July 6, 2022 • 28 mins
Before Brian hired employees to support his three businesses, he was a solo practitioner in the payroll and financial services space for six years.
And in today’s bonus episode, we’re tapping into Brian’s 10+ years of experience helping self-employed clients get off the ground. Brian dives into the realities of starting your own business, including:
- How to prepare for entrepreneurship before making the leap.
- Passion vs. practicality in starting a business.
- The extra work that self-employment demands.
- How to register a business name and weigh the pros and cons of different business entities (namely a sole proprietorship or an LLC — don’t worry, we explain each).
- What additional taxes and liabilities you may face, and how to pay yourself.
- How to bring on extra help if business is booming, and whether those workers are contractors or employees.
***And just to be on the safe side … This episode does not contain or constitute legal advice. You should really contact a CPA or business attorney if you want advice about your (aspirational or realized) business.***
Resources mentioned
Where to find Brian & his businesses
Brian @ InFocusPayroll.com
Check out more from The Work Seminar
Visit theworkseminar.com or find @TheWorkSeminar on social media.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Jesse Butts (00:24):
Hey everyone.
Thanks for joining mefor another episode.
I'm your host, Jesse Butts.
Today, we have a bonus episode,and this one is all about the
realities of self-employment.
I'm chatting with BrianBohley a payroll expert
with years of experiencebeing self-employed before
hiring his first employees.
Brian and I met when we wereboth working for a small
(00:44):
business online payrollcompany, when that was still
a little bit of a novelty.
Brian is now the founderand owner of InFocus
Payroll, goodbookin', and,coming soon, BookAssure.
Brian, welcome to the show.
Thanks for joining me.
Brian Bohley (00:59):
Jesse, thanks for having me today.
Jesse Butts (01:01):
Yeah, absolutely.
So Brian, can we start a littlebit with your background?
Can you tell us what youwere doing before you
ventured out on your own?
Brian Bohley (01:12):
Well, I, I spent many years doing customer
service, , at all levels.
So I started out as lowas a the grocery store,
moved my way up to customerservice desk, then cashier.
I really enjoyed workingwith the customers,
making them happy.
So during college and justafter college, I took on some
(01:33):
customer service representativejobs and at the online payroll
service, that's where I met you.
I was working there andservicing 35,000 small
businesses, answeringtheir questions, helping
them resolve issues.
One of which you might rememberwas Twitter back when they
only had five employees.
Jesse Butts (01:55):
Vaguely.
I do remember that.
Yeah.
Brian Bohley (01:57):
Yeah, So I, I, I, I had a problem with, , with how
the customers were being helped.
So I went into the taxdepartment because I
thought that's where Icould solve their issues.
The troubles were just so muchdeeper than that, that I really
felt like either I had to getout of the industry altogether
or do something about it.
Instead, right away, Ifound a position working
(02:19):
for Aon, which was servinglarge Fortune 50 companies.
Bank of America was one of them.
And the corporate culturejust wasn't for me.
It was really toxic.
That was where I was forcedto decide whether or not I was
just gonna go and do somethingelse, change careers altogether.
Or if I was just gonnatry to do something within
(02:40):
the payroll industry.
And that was when I decidedto start InFocus Payroll.
Jesse Butts (02:45):
And, and what timeframe was this
roughly that you started?
Brian Bohley (02:49):
Well, I, I incorporated in February of
2012, so just over 10 years ago.
And that was about a month afterI had started with, with Aon.
So I kind of had an ideapretty early on that it wasn't
gonna work out with them.
And then I launchedright after leaving Aon.
In July, I got my first client.
(03:10):
That was pure luckand happenstance.
I, I was at a networkingevent, a chamber of
commerce networking event.
And it was my very first one.
I think I had ahundred business cards.
I thought that'd be enough.
I had a, a businessowner come to me.
He says, I need payroll.
And I just thought, Well,this is gonna be easy.
I'll just get a client ateach networking event and I'm
(03:31):
gonna be highly successful.
Jesse Butts (03:33):
And did that pan out as you, as
you thought it would?
Brian Bohley (03:36):
No, no, it was, uh, it was a disaster actually.
Cause then I went into eachnetworking event trying to
pitch my services to allthe other people there to,
you know, trying to makelong lasting relationships
with other colleagues.
And there, I was tryingto sell them on payroll.
Jesse Butts (03:57):
For, for a little more frame of reference too.
So you started yourbusiness, InFocus Payroll,
a little over 10 years ago.
How long were you doingthat solo, just yourself?
Brian Bohley (04:10):
So I ran into some difficulties pretty early on.
Having my first child in 2013did not help the situation.
It kind of put astrain on our finances.
And so I started taking onsome consulting gigs, and
so that allowed me to besolo for much longer than I
probably should have been.
Then as I started to feel likeI could go back to the business
(04:34):
and grow it, we had our secondson in 2015, and so I started
taking on some more consultinggigs, all the way through
the end of 2018 I did those.
And then I kind of hadan issue with a client,
my largest client, morethan 50% of my revenue.
And I had to fire them,which was a really tough
decision, obviously.
(04:56):
And that was when I waslike, okay, I have to
take this seriously now.
It was almost likea fork in the road.
Again, just like before Iwas like, Either I gotta
make this work or get aregular nine to five job.
So that was when Ihired my first employee.
And he did not haveany payroll experience.
He came highly recommended,from his aunt who I had
(05:18):
actually trained in payroll.
Yeah, he's, he's been great.
He's still with me and he'slike my right hand man.
Jesse Butts (05:26):
Nice.
Congratulations.
So, so Brian, now that we havekind of a sense of your high
level story, wondering if we cankind of tap into that expertise.
So I'm curious, based onyour experience going solo,
if there's a listener outthere who's been considering
that, what should they do orconsider at this point, if,
(05:46):
if they've been toying aroundwith the idea for a little bit?
