Meeting Title: Uttam <> Megan Murray Date: 2025-01-21 Meeting participants: Megan Murray, Uttam Kumaran
WEBVTT
1 00:01:53.920 ⇒ 00:01:54.840 Uttam Kumaran: Hi Megan.
2 00:01:55.520 ⇒ 00:01:56.980 Megan Murray: Hey! How are you?
3 00:01:56.980 ⇒ 00:01:58.080 Uttam Kumaran: Good! How are you?
4 00:01:58.450 ⇒ 00:02:00.099 Megan Murray: Good, you staying warm.
5 00:02:00.510 ⇒ 00:02:08.990 Uttam Kumaran: Yes, it’s kind of it’s kind of interesting seeing snow today. But yeah, I feel okay. I gotta turn the heater up a little bit. But.
6 00:02:10.530 ⇒ 00:02:15.510 Megan Murray: Yeah, I’ve been. I was running a space heater in my office for the same reason. It’s like.
7 00:02:15.510 ⇒ 00:02:26.800 Uttam Kumaran: It’s so it it looks so nice to see the snow, but I don’t know. I haven’t been out at all like driving or anything, so I don’t know what I haven’t, you know, heard about the roads or anything. So
8 00:02:26.800 ⇒ 00:02:34.790 Uttam Kumaran: it’s kind of the perfect amount. It’s just enough for everybody to kind of chill for a night in a morning, and like.
9 00:02:34.900 ⇒ 00:02:40.860 Megan Murray: Yeah, i, 1 of the Yoga studios I go to. They cancelled all their classes today. It’s like, you know.
10 00:02:41.220 ⇒ 00:02:42.210 Megan Murray: So so.
11 00:02:42.210 ⇒ 00:02:46.110 Uttam Kumaran: Yeah, I didn’t. I didn’t get the day off, like, you know.
12 00:02:46.110 ⇒ 00:02:55.119 Megan Murray: Yeah, no, it’s yeah. Same with me. It doesn’t really disrupt my other than I guess. I didn’t go work out yesterday, because it was so
13 00:02:55.290 ⇒ 00:02:57.214 Megan Murray: so cold then, too, but.
14 00:02:57.600 ⇒ 00:03:00.550 Uttam Kumaran: Yeah, I went last night, and it was very cold.
15 00:03:01.950 ⇒ 00:03:02.800 Uttam Kumaran: Yeah.
16 00:03:02.960 ⇒ 00:03:04.650 Megan Murray: Yeah, yeah.
17 00:03:05.000 ⇒ 00:03:06.933 Uttam Kumaran: Well, thanks for taking the time. And
18 00:03:07.460 ⇒ 00:03:30.359 Uttam Kumaran: yeah, I’m glad to, you know. Reconnect and yes, stuff has sort of been growing on our side. And starting to think a lot about this year on basically what we need to do from the financial side. You know. And and I know you mentioned last time that you may have a couple of openings for more clients. But you know also, this is an area where
19 00:03:30.780 ⇒ 00:03:43.840 Uttam Kumaran: we’re looking for not only like our current partner right now, is mainly handling, like sending out invoices, doing, pending, you know, payroll for contractors, and then sort of like closing books.
20 00:03:44.472 ⇒ 00:03:47.639 Uttam Kumaran: But definitely, we’re going to. We’re probably
21 00:03:48.340 ⇒ 00:04:00.829 Uttam Kumaran: backlog and some stuff on the compliance side. We probably have a couple of other things that we’re not doing that would like to do. And then we’re definitely going to be bringing. We have plans to bring on some people onto W 2
22 00:04:00.960 ⇒ 00:04:05.550 Uttam Kumaran: you know, and so kind of in the market to look at other providers for
23 00:04:05.960 ⇒ 00:04:12.159 Uttam Kumaran: for these sorts of services, and also just understand, like, what are we missing. And what are things to consider so.
24 00:04:12.900 ⇒ 00:04:30.298 Megan Murray: Yeah, totally. Totally agree. That’s I mean, it sounds like a really good fit for exactly why I offer the types of things that we do, because it’s like, you know, your pay, like your accounting team, pretty much needs access to your payroll system just to reconcile every month.
25 00:04:30.760 ⇒ 00:04:36.010 Megan Murray: And but you know accountants don’t like to play hr, they just.
26 00:04:36.010 ⇒ 00:04:36.720 Uttam Kumaran: Dumb.
27 00:04:36.930 ⇒ 00:04:54.850 Megan Murray: And and that can work pretty well for contractors when you don’t have employment standards to have to adhere to it just starts to get like more. Like the second, you have full time employees. Just the relationship can completely changes. And
28 00:04:54.920 ⇒ 00:05:13.829 Megan Murray: I see this a lot where we’re working with a contractor relationship. And then, you know, transitioning that to employer employee relationship, super common, especially for early stage companies and but it it does like start to change things so
29 00:05:13.990 ⇒ 00:05:20.270 Megan Murray: would be so. How many contractors do you have now? And you’re using gusto for paying contractors?
30 00:05:20.270 ⇒ 00:05:25.020 Uttam Kumaran: Now we’re on gusto. We have about 9
31 00:05:25.470 ⇒ 00:05:28.730 Uttam Kumaran: and then, yeah, we have about 9 contractors. Mix of
32 00:05:29.200 ⇒ 00:05:31.519 Uttam Kumaran: here in the Us. And overseas.
33 00:05:32.180 ⇒ 00:05:39.720 Megan Murray: Okay, are the Us ones. Where are they all based in Texas, or are they all over.
34 00:05:39.720 ⇒ 00:05:42.799 Uttam Kumaran: All over like New York, California.
35 00:05:43.190 ⇒ 00:05:45.050 Uttam Kumaran: But yeah, New York, California.
36 00:05:45.860 ⇒ 00:05:49.300 Megan Murray: Okay and international, or where.
37 00:05:50.040 ⇒ 00:05:56.410 Uttam Kumaran: We have one in Argentina, and the rest are in the Philippines.
