The Smart Way to Structure Your Escapee Business: LLCs, S-Corps, & Big Tax Savings with Gabrielle Tenaglia

Brett Trainor (: 00:02

Hi, Gabrielle. Welcome to the Corporate Escapee Podcast.

Gabrielle (: 00:05

Hi, Brett. Thanks so much for having me.

Brett Trainor (: 00:08

It's my pleasure and definitely you are going to be, even before we record this, I know this is going to be one of our more popular episodes because the question you're going to be able to answer around taxes and LLCs and S-Corps is probably the number one question I get from potential escapees.

Gabrielle (: 00:26

I would never have imagined years ago that I would be an expert on this topic, but I am now. And it's kind of fun because I do get a lot of people who have questions about it and it's really nice to be helpful.

Brett Trainor (: 00:38

Yeah, no, so we're definitely going to spend the majority of the time on that, but I think your escapee journey is also very interesting and relevant to the discussion because that's how you kind of stumbled upon, if I can use that word of S-Corps and the power of the tax savings. Plus you had some other interesting insights from your escapee journey. So if you don't mind starting there, I'd love, you know, just go back a few years and, how did you first decide you were making that leap?

and then we can be off and running from there.

Gabrielle (: 01:10

My gosh, it's such a good question. I am a career marketer and I am lucky in that I spent a good part of my career working in agencies and creative agencies and then this latter part of my career for the past 10 years working in-house, mostly at startups, tech startups. I live in San Francisco, so it was a natural place to go.

And in the agency world and marketing in particular, there's always been a lot of need for freelance or contract work. Agencies scale up and down for pitches or when they win new clients. And so it was really easy for me to do that in the beginning because it was already part of the world that I worked in. The first time I did it, I did it because I wanted to work for Outward Bound.

and I spent summers working for Outward Bound in my 30s as an instructor, taking groups of people out into the wilderness in Northern Minnesota along the Canadian border. And I would do that in the summer and then I would do contract work in the fall and winter. I was only...

I did a few trips a year, so it was really easy to go do those couple of trips. And at the time, there was a lot less flexibility in the way companies were willing to let you work full time. So being a contractor was my option then. after doing it once, you learn that it's easy to go back to. think it's pretty, I found a company that I wanted to work with and I ended up spending five years there.

And once you've done it the first time and you've built your network and you realize that you can build up a book of business, that you can find work, it becomes pretty easy to say yes to it a second time and to give yourself the flexibility in your career to take a break and to go back and forth. I have some friends who...

Gabrielle (: 03:20

love being on their own so much that that's all they want to do. And when they started doing it, they committed to that being their business forever. And then I know other people like me who have who have gone back and forth, you jump in, you come out. And what I like about that is it gives you the flexibility to really be choiceful about the full time opportunities that you do take and do it when it really feels right instead of doing it because you need it, you know, you need an income.

right? And sometimes you end up making decisions about things that might not be the best fit because you're looking for that, the paycheck that you need.

Brett Trainor (: 04:01

Right. And what I love about that, and you were the first of first people I've heard talk about the flexibility of going back and forth, right? And it makes sense because maybe there's a time and place. Now, most of the folks I work with are Gen Xers, and so they don't have a lot of desire to go back into a full-time role, but it makes sense. You can always go back. And I think one of the things is I look backwards is I was not super intentional about what I want. I may have had a few times where I could

choose on the job, but very rarely, right? We weren't, it was, hey, this is what's here. Is this weight? This makes sense. Is there enough money and go forward? So I love that intentionality. But then part two is the, belief, right? Once you do it once, cause there's so many people have had successful corporate careers, 25, 30 years, you know, through the gamut run large teams, but they have zero confidence. They can actually go out and do this on their own, which

surprises me but then I just remember back to the time when I was doing them, I get it. You just got to get over that hump of getting that first client and it opens up. I love that. Again, I wish I would have discovered that a lot earlier but as I tell people, better late than never, we still got time.

Gabrielle (: 05:05

Yes.

Gabrielle (: 05:12

Absolutely, absolutely.

Brett Trainor (: 05:15

All right, so you're bouncing back and forth and so when did, mean, I'm assuming you're not full time now, so we'll get into lettuce and that you're fractional with them. So are you mostly fractional now or when was the last time you were actually in a full time role?

Gabrielle (: 05:30

Yeah, I'm fractional now. I left my last full-time job in January of 2023.