Brian Bohley (05:49):
Well, it's, it's different
for everybody obviously.
I keep thinking back toearlier on, in my career when
I could have started sooner.
And really, if you can do it,if you can get started before
you have kids and a mortgage,maybe even before you're
married, that makes life awhole lot easier because you're
(06:10):
gonna wanna put everythingthat you have into this.
It's not as glamorousas people think.
It just takes a lot of workand it can put a strain on
relationships, especially whenyou're married and you have kids
it's, it's no longer about you.
Every decision youmake is about us.
So that's, that's kind of, mybiggest piece of advice would
(06:33):
be to try and strategically planthe timing, , so that you have
the least number of roadblocksin the way or any kind of things
that could complicate the issue.
And then second after that,you either wanna make sure
you have a proper runway,so depending on what kind
of business it is, it's aproduct, then a lot of times
(06:55):
you have to have, you need tostart up with a lot of capital.
If it's a service business,like I, like I started, it's
a little less of an issue.
You're only charging for yourtime and maybe some software.
And then third, you might wantto, before you quit your job,
just kind of use friends, familycolleagues, as Guinea pigs to,
(07:20):
to see if they're as excitedabout your idea as you are.
Sometimes, , you can kind ofget stuck in your own little
bubble and think that youhave this really great idea.
It turns out that it's, it'sonly gonna help a small few.
And you might be oneof those small few.
Jesse Butts (07:38):
Can you elaborate a little bit on that comment
you made about, self-employmentnot being as glamorous as
it, as it's made out to be?
Brian Bohley (07:47):
Sure.
I think, I think that'stouched on a lot in, in
various different self-helpbooks and, and everything.
They try to really paint apicture of just like what it
really means to, to start abusiness and , it it's nice
and it's rewarding to becalled the founder or to be
referred to as a business owner.
(08:08):
It's, it's...
it can feel like aprestigious title.
But really you're not justthe founder and the owner.
When it's just you, you're the,you're the bookkeeper, you're
the administrative assistant.
You're the janitor.
You're pretty much everythingthat you wish you could
be and never wish youcould be at the same time.
Jesse Butts (08:30):
So, for example, if you have a passion for
photography, this spans alot of creative endeavors and
you want to do more of that.
People think, I can do moreof that if I go on my own.
And what most of their time,and it sounds like this is
what you're mentioning too,is occupied with is, you know,
(08:52):
booking the gigs and payingvendors and updating your
website and answering inquiries.
So that time for the actualpractice of what your business
is continually shrinks,especially as you grow.
Brian Bohley (09:06):
Yeah.
I mean, you certainly havemore creative freedom when
you're calling the shots.
And, and you get to decide whatprojects you're working on.
It becomes really tough whenyou're starting to have to
decide between the ones that,the projects you want to work
on and the projects that youneed to work on that are gonna
actually help you pay thebills and keep the lights on.
(09:27):
Definitely the biggeryour business becomes,
the more layers ofcomplexities there are.
And, my father-in-law,who's a serial entrepreneur
and one of my mentors.
He told me right when Istarted the business, he's
like, Well, this is great.
Now you only have towork half the time.
And I thought this was odd forhim to say, because he worked
(09:47):
like 70 to 80 hours a week.
He's like, Yeah, , you get topick which 12 hours a day, seven
days a week you wanna work.
And so it's kind of like inorder to get to the things
that you really want to getto, you have to spend a lot
of time working at the thingsthat you need to work on.
(10:09):
So I think of it as youcould probably work eight
hours a day, five days aweek and, and maybe get by.
But you would only begetting done the things
that you need to get done.
The things that you want to getdone are the things you save
for after you get through all ofthe, tough stuff, all the things
(10:29):
that need to get done in orderfor the business to survive.
Jesse Butts (10:33):
And earlier when you were talking about
going into to payroll or,or excuse me to a payroll
business for yourself.
You had mentioned that, you'dhit this crossroads where you'd
seen the problems and you feltlike it was either try to solve
them or make a, a career change.
So, I'm curious how we canframe this a little bit around,
(10:56):
you know, the passion debate.
For listeners who mightbe wondering, like, Do
I pursue my passion?
Do I pursue somethingI'm good at?
And, and I don't wannaput words in your mouth.
So, so please, you know,correct me or, or disabuse
me of any incorrect notions.
But it, it sounds like maybeyou, you did develop a, a
passion for this, but it wasreally more like you saw this
(11:18):
opportunity and felt that youcould solve it versus being, you
know like, payroll is the thingthat I love more than anything.
Like what's your, yourtake on going self-employed
in the, you know, passionversus practicality realm.
Brian Bohley (11:34):
Well, let's, let's just take a couple
steps back real quick.
Payroll was not alwaysmy passion and, I
get asked that a lot.
Like, what madeyou wanna do this?
What made you wannastart a payroll service?
It's even sometimes I, Itake a step out and I look
at myself and I'm like,How did you get here?
(11:54):
But I saw an opportunityto make a difference and to
provide a kind of servicethat didn't already exist.
Customer service is notreally highly valued within
the payroll industry.
Mostly geared towards thetechnology end with low paid,
(12:17):
undervalued reps, glorifiedcustomer service reps talking
to the clients, tellingthem, You're gonna have to
talk to your CPA about that.
Or, you know, wecan't comment on that.
Or it's gonna be 12 to16 weeks until you get
your amendment done.
It doesn't matter whatyou're needing it for.
and that was justfrustrating for me to see.
(12:39):
And at the time I didn'treally have any other thing
that I thought stood out tome that needed to be solved.
So payroll it was.
Jesse Butts (12:49):
So, you know, for people who are really interested
in, in self-employment, shouldthey form or incorporate
some type of company?
Or should they just workunder their own name?
Like, what are,what's your take?
What are you typicallyrecommending to, to, to people?
