot of those materials are coming from overseas, and they just got more expensive, and your expenses go up. Your clients don’t want to pay that much. Well, where are you squeezing out the margin to get that and and are those tariffs going to actually happen? Some of them already did happen. It’s really hard to make a decision in the absence of at least some semblance of certainty, and that’s probably been the biggest challenge this year for business owners, is just not knowing, yeah, not even knowing. We still don’t know, right? I mean, the tariffs, you know, some of them have gone through. Some of them haven’t. Some of them have gone through halfway, quarter of the way, whatever it is, and it’s, you know, how do you play it? And that’s keeping people from living their best lives, because I don’t know if my profits going to be there tomorrow.
Damon Pistulka 24:29
Yeah, one it really comes back again to, I think, when we’re talking here today about tax traps for business owners, wealth, wealth wealth planning traps for business owners. It also really brings to bear that if you start early with diversifying outside your business, and you know you, you mentioned this, I mentioned again, just because I think it is so important that you you got to be diversifying out. Side of your business, or because of things like this, because of technology change, because, you know, tariffs could honestly, and it has wipe some businesses out, or market changes, or whatever they are, that wipe, wipe things out, and that diversification just, I’m just coming back to that again. I’m seeing the notes from that. It’s just when you diversify, it gives you options. And when you’re not, you really are stuck,
John Browning 25:26
yeah, it’s, it’s another thing I call that too. Is financial flexibility, yeah, creating for yourself financial flex, of flexibility well before you need it, is, you know, key to happiness, right there. Man, that is, that is huge. And it just to speak real quickly to maybe the smaller folks out there, maybe they got a family run business, and they’re like, how do I do a financial flexibility? Well, if you’ve been if you’ve done well enough that say you own your own house, if if you’re still in a traditional mortgage, you’re not doing it right. Okay, there’s, there’s a whole different mortgage out there that none of the banks are going to tell you about. It’s called the all in one mortgage. And just by doing that, if you’re a smaller guy, and you don’t, you know you’re not, you’re not that big, huge, multi, multi million dollar thing, you can create for yourself some significant financial flexibility just by knowing that one thing, and it’s it’s in not talking to again, a wealth manager who is well versed in all this stuff, because you think you don’t have time, they’ll be too expensive, the amount of money that they can save you. I’m talking, I’m talking about myself here now, but listen, I can save you so much money that, you know, I’ll pay for myself just in saving you money. Forget, forget making it. I’ll, I’ll save you a lot. And creating in create financial flexibility. There, you can create financial flexibility. You see, I’m in a kind of an old business, business that doesn’t benefit from Ai, that that’s the big, sexy thing that we’re all talking about right now. Well, if you’re doing well, you got a good, cash flowing business, why isn’t your business involved with AI? You can diversify outside of your business and invest in something artificial intelligence, something Bitcoin. You’re seeing a lot of companies out there now, the cool thing to do now is invest in Bitcoin as part of your company holdings, and you got to be really careful with that. This is not investment advice, and be super careful with that. I always tell people never fall so in love with a sector or an asset or your own business that you over allocate and get way overweighted to that particular sector, that company or whatever it might be, but that does, to your point, also include your own business, and most of us as business owners, like a very large portion of our net worth, is our business, including me, I raise my hand as being very guilty of that, especially when you’re in the early stages. But it doesn’t have to stay that way. Yeah,
Damon Pistulka 28:23
yeah, that’s for sure. So what are some no nos that you see people do, or hear about that people do that they should just say, Hey, stay out of this, because that’s it’s not a good move.