38 00:05:57.150 ⇒ 00:05:57.950 Megan Murray: Okay.
39 00:05:59.260 ⇒ 00:06:09.030 Megan Murray: yeah, the that we don’t really care a whole lot about. It’s, you know, it’s actually pretty easy to support those. There’s like some
40 00:06:09.280 ⇒ 00:06:27.769 Megan Murray: W. 8 or W. 8 en type forms which is like the equivalent of A. W. 9. But for international companies. So you know, just making sure you have that on file which basically says, Oh, this is why we’re not sending taxes to these people because they’re international, their contractors, whatever.
41 00:06:28.010 ⇒ 00:06:39.290 Megan Murray: So so yeah, that’s that’s pretty easy. So of your current contractors or new like employees, where are you thinking that those would be based.
42 00:06:39.730 ⇒ 00:07:04.070 Uttam Kumaran: Yeah. So I’m currently the only W. 2 employee. I do think that. So we have a couple of changes to the company broadly. 1, 1 of our partners that ran a similar business. We have been working on several deals together. And we’re actually basically like combining companies, what we’ll be doing. And this is probably gonna be a little bit more of the complication is we’re planning on floating a C Corp and sort of issuing shares.
43 00:07:04.150 ⇒ 00:07:25.220 Uttam Kumaran: We’re also join an accelerator for tech Services company. And there they have a couple they have some percentage that they need. So there’s some logistics issues on like setting that entity up right now. Brainforge is an Llc. But we’ll be creating that new corporation and then basically issuing share. So there’s.
44 00:07:25.500 ⇒ 00:07:32.659 Uttam Kumaran: you know, a whole lot of stuff there. Second, me and now, my partner, both of us want to figure out.
45 00:07:32.830 ⇒ 00:07:35.780 Uttam Kumaran: of course, W. 2, but also like healthcare and.
46 00:07:35.780 ⇒ 00:07:36.200 Megan Murray: Yeah.
47 00:07:36.200 ⇒ 00:07:40.720 Uttam Kumaran: That stuff set up another big thing to to figure out
48 00:07:41.150 ⇒ 00:07:47.979 Uttam Kumaran: and then I think we will be trying to at least bring one other person in the short term on Usw. 2
49 00:07:48.732 ⇒ 00:07:50.980 Uttam Kumaran: are currently we have
50 00:07:51.250 ⇒ 00:07:56.979 Uttam Kumaran: a couple of one. The person in in Argentina and one of the people is in Philippines.
51 00:07:57.553 ⇒ 00:08:06.930 Uttam Kumaran: The person Argentina has like a full time salary, but it’s just paid out through gusto, like the amount. And with Philippines one or 2 of those people I want to convert
52 00:08:07.210 ⇒ 00:08:08.420 Uttam Kumaran: to full time
53 00:08:08.869 ⇒ 00:08:26.740 Uttam Kumaran: just to like sort of standardize things and like, give us a better sense of payroll expense, but that’s where it’s kind of like. I’m not exactly sure what the ramifications are how to do that. I mean, people have just said, try to go through deal for stuff. But again, for that, I want to try to have a partner that can walk us through sort of like.
54 00:08:27.150 ⇒ 00:08:31.700 Uttam Kumaran: What’s the best way to to handle that and to do those sorts of things.
55 00:08:32.960 ⇒ 00:08:39.489 Megan Murray: Yeah, so I guess what I would tell you is a couple of things you had.
56 00:08:39.659 ⇒ 00:08:48.439 Megan Murray: So okay, so you mentioned that you had a a partner, too, that that was also looking to go. W. 2. Are they also in Texas, or they want the New York account.
57 00:08:48.440 ⇒ 00:08:50.439 Uttam Kumaran: No, he’s in. He’s in New York. Yeah.
58 00:08:50.440 ⇒ 00:09:12.419 Megan Murray: Okay, so just the things to be aware of. And it’s good to know about the C Corp distinction coming up to also very common. It’s very common, for you know, a concept to kind of start as an Llc. And then start to get that interest, whether it’s from an accelerator or Vcs. They they just don’t like to invest in Llc.
59 00:09:12.920 ⇒ 00:09:40.599 Megan Murray: just like it’s kind of like that. Hard. No, and so but the Llc. Is pretty much like the base you need to professionalize and to build. So so yeah, starting with a brand, new entity is definitely doable. And then from even from like an ongoing tax preparation perspective. And so with the Llc. Is that you and the partners at a hundred.
60 00:09:40.600 ⇒ 00:09:44.479 Uttam Kumaran: So right? So right now, it’s a hundred percent. Me, he has his own. Llc.
61 00:09:44.984 ⇒ 00:09:52.640 Uttam Kumaran: and basically, I was like we were discussing like do. Should we convert this one or whatever we’re like? Let’s just start a new one, and then we’ll issue
62 00:09:52.750 ⇒ 00:09:55.430 Uttam Kumaran: from there. But of course, like
63 00:09:55.920 ⇒ 00:10:05.379 Uttam Kumaran: I don’t know about moving folks to that Llc. Like bank accounts like we’ll have to do like all that sort of stuff and moving expenses.
64 00:10:05.840 ⇒ 00:10:09.079 Uttam Kumaran: You know. So all of that is sort of top of mind.
65 00:10:09.080 ⇒ 00:10:14.100 Megan Murray: Yeah, it’s it’s pretty, and you can’t do any of that until you have an incorporation.
66 00:10:14.100 ⇒ 00:10:21.450 Megan Murray: Yes, yes. So that’s why it’s like I just try to kick. I mean, I have to go. I’ll go to the lawyers and sort of get them to kick off.
67 00:10:21.940 ⇒ 00:10:25.589 Uttam Kumaran: All of the like document production and stuff
68 00:10:26.050 ⇒ 00:10:28.150 Uttam Kumaran: but I just sort of wanna.
69 00:10:28.470 ⇒ 00:10:31.609 Uttam Kumaran: I just want to do that while we get on that process.