Brian Bohley (13:10):
Well, it depends on who you talk to.
What they recommend.
And really if you're gonna startout anywhere, if it's not a,
if it's not a business wherethere's a lot of liability where
you could get sued being a soleproprietor is absolutely the
simplest most straightforwardoption, especially when you
don't have any revenue yet andyou're just incurring expenses.
(13:33):
And then once you get enoughrevenue to where you can
think about paying yourself,that's when you need to
talk to an expert like abusiness attorney or a CPA.
Jesse Butts (13:43):
If you want to start working with a business
name, is that permissiblebeing a sole proprietor or do
you have to form a businessif you want to, instead of,
you know, Jesse Butts Writing,something like, The Best
Damn Writer Ever, hopefullyyou don't use that name.
Brian Bohley (14:06):
Yeah, that would be tough to fit on an IRS form.
You can have a DBAas a sole proprietor.
Jesse Butts (14:12):
A DBA is a?
Brian Bohley (14:13):
Doing business as.
So you would file that withthe secretary of state.
And it's, it's prettystraightforward.
Anyone can do it.
You would need to, uh, publishin a newspaper your information
and that your your name isbeing used as a DBA, and it's
(14:33):
representing you as a company.
So once that's publishedyou send that, in proof
of the publishing to the,with the application.
Then it can, be official.
So anyone can do that.
When you're a DBA it doesn'treally shield you from anything
from a liability standpoint.
If that's what you'remainly looking to do,
(14:54):
then it's, it's betterto, form a a formal entity.
Jesse Butts (14:58):
If I'm a sole proprietor, that means that, you
know, the IRS and whatever yourstate's revenue department, they
don't see any difference betweenwhat I do for work and what I
do with my personal finances.
It's all one and the same.
Is that
Brian Bohley (15:15):
So there's opportunities to write
off business relatedexpenses from your income.
So that's one way todifferentiate your
expenses from personal.
The main thing is, is that youhave to pay self-employment
tax because you are theindividual and the business,
(15:36):
you're both of those things.
And so that is where theemployer, in case you don't
realize it yet, the employeractually matches the Social
Security and Medicare onyour regular W2 income.
A lot of people don't know that.
And then when they start theirbusiness, they're really shocked
when they get hit with theself-employment tax, which is
(15:56):
the employer portion as well.
So, so there is a difference,but it's all filed under
the same tax return, ifthat's what you mean.
Jesse Butts (16:04):
And what, how much is that, like percentage-wise,
that self-employment tax?
Brian Bohley (16:09):
Well, it comes across as 15.3%.
7.65% is the employee portion.
7.65 is the employer portion.
Jesse Butts (16:19):
So when you're a W2 employee for a company,
you're only paying half of that.
But then once you'reself-employed, and we're talking
about sole proprietor, you'repaying all of that yourself.
Brian Bohley (16:32):
Exactly.
And that's why when you dobecome a consultant or you
do work for yourself, yourbillable rate should be much
higher than what your ratewould've been as a W2 employee.
To cover all the extrataxes, all the paperwork,
the liability, and thehassle of, of, of setting
up your own entity.
Jesse Butts (16:54):
So why would somebody choose to create
an LLC, which, you know, Isee so many small business
names have LLC at the end.
Why would they choose to do thatversus being a sole proprietor?
Brian Bohley (17:09):
I mean, I'm not a, I'm not a business attorney, so
this isn't legal advice, but...
when you set up an LLC,you're basically making
that announcement oryou're differentiating
you from the business.
That, that shieldsyou from liability.
Now, of course, youdon't get that for free.
You don't get to just doeverything exactly the same way.
(17:30):
There's a lot of extra hoopsyou have to jump through.
You have to hold board meetings.
If you're the only boardmember then it's with
yourself basically.
Yeah, you just have tobasically record everything
as if you are a businessand not just an individual.
Jesse Butts (17:46):
And you mentioned the liability.
Or a liabilityaspect, I should say.
So what does that mean?
Brian Bohley (17:54):
The liability of owning a business, can span
into many different realms.
But for an example,I'll just use payroll.
You could make a mistakethat would damage one of your
clients either financially oremotionally, and, and then they
could come at you for damages.
(18:16):
So as long as you have yourbusiness operating under an
LLC, and you're not piercingthe corporate veil by treating
the LLC, operating accountas your personal piggy bank,
you're not commingling personalexpenses with business expenses
(18:36):
then r eally you should havebusiness liability coverage.
And between that and theentity itself should shield you
from any personal liability,which means if you have a
house and you have savingsthat would be shielded
from any kind of lawsuit.
Jesse Butts (18:55):
And that business coverage liability is that
some type of insurance policythat you were mentioning there?
Brian Bohley (19:01):
Yes.
So there's general businessinsurance, and then there's
also professional liability.
So professional liability...
you can think of it aslike an endorsement for
specific types of, types ofindustries that you're in.
So, professional liabilitymeans, you could make a
mistake that would have anegative impact on your clients.
(19:26):
Whereas there's other businesseswhere there's not really as
much risk and it can all becovered under a general policy.
Jesse Butts (19:35):
So Brian, when you are self-employed
and, and let's, you know,just keep this simple.
So like, you know, you'vechosen the sole proprietor
or maybe the LLC option.
How do you actuallypay yourself?
Do you need payroll ifit's just you and you're a
sole proprietor or an LLC?
Brian Bohley (19:54):
If you are an LLC, ideally you want to be
paying yourself guaranteedpayments, which are basically
the same as owner distributions,which is just taking money
out of the, the account touse for personal reasons.
The guaranteed paymentsgo on the, they actually
(20:18):
go on the profit and lossstatement, which can help you
decide whether or not yourcompany is truly profitable.
Whereas if you don't takeguaranteed payments, it might
look like you're actuallymaking more money than you
really are, especially ifyou're trying to sell the
business, uh, eventually.
