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Running a Tax-Efficient Marketing Agency with Josh Bauerle

Gray MacKenzie
Gray MacKenzie is a true operations nerd who has spent the past decade helping hundreds of agencies build more productive, profitable, and healthy teams by solving the core issues plaguing their project management.

To chat with Gray and have ZenPilot lead your team through the last project management implementation you'll ever need, schedule a quick call here.

Josh Bauerle from The Prestige Journal joins us on this week’s Agency Journey episode to share his entrepreneurial story and tips for building a tax-efficient, tax-compliant agency.

This Episode is Sponsored by: Sweet Process

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Choosing the Correct Corporate Structure

At our agency, GuavaBox, we learned the hard way that generating sizable profits comes with a steep tax price if you don’t have the correct corporate structure.

In most locations, once your firm begins generating a decent amount of profit (starting around 30-50K), electing S Corp status for your business will be more efficient from a tax perspective.

Keep in mind that changing your corporate structure also may change your compliance requirements (payroll, annual meetings, etc).

Running a Profit-First Agency

At The Prestige Journal (TPJ), Josh and his team prefer to get their clients using the Profit-First method.

Back in episode 200 of Agency Journey, we interviewed the author of Profit First, Mike Michalowicz.

Investing Your Profits

Once you hit a point where your agency is throwing off a decent amount of cash, Josh recommends that most agency owners begin allocating that capital with a retirement account – often either a 401K or SEP.

Personally, Josh has also chosen to invest in real estate and has accumulated 41 units over the past 2.5 years. While real estate gets a lot of hype, keep in mind that this is a much less passive income stream than buying an index fund. It’s a good fit for Josh, but if you’re not willing to deal with the hassle or pay a property manager, a REIT or additional investment opportunity may be a better choice.

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