Katherine: Hello, we have Paul Contris of Welcov Healthcare joining us again this month. He’s been so gracious to allow me to ask him some business questions. Many of you have had some really great questions, so we’re going to get into those, but I want to welcome Paul back to This Needs to be Said. Welcome back, Paul, how are you?
Paul: I’m good, thank you Katherine, nice to talk to you again.
Katherine: All right. Actually, I know I sent you over a list of questions. I want to start with the last one first. When a business owner decides to categorize their business as sole proprietor, or LLC, or even INC, what is something you think that they should take into consideration to choose the category that’s right for them?
Paul: Well, I guess, the first thing I would say is that they should consult with their CPA or attorney, or whoever their advisor is. I used to be a CPA, I’m not an attorney, and this is not really my area of expertise, but I probably know more about it than the average person. My company is set up as an LLC, limited liability company. You get certain protections if you set up a company as either a Corporation or an LLC that you don’t really have if you’re a sole proprietor. It has to do with legal liability protections. That’s probably one of the primary things that you get is if somebody wants to sue you for something, they’re suing the company, the entity, not you personally.
I really think most new businesses are being set up as LLCs as opposed to Corporations, C Corporations or even S Corporations, because you get the same protections as far as legal liability as you do with a C Corp, with an LLC, but you don’t have the, one of the big disadvantages of the C Corp is the double taxation. You’re taxed at the Corporate level, your Corporate earnings are taxed, and then any income that you get from that Corporation, whether in the form of salaries or dividends, is then taxed at your personal rate.
A C Corp can make sense for; it’s typically like larger companies, obviously, publicly held companies. If you have a board of directors and all that, C Corps can definitely make sense. For small business owners, I think the most common entity that they form now is the LLC, because you get the same protections as you do in a C Corp, but it’s like a pass through as far as the taxes go, and it’s very flexible with taxes, so there’s no tax on the earnings of the LLC itself. Those earnings do float through directly to you as an individual, and then you’re taxed on those earnings at your individual rate getting double taxed.
Katherine: Okay, I see that. Hey, Paul, is there a mindset a person has to have in order to be successful as an entrepreneur?
Paul: Yes, I think you really have to have a very determined mindset. I think that’s the key. We’ve talked about this in past interviews, I believe, that you have to be prepared for setbacks. It’s kind of a roller coaster ride. You can be up for a while, and then there’s a major problem, and you get kind of knocked down. You need to kind of accept that as kind of the nature of being in business with yourself. That happens obviously when you’re working for a company, and you’re not in business for yourself, you can have good times and bad times.
I’ve been in both situations, and I guess the difference with being in business for yourself, when you’re working for somebody else, you can always think well, worst case scenario, I quit or I get fired and I go get another job. With your own business, it depends on what you have into it. If you have a lot of money invested into it, if you have personal guarantees, it just seems like there’s a lot more at stake. I think the stress level is higher when it looks like things might go south. It seems like you have a lot more risk. Then, on the other hand, the rewards are a lot higher, too. It’s the old risk reward thing, you know? I really think you have to have that mindset that you’re going to be committed to your venture through the highs and the lows. You’ve got to be persistent, and not give up. That’s kind of the key. You’ve got to just keep pounding away, and ultimately, I think you’ll be happy you did.
Katherine: All right. I have to agree with you, definitely be prepared to get knocked down. What’s one thing you believe every entrepreneur should do each day?
Paul: Well, I guess try to keep looking at the big picture, in the sense that it can be sometimes easy to get kind of – they say not see the horse in the trees. You get kind of lost in the details, get lost in the weeds. If you’re not kind of continually looking at, evaluating, and reassessing where you’re ultimately trying to go, and trying to relate that back to okay, what am I doing today? Are you spinning your wheels, are you spending too much time on something that maybe, maybe if you’re doing something that you’re comfortable doing, and it’s something you can get done and you know it, but really, there’s something else you should be doing that’s way more important, but it’s something that’s uncomfortable, like maybe it’s having a conversation with a vendor, or a bank or somebody.
You know you need to get it done, but you keep putting it off and doing other things that are in your comfort zone. I guess kind of continually looking at what are the most important things I need to get done, and am I really dealing with that today? Am I doing something that gets me closer to where I need to be as opposed to just kind of spinning my wheels doing something that’s easy to do. That would be one thing I would say to kind of keep on the top of your mind each day.
Katherine: Okay. My last question for you today, Paul, is what are common mistakes you see new business owners make?
Paul: Right. I think I’ll just kind of revert back to the last two questions. What’s the mindset for an entrepreneur? I think that, perseverance, not giving up too quickly, and I think that’s one of the common mistakes that I’ve heard about and seen, you know, talking to people that they get their first disappointment or setback, and they get frustrated and say, oh this is not for me. I think that’s one of the most common mistakes is just giving up too early and not being determined enough to get it done.
The other thing too, is people who aren’t able to really kind of see the big picture, and see what are the steps I have to do to get to where I want to be, and prioritizing the real critical steps, and really focusing on getting those things done. The common mistake is somebody who isn’t able to prioritize, and spends too much time on stuff that doesn’t really get them to where they need to be, whether that it’s more comfortable for them, or they just don’t realize it or whatever. I think that’s another common mistake people might make.
Katherine: Yeah, and I’d like to add to that, I’ve seen people say, you know, this was a door that was opened for them, or this is what they’re supposed to do. They will see a sign, and the path will be clear kind of thing. That’s not necessarily the case, it’s not that you made the right choice, and there is nothing that’s going to hinder you from going that way. There are temptations and distractions, and things that will pull you, bright, shiny objects kind of things, you want to try something new every other day.
You want to have a grand opening. I like the feeling of a grand opening because people are rushing through your doors to see what you have new. Two weeks later, they’re not doing that, so now you want to close down and have another grand opening. I actually had a peer who would do that. They would cut their radio show off after a period of time, and then they’d come back, and they’d say, “Oh, no, I’m doing something new,” and then they’ll have a bunch of attention, and then they won’t again. I was like you have to stop that.
Paul: That is funny.
Katherine: Yeah, this has been really good. For those who are in business, we’ve had some encouraging words from Paul Contris, as well as those that are new in business, for more encouraging words, just stay the course, be patient, and sometimes, there’s going to be some high points, and sometimes there’s going to be some really low points. If you’re passionate about it, there’s some work in it too. Don’t think that just because you’re passionate about it, there’s no work involved. Paul, I want to say thank you once again for coming on This Needs to be Said, and sharing with us your words of wisdom. Tell people how to get in touch with you outside of This Needs to be Said.
Paul: Our website is www.welcov.com. Thank you Katherine, it’s always a pleasure.
Katherine: Awesome. Until next time, have a good day.
Paul: You too, bye.