Jesse Butts (20:37):
So, so let's just make this very simple.
If you're a sole proprietor,can you just, as needed
withdrawal funds from a businessaccount to your personal, or
do you have to do anythingformal around paying yourself?
Brian Bohley (20:51):
No, when you're a sole proprietor, you can pretty
much treat the business accountas your own savings account.
But it's not recommended,obviously you wanna keep
it separate if you can,but there are no real
regulations or requirements.
Jesse Butts (21:09):
So let's say you, you're self-employed
and, and you're doing well.
let's say you're a designer,and you have more work
than you can handle.
Do you need to hire a W2employee if, if you've
just decided that I can'tdo this, I need some help?
Or is there some other way toget that help, without hiring
(21:33):
an employee that's, you know,still, obviously above board.
Brian Bohley (21:36):
Well, just like a lot of these other topics we've
been discussing, I, I alwaystry to introduce my clients
to a professional that canspeak on these more formally.
But, I will say that younever wanna just jump
to hiring a W2 employee.
That's, that's a commitmentthat, if it doesn't
(21:58):
work out, could lead toissues down the road.
However, it's not alwaysas simple as just hiring
a contractor either.
Contractos need to be treatedas their own individual
companies that can make theirown decisions and operate
when they want and how theywant, up to a certain extent.
(22:19):
If you're gonna hire somebodyand you're gonna say, This
is where we're at right now.
This is where we need to be.
Go get 'em.
Then that can be a contractor.
But if you're gonna say,This is where we are.
I want you to comein these hours.
Here's a computerthat you can use.
Make sure you use this software.
(22:39):
And I need it done by this date.
Then that's an employee.
Jesse Butts (22:44):
So if you had a scenario where maybe keeping
with the designer thing...
and, and again, I, Itotally realize that , this
is not legal advice.
This is just a hypothetical.
But let's say you're adesigner and you have this
big contract and you findanother designer and say, you
know, This is where we are.
I need these images in theseformats two weeks from today.
(23:10):
Ping me, if youhave any questions.
It, it sounds like, ifI'm understanding you
correctly, that's a prettylegitimate contractor
situation versus an employee.
Brian Bohley (23:20):
Yes.
I mean, When it comes tosomething that, detailed you
really don't have a choice,but to lay it out for them.
You know, this formatby this, by this date.
But at the end of theday, you're still not
telling them how to do it.
You're still not telling themwhen to do it necessarily.
Cause they could doit ahead of time.
(23:40):
You're simply giving themsome, some constraints
to work work within.
Jesse Butts (23:46):
And I assume if you are in a position where
you do need to hire an employeebecause, you know, you, need
them to work certain hours.
You, you have to tell them everylittle thing that they're...
I don't mean that likenegatively, but if you
have to give them a lot ofinstruction and training.
What do you need whenyou hire an employee?
(24:09):
Do you need likeworker's compensation?
Do you have to startpayroll at that point
if you haven't already?
Brian Bohley (24:17):
Even if you don't hire an employee, if you hire a
contractor, you may still needto get workers' compensation.
Or at least make sure thatthey have liability coverage.
So definitely wanna stillmake sure that when you
hire a contractor, youhave, you have that.
With a W2 , they're,they're kind of like
your responsibility.
I joke and I call myemployees, my kids.
(24:38):
It's like takingcare of my, my kids.
You have to make sureeverything is above board
and that you are transparentand reporting everything
about that relationship.
So you need to do a newhire reporting to the state.
You need to collect I-9verification and all their
(24:59):
identification you need toverify to make sure that
they are authorized towork in the United States.
You need to have them fillout W4 forms so that you know,
how much tax to withhold.
And then, for insurancepurposes, you definitely
need to get workers' comp,even if they're working
out of their home or yourhome it doesn't matter.
(25:20):
If they get injuredwhile they're working,
then that's a liability.
Jesse Butts (25:25):
So, so Brian, as you over the last 10
years, as your business hasevolved, and as you have
started new businesses, whatresources have you found
most helpful in all of this?
Brian Bohley (25:41):
Good question.
Let's see.
Well, my father-in-law, who'sa serial entrepreneur, as I
mentioned before, he's, he'sprobably been my best resource.
He's, he's let me figure thingsout on my own quite a bit too.
Yeah, it was pretty tough.
I didn't really have toomany people to lean on
in the very beginning.
I just had to really workon building relationships
professionally, to find outwho I could trust and for what.
(26:05):
Yeah, I think I, I think Ilearned the hard way a lot.
I did join some networkinggroups and there was, I don't
know if you're familiar withmastermind groups, but there
were some mastermind components.
There were some coachesthat I worked with.
I've worked with three coaches.
One was an absolute disaster.
(26:25):
It was like every time Iwent to him with a problem,
I, I left with five timesthat, from the meeting.
That was a very tough situation.
Coaches can be a good thing,but they're expensive.
So I'm, I don't know.
I, I'm still trying tofigure out really who, uh,
who , who's a good, where,where a good resource is.
Actually for my, for my appthat I'm just now trying
(26:46):
to get built, I've actuallyjoined a community called
1871, which is an incubatorin downtown Chicago.
They're a nonprofit,they have all kinds of
resources and differentworkshops and, and things.
So I would say that going toa nonprofit organization that
is geared towards helping abusiness, small businesses or
(27:10):
someone in the industry thatyou're looking to get into,
that's probably your best bet.
Because they shouldn't havetoo much of an ulterior motive
other than just to help.
Jesse Butts (27:20):
So Brian, if, a, if a listener is a little
bit curious about what you'redoing, where can they find
more about like the payrollservice that you offer?
And I know that you dobookkeeping and, and
you mentioned an appthat you're developing.
Can you just share alittle bit about those?
Brian Bohley (27:36):
Sure.
I, I don't spend a lotof time on social media.