John Browning 28:44
First thing is, stay out of things that you are not an expert in. Hire the expert to do that. And you know this as a business owner, right? We all know this. As a business owner, you’re really good at whatever it is that you do. That’s why you’re successful. And seem like I deal with a lot of blue collar folks that work trades. Actually, that’s my favorite client. I love people in their trades. They’re just, I don’t know, I’m stereotyping here, but they seem to be just more down to earth than they get it because they’ve gone in and they’ve seen the water heater that’s completely set up incorrectly. They’ve seen the electrical system that is like, what were they thinking? They’re gonna kill themselves. You know that they’ve seen people in the do it yourself, things, but yet they still try and do the numbers things and the and the financial planning, the wealth management and all that on their own. And sometimes I play the YouTube game. Have you ever heard of the YouTube game? No, when I go speak at events, sometimes I’ll do this, and I’ll say, so let’s all play the YouTube game here. Let’s see like you’re gonna fix a dripping faucet. You’re gonna fix a dripping faucet. Is that a YouTube problem, or do you call the plumber for that? Up. Maybe you try a YouTube first, if it’s just dripping, you know, you know if it’s, yeah, well, if it is, if it is a sewer back up and it is all it’s two inches deep on your floor. Is that a YouTube thing, or is that called a plumber, right? Yeah. Or my personal favorite, if you are going with your friends and you decided we’re going to do a parachute jump today. So I’m going to pack, I’m going to pack all the parachutes. Is that a YouTube thing, or is that let me get somebody who knows what the heck they’re doing to pack my parachute? Yeah, yeah. You’re dealing with your financial stuff. That actually impacts the rest, not being melodramatic here really impacts the rest of your life, maybe your family’s life, that a YouTube, YouTube thing probably knows how to call the expert thing.
Damon Pistulka 30:52
Yeah, that’s a great that’s a great way to explain it. That’s a great way to explain it. So as you’re moving forward now, John, what are some of the exciting things you are seeing for business owners, and just what’s got you fired up about helping them, you know, avoid these tax traps and get their wealth planning rolling.
John Browning 31:13
I’m seeing, I am seeing a lot more business owners, especially the baby boomers, who are getting a little bit older, yeah, and they’re realizing I need to sell this thing, or, you know, I’m just, I need to somehow get rid of it. And they’re realizing my kids don’t want it, yeah, kids don’t want anything to do with my business. And they’re starting to realize that they need some time to plan to sell it. So I am seeing more awareness to that also with all the talk about taxes and the new tax bill and all that’s going on with that, people are thinking a little bit more about, what is my tax liability and how does that affect my cash flow as I go into retirement and I no longer have this business, is everything that I earn going forward going to be taxable? Or have I done some planning that makes what I’ve earned so far? Because I’ve diversified it and I put it into some tax free forever instruments. When there are some, they’re thinking more about that than I’ve ever seen before, and it’s mainly the baby boomers, but even some of the Gen X guys like myself, yeah, are are starting to think that direction. So it’s nice to see that, and they’re doing it. The Gen Xers, at least, are doing it early enough so that I can really, you need you really, it helps the earlier you start. But if you don’t start, at least give me five years. Yeah, five years, I can do some amazing things with you. Three years is really, really hard. You give me one year, and there’s not a lot we can do in a year. Yeah, it’s just, it’s hard, yeah, but I’m seeing the awareness a lot more than I have in the past, which is, which is good, yeah. So let’s start early. Start early. I’m also seeing some people really think about the AI thing, and some of them are scared. Others are like, how can I use this? And it’s the ones that are saying, Ooh, how can I use this that are actually going to get ahead, yeah? Because just like when Henry Ford said, we’re going to do this, we’re going to do this assembly line there, oh, we’re all going to lose their jobs. A lot of people did lose their jobs. And then the smart ones, they figured out how, oh, I can just be more productive. I can do this, and I can they adapt. It’s the same thing with artificial intelligence. If you learn how to use it and use it correctly, it can transform I maybe, maybe this is too dramatic. I’m going to say any business. Maybe I should say most businesses. It can transform it in some way. You can use it for all sorts of things. Just have to use your imagination a little bit. Maybe you need to talk to an expert, yeah, AI to see how could I actually use this in my business? This doesn’t have anything to do with AI. Maybe you can reduce your paperwork. Maybe you can all that stuff you hate to do, you know, filling out stuff that takes you time that doesn’t generate revenue. Yes, maybe AI could do that
Damon Pistulka 34:24
now. Yes, well, that’s, yeah, it’s, that’s a great point. It’s the things that we can continue to do with with the new tools and technology in general. We really need to be looking at that, because that’s what keeps our businesses viable for as long as they can be and and helps to increase the profitability if you’re doing it right, because you have more time to work on things that generate revenue, because you have more time to generate revenue in diverse diversify maybe from where you’re at today, a little different, little more effective. And really give you potentially blue ocean opportunities.