70 00:10:32.090 ⇒ 00:10:39.750 Uttam Kumaran: We’re we’re growing like a lot. And so I’m like, I want to try to get a partner, especially who’s on the finance side to help us walk through.
71 00:10:39.970 ⇒ 00:10:55.819 Uttam Kumaran: You know anything that we may be missing in that when we when we do that, you know. So that’s top of mind like there our current. It would be a lot to go to them and ask them for like again. They’re just accountants, so they’re not going to get. They’re not giving me any business sort of help on on that side. So.
72 00:10:56.530 ⇒ 00:11:14.160 Megan Murray: Yeah, and and and it does get to be complicated, too, because it’s very doable. But it’s like you kind of have to do it in a certain order, and especially once you’re starting up like a new cap table. Then, because a lot of your contributions right, those like
73 00:11:14.330 ⇒ 00:11:18.109 Megan Murray: it could end up on like, maybe not necessarily
74 00:11:18.582 ⇒ 00:11:36.909 Megan Murray: like cause. There’s a transition period, right? So some of what you’re getting reimbursed out. And then, like, what’s the seed amount that’s going in. Well, some portion of your contributions should show up on the cap table as owner contributions, even if it wasn’t money that you directly put in right?
75 00:11:36.910 ⇒ 00:11:52.549 Megan Murray: So it’s just. It’s just good practice just to keep that updated. Most lawyers understand that. And especially if you’re going Llc. To new entity they should. That should all get flushed out pretty early on operationally, though it’s kind of like.
76 00:11:52.640 ⇒ 00:12:05.910 Megan Murray: you know, you need the incorporation date and attorneys are. They’re super used to just deferring payments because they know how it is. They know they have to do your incorporation, your setup, and all of that before you can open a bank account.
77 00:12:05.910 ⇒ 00:12:06.340 Uttam Kumaran: Yeah.
78 00:12:06.728 ⇒ 00:12:20.699 Megan Murray: So like those. Those are also kind of normal things, too. And then, if you have an operating account that you’re paying payroll out of and things like that. Now then, at some point in time.
79 00:12:21.140 ⇒ 00:12:35.620 Megan Murray: it’s just a matter of like picking a cut over date and saying, Okay, now, the payment accounts are all changing to this one. And it it doesn’t sound like it’s super complex. But what starts to really get confusing is like all the subscriptions you’re using.
80 00:12:35.620 ⇒ 00:12:36.670 Uttam Kumaran: Yes. Yeah.
81 00:12:36.670 ⇒ 00:12:38.839 Megan Murray: So, starting to make a list of those things.
82 00:12:38.840 ⇒ 00:12:43.970 Uttam Kumaran: We do have a list, all the sort of subscriptions. And
83 00:12:44.140 ⇒ 00:12:51.070 Uttam Kumaran: yeah, we have a lot of that sort of book. I mean, basically, I, I’ll go through the list and then go through a quick book. So basically see what’s on
84 00:12:51.180 ⇒ 00:12:52.880 Uttam Kumaran: recurring subscriptions.
85 00:12:53.410 ⇒ 00:12:58.780 Uttam Kumaran: And yeah, just like basically trying to flip that over to the to A, that’s all.
86 00:12:58.780 ⇒ 00:12:59.230 Uttam Kumaran: Yeah.
87 00:12:59.230 ⇒ 00:13:05.449 Uttam Kumaran: Credit card right now. But yeah, I mean, we’ll have to open. Yeah, I guess a new credit card, or just try to flip all those over.
88 00:13:05.650 ⇒ 00:13:15.309 Megan Murray: It would, it would be easiest. It’s cleanest just to treat it like a whole new business opening. And honestly, it’s a lot easier than the reverse. If you’re going M. And A,
89 00:13:15.608 ⇒ 00:13:40.109 Megan Murray: it’s like, now, it’s like, Oh, okay. Now we have a domain name change, and some of that does start to get more complex. And so yeah, but there! And there’s like a little bit of a catch period with those 2. The one thing I’ll like your monthly subscriptions are, gonna be pretty obvious, but anything that you might have paid for like an annual license for something. Those are the ones that kind of sneak up on you
90 00:13:40.320 ⇒ 00:13:48.040 Megan Murray: and but but yeah, so the other thing, just to kind of bring it back to like transitioning from that
91 00:13:48.200 ⇒ 00:14:01.920 Megan Murray: contractor relationship to employees. Very, I I would. If you’re already using gusto. I don’t think you need to worry with doing deal or anything. If they’re gonna do the exact same thing. They’re gonna charge you more to do it
92 00:14:02.070 ⇒ 00:14:28.559 Megan Murray: and and even like, I think there’s also some things to with gusto. So I have a gusto pro advisor relationship, too. So I can actually set up your your incorporation like the brain forge inc. For you. And then, if you go, if we go that route, then I also have a service team that they’ll allow me to tap into. Who will convert.
93 00:14:28.770 ⇒ 00:14:29.480 Uttam Kumaran: Oh, correct!
94 00:14:29.480 ⇒ 00:14:30.290 Megan Murray: Birds.
95 00:14:30.370 ⇒ 00:14:50.620 Megan Murray: So you have everything in one place, like, historically speaking, and then you’re not having to sort of swivel. So it’s like then they’d be under a new ein. There’s there is some work there, but at least, if we’re able to tap into the support team that I have access to. Then they can kind of do a lot of that work for you.
96 00:14:50.936 ⇒ 00:15:02.020 Megan Murray: But we’ll that’s when the cut over date becomes kind of important. But I think there’s some ways we could manage that like both through your current one and then going through the new one.
97 00:15:02.190 ⇒ 00:15:07.689 Megan Murray: So. But yeah, there’s definitely a little bit of setup works, since you’re already
98 00:15:07.860 ⇒ 00:15:10.540 Megan Murray: payroll, like we would literally have to off board you from the
99 00:15:10.910 ⇒ 00:15:16.229 Megan Murray: see. And so it’s like, there’s definitely a series of things that need to happen.