Brett Trainor (: 05:37

okay. So yeah, you really have been living that life. I like it again, because you have control of it. So, okay, we talked about that journey, these back and forth, so you didn't really have a tipping point. was something you just made a decision to do. let's get into the, again, taxes are a four letter word for a lot of folks, but, it's scary, right? I mean, until I met you and some of the other folks at Lettuce, right, I've been doing this wrong for...

for four years, right? Usually the question I get from escapees is do I need an LLC or not, right? But you're taking it to the next level with S-Corp could be a better solution. So I don't wanna muddy the waters too much, but let's go back of how you kind of stumbled upon this, because you were you set up as an LLC originally and then transitioned or maybe share how you've kind of evolved.

Gabrielle (: 06:27

Yeah. And I will tell you from my own experience is that if you're coming from a full-time W-2 job and running your own business now, almost everything you think you know about taxes is wrong. And you have to relearn it.

I had never been in LLC. I can address that question a little bit, but I'll tell you overall my story. I was never in LLC because my financial advisor and my CPA said it doesn't, that in my kind of work, if you're a consultant doing marketing work or giving sort of professional services advice, the chances that you're gonna get sued are so small. And,

If you just have business insurance, you don't need the LLC. Now, I'm not a lawyer. There's probably some folks who would tell you all kinds of things about the benefits of an LLC, but it felt pretty low risk for me and like more of a hassle than I needed.

just for that liability protection. And LLC doesn't give you any tax benefits, so there's no tax reason for doing it. And that's the perspective that my financial advisor and CPA were giving me. But over the course, I ran my own business for four different chapters during the course of my career. And...

I tried all the different methods to try to reduce my taxes. In the beginning, I was carefully collecting my receipts and making sure I had them all written down. And my dad would help me with my taxes and help me figure out how to do my Schedule C. And then later on, even had QuickBooks.

Gabrielle (: 08:11

And then I hated using QuickBooks, so I had a bookkeeper to keep everything clean and QuickBooks for me. So I had a monthly P &L so I could give that stuff to my accountant to do my taxes. And the more money I made and the more time, the more effort I put into it, I felt like the less I saved.

Gabrielle (: 08:32

I would spend hours and hours doing all the things that my accountant told me to do. And, you know, they would be like, well, you saved $1,200 with all these deductions. And I'm like, my God, $1,200 versus the size of my tax bill is like nothing. And if I had taken those hours and actually spent them working with clients, I would have made 10 times that. So it didn't work the trade off. And the busier I got,

Brett Trainor (: 08:57

I ain't right.

Gabrielle (: 09:01

the less time, it felt like, you know, the less and less it was worth it to do all that work because I was making a huge time sacrifice. There's a coach who we work with, her name is Jenny Gritters and she coaches people running their own businesses, independents. And she says, my time is my most valuable resource. And if you don't think of your business that way, then you're missing out. And so,

usiness, and this is in about: 2019

And I was like, great. Another idea of how I'm going to save like another $1,500 on my tax bill. Like, I don't, that's not worth it. I was like, what, what am I really going to save? And she said that the number she told me was, was a full year of preschool for one of my kids. And I was like, okay. That's a real amount of money. What do I, what do I do to do this? And she was like, well, there's some forms and I can send them to you. I'm like, Love a government form, send it to me. I'll fill it up.

Brett Trainor (: 10:03

Thank

Gabrielle (: 10:24

And then she started explaining the work I would need to do to maintain my S corp. And, and she said to me, you you have to, you're going to have to pay yourself payroll every month. And I was like, payroll, but I already have the money. Like my clients pay me and the money is in my bank account. She was like, no, no, you've got to pay. You have to like run payroll. Like a company runs payroll and you have to pay, the state payroll taxes in your state. And I was like,

Brett Trainor (: 10:30

So please.

Gabrielle (: 10:50

you are now in a world that I am not willing to go to. I was like, there's no way I'm going to spend, I've got kids, I am busy in my business, I'm not spending my weekends trying to figure out how to run payroll. She's like, once you figure it out, it'll be no problem. I was like, this is not my zone of genius. I would rather go get a whole new project to pay those taxes than spend, I'd rather spend my time doing that work that I love than spend my time trying to figure out payroll. So I didn't do it.

Brett Trainor (: 11:01

Right.

Gabrielle (: 11:19

But the thing that's really interesting is, and I'll explain why she wanted me to be an S-Corp. When you hear about it, like when you understand what an S-Corp is and what it does, it makes a ton of sense. When you work in the United States, everyone who works in the United States pays Social Security and Medicare tax. And when you...

work for a company when you're a W-2 employee, you pay half of that tax and they pay half of that tax. The tax is 15.3 % and when you're a W-2, you pay 7.65 % and your employer pays 7.65%. When you work for yourself, the government sees you as both the employee and the employer and you pay the full 15.3%. So as soon as you start working for yourself,

your self-employment tax doubles. And what an S-corp can do is cut that in half, and even more than in half. And I'll explain how. When you're an S-corp, you become a corporation. It's interesting to think about this, because our tax system in the United States is built for W-2 employees and corporations. And when you work for yourself, you fall in this gap, where by default, you are overpaying your taxes. So you want to put yourself in one of those two boxes.