John Browning 35:05
And you know what else I just sort of thought of as I what I really like to see, and what I try and do my myself, with people who are working with me, is, don’t think of it as this is an opportunity for me to eliminate workers. How about we think about it as, hey, this is an opportunity to make my workers either better or show them how they can they can grow the business by learning something new. I think so many times I think, well, in the bigger companies, you see this, you know, with AI, they’re like, Oh, great man, big, this big announcement, we’re going to be able to lay off 20,000 workers because of AI. That is so the wrong way. I hate that. How about I can retrain 20,000 workers to do something to greatly increase the profitability of our business and enrich their lives? It’s like the Simon Sinek idea I just, I, I’m sad to see so many businesses, and even small business say, Oh, great, I can save some money by laying off people. How about you make your business bigger, better, more, yeah,
Damon Pistulka 36:13
or eliminate, eliminate, increase in some of the costs as you scale. I mean, that’s a huge thing. Because if you, if you’ve got an aggressive scaling plan, and I’m going to go, you know, I’m going to grow 25, 30% in the next three years each year, and I can do it with the same admin overhead, people doing the work, whatever, that’s huge. That is massive. That is, that is just game changing. When you look at that and go, Okay, I can now add profitability that I could have never done before, and right? And if you’re doing that and your competitors are not doing that, that just made you that much better in your industry, that much more desirable. If you are one of these people that is considering an exit in the next, you know, X years and, and plus, you just have more money to do what you need to do.
John Browning 37:09
Yeah, absolutely. And that diversification. And, you know, for those folks out there who are concerned about, you know, BlackRock and Blackstone coming in, and, you know, they show up as an LLC, but they’re giving you this all cash offer. Guess what? That’s BlackRock. They’re buying up all these small businesses. And what they’re doing is they’re using AI and they’re but unfortunately, they also are, in my opinion, sucking the soul out of the small business. Yeah, and I hate to see that, but what if you could do that as the small business owner, because with AI, smaller businesses can do some of the same things that these massive businesses can do, and they can actually do it better. So get on the stage. That’s one
Damon Pistulka 37:58
of the things we love seeing, is, is, is somebody that’s, you know, a regional player. Doesn’t even have to be a regional player, local player. I mean, let’s just go, for example here, where I’m in the northwest, you look at HVAC companies. A lot of the HVAC companies, once they got to a certain size, they got bought by PE so it is, you still have smaller ones around with, you know, 1235, people in but the ones that had 2050, those people, those have been been gone for a long time now, and rolled up and put together. But if you wanted to create that, if I’m sitting here, I’m Damon, and I’ve got an HVAC company or an electrician and plumber, whatever, and, and really doesn’t matter the company that’s a local company, and I’ve got five competitors, and some of them are getting near retirement age. I just love to see when you and I, John, we decide, hey, Damon, it’s time for Damon to get out. John’s going to buy my business. Because I know if John buys my business, the ownership is staying in the community, the employees probably have a very good chance of staying employed. And if we do it right, no one loses a job in the community. The community benefits. Because that doesn’t just get, like a lot of these roll ups, it’s cut the overhead, cut the offices that aren’t that aren’t make enough, put the people all in one, you know, more centralized locations, and away you go. That’s what happens. So now that my, my service that was down the street now is two miles away, yeah, it’s not that much different, but it is to the people that were working there in the community, because that’s gone from the community,
John Browning 39:34
yeah, and you’re, you know where your service goes, yeah, probably it may not even be in the country. It goes down, down that toilet, exactly. Yeah.