100 00:15:16.230 ⇒ 00:15:41.799 Uttam Kumaran: Yeah, so that’s the thing for me. It’s like, if I can see. And I, this is how I would say we’re fairly organized. So as long as I can see that, then I can just basically like execute. And and you know, I’ll be able to handle that. Of course, we’re doing a million other things. But for me, this is important because we’ve been sort of operating like we, we kind of finalize everything in terms. And we’re we’re sort of operating everything and moving the revenue all the one
101 00:15:41.980 ⇒ 00:15:46.470 Uttam Kumaran: right, because I knew the this would take a few months to sort of get done.
102 00:15:46.640 ⇒ 00:15:51.579 Uttam Kumaran: and probably the biggest delay would just be the incorporation. So we’re sort of kicking that off
103 00:15:51.740 ⇒ 00:15:55.530 Uttam Kumaran: this month and getting them to work on all those documents.
104 00:15:55.530 ⇒ 00:16:22.000 Megan Murray: Yeah. And and since you have existing agreements with with customers already, too. So making sure that your legal team is just, you know, I based on how your current agreements are, you might have the privilege of assigning language, which is super easy, and then you don’t really have to change the previous agreements. But it kind of depends. There’s like a whole other list of things you want to go through like a game plan with the
105 00:16:22.402 ⇒ 00:16:27.670 Megan Murray: with the legal team, but but just remember, it is doable. Other people do it all the time.
106 00:16:27.670 ⇒ 00:16:28.270 Uttam Kumaran: It’s.
107 00:16:28.270 ⇒ 00:16:30.349 Megan Murray: A lot like for, you know. Maybe.
108 00:16:30.350 ⇒ 00:16:30.710 Uttam Kumaran: Yeah.
109 00:16:30.710 ⇒ 00:16:46.300 Megan Murray: A month. That’s pretty hectic, but it’s it’s I. I don’t know when I just think about like start to get overwhelmed with how many things are. Oh, my gosh! And we’ve got this account. It’s like other people do this. It’s totally fine. You’re not doing anything that hasn’t been done before.
110 00:16:46.689 ⇒ 00:17:09.289 Megan Murray: And then just the the one thing to be aware of on the fte side of things is that effectively, every if you have one remote employee in a State. Then it’s basically the same as having an office there. So as a C Corp, you’ll be registered in Delaware. Your headquarters is gonna be in Texas.
111 00:17:09.359 ⇒ 00:17:19.739 Megan Murray: And so those are already your 2 States that you have to file in. Now in Texas there’s a franchise tax. It’s not. There’s not a State income tax. So it’s like
112 00:17:19.790 ⇒ 00:17:44.319 Megan Murray: 450 bucks until you really have, like some serious profit that you know. That’s pretty much it. New York and California. They’re they have the same thing, too. So so pretty much like, that’s that’s where it just starts to add complexity. And that’s what we stay on top of for you is, you know, we decide. Okay, we’re gonna have
113 00:17:44.370 ⇒ 00:17:50.449 Megan Murray: it, you know, employees in these states. So if it is, let’s say hypothetically, it’s a c. Corp.
114 00:17:50.550 ⇒ 00:18:16.770 Megan Murray: Operate in Texas with remote employees in California and New York. That’s 4 State returns, plus a Federal return that we would plan to do for you. And then also, like the registrations, the license in each of those California itself has like 4 things you have to register for. So there’s like the employment division. There’s the franchise tax board, and there’s like an unemployment thing, too. And then.
115 00:18:16.770 ⇒ 00:18:28.310 Megan Murray: once you have 5 ftes doesn’t matter where they are 5 ftes in total. Then they also require that you start offering a 4 0. 1 K. Plan
116 00:18:28.310 ⇒ 00:18:41.199 Megan Murray: to all your employees. You don’t have to match, but you have to make it available. And there’s a couple of other things with California and New York where that 5 fte is also kind of like a
117 00:18:41.530 ⇒ 00:18:41.950 Uttam Kumaran: I guess.
118 00:18:41.950 ⇒ 00:19:01.420 Megan Murray: Then you have to offer benefits. But you’ll be doing that anyway. And but yeah, there’s a couple of different things. So once you get close to that 5 fte mark. Then that’s really when it’s like, okay, training wheels are off grown up company now. It it might not feel like it if you’ve only got 5 people on your team. But
119 00:19:01.844 ⇒ 00:19:23.060 Megan Murray: but I already have a trustee plan through human interest which integrates with gusto, and at least for my past couple of clients that I’ve brought on as completely brand new organizations. They’ve waived the the record keeping and employer fees for like a year up to 3 years.
120 00:19:23.060 ⇒ 00:19:23.590 Uttam Kumaran: Okay.
121 00:19:23.590 ⇒ 00:19:36.101 Megan Murray: So that’s like pretty much a no brainer. And then you don’t have to offer matching. You can make it available. And then it just sort of checks, a bunch of compliance boxes and
122 00:19:36.470 ⇒ 00:19:54.249 Megan Murray: there’s an annual review that goes into it. It literally takes 15 min. I’ve done it for a couple of my other clients this month. And it seems like it’s gonna be this big, complicated thing. But you know, it’s it’s 1 of those where it’s like, okay, this is the same type of plan that big companies have. But when you have
123 00:19:54.360 ⇒ 00:20:21.679 Megan Murray: less people it has to do with like ownership of the company. You know how much ownership does certain individuals have, and but with a small company it takes like no time. So so those are all the things that we do, and stay on top of insurance renewals or another one. Then you’re having, you know, you’re definitely with different states. Then you pretty much have to add all of those States to your
124 00:20:22.638 ⇒ 00:20:25.589 Megan Murray: plan. A lot of people, miss, that. They think.
125 00:20:25.907 ⇒ 00:20:30.030 Uttam Kumaran: Think we’re all we have. Everything is now, I think just has Texas.
126 00:20:30.380 ⇒ 00:20:31.300 Megan Murray: Yeah.
127 00:20:32.140 ⇒ 00:20:46.740 Megan Murray: yeah, which which is fine, if you’re the only fte but once you have. So what I would suggest is not to bring on any new ftes until you’ve got the the corporation up and running.