So you become a corporation, you have to pay yourself a salary. So when you work for yourself, let's say you make $100,000, you pay the 15.3 % on the 100,000, it's $15,000. When you are an S-corp, you pay yourself a salary and you take the rest of the money you make as an owner's distribution, as a profit. You only pay the 15.3 % tax.

on the salary. So that same $100,000, let's say you take 40,000 salary and 60,000 profit, the 15.3 % tax on the 40 is $6,000 instead of 15. So you still have to pay federal and state taxes on those amounts, right? But that $6,000 is what you save just right off the top. And then because you're a corporation, there are

Gabrielle (: 13:40

Better, if you want to save money for retirement in a 401k, there are better deductions. And you can actually save almost twice as much when you're an S-corp. The caps are different. You can save more. So if you're like me and you're actually thinking about retirement and trying to figure out how you're going to put money away for that, this is a great choice. The deductions for health insurance are better if you're paying them from inside your S-corp.

So there starts to be additional strategies that you can take advantage of that are corporate strategies that can help you Save more on taxes. So The s-corp really has when I tell people what they can save they're like, I'm sure somebody saves that but I'm not that you know, like There's no way I'm gonna save that match, right? but it's it's just

Brett Trainor (: 14:27

Thank you.

Gabrielle (: 14:33

Like those are the rules, it's the structure of how it works. And that's what you, you you reduce your self-employment taxes. That's what an S-corp does. That's what it's built to do. It's a type of corporation designed for small businesses and it's designed to help you manage those high self-employment taxes.

Brett Trainor (: 14:52

Can I ask you one question going back with the difference between paying yourself and then owners distributions? Is there some threshold? mean you can't pay yourself like 2,000 in salary and 98,000 in benefits. there...

Gabrielle (: 15:07

That's right. You can't, I mean, you could, but that might be a flag for the IRS to take a look at your return. What you, the IRS says that you have to pay yourself a reasonable salary. And there's no hard and fast definition of what a reasonable salary is. What we do is we, there's a lot of salary studies. There's companies that do salary studies. And so we have all this data.

Brett Trainor (: 15:14

Yeah.

Gabrielle (: 15:34

And you have to pay yourself something that is comparable for the work that you do, the industry you're in, the place where you live. And so we take a look at the job. I'm a marketer. I live in California. I'm at a pretty senior level. And in my business, I'm not always doing work where I'm performing at the absolute top of my salary band. Sometimes I'm the janitor.

cleaning my office and sometimes I, you like you do all the things, right? And so there's some principles around how you need to split up the money to pay a salary that the IRS sees as reasonable for the work that you do.

Brett Trainor (: 16:01

Yep.

Brett Trainor (: 16:16

Okay. That makes sense. Yeah. And it's interesting when I started, I I heard S corp earlier this year for the first time. And so in the, like I said, the four years I've been doing this hasn't come up. Plus my accountant was my previous accountant when I was in corporate, right? And so.

Looking back, historically, it's been very conservative in the way. And so I know I've left money on the table. as you're talking about, it's not my expertise. I'm saying way, even in corporate, I hated doing expense accounts, right? It just hated eventually in some companies, I would pay somebody to do that for me just because I want to don't like it too. I don't know what it is. So then when I started doing this myself, I'm like, I just don't want to deal with it. And so when you first heard S corp, that sounds like a lot of work and payroll, but

You know, and then that's where, again, you've kind of the next step is, Hey, how do I take some of the, the, the leg work out of that or the, again, because most of us, and I'm not going to speak for everybody, but I think the number of conversations I've had, it's just not high on anybody's priority list. The number of people that, again, QuickBooks isn't a sponsor, but yeah, not a friend, friend of QuickBooks. again, historically we've never had to do this, right? It's not our, there's no one of genius, as you said, which I like. So,

most of us just put it on the back burner off to the side or it's a necessary evil and not really a business advantage. So it sounds like that.

Gabrielle (: 17:42

I think a lot of tools like QuickBooks, they're not purpose-built for people like us. And they offer you so many choices. Even their simpler products offer you so many choices. And look, they make their money by upselling you in bits and pieces. So the base product is cheap.

Brett Trainor (: 17:56

Thank

Brett Trainor (: 18:00

Thanks.

