Black women are the fastest growing demographic of entrepreneurs in the United States. Despite this statistic, many Black women, and women of color in general, are finding it increasingly challenging to traverse the entrepreneur landscape and secure venture capital funding. How do you create a business that is successful and profitable? More importantly, what is needed to sustain your business and expand? Keisha Credit is a serial entrepreneur that has discovered how to grow and maintain a profitable business. Credit didn’t come from an entrepreneurial background but learned lessons through her many wins and losses. One of her companies recently hit the one-million mark and now she is coaching others on how to grow profitable businesses. Credit sat down with Forbes to discuss what she’s learned along the way, business necessities every founder should consider and how her recent collaboration with Amazon came about.
Janice Gassam: What sparked your desire to start your own business?
Keisha Credit: It really came out of a desire to kind of see what was out there. I had…tapped into entrepreneurship a little bit in college with a house painting company but I had no idea that it was entrepreneurship. I thought it was just a hustle that I was doing in college. I would say honestly it wasn’t even about a year into me running my business, cause I ran it for about nine months, while I was at Microsoft and then I decided to leave…and then I realized, oh wow, you’re an entrepreneur…this word that I had heard before but it didn’t really seem reachable—I was now that. So it was kind of cool to be like, you’re doing this for yourself…then I had to think deeper into what is my true desire, and that’s been providing jobs for people and understanding how to do different things and being able to help others with that, so that’s how I ended up coaching and doing different things of that nature. Each business comes from me really wanting to see what’s out there…is this even a business because just because you have an idea doesn’t necessarily mean it’s a sustainable business.
Gassam: How many businesses do you have?
Credit: So currently, I’m running three. Right now, I’m the CEO of Lucke by Keisha; it’s custom wig-making so that’s my oldest brand…it’s almost seven years old now…it just hit its million-dollar mark, I think last year. So, then I started a company called Ego Centric Beauty, which was an organic hair care line. I sold that company in 2017, so it’s still Black-owned and in the community. One of my good friends runs that now. Then I started Super Lit apparel, which was a Christian t-shirt company and along that journey I had launched this Keisha Credit coaching/consulting thing and every time I launched it, it just wasn’t the right time…people just didn’t understand that Credit was my last name and that I wasn’t doing credit counseling…so it was very hard to market…so finally found something that stuck and now I’m doing Business Bestie, which is my entrepreneurial coaching and business coaching…and then as of this summer, I became CEO of a business that’s in a local business accelerator, Jones & Foster, so I run Paca Y Paca, which is an Artisan candle company that was just getting off the ground.
Gassam: For anyone who is a serial entrepreneur like you and particularly millennials and people from underrepresented backgrounds, many of whom have multiple side hustles: at what point did you realize that you needed an accountant?
Credit: I would say, one thing that I really want the readers to understand is that it’s okay if you don’t realize how bad you need an accountant. Having an accountant is a really big expense, especially when you’re a small business…every single dollar counts. I honestly was five years into entrepreneurship before I was like ‘oh shoot, you actually need this thing.’ I think for most small businesses, it seems like a nice-to-have, like an optional thing to have, but not a requirement to have sustainability…I was interviewing for this really big thing…and they needed all these documents and I did not have one. I was like ‘I don’t even know where to begin with this!’ So, I had to find an accountant. Luckily, I had been in a network of people, so I knew exactly who to reach out to. But the downward spin on that is that I had to spend thousands and thousands of dollars to get my books up to date, to make sure things were right, so that I could get these documents in order to apply for this opportunity. Through that process, I realized how much money I could have saved, had I just had this from the beginning. Now that I’m fully into the understanding of having an accountant…the decisions that I made previously without an accountant probably weren’t the most sound, because they weren’t based off of data, and numerical information. I was pretty much making assumptions and making moves in my business that may or may not have been adding to my bottom line because I couldn’t look at the numbers holistically. As much as I thought I was super good with numbers and kept really good records on my own, I am not an accountant and so the level of detail that an accountant goes into, that’s what matters and that’s how you get the data that helps you make smarter business decisions. Me getting an accountant really opened my eyes to how I was hindering myself by thinking ‘oh, it’s an optional thing,’ when it should really be a requirement for every business.
Gassam: Where did you look to find an accountant? There are so many accountants out there, so how do you know who’s good, and who’s the right fit for you?
Credit: For me, I had already been tapping into different entrepreneurial networks. An accountant was on my radar. It was like, once you get the money to afford this person, then let’s have a list of people that we’ll reach out to. I had kind of been building my repertoire in that way, but had I not been building my repertoire, I honestly would have asked other business owners that I knew that were local to me. I say local to me because in the beginning, it was very important to get hands-on, face-to-face interaction with that person. I leveraged my networks because those are people that I trust…I wanted an accountant that looks like me, that understands me, and that understood the decisions that I needed to make financially for my life to make sense. As an entrepreneur, you are the one that’s sustaining and providing for your household, more than likely, and if your accountant doesn’t understand that…it’s going to be very difficult to come together on decisions. Your accountant really should give you insight into how to read that data. I really wanted someone that resonated with me, looked like me, felt like me…it has to be someone that I can trust because this person is moving your money around—there is a risk factor involved.
Gassam: I know you’re not a certified public accountant, but could you share with the readers what some of the lessons are that you’ve learned since you got an accountant?