128 00:20:46.740 ⇒ 00:20:49.649 Uttam Kumaran: Yeah, we don’t. I don’t have any plans. Yeah.
129 00:20:49.790 ⇒ 00:21:07.183 Uttam Kumaran: mainly like the ft. Only thing I’m planning on doing is some. A lot of our contractors are like billing hourly, and so it fluctuates. I may move to standard monthly rates, but we don’t have any plans to move people to like fte, otherwise,
130 00:21:08.050 ⇒ 00:21:11.679 Uttam Kumaran: like, I’m still the only one, basically until the entity starts.
131 00:21:12.120 ⇒ 00:21:32.260 Megan Murray: Yeah, that’s that’s what I would suggest is, keep it that way. Keep it as simple as possible, and then, you know, you’ll have a whole other checklist to go through with the legal team. But those are really the things that I would make sure. And also, did you say you currently have benefits for yourself.
132 00:21:32.260 ⇒ 00:21:33.100 Uttam Kumaran: No.
133 00:21:33.100 ⇒ 00:21:56.269 Megan Murray: Okay? Okay? Cause? Well, that’s that’s good. So I wouldn’t add any until you have the new one. Because there, then, you’re kind of committed to that for a year, unless there’s a life event which we could get around and say, like he was terminated by the Llc. Like, but but yeah, if you’ve if you’re okay, not having that, I would just leave it, table it for now.
134 00:21:57.470 ⇒ 00:22:02.109 Uttam Kumaran: Okay, makes sense. And then and then what? How about like the regular month to month?
135 00:22:02.734 ⇒ 00:22:09.469 Uttam Kumaran: Stuff like I mentioned, which is like, yeah. Sending out customer invoices be running payroll like bookkeeping. Is that.
136 00:22:09.470 ⇒ 00:22:10.120 Megan Murray: Oh, yeah.
137 00:22:10.120 ⇒ 00:22:10.830 Uttam Kumaran: Okay. Cool.
138 00:22:10.830 ⇒ 00:22:26.079 Megan Murray: Yeah, that’s all. That’s all the regular stuff that we do. Just all the ongoing payroll. Reconciliation ap AR, the way we we monitor, that is, we would set up like an accounting inbox that
139 00:22:26.080 ⇒ 00:22:42.189 Megan Murray: a couple of people on my team would have access into. And then we’ve got someone who does more of the like ap and AR administrative processing. So she’s probably who I would assign to like managing that. And then you know, and then it’s
140 00:22:42.190 ⇒ 00:23:00.760 Megan Murray: and she’s like right now, pretty much on a schedule where she’ll go into every inbox like once a week and just clear out everything. So if there is anything urgent that needs to be done, then you can copy me or Kelly to have it expedited, and we can take care of it, but otherwise we kind of have like a soft like.
141 00:23:00.770 ⇒ 00:23:10.359 Megan Murray: you know it. Just treat it like a to do list and then manage through it. And then that accounting inbox which would be like accounting at Brainforge.
142 00:23:10.360 ⇒ 00:23:13.780 Uttam Kumaran: Yeah, we already have one of those where I’m basically sending all the bills.
143 00:23:14.070 ⇒ 00:23:14.990 Megan Murray: Yeah, that’s.
144 00:23:14.990 ⇒ 00:23:22.380 Uttam Kumaran: Send everything there, basically where I sign up for something, or it’s finance related. I just put accounting at great force, basically.
145 00:23:22.380 ⇒ 00:23:33.590 Megan Murray: Perfect. Yeah. So there’s a and we prefer to do that, too. Because then that way, you have access into something. You know, where there’s always there’s a search history. It’s all in one place.
146 00:23:33.590 ⇒ 00:23:58.169 Megan Murray: And then any any login ids that we’d be setting up for your bank or just different types of systems we would use. We would use that id so exceptions would be like gusto. I have my own login to that. So it’s like I log in, and I have all my clients on one dashboard. Same thing with quickbooks, too. Those are kind of the 2 exceptions, but everything else
147 00:23:58.250 ⇒ 00:24:07.830 Megan Murray: we pretty much do through the accounting inbox and and that just helps us with like, you know, the password management, and all that, too.
148 00:24:08.440 ⇒ 00:24:13.359 Megan Murray: so pretty much just have, like a separate chrome profile set up for each of those.
149 00:24:13.590 ⇒ 00:24:18.560 Uttam Kumaran: Okay? And then how about for tax? And like tax filing.
150 00:24:18.900 ⇒ 00:24:33.280 Megan Murray: Yeah. So we would. So for you. If you did have employees in those 3 States, plus Delaware, then we would plan to do we plan to do the 4 State, returns the Federal, and then also the R. And D tax credit.
151 00:24:33.280 ⇒ 00:24:33.670 Uttam Kumaran: Yeah.
152 00:24:33.670 ⇒ 00:24:39.289 Megan Murray: So that’s that’s a good one that we would use gusto services to do that.
153 00:24:39.380 ⇒ 00:24:42.450 Megan Murray: So I actually am not
154 00:24:42.470 ⇒ 00:25:07.869 Megan Murray: sure how that works with the Llc side of things like, typically, it’s been pretty minimal. So even with these Llc. C. Corp conversions, we haven’t even really explored it. Cause. It is more beneficial for the form 1120, which is the corporate tax form. So as a hundred Llc. Like, there’s like to you, it’s all it’s all being written off as business expense anywhere. There’s not really an incentive.
155 00:25:07.870 ⇒ 00:25:34.100 Megan Murray: but with the C Corp there is, and there’s like and and gusto has the best way to manage this, because once you do have ftes. So this would really your C. Corp. Would start effectively in the calendar year 2025. So in 2026 we’d go through this process with gusto. They, you know, would take a percentage of the total credit calculated as a professional fee.