Gabrielle (: 18:03

But the base product is maybe not exactly what you need. And so then all of a sudden you've gone from a $20 a month subscription to a $75 a month subscription. And that's what they want. But the problem is I don't know enough to make the right choices. And if they're selling something to me, like, guess, you know, maybe I need that thing. I don't know. And what we do at Lettuce is purpose-built

exactly for what people like you and I need. And it's designed to do exactly what I just walked through to take care of that work for you and save you the money. I think even, you know, it was unusual that my my financial advisor recommended this for me. Because a lot of accountants like, you know, your accountant who probably works mostly with W two employees or

corporate, you know, or bigger companies doesn't really know about this. And if they do, they don't recommend it for folks like you and me because traditionally it has been a lot of work to manage. Like when I, when I talked to my financial advisor about it, I was like, I'm not going to do this. Can you run it for me? And she's like, no, we don't do this work. And neither does the CPA that we work with, like only for bigger companies, not for folks like you. Cause it, it's a lot of bookkeeping and they just can't charge the rates for it.

Brett Trainor (: 19:01

six plus seven.

Gabrielle (: 19:30

that they would need to charge to make it worthwhile. So they don't do it.

Brett Trainor (: 19:37

Yeah, I mean, it makes sense. And that's been one of the bigger challenges, right? Going solo, right? You mentioned marketing, I think was one of the first ones, like Fiverr and some of those others that made sense. A number of years ago, you could do the freelance. But I think I've seen projections and written about that by 2027, right? 50 % of the workforce is going to be solo businesses. So somebody needs to figure out and start to put some tools in place to help us manage, right? We've got the number of folks that I work with that are now...

either testing AI or using it in their solo businesses surprised me. I I use it and I think, know, lettuce is built kind of off of that. So, I mean, we're going to get to the point sooner or later where somebody is going to take on these challenges, right? Because if 50 % of the workforce is this, you got to make it easier for us to do business. And maybe some point the government will, you know, help us on the healthcare side of this, make that easier. I mean, it's getting easier, but...

Gabrielle (: 20:11

Absolutely.

Brett Trainor (: 20:29

Right, so again, you were speaking my language when I first heard you speak, talking about how do we take not only the cost savings, which was important, but the time was the bigger issue to me. To your point, I left money on the table because I didn't want to go through all the steps and the tracking of those types of things. So interesting. So how did you get hooked up with with lettuce? I'm curious.

Gabrielle (: 20:53

So when I left my full-time job in 2023, I was doing what I do when I start to look for work, reaching out to people in my network. And Ron Harpaz, who is our founder and CEO, he and I had worked together before, years ago. And I reached out to him to see what he was doing. And he's like, well, I think I'm starting this new.

And of course I asked, what are you going to do? That sounds fascinating. And he said, well, we're going to automate S-Corps for freelancers. And immediately I was like, that's amazing. I want to work with you. Here's all my ideas. And I knew right away what the value was of that because that was the problem that I was sitting with five years ago.

Brett Trainor (: 21:27

You can't do that.

Brett Trainor (: 21:34

Yeah.

Brett Trainor (: 21:51

All right.

Gabrielle (: 21:52

And so it was just a really exciting opportunity.

What's been super interesting is we've been able to build this company with a lot of fractional talent. And a lot of us, myself included, use our products to run our businesses. And what we do is we automate all of your S-corp setup, but then all of your ongoing taxes and accounting. So there are a lot of folks out there who feel some considerable anxiety about

managing their taxes or if not anxiety, at least like me, I wasn't particularly anxious about it. I just didn't like it. I didn't want to do any of it. And, we automate all the work. have a, once you're all set up, you know, you have your S corp, you have your LLC, your invoices get paid into your lettuce account. We set aside the withholding, all of your expenses and deductions. Like you use that as a

as a clearinghouse account, so you pay your credit card bills, use the AT, you know, we have a bank card, pay your expenses if you have a contract or you pay them out of that account, so everything's recorded there. That enables us to not only set aside what you owe for taxes, but do all of your accounting, all your bookkeeping, we pay your quarterly taxes for you and we do your returns at the end of the year, your business returns, and then you just take those business returns and file your personal taxes.