But I, I am on LinkedIn.
So, the profile is,is Brian Bohley C-P-P.
And then also the websitesI have, InFocusPayroll.com.
It's the payroll website.
And then GoodBookin.comwithout the G at the end
(28:00):
is the bookkeeping website.
And my email address isBrian@GoodBookin.com or
Brian@InFocusPayroll.com.
Jesse Butts (28:09):
All right.
Well, Brian, thank youso much for joining me.
This was a pleasure.
Brian Bohley (28:13):
Yeah, no problem.
Thanks so much for having me.
It's been great.
Hey everyone.
Thanks for joining mefor another episode.
I'm your host, Jesse Butts.
Today, we have a bonus episode,and this one is all about the
realities of self-employment.
I'm chatting with BrianBohley a payroll expert
with years of experiencebeing self-employed before
hiring his first employees.
Brian and I met when we wereboth working for a small
(00:44):
business online payrollcompany, when that was still
a little bit of a novelty.
Brian is now the founderand owner of InFocus
Payroll, goodbookin', and,coming soon, BookAssure.
Brian, welcome to the show.
Thanks for joining me.
Brian Bohley (00:59):
Jesse, thanks for having me today.
Jesse Butts (01:01):
Yeah, absolutely.
So Brian, can we start a littlebit with your background?
Can you tell us what youwere doing before you
ventured out on your own?
Brian Bohley (01:12):
Well, I, I spent many years doing customer
service, , at all levels.
So I started out as lowas a the grocery store,
moved my way up to customerservice desk, then cashier.
I really enjoyed workingwith the customers,
making them happy.
So during college and justafter college, I took on some
(01:33):
customer service representativejobs and at the online payroll
service, that's where I met you.
I was working there andservicing 35,000 small
businesses, answeringtheir questions, helping
them resolve issues.
One of which you might rememberwas Twitter back when they
only had five employees.
Jesse Butts (01:55):
Vaguely.
I do remember that.
Yeah.
Brian Bohley (01:57):
Yeah, So I, I, I, I had a problem with, , with how
the customers were being helped.
So I went into the taxdepartment because I
thought that's where Icould solve their issues.
The troubles were just so muchdeeper than that, that I really
felt like either I had to getout of the industry altogether
or do something about it.
Instead, right away, Ifound a position working
(02:19):
for Aon, which was servinglarge Fortune 50 companies.
Bank of America was one of them.
And the corporate culturejust wasn't for me.
It was really toxic.
That was where I was forcedto decide whether or not I was
just gonna go and do somethingelse, change careers altogether.
Or if I was just gonnatry to do something within
(02:40):
the payroll industry.
And that was when I decidedto start InFocus Payroll.
Jesse Butts (02:45):
And, and what timeframe was this
roughly that you started?
Brian Bohley (02:49):
Well, I, I incorporated in February of
2012, so just over 10 years ago.
And that was about a month afterI had started with, with Aon.
So I kind of had an ideapretty early on that it wasn't
gonna work out with them.
And then I launchedright after leaving Aon.
In July, I got my first client.
(03:10):
That was pure luckand happenstance.
I, I was at a networkingevent, a chamber of
commerce networking event.
And it was my very first one.
I think I had ahundred business cards.
I thought that'd be enough.
I had a, a businessowner come to me.
He says, I need payroll.
And I just thought, Well,this is gonna be easy.
I'll just get a client ateach networking event and I'm
(03:31):
gonna be highly successful.
Jesse Butts (03:33):
And did that pan out as you, as
you thought it would?
Brian Bohley (03:36):
No, no, it was, uh, it was a disaster actually.
Cause then I went into eachnetworking event trying to
pitch my services to allthe other people there to,
you know, trying to makelong lasting relationships
with other colleagues.
And there, I was tryingto sell them on payroll.
Jesse Butts (03:57):
For, for a little more frame of reference too.
So you started yourbusiness, InFocus Payroll,
a little over 10 years ago.
How long were you doingthat solo, just yourself?
Brian Bohley (04:10):
So I ran into some difficulties pretty early on.
Having my first child in 2013did not help the situation.
It kind of put astrain on our finances.
And so I started taking onsome consulting gigs, and
so that allowed me to besolo for much longer than I
probably should have been.
Then as I started to feel likeI could go back to the business
(04:34):
and grow it, we had our secondson in 2015, and so I started
taking on some more consultinggigs, all the way through
the end of 2018 I did those.
And then I kind of hadan issue with a client,
my largest client, morethan 50% of my revenue.
And I had to fire them,which was a really tough
decision, obviously.
(04:56):
And that was when I waslike, okay, I have to
take this seriously now.
It was almost likea fork in the road.
Again, just like before Iwas like, Either I gotta
make this work or get aregular nine to five job.
So that was when Ihired my first employee.
And he did not haveany payroll experience.
He came highly recommended,from his aunt who I had
(05:18):
actually trained in payroll.
Yeah, he's, he's been great.
He's still with me and he'slike my right hand man.
Jesse Butts (05:26):
Nice.
Congratulations.
So, so Brian, now that we havekind of a sense of your high
level story, wondering if we cankind of tap into that expertise.
So I'm curious, based onyour experience going solo,
if there's a listener outthere who's been considering
that, what should they do orconsider at this point, if,
(05:46):
if they've been toying aroundwith the idea for a little bit?
Brian Bohley (05:49):
Well, it's, it's different
for everybody obviously.
I keep thinking back toearlier on, in my career when
I could have started sooner.
And really, if you can do it,if you can get started before
you have kids and a mortgage,maybe even before you're
married, that makes life awhole lot easier because you're
(06:10):
gonna wanna put everythingthat you have into this.
It's not as glamorousas people think.
It just takes a lot of workand it can put a strain on
relationships, especially whenyou're married and you have kids
it's, it's no longer about you.
Every decision youmake is about us.