156 00:25:34.150 ⇒ 00:25:42.109 Megan Murray: their process for doing that is significantly cheaper than going with a direct professional. It’s half literally half
157 00:25:43.110 ⇒ 00:26:06.979 Megan Murray: so that’s the 1st benefit. But then they also have a built in process with the R. And D tax credit where you can apply that to your fica wages. So social security Federal tax on the employer side, and you can pretty much use that up until you dwindle it down. So like tax. That’s 1 unique thing with the tax credit, because
158 00:26:07.010 ⇒ 00:26:14.149 Megan Murray: what people often, miss. Is that like, if you have a tax credit that really only offsets any tax owed.
159 00:26:14.150 ⇒ 00:26:14.910 Uttam Kumaran: Yeah, and if you’re.
160 00:26:14.910 ⇒ 00:26:18.359 Megan Murray: A startup operating a loss. Guess what? You don’t pay any tax.
161 00:26:18.360 ⇒ 00:26:24.289 Uttam Kumaran: Exactly. So that’s like, that’s where we were. I think this year we’ll definitely have like a much
162 00:26:24.450 ⇒ 00:26:32.030 Uttam Kumaran: significant tax bill. So that’s where I want to get ahead. But yeah, I mean, we are spending money on R&D related activity.
163 00:26:32.030 ⇒ 00:26:32.680 Megan Murray: Right.
164 00:26:32.680 ⇒ 00:26:37.869 Uttam Kumaran: And so definitely like want to take advantage of that, I feel like 100%. So.
165 00:26:38.180 ⇒ 00:26:50.470 Megan Murray: Yeah, it’s it’s worth for, just like a couple of hours of time being able to get that future benefit. And and it’s yeah, it’s it’s very beneficial for early stage companies.
166 00:26:50.630 ⇒ 00:26:54.425 Megan Murray: So I would definitely recommend it. And then
167 00:26:55.030 ⇒ 00:27:21.999 Megan Murray: and and that’s when it does make sense having those ftes right, because you’re gonna be paying tax with them like you’re going, you know, to be paying some of those things. So yeah, I I think I mean we could we definitely have capacity to start working with you. But you know, I know you’ve got a lot of other things you probably need to do with the formation. But there’s probably a lot of things we could do even before you like
168 00:27:22.370 ⇒ 00:27:34.851 Megan Murray: officially, have the formation documents like we can like setting up the payroll account, making sure that’s kind of a clean start, like some of that sort of stuff. We can just do
169 00:27:35.680 ⇒ 00:27:36.810 Megan Murray: But
170 00:27:37.010 ⇒ 00:28:01.949 Megan Murray: but yeah, and then we’d be happy to work on you with the right timing of things, and all of that, too. And then, as far as my team, so there’s myself, and then my Hr. Team support. There’s 2 people is primarily Tina is her name, and then her backup. Is this woman? Bree? They’re both awesome. Tina’s been doing Hr. And compliance for like 20 plus years. And she’s just very.
171 00:28:02.290 ⇒ 00:28:16.830 Megan Murray: very thorough. And so yeah, there’s there’s very little that comes up that I’m like, have you ever seen this before? And she’s like you’d be surprised. She’s seen it all and then, on the finance side, I’ve got
172 00:28:16.830 ⇒ 00:28:46.549 Megan Murray: Kelly, who handles financial reporting. So she’s the one who’s go who’s working with our accounting and bookkeeping team on a monthly basis to make sure that everything’s where it needs to be and and then working with you on like, do you do? We wanna work on cash flow forecasting with you? Would you prefer to set up more like accrual based budget. So we kind of go through that and make sure that you’re getting the right financial package delivered to you
173 00:28:46.680 ⇒ 00:29:09.199 Megan Murray: that would help you run the business, and then I’ve got Carla, who’s an administrative coordinator, and so she’s handling more of that day to day inbox management AR, and Ap, so that kind of becomes a little bit of like a customized based on what’s your invoicing system? What’s your processes like? Are you wanting to just
174 00:29:09.200 ⇒ 00:29:34.169 Megan Murray: email something to the accounting inbox and just say, approved, this is for X, which is fine, or do we have, like the needs for a more robust Ap or AR system. We’d work with you on that, too, and and then the bookkeeping team. They’re they’re certainly available to you as bookkeeping and tax. So they’re a preferred partner of mine that I work with and
175 00:29:34.170 ⇒ 00:29:39.269 Megan Murray: have been working with for several years now. So the bookkeeping side you would have
176 00:29:39.270 ⇒ 00:29:50.120 Megan Murray: a service manager. So that’s my prime, Kelly and I’s primary contact. And then they have a controller who’s handling more of the day to day expense management.
177 00:29:50.452 ⇒ 00:30:15.029 Megan Murray: And then a reviewer. So the Controller and the reviewer like I don’t even really get involved with them very much. It’s pretty much just the service manager, and then we have a tax team. So this guy, Troy, he’s just very. He’s just a lovely guy. He’s very thorough on the tax side. He’s been a corporate tax attorney or a corporate tax preparer for a long time, and then his counterpart.
178 00:30:15.030 ⇒ 00:30:26.150 Megan Murray: Cassie is one of the owners of the firm, and so between the 2 of them, like they go through all of the complex things, make sure that we don’t miss anything.
179 00:30:26.150 ⇒ 00:30:49.449 Megan Murray: cause a bookkeeping and tax or 2. It’s like left brain and right brain, it’s totally different. So but yeah, so that pretty much covers, like all the services and people, so you might have more of like a day to day contact in myself, Kelly and Tina probably depending, if it was Hr. Or finance, or something else.
180 00:30:49.450 ⇒ 00:30:57.100 Megan Murray: But then there’s like probably another 7 people behind us that are touching different pieces of your business. So.
181 00:30:58.050 ⇒ 00:31:01.600 Uttam Kumaran: And then give me a sense, for like how contracts work for
182 00:31:01.900 ⇒ 00:31:06.540 Uttam Kumaran: for your side? Is it like a pay per service? Or is it holistic like, how does it work.