Brett Trainor (: 23:29

Interesting. mean, like I said, I don't know if you've ever read the book, Who Not How, but this fits right into that model. Dan Sullivan is a business consultant. He's worked with entrepreneurs, mostly bigger businesses, but his whole philosophy and he, and I forget, folks listening to me are going to be mad that I can't remember the other guy's name, but co-wrote a book called Who Not How. And the whole thing is with entrepreneurs, they get bogged down because they're better off, they try to answer the question of how.

all these like just this specifically, how do I pay my taxes? Am I doing this right way? Instead of asking who should do this, right? Go find the who's that love to do this type of work and can make it easier for you. And so that's been one of our mantras is to go find those who's for your business where it makes sense. And again, I haven't in the past been comfortable advising right people because again, this wasn't my area of expertise. And so people said, Hey, should I set up an all C? And can say, I'll tell you what I did.

but talk to an accountant. And like I said, I think you're right. We need to move beyond just the haze and the fog and should we be guessing about what we're doing and have clear like, yes, if you're only gonna make 40,000 a year as a side hustle, maybe it doesn't make sense, right? But if you're looking to build 100K and beyond, it probably does make sense. And I'm even looking at my business.

I said, think I've told you offline, I'm looking to switch next year because I didn't want to do it at the end of this year, but I've got revenue streams all over the place now from the podcast to the community to fractional work and all those types of things that it's just, that would have been a real headache for me. And this year we'll be tying it together, but.

Gabrielle (: 25:10

Yeah.

Brett Trainor (: 25:14

Yeah. So like I said, I'm a huge believer and advocate in finding the experts that make sense. And they're focused on, or your guys are focused on our businesses, not modifying it to make it fit for a solo.

Gabrielle (: 25:27

That's right. are focused. think it is one of the things that is unique about us and that makes us special. We are focused only on businesses like yours and mine. And because we understand the needs of businesses like ours, we are able to build around it. Like we just are, we're about to launch.

an integration with a retirement savings program, a company that does solo 401Ks essentially. So you'll be able to sign up from Lettuce, you get a discount, and then you can pay into that account from your Lettuce account. So it makes it really easy to do the savings. We will have a similar integration next year with health insurance so that you can purchase health insurance and pay for it

out of your lettuce accounts so that the deductions are automatic. You know you're taking the right deductions and saving everything you can from those expenses. And we also...

Because we really understand this audience, we literally live it ourselves. We know that understanding the right thing to do is important and it's hard. It's hard to figure out where to go to get the right advice. So we built an AI accountant. It's called Lettucehead. It's available on our site and it's integrated into our product. you know, I have had many times where you're thinking about making a choice and you're like, I wonder.

I should get some tax advice about that. Like maybe I should do it this way or maybe I should do it, should I pay for it from inside my business? Should I? And it's always so hard to like, I've got to send them an email and schedule a call or do a thing and get an answer here. You can just go and ask the AI accountant. It is purpose built for businesses like ours. The advice is, you know, the knowledge base that we built it on is for businesses of one.

Gabrielle (: 27:39

And so you can go and get quick answers. So we've built a bunch of features into the product that will help you work the way you need to work instead of, you you're having to adapt to the system.

Brett Trainor (: 27:53

Yeah, it's about time, man. Better late than never is the motto with the GenX. So thinking about that, like I I've already gone through down the process with what I want to do. So if somebody is just starting, which a good portion of this audience is maybe still in corporate, but thinking, what would you say is best practices from, all right, so I'm going to think, do I set up an LLC and then convert it to an S-Corp when I get there?

We kind of talked about in the early days, you may not even need the LLC depending on how much revenue you're generating. So, and again, I'm not asking for legal advice, but just in general, what's a good rule of thumb or what do you recommend to folks that are, one, let's just say starting in the process or heading down this path?

Gabrielle (: 28:36

Absolutely. think even if I back it up even to before you get an LLC, the first thing I tell people is get a business bank card. I mean, a business credit card and a business bank account. Separate your finances from the very, very beginning and try to do everything out of that business bank account and with that business credit card. If you keep everything in those, you know, with those two sort of two financial hubs,

Brett Trainor (: 28:51

it.

Gabrielle (: 29:06

It makes it a lot easier to do your bookkeeping and accounting.

If you are trying to separate out business expenses from your personal expenses, it becomes impossible. And if you do that, then you don't even really need to save receipts, right? I always had like the envelope of receipts, unless you're doing a lot of cash payments, which I don't even really do at all anymore, right? I buy a cup of coffee sometimes, but you know, which it doesn't even, that deduction doesn't help you. I'm here to say, don't save that receipt, but it's not worth the time, but.

If you do that, it becomes really easy and really clear to say like, here were my expenses. Here's the deductions I need to take, you know, simplifies a lot of things. After that, I would personally recommend business insurance is the next most important thing that you should be thinking about. And it's not that expensive. We have an integration with a company called next insurance that,

that does this kind of business insurance that you would need. And that protects you against liability issues. And some of your clients are going to require that you have it. If you work with bigger corporate organizations, they're going to tell you you have to have it to work with them. And then an LLC, again, I'm not a lawyer. There's no tax benefit to it. It has some expense to setting it up and to managing it.