So that's, that's kind of, mybiggest piece of advice would
(06:33):
be to try and strategically planthe timing, , so that you have
the least number of roadblocksin the way or any kind of things
that could complicate the issue.
And then second after that,you either wanna make sure
you have a proper runway,so depending on what kind
of business it is, it's aproduct, then a lot of times
(06:55):
you have to have, you need tostart up with a lot of capital.
If it's a service business,like I, like I started, it's
a little less of an issue.
You're only charging for yourtime and maybe some software.
And then third, you might wantto, before you quit your job,
just kind of use friends, familycolleagues, as Guinea pigs to,
(07:20):
to see if they're as excitedabout your idea as you are.
Sometimes, , you can kind ofget stuck in your own little
bubble and think that youhave this really great idea.
It turns out that it's, it'sonly gonna help a small few.
And you might be oneof those small few.
Jesse Butts (07:38):
Can you elaborate a little bit on that comment
you made about, self-employmentnot being as glamorous as
it, as it's made out to be?
Brian Bohley (07:47):
Sure.
I think, I think that'stouched on a lot in, in
various different self-helpbooks and, and everything.
They try to really paint apicture of just like what it
really means to, to start abusiness and , it it's nice
and it's rewarding to becalled the founder or to be
referred to as a business owner.
(08:08):
It's, it's...
it can feel like aprestigious title.
But really you're not justthe founder and the owner.
When it's just you, you're the,you're the bookkeeper, you're
the administrative assistant.
You're the janitor.
You're pretty much everythingthat you wish you could
be and never wish youcould be at the same time.
Jesse Butts (08:30):
So, for example, if you have a passion for
photography, this spans alot of creative endeavors and
you want to do more of that.
People think, I can do moreof that if I go on my own.
And what most of their time,and it sounds like this is
what you're mentioning too,is occupied with is, you know,
(08:52):
booking the gigs and payingvendors and updating your
website and answering inquiries.
So that time for the actualpractice of what your business
is continually shrinks,especially as you grow.
Brian Bohley (09:06):
Yeah.
I mean, you certainly havemore creative freedom when
you're calling the shots.
And, and you get to decide whatprojects you're working on.
It becomes really tough whenyou're starting to have to
decide between the ones that,the projects you want to work
on and the projects that youneed to work on that are gonna
actually help you pay thebills and keep the lights on.
(09:27):
Definitely the biggeryour business becomes,
the more layers ofcomplexities there are.
And, my father-in-law,who's a serial entrepreneur
and one of my mentors.
He told me right when Istarted the business, he's
like, Well, this is great.
Now you only have towork half the time.
And I thought this was odd forhim to say, because he worked
(09:47):
like 70 to 80 hours a week.
He's like, Yeah, , you get topick which 12 hours a day, seven
days a week you wanna work.
And so it's kind of like inorder to get to the things
that you really want to getto, you have to spend a lot
of time working at the thingsthat you need to work on.
(10:09):
So I think of it as youcould probably work eight
hours a day, five days aweek and, and maybe get by.
But you would only begetting done the things
that you need to get done.
The things that you want to getdone are the things you save
for after you get through all ofthe, tough stuff, all the things
(10:29):
that need to get done in orderfor the business to survive.
Jesse Butts (10:33):
And earlier when you were talking about
going into to payroll or,or excuse me to a payroll
business for yourself.
You had mentioned that, you'dhit this crossroads where you'd
seen the problems and you feltlike it was either try to solve
them or make a, a career change.
So, I'm curious how we canframe this a little bit around,
(10:56):
you know, the passion debate.
For listeners who mightbe wondering, like, Do
I pursue my passion?
Do I pursue somethingI'm good at?
And, and I don't wannaput words in your mouth.
So, so please, you know,correct me or, or disabuse
me of any incorrect notions.
But it, it sounds like maybeyou, you did develop a, a
passion for this, but it wasreally more like you saw this
(11:18):
opportunity and felt that youcould solve it versus being, you
know like, payroll is the thingthat I love more than anything.
Like what's your, yourtake on going self-employed
in the, you know, passionversus practicality realm.
Brian Bohley (11:34):
Well, let's, let's just take a couple
steps back real quick.
Payroll was not alwaysmy passion and, I
get asked that a lot.
Like, what madeyou wanna do this?
What made you wannastart a payroll service?
It's even sometimes I, Itake a step out and I look
at myself and I'm like,How did you get here?
(11:54):
But I saw an opportunityto make a difference and to
provide a kind of servicethat didn't already exist.
Customer service is notreally highly valued within
the payroll industry.
Mostly geared towards thetechnology end with low paid,
(12:17):
undervalued reps, glorifiedcustomer service reps talking
to the clients, tellingthem, You're gonna have to
talk to your CPA about that.
Or, you know, wecan't comment on that.
Or it's gonna be 12 to16 weeks until you get
your amendment done.
It doesn't matter whatyou're needing it for.
and that was justfrustrating for me to see.
(12:39):
And at the time I didn'treally have any other thing
that I thought stood out tome that needed to be solved.
So payroll it was.
Jesse Butts (12:49):
So, you know, for people who are really interested
in, in self-employment, shouldthey form or incorporate
some type of company?
Or should they just workunder their own name?
Like, what are,what's your take?
What are you typicallyrecommending to, to, to people?
Brian Bohley (13:10):
Well, it depends on who you talk to.
What they recommend.
And really if you're gonna startout anywhere, if it's not a,
if it's not a business wherethere's a lot of liability where
you could get sued being a soleproprietor is absolutely the
simplest most straightforwardoption, especially when you
don't have any revenue yet andyou're just incurring expenses.
(13:33):
And then once you get enoughrevenue to where you can
think about paying yourself,that's when you need to
talk to an expert like abusiness attorney or a CPA.
