The January Move That Beats Any New Year's Resolution

NEW YEAR, NEW BUSINESS (STOP PLAYING PRETEND)

Two consultants. Both making $400,000.

One runs a business — S-Corp, clean books, professional systems. Pays $52,000 in taxes.

The other "does consulting" — sole prop, shoebox receipts, Venmo requests. Pays $78,000 in taxes.

Same income. $26,000 difference. The gap isn't talent. It's infrastructure.

January 1st, 2026. While everyone else makes resolutions they'll abandon by February, you have a different choice.

You can keep running your "business" like a lemonade stand. Mixing personal expenses with business ones. Telling people you're "self-employed" instead of saying you own a company.

Or you can spend the next 30 days building something real.

What "Getting Serious" Actually Costs You

Every month you delay, you're leaving money on the table:

Making $400,000 as a sole prop instead of S-Corp? $20,000-$30,000 per year in unnecessary taxes.

Using your personal account for business? $5,000-$8,000 to clean up the bookkeeping mess later.

No real invoicing system? 2-3 weeks longer to get paid on every project.

The entrepreneurs who break $1M don't have better ideas than you. They just stopped tolerating amateur hour.

The 4 Moves That Matter

Forget the 47-step business launch guides. You need four things. That's it.

1. Form Your LLC (This Week)

Go to Better Legal. Set up an LLC. Takes 15 minutes. 

While there are other services, friend of the newsletter Chad Sackonchick has built my favorite here. Use my link and save.

I don't care if you think it's "premature" or you're "not ready yet." If you're making real money, you need liability protection and credibility.

Stop telling prospects you "do some consulting." Start saying you run XYZ Company.

The psychology shift is worth the $300 setup fee alone.

2. Open ONE Business Bank Account (This Week)

The biggest amateur mistake: mixing personal and business money.

Your kids' soccer fees don't belong on the same statement as your $50,000 client payments. I don't care if it's "just easier" to use one account.

Mercury, Chase, Relay, your local credit union — pick ONE account for business. Use it for everything business. Nothing personal goes through it.

This single move will save you $5,000+ in bookkeeping cleanup costs later.

3. Set Up Real Systems (Week 2-3)

Invoicing: Stripe Invoicing — no monthly fee, $2 max per invoice, takes 5 minutes to set up. Stop sending Venmo requests for $15,000 projects.

Payroll: Even if you're the only employee, you need this for S-Corp election. Gusto handles the compliance. Don't DIY payroll — the penalties cost more than the service.

Accounting: Better Bookkeeping connects to everything. If you followed the one-account rule, setup takes an afternoon.

4. Make the S-Corp Election (Week 4)

Here's where the tax savings happen. File Form 2553 with the IRS to elect S-Corp status.

The catch: You must pay yourself a reasonable salary based on market rates for your role. A software consultant can't pay themselves $40,000 when the market rate is $150,000. The IRS has data on what people in your industry earn.

Done right, everything above your reasonable salary becomes distributions — escaping self-employment tax. That's where the $20,000-$30,000 in annual savings comes from.

The January 31st Reality Check

By month-end, you should answer "yes" to all of these:

• Can you send a professional invoice in under 2 minutes?
• Do you know exactly how much profit your business made last month?
• Are your business and personal finances completely separate?
• Can prospects find and contact your business online?

If you answered "no" to any of these, you're still playing pretend.

The Proof

Had a client call me four years into his business. $450,000 in revenue, but he felt like he was running a hobby instead of a company.

"Mitchell, I can't even tell prospects my company name without feeling like a fraud."

We spent 30 days fixing his foundation. By June, he closed his first $100,000 contract.

Not because his service got better. Because he finally looked and acted like a real business.

The infrastructure changed everything.

Your Choice

Two paths in front of you:

Path 1: Keep operating like it's 2019. Mixed finances, amateur systems, playing small. In December 2026, you'll have another "decent" year and wonder why you can't break through.

Path 2: Spend January building real infrastructure. In December 2026, you'll be running a company that prospective clients take seriously, the IRS respects, and you're proud to own.

The move from "playing business" to "being in business" happens in 30 days.

But only if you're serious about it.

Until next time,

Mitchell Baldridge, CPA, CFP®

P.S. That business owner who paid $26,000 extra in taxes for four years? He's now an S-Corp and saves $25,000+ every year going forward. The only thing he regrets is waiting.

P.P.S. Want to get this right without spending your next 74 days becoming a tax and bookkeeping expert? Better Bookkeeping handles the infrastructure so you can focus on growth. We'll set up your books and tax planning before March. Book a consultation here if you want the systems without the setup headaches.