If you are concerned about that liability, get it. mean, if you're making decent money, it's not, you know, there's some costs. It's not a dramatic cost. You do have to file an extra return for it. have, even if, even if your business doesn't make any money, you have to file a return for the LLC. So it will add some, some costs and some complexity to your business. And for me, it seems, and this is my, this is my personal position. I'm not giving you tax advice or legal advice, but it seems,

Brett Trainor (: 30:45

Right.

Gabrielle (: 31:02

not worth it to put that in place if you're not also getting a tax benefit from the S-Corp. You need an LLC to have an S-Corp. The LLC is a legal status defined by your state and an S-Corp is a tax status that's defined and governed by the IRS. So they are different things. And in order to have an S-Corp, you also need to be a legal corporation. So it's not the first thing I would go and do.

Now when you are

I think there's a couple of factors that determine whether or not an S corp is right for you. I think the first one is, are you committed to your business? Like if you're just gonna do this for 15 months while you look for a full-time job, it's probably, you know, it might not be worth it.

Brett Trainor (: 31:58

Right.

Gabrielle (: 32:00

If you, because there's some work in setting it up. It's not hard to close it down, but there's tax returns and there's some implications. You might not want to do it if, if you are convinced that you're just in a temporary situation. Like if you're going to run your business for two years or three years and you want to grow your business and go beyond that, maybe even absolutely do it. But if, if in your head you're thinking like, this is temporary, I'm only going to do this for a little bit while I look for another job.

Brett Trainor (: 32:21

Thank you.

Gabrielle (: 32:29

I might not choose to set it up unless you're going to make $300,000 in that window, in which case the tax savings are worth it. After we have a tax calculator on our site that you could play with and just sort of see what point it's worth it. But at around $100,000, you're saving about $10,000. you're still saving after the expense of doing the work, of setting it up and managing it. You're saving.

Brett Trainor (: 32:35

to be able to, yeah.

Gabrielle (: 32:59

probably six or $7,000. Your call, is that worth it to you in your life or not, right? And so I think committed to your business, it really starts to, at about $60,000, it's break even at about 70, $75,000, depending on the state you're in, you're saving more than it costs you to run it. And after that, it's all gravy. There's one.

Brett Trainor (: 33:01

Yeah.

Brett Trainor (: 33:24

Yeah

Gabrielle (: 33:26

There's one accountant who I talked to who's like, well, an S-Corp can have benefits for you at any income level, which might be true. There is expense in running it. And we are one of the cheapest ways to run your own S-Corp at Lettuce. And still, it's real money. if you are, for example, there are some folks I've talked to who have left the corporate world.

have made a good chunk of money. And in their consulting business, all they want to do is put that money into a retirement fund. They want to absolutely max out every penny that they can save. And in that case, even if you're only making $60,000 a year, an S-Corp is worth it because you can put all that money away for retirement as an S-Corp. So it'll.

Brett Trainor (: 34:04

never say.

Gabrielle (: 34:24

be worth it for you and you probably have the, you know, the fee that you pay is worth it because the tax savings you're gonna get on that money is meaningful. So it depends a little bit, you know, what your, ultimately what your goals are, where you are, if you're looking at it strictly from a financial perspective, if you know, you know, I am, I at this point can predict it's still a lot of hustle and a lot of work, but I have enough confidence in my ability to get over that.

70k mark from the beginning because I know I have clients, have people I can turn to, I'm going to find some work. Once you are confident that you're going to get past that mark, get an escort because every penny that you make, you saves, you're saving money on every penny. So when you can see that number and you're committed to your business, set it up.

Brett Trainor (: 34:59

Right.

Brett Trainor (: 35:22

Yeah, no, makes perfect sense. again, I think the bigger picture, right, because when we look at people, you know, it's safer to stay in corporate, right? We get the benefits, you get that. But when you start adding up, right, what you actually need to make in income compared to what you're doing in corporate, it's not there's the... Someone's going to have to come up with a full calculator. I mean, I can walk people through, but just even with the tax savings that you could be doing, there's some bigger benefits to this. So...

And then part two of that, so if somebody's already running an LLC and they've like, huh, all right, I'm making a hundred K. I mean, they can, again, with lettuce, one, they can, I'm assuming they can go do create their own S corp and go through that process, but something lettuce would do as well as help you convert or add, I guess it's not converted, it'd be adding to it, right?

Gabrielle (: 36:10

That's right. If you have an LLC, we ask you a couple of questions about your LLC and then we can just add the S-Corp on top of that for you.