183 00:31:06.540 ⇒ 00:31:36.300 Megan Murray: Yeah, so we would, we set a flat rate bookkeeping and tax fee which is going to include all of those state returns. So cause. What we’re not doing is is sending you different invoices for. Oh, we filed this State return. We filed this Federal return. Here’s a big bill. We smooth that out over the over the whole year. The only one time payments that you’ll get would be like in January. We invoice you for 1099.
184 00:31:36.340 ⇒ 00:31:47.379 Megan Murray: So we’re sending that out just once. That’s a that’s just a 1 time thing that we do every year, and that’s also flat rate. So it’s more thorough than like.
185 00:31:47.948 ⇒ 00:32:17.050 Megan Murray: We’re we’re doing a pretty deep review doing. W. 9 reviews. Do we have the right? W. 9 form on file. The Irs issued new ones in 2024. Some people are still using the 2018 one. So it’s like, it’s a whole process that we go through. And it’s a lot more than just like preparing the tax forms. So but that’s pretty much it so based on the filing that you have the complexity that we think your business is at
186 00:32:17.050 ⇒ 00:32:38.419 Megan Murray: like I’d I’d probably put that somewhere. I’m gonna have to give a big range because of the other state returns. But what I’ve what I’ve seen with others that are around there is like somewhere between 1,000 1,500 a month. And that’s the flat rate for so somewhere between what 12 and 18,000 for the year to do.
187 00:32:38.600 ⇒ 00:32:54.650 Megan Murray: Federal taxes for State returns, and then monthly bookkeeping. So probably somewhere in that range, depending on on where it falls, and then that pretty much stays fixed for a year. Then we’ll review it, and usually it’s just like.
188 00:32:55.072 ⇒ 00:33:14.487 Megan Murray: It’s 50 bucks a month more. It’s something like that. And then and then the day to day team is all hourly, and there’s no minimums. So so on the contract, you’d see, like 4 different roles listed out Hr. And financial analyst business management.
189 00:33:15.050 ⇒ 00:33:37.490 Megan Murray: the administrative coordinator. And then Cfo services. So you pretty much have all those roles set. And then there, like I said, there’s no minimum. So it’s not like you’re having to pay a retainer for like, if if we only talk to you a couple of times over the month and run one or 2 payrolls, then, you know, it’s really only a couple of hours going on that month’s invoice.
190 00:33:37.490 ⇒ 00:33:37.990 Uttam Kumaran: Okay.
191 00:33:37.990 ⇒ 00:33:48.390 Megan Murray: So, and those and those rates range anywhere from 80 per hour on the low end, to like 2 50 on the high end.
192 00:33:48.570 ⇒ 00:33:49.270 Uttam Kumaran: Okay.
193 00:33:49.830 ⇒ 00:34:07.520 Uttam Kumaran: okay, this makes a lot of sense. I mean, overall. The priority for me is one just like getting everything right, like one of the things that we want to do is this is just a part of the company where, similar to legal like, I just wanna make sure it’s done properly. I think we’ve done an okay job.
194 00:34:07.640 ⇒ 00:34:12.889 Uttam Kumaran: But of course, like, although this is probably this is one of the most important things. It’s just the last thing.
195 00:34:13.376 ⇒ 00:34:20.290 Uttam Kumaran: And so this is one of the key reasons I want to explore with you guys is just to have a partner, especially as we.
196 00:34:20.400 ⇒ 00:34:43.480 Uttam Kumaran: as we’re growing you know. And of course, like to have someone locally would be great regardless. But that’s the biggest thing for us. I think we’ve made. We’ve made some good headway with our current partner. But I think, having somewhere where it’s like, okay, as things get more complicated, you guys are like cool. We can take that, too. That’s sort of my thinking is I don’t wanna have to make.
197 00:34:43.830 ⇒ 00:35:04.684 Uttam Kumaran: I don’t. I kind of want this to work as long as it can work. So I don’t want, and going with some of the fractional services. It’s tougher, like there’s a lot of work on my side to find out what they can do. And I have to shop around. So for me, this has been great to to hear the services. And then, yeah, if I could just get sort of that like in an email or written out. And I can
198 00:35:05.260 ⇒ 00:35:08.760 Uttam Kumaran: I can discuss with with my partner, and sort of talk through it.
199 00:35:09.350 ⇒ 00:35:30.460 Megan Murray: Yeah, I can. I can send you over a proposal that’s got a lot more detail on exactly what the day to day support looks like exactly the things that we do for others. So I can. I can send that over to you. And but I I think you’re thinking about it the right way, like for you, it’s the yeah. Can you do it versus? What’s the trade off of your time?
200 00:35:30.460 ⇒ 00:35:30.880 Uttam Kumaran: Yes.
201 00:35:30.880 ⇒ 00:35:35.059 Megan Murray: That is building the relationships with the clients man
202 00:35:35.740 ⇒ 00:35:46.829 Megan Murray: like. So so yeah, there, there definitely gets to be a point where it’s like, it’s just your time is better used focusing on growing the business. And that’s really where we add value.
203 00:35:46.830 ⇒ 00:36:10.679 Uttam Kumaran: Yeah. And I. And I think the biggest thing you know, for the we want to work with somebody who also is like gets a little bit of our what type of business we are. But I I have a lot of it. We we’re setting up all of our financial models. We’re doing a 1 year forecast. We’ll start to have longer 3 year forecasts. And having all of our bookkeeping aligned with that and making sure we can. We can get expenses in a clear way to fund to
204 00:36:10.900 ⇒ 00:36:24.049 Uttam Kumaran: to like sort of fund. That model is what I’m looking for even more short term and so I think, ha! Working with you guys, I think there’s a good opportunity to make that a lot more seamless. And then, yeah, everything on the tax compliance side is just like
205 00:36:24.370 ⇒ 00:36:37.959 Uttam Kumaran: over my head. I’m like as well. I just wanna know that it’s checked off. I I it’s not my expertise. And I don’t. I like I don’t want it to be. I I wanna continue to do great data work for our clients. So.
