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MARKETANALYST.US / MONEY 101

39-Year-Old Entrepreneur Who Quit Her $80,000/Year Job Shares Crucial Business Advice

Today, Torres has seven income streams, which bring in an average of $37,394 a month.
PUBLISHED MAY 3, 2024
Jannese Torres | Image Source: Yo Quiero Dinero podcast official website
Jannese Torres | Image Source: Yo Quiero Dinero podcast official website

Starting on the journey of entrepreneurship and financial independence can be daunting. Such was the case with Jannese Torres, an award-winning Latina money expert. Torres, who runs the famous food blog Delish D’Lites and financial podcast Yo Quiero Dinero, became an entrepreneur after leaving her $80,000 per year engineering job. Today, Torres, 39, has seven income streams, which bring in an average of $37,394 a month of which $9,300 is in passive income.

Speaking to CNBC Make It, Torres shared some valuable advice for the budding entrepreneurs.

Torre’s expressed that when she turned her side hustle into a full-time business in 2020, she invested in accounting software. She says it allowed her to track her income and have crucial information at her fingertips. Thus, she recommends using tools like QuickBooks, Wave, or Xero to record the numbers and cut unnecessary expenses in real time.

Representative Image | Unsplash | Photo by Microsoft 365
Representative Image | Unsplash | Photo by Microsoft 365

Torres recommends making separate bank accounts for the business and for personal uses. According to her, it helps in maintaining a distinction and is crucial for accurate bookkeeping and tax purposes.

According to Torres, entrepreneurs should decide whether they want to use cash or accrual accounting. Cash accounting records the transactions when the payment is completed. She recommends consulting with an accountant to determine which method is suitable for the business.

A budget that outlines the projected income and expenses is crucial for the business. Torres says a budget helps the businessowner plan and make informed financial decisions. She further recommends periodic reviews of the budget to reflect changes in the business.

Torres says cash flow management is vital for the financial health the business. She recommends monitoring what comes in and goes out to make sure there is enough liquidity to cover expenses and maintain operations. She also recommends managing receivables and payables and negotiating favorable payment terms with suppliers and maintain a cash reserve for emergencies.

Representative Image | Unsplash | Photo by Erik Mclean
Representative Image | Unsplash | Photo by Erik Mclean

Understanding the tax obligations and payment deadlines is crucial to avoid penalties or action by the IRS. Torres recommends consulting a professional to determine the appropriate tax structure and ensure compliance with all IRS laws. She recommends keeping funds separate to cover the tax liabilities.

Representative Image | Unsplash | Photo by Olga DeLawrence
Representative Image | Unsplash | Photo by Olga DeLawrence

According to Torres, a good benchmark is to put aside 25% of the revenue for tax purposes. She says that the number will vary widely based on the location of the business and the state it is registered in. This will impact whether the business needs to account for sales taxes, state or local income taxes.

Torres recommends reviewing the financial reports of the business regularly. Profit and loss statements, balance sheets, and cash flow statements should be regularly reiewed to get an insight into the business’s financial performance. Torres says this will allow businessowners to identify areas for improvement.

Representative Image | Unsplash | Photo by Towfiqu barbhuiya
Representative Image | Unsplash | Photo by Towfiqu barbhuiya

Torres further says that it is crucial to consult with accounting and legal professionals who are familiar with the business needs and local regulations. Getting personalized advice tailored to the business circumstances is crucial to ensure compliance with all financial and legal requirements, Torres says in the report.

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