Brett Trainor (: 36:20

Awesome. And then I'm guessing you've been doing this for a little bit now, you get a ton of questions. Right. So I'm guessing on the website, you've got a good, well, you've got an AI bot that can answer questions, but FAQs, because I'm sure we're not going to cover half of what people are going to have today. you know, like I said, I'm always looking for advantages and how do we move this and make it easier to be solo businesses? Because I do believe this is the future. you know, at some point, corporations are going to realize, you know, I'll just share a quick story that, within

Gabrielle (: 36:25

Yes.

Brett Trainor (: 36:49

corporate, you know, I think it was Asana that did a work at what now are a study on knowledge workers, right? And all corporate employees basically are knowledge workers, that only 27 % of their time was actually spent doing knowledge work. You know, the rest was an unnecessary meetings, fire drills, whatever it is. And so if you're looking at a in corporate, you know, they're paying 80 % overhead for your 20 % output.

or what they're paying you to do. And that's part of my pitch to small businesses is look, we're not charging the 80%, we're only charging the 27 % for what we can actually deliver. But if we can start to even further show that cost savings, big corporates can latch onto this at some point too, because of the benefits and companies and maybe that's a good transition into the way lettuce is set up, which I love a modern organization that's using fractional to build.

organizations. Go find the specialists like yourself and others that, you know, it just makes sense. So that's why I should have said there was three benefits to this one. One, your journey, because I think it was interesting. Two, how we're going to save money with taxes. then three, know, companies that are starting to really embrace the fractional and, you know, call it freelance type of workforce.

Gabrielle (: 38:03

Yeah, it is. have today a hundred percent fractional team lettuce in the marketing organization at lettuce. Lettuce was built by a hundred percent fractional team. The product itself from from our initiation to launch everyone on that team was fractional and we are still mostly fractional today and our founder is convinced that it is the secret to our

success because not only do we as business people understand the challenges and the problems that our customers are facing, but also it has enabled us to access a level of talent that you couldn't hire full time at a tiny startup. And what a lot of startups at our stage do is they end up hiring a lot of

Gabrielle (: 39:06

People who tend to wear a lot of hats and sometimes, know, that can be good in some ways and challenging in some ways because, you know, what Ron always says is he's like, I want marketing to be one thing, but marketing is like 20 different things. And today in the marketing world, like there are a lot of very niche specialties. And if you don't have the deep knowledge in that specialty area, it can be hard to do it well.

And so if you're working with folks who know a little bit about a lot of things, you are often missing out on some of the specialized knowledge that you need to move fast. Now, I am less familiar about the engineering world or the product world, but I am sure the same thing is true there also. And we've been able to bring together a really unique.

level of talent for a company our size. And you know, we had a seed round of funding launched, did a series A very quickly on the back of that. And we're moving really fast. And it's because of the talent and the knowledge that we have inside our organization.

Brett Trainor (: 40:21

Yeah, no, I'm sold on that. One of the things I'm doing off the back end of the escapee collective, which we've got just about 1,400 former, mostly Gen X corporate professionals in there, is helping small business figure out how to unlock the power of expertise. You don't need to hire that head of sales initially. You may not even need sales. You may need somebody with branding, or is it more demand, Jen? Again, to your point, there's so many different...

specialties that you don't have to hire everything. And what I've seen with small businesses, tend to either that junior person has got a lot of potential, but it's never been through the trenches before. you're going to take a chance on growth, which again, I'm all for, but why not add a little bit of resource and expertise to somebody that's been doing that for 20 or 30 years to help drive it. So yeah, I'm absolutely sold. And the more I can promote fractional.

Gabrielle (: 40:57

Mm-hmm.

Brett Trainor (: 41:17

companies that are being built this way. just makes sense. So that's super cool. I do want to be respectful of your time. We've been chatting for while and we probably could do two full episodes out of this, but is there anything that we didn't cover today you think that corporate escapees should know? And if not, then what's the best way for them to learn more about you and to get started?

Gabrielle (: 41:41

Absolutely. will say that the thing that I, the advice that I give people all the time is that when you are working for yourself, there is no one who's going to pat you on the back and tell you, are doing a great job and what you are doing is hard.

And you need that pat on the back. And so you have to do it for yourself. So I'm going to tell you all out there, like you are doing a great job. This work is really hard, but it is really interesting and it is worth the work. So give yourself a pat on the back once in a while, remind yourself that you're doing a great job. I have a sign that I keep on my desk that says you are doing a great fucking job and I need that sign every day.

Brett Trainor (: 42:25

I love it.