Jesse Butts (13:43):
If you want to start working with a business
name, is that permissiblebeing a sole proprietor or do
you have to form a businessif you want to, instead of,
you know, Jesse Butts Writing,something like, The Best
Damn Writer Ever, hopefullyyou don't use that name.
Brian Bohley (14:06):
Yeah, that would be tough to fit on an IRS form.
You can have a DBAas a sole proprietor.
Jesse Butts (14:12):
A DBA is a?
Brian Bohley (14:13):
Doing business as.
So you would file that withthe secretary of state.
And it's, it's prettystraightforward.
Anyone can do it.
You would need to, uh, publishin a newspaper your information
and that your your name isbeing used as a DBA, and it's
(14:33):
representing you as a company.
So once that's publishedyou send that, in proof
of the publishing to the,with the application.
Then it can, be official.
So anyone can do that.
When you're a DBA it doesn'treally shield you from anything
from a liability standpoint.
If that's what you'remainly looking to do,
(14:54):
then it's, it's betterto, form a a formal entity.
Jesse Butts (14:58):
If I'm a sole proprietor, that means that, you
know, the IRS and whatever yourstate's revenue department, they
don't see any difference betweenwhat I do for work and what I
do with my personal finances.
It's all one and the same.
Is that
Brian Bohley (15:15):
So there's opportunities to write
off business relatedexpenses from your income.
So that's one way todifferentiate your
expenses from personal.
The main thing is, is that youhave to pay self-employment
tax because you are theindividual and the business,
(15:36):
you're both of those things.
And so that is where theemployer, in case you don't
realize it yet, the employeractually matches the Social
Security and Medicare onyour regular W2 income.
A lot of people don't know that.
And then when they start theirbusiness, they're really shocked
when they get hit with theself-employment tax, which is
(15:56):
the employer portion as well.
So, so there is a difference,but it's all filed under
the same tax return, ifthat's what you mean.
Jesse Butts (16:04):
And what, how much is that, like percentage-wise,
that self-employment tax?
Brian Bohley (16:09):
Well, it comes across as 15.3%.
7.65% is the employee portion.
7.65 is the employer portion.
Jesse Butts (16:19):
So when you're a W2 employee for a company,
you're only paying half of that.
But then once you'reself-employed, and we're talking
about sole proprietor, you'repaying all of that yourself.
Brian Bohley (16:32):
Exactly.
And that's why when you dobecome a consultant or you
do work for yourself, yourbillable rate should be much
higher than what your ratewould've been as a W2 employee.
To cover all the extrataxes, all the paperwork,
the liability, and thehassle of, of, of setting
up your own entity.
Jesse Butts (16:54):
So why would somebody choose to create
an LLC, which, you know, Isee so many small business
names have LLC at the end.
Why would they choose to do thatversus being a sole proprietor?
Brian Bohley (17:09):
I mean, I'm not a, I'm not a business attorney, so
this isn't legal advice, but...
when you set up an LLC,you're basically making
that announcement oryou're differentiating
you from the business.
That, that shieldsyou from liability.
Now, of course, youdon't get that for free.
You don't get to just doeverything exactly the same way.
(17:30):
There's a lot of extra hoopsyou have to jump through.
You have to hold board meetings.
If you're the only boardmember then it's with
yourself basically.
Yeah, you just have tobasically record everything
as if you are a businessand not just an individual.
Jesse Butts (17:46):
And you mentioned the liability.
Or a liabilityaspect, I should say.
So what does that mean?
Brian Bohley (17:54):
The liability of owning a business, can span
into many different realms.
But for an example,I'll just use payroll.
You could make a mistakethat would damage one of your
clients either financially oremotionally, and, and then they
could come at you for damages.
(18:16):
So as long as you have yourbusiness operating under an
LLC, and you're not piercingthe corporate veil by treating
the LLC, operating accountas your personal piggy bank,
you're not commingling personalexpenses with business expenses
(18:36):
then r eally you should havebusiness liability coverage.
And between that and theentity itself should shield you
from any personal liability,which means if you have a
house and you have savingsthat would be shielded
from any kind of lawsuit.
Jesse Butts (18:55):
And that business coverage liability is that
some type of insurance policythat you were mentioning there?
Brian Bohley (19:01):
Yes.
So there's general businessinsurance, and then there's
also professional liability.
So professional liability...
you can think of it aslike an endorsement for
specific types of, types ofindustries that you're in.
So, professional liabilitymeans, you could make a
mistake that would have anegative impact on your clients.
(19:26):
Whereas there's other businesseswhere there's not really as
much risk and it can all becovered under a general policy.
Jesse Butts (19:35):
So Brian, when you are self-employed
and, and let's, you know,just keep this simple.
So like, you know, you'vechosen the sole proprietor
or maybe the LLC option.
How do you actuallypay yourself?
Do you need payroll ifit's just you and you're a
sole proprietor or an LLC?
Brian Bohley (19:54):
If you are an LLC, ideally you want to be
paying yourself guaranteedpayments, which are basically
the same as owner distributions,which is just taking money
out of the, the account touse for personal reasons.
The guaranteed paymentsgo on the, they actually
(20:18):
go on the profit and lossstatement, which can help you
decide whether or not yourcompany is truly profitable.
Whereas if you don't takeguaranteed payments, it might
look like you're actuallymaking more money than you
really are, especially ifyou're trying to sell the
business, uh, eventually.
Jesse Butts (20:37):
So, so let's just make this very simple.
If you're a sole proprietor,can you just, as needed
withdrawal funds from a businessaccount to your personal, or
do you have to do anythingformal around paying yourself?
Brian Bohley (20:51):
No, when you're a sole proprietor, you can pretty
much treat the business accountas your own savings account.
But it's not recommended,obviously you wanna keep
it separate if you can,but there are no real
regulations or requirements.
Jesse Butts (21:09):
So let's say you, you're self-employed
and, and you're doing well.
let's say you're a designer,and you have more work
than you can handle.