206 00:36:38.230 ⇒ 00:37:01.670 Megan Murray: I I totally get it. And that’s that’s exactly why I’ve kind of gone. The direction I have with adding on all these services is because when I would do you know, fractional Cfo work as an independent contractor, it’s like you kind of get the responsibility of all those things, too, without the like, without some depending on the organization, without a lot of the ability to make decisions.
207 00:37:01.670 ⇒ 00:37:02.070 Uttam Kumaran: Yes.
208 00:37:02.070 ⇒ 00:37:14.419 Megan Murray: Preparing the taxes and stuff. And so I was just like, you know what I can do this at a different scale. Then I can get a better deal, basically, for like 6 to 8 companies than I can with one.
209 00:37:14.776 ⇒ 00:37:37.600 Megan Murray: And then, you know, kind of taking that same look at the Hr services, too. So I mean for me, like, it’s as much as it’s been about building out services that are useful to people. It’s also been about just de-risking myself, cause there’s no way you can be proficient at Hr. Compliance, but also taxes, and section 1, 74. Recognition like.
210 00:37:37.600 ⇒ 00:37:38.010 Uttam Kumaran: Totally.
211 00:37:38.380 ⇒ 00:37:47.389 Megan Murray: It’s just impossible. Like, if you really want to do a good job, you’d need the, you know, the expertise kind of across the whole team. So
212 00:37:47.600 ⇒ 00:37:55.069 Megan Murray: that’s exactly why I went this direction versus just continuing to limp along as a fractional see myself.
213 00:37:55.360 ⇒ 00:37:56.260 Megan Murray: So yeah.
214 00:37:56.260 ⇒ 00:38:07.149 Uttam Kumaran: We’re we’re, I feel like very similar. I mean, similar business like where we started off. I was just doing like fractional engineering work. And now we offer like full stack engineering work across.
215 00:38:07.260 ⇒ 00:38:16.119 Uttam Kumaran: you know, several technologies, and we’re expanding and bringing on experts in each of them. So I totally get. It makes a lot of sense. So.
216 00:38:16.500 ⇒ 00:38:30.720 Megan Murray: Yeah. Yeah. But yeah, happy to answer any questions that come up later, I’ll work on a proposal and get something to you. Today. Tuesday. It’s only Tuesday. I swear it feels like I I can get you something by the end of the week.
217 00:38:30.720 ⇒ 00:38:32.269 Uttam Kumaran: Sure. No. Problem. Okay?
218 00:38:32.740 ⇒ 00:38:59.900 Megan Murray: And then beyond that like, if everything looks good, just keep me in in the loop on what your timelines looking like for the the C Corp, you know. Honestly, attorneys can kind of turn that stuff around pretty quickly. So it’s yeah, I think. And then, like, if you need any suggestions or insights as you’re thinking about like cap tables and stuff. Then just let me know.
219 00:39:00.300 ⇒ 00:39:01.180 Uttam Kumaran: Definitely.
220 00:39:02.120 ⇒ 00:39:02.860 Megan Murray: Yeah.
221 00:39:02.970 ⇒ 00:39:13.419 Megan Murray: well, cool. That sounds really exciting. I mean, honestly, I think it. Your business is really the exact type of business that we love supporting. So we’d love to work with you.
222 00:39:13.420 ⇒ 00:39:16.060 Uttam Kumaran: Yeah, I’m really excited. And again, hopefully, this is
223 00:39:16.230 ⇒ 00:39:25.529 Uttam Kumaran: this kind of allows us to close at least one door on a on like a big part of the business. And then allow us again for me. The number one thing is focus.
224 00:39:25.670 ⇒ 00:39:37.539 Uttam Kumaran: So I want to spend as much time with clients and our client problems as possible. And this is a big area. I know where we’re like definitely dropping some balls that I want to make sure all tidied up. So appreciate it.
225 00:39:37.540 ⇒ 00:39:48.279 Megan Murray: Yeah. Oh, and then just last question for you, what’s about like your average revenue and average expenses? Just because I know my accounting manager will ask.
226 00:39:48.280 ⇒ 00:39:51.519 Uttam Kumaran: Yeah, we’re we’re probably running like
227 00:39:51.900 ⇒ 00:39:56.159 Uttam Kumaran: 20 to 30 KA month in expenses and probably
228 00:39:57.570 ⇒ 00:40:00.639 Uttam Kumaran: like 40 to 60 K in revenue.
229 00:40:00.640 ⇒ 00:40:01.370 Megan Murray: Okay.
230 00:40:02.540 ⇒ 00:40:25.240 Uttam Kumaran: where our goal is like 50%. I mean, we’re a consulting business. So a lot of our math is probably math you’re familiar with. They’re just like looking at rates. And so our goal is basically like 50% gross margin. Or we don’t have much in terms of fixed expenses like in terms of that fluctuating very highly. It’s really people. So as we, as we get more clients, we need more staff to support that
231 00:40:25.704 ⇒ 00:40:35.190 Uttam Kumaran: but our fixed expenses, like in terms of, we have a designer. We have, like some Ops people that stays roughly the same. Yeah.
232 00:40:36.630 ⇒ 00:40:38.139 Megan Murray: Yeah, okay, good.
233 00:40:39.910 ⇒ 00:40:47.737 Megan Murray: That sounds like a good start. So yeah, let me run this by my accounting manager. See what we can
234 00:40:48.670 ⇒ 00:41:05.850 Megan Murray: suggest for that like flat rate fee. Just so you’ve got. That’s that’s pretty much the only thing like the rest is like the rates, the hourly rates. I know what those are, but trying to get a good sense of what that is. Then soon as I have that, I’ll send you over the proposal, and then we can start talking timeline.
235 00:41:05.850 ⇒ 00:41:07.810 Uttam Kumaran: Okay. Alright, thanks, Megan. Appreciate it.
236 00:41:07.810 ⇒ 00:41:12.046 Megan Murray: Awesome. Thanks, so much. Stay warm and hope. The sun comes out.
237 00:41:12.986 ⇒ 00:41:14.160 Uttam Kumaran: Thank you.
238 00:41:14.160 ⇒ 00:41:15.350 Megan Murray: Alright, bye.