Damon Pistulka 39:44
And I think that’s just cool to see people doing that, especially I’m I was just talking to somebody about today. I was like, Listen, if you can do that, that is that’s an incredible thing to be able to do, and I’ve been a part of that, helping people do it in their communities and and their little industry. Trees too, because it’s so it virtually in any industry. I don’t care if you’re carpet cleaning or healthcare or whatever and and you can do this and make a tremendous difference in your in your local area.
John Browning 40:13
Yeah, absolutely. Yeah. Good stuff.
Damon Pistulka 40:16
Well, John, what’s this? Let’s do one thing, if you had to leave everyone with one piece of advice today before we go, what would that be?
John Browning 40:27
Well, we kind of kept coming back to one thing, but I gotta have two. I gotta have two. So two. So one thing is, create that retirement plan for your business. The second thing is diversify. We talked about that a lot. Diversify away from the one thing you cherish most, which I understand, is very difficult. But if you’re 100% if you if somebody told me they were, they had 100% of their portfolio in Tesla stock or talent here, Nvidia, I would say you are crazy. That’s way too much risk. And yet, small business owners, we do it every day. We have 50% 100% of our entire net worth in one business. Don’t do that, and there are ways to diversify. Yeah, and call the expert.
Damon Pistulka 41:22
Awesome. John, thanks so much for being here. So if someone wants to talk to you directly, John, what’s the best way to get a hold of you?
John Browning 41:28
Well, you can either go to Guardian rock wealth.com, that’s the website, but probably the very best way and easiest way is to grab your cell phone. Everybody pick up their cell phone. All right. Dial 321, text on the text app, and you open up the text, up, 321-421-5213, and then just text the word life. Very good, super easy. You’re going to get a text from me that has all kinds of ways to get free information. I’ll send it’ll be on a different text stream. I will not inundate you with a bunch of texts. I’ll send you a couple. It’s not going to be a bunch, though. I’m not going to do it every day or even every week or even every month. Frankly, yeah, I always
Damon Pistulka 42:16
hate that. Yeah. Awesome. Awesome. So those text text you 321-421-5213, 214215213, text, the word life, l, I, F, E, and you’ll get some free info to that’ll help you out. Now, John, before we get off, I don’t think I can stop because you have a daily, little daily newsletter you’ve been sending out for quite some time. That’s something else that people might be interested in. Yeah,
John Browning 42:43
yeah. You can find me on sub stack, and a lot of people just like to, Hey, cut through the noise and and just listen, not have to read anything. And it’s just what’s going on that particular day. And I try and drop a couple things that are long term as well. And goes beyond the headlines, beyond beyond. You know what people are saying in the news that day and really analyzes things. It’s about five to 10 minutes in the morning. I just recorded each morning. It’s on substack, called Building your life. Everything that I do is my podcast is the building your life podcast, and the daily update is the building your life daily update on substack. Yeah, if you’re interested in that, again, reach out to us and we can get you on that list to get it as well.
Damon Pistulka 43:27
All right. All right. Well, John, thanks so much for being here today. Again, we had John Browning from Guardian rock wealth. Now, did that? Make sure I got it right, Guardian rock wealth. And if you want to talk more with John or get more information, just text him. 321-421-5213, text life to that you’ll get some information. He won’t inundate you with a whole bunch of other texts, but that’s a great way to get a hold of him talk about wealth planning and understanding some of these tax traps for business owners and ways to really plan for the future so you can you can retire when you want, and do it the way you want.
John Browning 44:08
That’s right. All right. Thanks for having me on the show.
Damon Pistulka 44:11
You bet. Well, hang out for a minute, John. We’ll finish up offline. I want to thank everyone that was here today. I want to thank Usman for being here and dropping in a note. And I got some LinkedIn users. I can’t see who you are, but thanks for being here. Love the comments. We will if you got in this late, go back to the beginning and listen to some of the things that John was talking about, and we will be back again. Thanks once again, John for being here. We’ll finish up offline. All right. You.