Do you need to hire a W2employee if, if you've
just decided that I can'tdo this, I need some help?
Or is there some other way toget that help, without hiring
(21:33):
an employee that's, you know,still, obviously above board.
Brian Bohley (21:36):
Well, just like a lot of these other topics we've
been discussing, I, I alwaystry to introduce my clients
to a professional that canspeak on these more formally.
But, I will say that younever wanna just jump
to hiring a W2 employee.
That's, that's a commitmentthat, if it doesn't
(21:58):
work out, could lead toissues down the road.
However, it's not alwaysas simple as just hiring
a contractor either.
Contractos need to be treatedas their own individual
companies that can make theirown decisions and operate
when they want and how theywant, up to a certain extent.
(22:19):
If you're gonna hire somebodyand you're gonna say, This
is where we're at right now.
This is where we need to be.
Go get 'em.
Then that can be a contractor.
But if you're gonna say,This is where we are.
I want you to comein these hours.
Here's a computerthat you can use.
Make sure you use this software.
(22:39):
And I need it done by this date.
Then that's an employee.
Jesse Butts (22:44):
So if you had a scenario where maybe keeping
with the designer thing...
and, and again, I, Itotally realize that , this
is not legal advice.
This is just a hypothetical.
But let's say you're adesigner and you have this
big contract and you findanother designer and say, you
know, This is where we are.
I need these images in theseformats two weeks from today.
(23:10):
Ping me, if youhave any questions.
It, it sounds like, ifI'm understanding you
correctly, that's a prettylegitimate contractor
situation versus an employee.
Brian Bohley (23:20):
Yes.
I mean, When it comes tosomething that, detailed you
really don't have a choice,but to lay it out for them.
You know, this formatby this, by this date.
But at the end of theday, you're still not
telling them how to do it.
You're still not telling themwhen to do it necessarily.
Cause they could doit ahead of time.
(23:40):
You're simply giving themsome, some constraints
to work work within.
Jesse Butts (23:46):
And I assume if you are in a position where
you do need to hire an employeebecause, you know, you, need
them to work certain hours.
You, you have to tell them everylittle thing that they're...
I don't mean that likenegatively, but if you
have to give them a lot ofinstruction and training.
What do you need whenyou hire an employee?
(24:09):
Do you need likeworker's compensation?
Do you have to startpayroll at that point
if you haven't already?
Brian Bohley (24:17):
Even if you don't hire an employee, if you hire a
contractor, you may still needto get workers' compensation.
Or at least make sure thatthey have liability coverage.
So definitely wanna stillmake sure that when you
hire a contractor, youhave, you have that.
With a W2 , they're,they're kind of like
your responsibility.
I joke and I call myemployees, my kids.
(24:38):
It's like takingcare of my, my kids.
You have to make sureeverything is above board
and that you are transparentand reporting everything
about that relationship.
So you need to do a newhire reporting to the state.
You need to collect I-9verification and all their
(24:59):
identification you need toverify to make sure that
they are authorized towork in the United States.
You need to have them fillout W4 forms so that you know,
how much tax to withhold.
And then, for insurancepurposes, you definitely
need to get workers' comp,even if they're working
out of their home or yourhome it doesn't matter.
(25:20):
If they get injuredwhile they're working,
then that's a liability.
Jesse Butts (25:25):
So, so Brian, as you over the last 10
years, as your business hasevolved, and as you have
started new businesses, whatresources have you found
most helpful in all of this?
Brian Bohley (25:41):
Good question.
Let's see.
Well, my father-in-law, who'sa serial entrepreneur, as I
mentioned before, he's, he'sprobably been my best resource.
He's, he's let me figure thingsout on my own quite a bit too.
Yeah, it was pretty tough.
I didn't really have toomany people to lean on
in the very beginning.
I just had to really workon building relationships
professionally, to find outwho I could trust and for what.
(26:05):
Yeah, I think I, I think Ilearned the hard way a lot.
I did join some networkinggroups and there was, I don't
know if you're familiar withmastermind groups, but there
were some mastermind components.
There were some coachesthat I worked with.
I've worked with three coaches.
One was an absolute disaster.
(26:25):
It was like every time Iwent to him with a problem,
I, I left with five timesthat, from the meeting.
That was a very tough situation.
Coaches can be a good thing,but they're expensive.
So I'm, I don't know.
I, I'm still trying tofigure out really who, uh,
who , who's a good, where,where a good resource is.
Actually for my, for my appthat I'm just now trying
(26:46):
to get built, I've actuallyjoined a community called
1871, which is an incubatorin downtown Chicago.
They're a nonprofit,they have all kinds of
resources and differentworkshops and, and things.
So I would say that going toa nonprofit organization that
is geared towards helping abusiness, small businesses or
(27:10):
someone in the industry thatyou're looking to get into,
that's probably your best bet.
Because they shouldn't havetoo much of an ulterior motive
other than just to help.
Jesse Butts (27:20):
So Brian, if, a, if a listener is a little
bit curious about what you'redoing, where can they find
more about like the payrollservice that you offer?
And I know that you dobookkeeping and, and
you mentioned an appthat you're developing.
Can you just share alittle bit about those?
Brian Bohley (27:36):
Sure.
I, I don't spend a lotof time on social media.
But I, I am on LinkedIn.
So, the profile is,is Brian Bohley C-P-P.
And then also the websitesI have, InFocusPayroll.com.
It's the payroll website.
And then GoodBookin.comwithout the G at the end
(28:00):
is the bookkeeping website.
And my email address isBrian@GoodBookin.com or
Brian@InFocusPayroll.com.
Jesse Butts (28:09):
All right.
Well, Brian, thank youso much for joining me.
This was a pleasure.
Brian Bohley (28:13):
Yeah, no problem.
Thanks so much for having me.
It's been great.
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