Credit: So, the two biggest takeaways from having an accountant: taxes are a much bigger deal than you think. The second biggest takeaway is that doing this in the beginning saves you a ton of money versus doing it later. One of the things that I learned that was super mind-blowing to me was that I did not set up my business in a proper way to maximize my tax shelter. As we’re going through all these documents [my accountant] was like ‘oh my gosh, you’re not an S-Corp yet?’ and I was like ‘no.’ So what an S-Corp is, is a way to categorize your business for tax reasons. You have to be registered with the state as a business…different states have different thresholds. For my state, it’s $10,000. Once your business is making $10,000, you need to be getting out there and paying your taxes. One of the things that’s different is that with an LLC, you’re taxed on your profit. So, it’s about 15% of the profit…if you switch to an S-Corp, you don’t have to pay that 15% on the profit. Instead you’re going to pay self-employment tax. You have to have someone who is an employee at your company, which could be you, in order to qualify to be an S-Corp. So, an S-Corp is really a way to pay the taxes to whoever you’re paying as employees. Once you’re able to transfer to an S-Corp, the amount of tax liability that you have shifts. You’re going to pay more upfront. You’re shifting the amount that you’re required to pay taxes on, however, that is a huge adjustment…businesses should not transfer to an S-Corp if they’re not ready. Meaning, if you’re not ready to pay those taxes, and also be able to have a bookkeeper that is doing this for you, it is very difficult to keep up with the tax amount…yes, with QuickBooks they do a lot of this work for you, but the average entrepreneur is not able to interpret all of this information in a way to pull it together clearly…what’s going to happen is, you’re not paying that tax on your profit anymore but the government is like, ‘you didn’t do this payroll stuff correctly, what’s going on?’ Now you’re a red flag, now you’re a risk…you really want to be ready.
You want to make sure your business is gaining profit, probably making about $10,000 or more, a little bit less depending on how much you want to pay yourself. You need to ask yourself: can your business pay yourself monthly? Do you have a bookkeeper to manage the payments? If you’re currently able to manage your financial statements and they’re correct, then you may be able to do it yourself. Most of us entrepreneurs don’t have the time and the capacity to do that…we parish for a lack of better knowledge. A lot of female and minority business owners have never been exposed to entrepreneurship in a way to know how to do it correctly. For five years, I was doing what I thought was best. I was making money, I was keeping my lights on, I had a team, it was great. However, I was not maximizing my profits in a way that I should have. I probably risked and lost thousands of dollars in taxes and other fees simply because I was not set up in the right way. Until I was able to say, ‘you need an accountant…make that leap’ I would have never been exposed to this sort of thing. When you are growing, it is okay to not do everything yourself. Outsource and hire the people that you need to grow to the level that you want to be at. The level that you want to be at is not a one-person show. If your dream is that you’re doing everything, you’re learning everything, you are keeping yourself small. To scale, you have to have people around you. It’s going to be costly, and you yourself may go broke just because you are the bottom of the totem pole. Your team gets paid first, and then you get the coins that are left. You need to understand that getting these things early, investing in your education early…getting the right coach, getting the right mentor, getting the right classes…so that you’re able to gain this information, that is honestly common knowledge for a lot of entrepreneurs that are in communities that have higher exposure to this type of lifestyle.
Gassam: Aside from an accountant, what are some tools that you can share that have helped your business to run more efficiently?
Credit: There’s a tool called Basecamp. If you have a team and you manage multiple silos of work, Basecamp is a great project management tool that allows you to minimize the need for email, text, and different things so that all of your communication with different vendors, contractors and your immediate team is housed in one place. I’ve been using it for a little while now and it really maximizes our productivity as a team. The second tool I would say, honestly is a really good computer. I just got a new computer and it has literally changed my ability to work. I didn’t realize how having a sucky computer really drains on my productivity because it’s so slow. So, I’m literally wasting time sitting, waiting on a machine when that should have been an investment, I made a while ago. Those would be the two tools I would say, top of mind, I would suggest…the third one is therapy. Entrepreneurship is very hard…and it is very tiring and misunderstood. Being an entrepreneur is one of the most misunderstood lifestyles…it’s very rare, especially in certain communities. If you don’t have an outlet that’s able to channel your personal, your business and everything else, it can be very isolating, very draining and it can seem a lot of times like you can’t do it. I would say, since I’ve been in therapy consistently and making it a part of my business knowledge, my businesses have grown and I have grown as a person…I’m able to be a better leader, make better decisions, have better clarity as I navigate through different landscapes…as an entrepreneur, you are the business…doing that personal work is one of the best tools that you can use.
Gassam: You recently partnered with Amazon to deliver a workshop. How did that partnership come about? How do you think entrepreneurs can best position themselves for those types of partnerships?
Credit: I see myself as a super bold entrepreneur…I like to see opportunities and different gaps and suggest different things. Amazon came to me through a panel last year, and they asked if I could do an ‘Art of the Side Hustle’ panel and I was like ‘yep, sure.’ So they asked me to come back this year, and I was super honored by that but I realized on the panels it’s difficult to deep-dive into certain things…people are always left wanting more…so I was looking at…opportunities to engage with them. There wasn’t many workshops…I asked them, I said I think I could really add more value if I have my own workshop because I’m doing coaching and people always ask for more of that specific targeted information and I can deliver that to you. And of course, the question was ‘well, what’s the budget?’ And I was like, ‘I’m not charging you guys, I just think that this would be a better opportunity to leverage me as a local resource, than just having me sit on a panel.’ I kind of pushed my way and asked and they said yes…I ended up having my own workshop during Startup Week…it sold out in six hours, and it was a packed room…they really realized this is where people gain a lot of value and it was a great learning moment for me to ask for the things that you want…go out there, push for it…I think it really worked out to be mutually beneficial.
This interview has been lightly edited for brevity and clarity. Keisha Credit is not a licensed tax, legal or accounting professional. This interview contains content that should be used for informational purposes only.