Gabrielle (: 42:29

And I don't

Brett Trainor (: 42:30

Yeah, we do. We do forget to celebrate those little wins. I'm guilty of that all the time and it does. It's a great reminder. And before we go too far, there is one thing that we were chatting off offline that you had mentioned. I heard you speaking somewhere else and I'm paraphrasing here because I think I wrote it down wrong, but people first become consumers of your ideas so they can become consumers of your products. And I know it's a little bit different from where we're talking with taxes, but I think that's

such a good reminder for solopreneurs and escapees is, you know, start with the idea. So I'll let you kind of where that came from. but I, you know, when I heard that, I'm like, I can't let her go without talking about this.

Gabrielle (: 43:09

Yes, absolutely. That comes from a lovely friend and colleague whose name is Ben Worthen and he is the founder of a content agency called Message Lab. He started his own solo company and built an incredible business out of it. And he was a journalist before he did this work and he really believes that

Brett Trainor (: 43:32

Yeah.

Gabrielle (: 43:39

When people are consuming your ideas, they will be more interested in consuming your product. And I think as solos, that is a really great piece of advice because if you, there are a lot of folks who talk about this, if you share your ideas, you share your expertise, more people will come to you to hire you for work.

And you know, that's what you do in this podcast. That's why I'm here I do a lot of education about s corps and about solo taxes for folks Because I know that you have to understand What this is before you can sign up for it? We don't want anyone signing up for something. They don't understand So, you know, and I also personally I think like you Brett I really believe in this and I believe in the opportunity that it offers people

Brett Trainor (: 44:05

Right.

Gabrielle (: 44:34

I believe in the flexibility that it offers people to build their own lives and have them work the way that's best for them. And so I spend a lot of time sharing the ideas that I have about solo work and the ideas that we have at Lettuce because I do think not only does it apply to us and our business, but that principle, I love it, I'm glad you brought it up, applies to the work that we all do as independent businesses.

Brett Trainor (: 44:42

Right.

Brett Trainor (: 45:02

Yeah, love it, love it, love it. So, I really appreciate you spending some time with us today. Again, I love when I take pages of notes from conversations because if it's helping me, I know it's helping folks that are not quite as far along in the journey. So, what's the best way for folks to get started, connect with you? I'll make sure we get everything into the show notes as well.

Gabrielle (: 45:24

Yeah, that's great. People can find me on LinkedIn. I'm on LinkedIn. If you have questions about Lettuce, our website is lettuce.co. Our support team is always available at support at lettuce.co. And right now through the end of the year, there's a lot of people who feel like you and who are interested in this but don't want to sort of mix up their tax year. So what we're doing right now is when you sign up for Lettuce,

Today, between now and the end of the year, we set your S-Corp to start on January 1st. So we will set you up, you can get your lettuce account set up, you can kind of explore the platform and see how it works. And your S-Corp will start on January 1. So that you will have the benefit of...

he clean tax year starting in: 2025

Brett Trainor (: 46:20

I it.

Brett Trainor (: 46:39

Can't beat that free money. And I like the idea of the clean, right? As we've talked about it, just we're sometimes creatures of habit in an area we're not experts. now's the time folks. So you've got two months. We've talked a lot about 60 day challenges. This may be a good one for you that if you're serious about it and you've got some traction now may be a good time to explore this. So, Gabrielle, thank you again. sorry.

Gabrielle (: 46:41

You can it.

Gabrielle (: 47:02

Yeah, if you can see into next year, and it looks good, you should do it.

Brett Trainor (: 47:10

And if worst case, educate yourself. And if you're still sitting on the fence, you know, keep this on the radar as you're going down the path to, you know, build that checklist. Cause this is definitely one of the things I'll update. We've got a few starter kits and stuff that we'll make sure to update. Cause again, before I was hesitant to put in recommendations, right? This is not legal advice. This is not accounting advice. Still go talk to your own folks, but I've got more clarity now than I, than I had before. Cause I think honestly, the first person I've had on the podcast talking about

specifically on the tax side of it and the tax savings side. So I definitely appreciate it.

Gabrielle (: 47:46

My pleasure. Thank you so much for having me. I really appreciate the opportunity to help everyone in your community learn from the mistakes that I've made in overpaying my taxes over the years. And I'm happy to be here. Thank you.

Brett Trainor (: 47:55

We both made.

Brett Trainor (: 48:00

Awesome. Yeah, the government doesn't need any more from us. We've paid our share. if we can save a little bit more, I'm all for it. So, all right. Well, thanks again. We'll check back in as you guys continue to grow. And if you want to conquer the healthcare next, keep me posted because I think that's the last. So appreciate it. All right. Have a great rest of your day.

Gabrielle (: 48:04

That's right.

Gabrielle (: 48:17

That sounds great.

Gabrielle (: 48:21

You too.