From Sole Proprietorship to Successful S Corp with Denise Cagan

Oct 16, 2023

The Back-Story

Ever felt the cold grip of uncertainty choke your ambitions as a business owner? Denise Cagan, CEO of DCA Virtual Business Support, has walked that path and emerged victorious. In a candid chat, she takes us on her journey of transforming a faltering business into a successful venture within a year’s span. Her secret weapon? A trio of mentors, coaches, and advisors. Denise also recounts her experience of transitioning from a sole proprietorship to an S corp, a costly error that taught her the value of sound knowledge and resources in making substantial business decisions. Learn from her experiences, avoid the pitfalls, and chart your own course to success.

Who is Denise Cagan?

Denise Cagan is the Founder of DCA Virtual Business Support. Her company offers VASuperheros, social media management, graphic design, and website support for growing businesses. Denise Cagan started her first company while still working as a QA Manager at Coca-Cola. After a year of doing both, she moved on to become a full-time business owner at DiCi Services. She grew DiCi for 10 years, selling it in 2011. At that time, Denise established a second and third company. Only one of these remains today, which is her current business. She attributes her success in navigating the business world to her strong operational and management style and being an incredible business advisor. Denise graduated from James Madison University with a BS in Quality Systems Development.

Show Notes

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In This Episode:
[0:00] Intro
[0:28] What’s Denise’s good note?
[4:25] The bad note: What didn’t go as planned?
[8:12] Who are the people in her band?
[16:36] How does she approach getting fans?
[21:19] On learning what she knows
[24:03] What’s exciting in her business right now?
[25:05] Where to find Denise
[25:31] Who would get the most benefit out of working with her?
[28:01] Outro

Transcript

Read Transcript

Tim Melanson: [00:00:00] Hello and welcome to today’s episode of the work at home rock star podcast.

Excited for today’s guest. She is the CEO of DCA virtual business support. And what they do is they help business owners focus on the tasks that only they can do by providing some outsourcing services. So super excited to be rocking out today with Denise Kagan. Hey, Denise, you ready to rock? I

Denise Cagan: am so ready to rock.

Tim Melanson: Perfect. So we always start off here in a good note. Tell me a story of success in your business that we can be inspired by.

Denise Cagan: So, um, 2019 is going to start out not sounding like a success. We ended 2019 in the red. Um, it was a very painful year where we tried. I’m going to say we threw spaghetti against the wall where we had no clue what we were doing in business development.

And we were trying everything from government contracting that sucked up a lot of time to a whole bunch of other things. Turn it around the next year, we wind up in the black. [00:01:00] Okay. So what got us there is really some solid advisor, a solid advisor, mentorship, coaching to get us from that kind of critical spot where I was literally saying, do I really want to stay in business for myself?

To okay, this looks like a formula we can grow and we were actually able to give, um, bonuses to our employees. That year was incredible.

Tim Melanson: Wow. Good job. Well done. And so how was that experience? Like, I’m just not knowing whether you’re going to continue or not.

Denise Cagan: It was, um, anxious, made me anxious. It was scary.

You know, I would, you know, I had one eye on the ads. What kind of job would I take the other eye on the business? And when you’re dividing your attention like that, it can, um, it creates a lot of stress because your brain’s like, which direction are you going in [00:02:00] girl? Yeah,

Tim Melanson: yeah, yeah, exactly. But now did you like feel more confident though, knowing that you had a backup plan or

Denise Cagan: like No, it was creating more stress having to make a decision.

And when I finally did make a decision to get rid of the stress, I was like, nope, I’m this is my business. I’ve been in business for at that point, just under 20 years. It’s now over 20 years. Um, so when I finally made the decision, no, this is what I’m going to do. And I stopped looking at ads. I, my, my, my tension just went away.

Tim Melanson: Yeah. Full steam ahead. Right. What made you decide, like, what was there something that happened that made you decide that, yes, I’m, I’m, I’m moving forward with this business.

Denise Cagan: It’s a lot of the things that remote work brings. It brings that flexibility. Also in 2020, I decided to move my company from [00:03:00] Charlotte, North Carolina to Richmond, Virginia, because, well, my daughter had a baby and I wanted to be where I could watch the grandbaby grow up.

So she’s 3 years old now. And it was, um, I didn’t want to be tied to having to be 2020. At a job from this time to that time that I have been a business owner for so long that I just knew I would struggle with that. So you had

Tim Melanson: a solid

Denise Cagan: why? Oh, yeah, a couple of solid wise, the granddaughter being 1 and not wanting to be tied to that type of structure.

Tim Melanson: Yeah, I have to say this is a very relatable story. I think to most people, because I’ve been in that boat to where things are not going well. And you start looking at those, you know, backup plans, right? But really, when it comes down to it, I think that. You know, those benefits, especially if you’ve gotten a taste of it, right?

It’s tough to go back, I

Denise Cagan: think. Yes. Yeah, I agree. It’s, it’s tough on, on both sides, you know, when you’re [00:04:00] considering that you could have benefits that you don’t actually have to pay for in your business, but then also the, just the structure, you know, and I’ve been in some male dominated industries in the past that I absolutely don’t want to go back to.

No offense. I just don’t want

Tim Melanson: to, no offense taken. I don’t want to go there either. So we’re good on that. So now, okay. You’ve been in business for a long time. So I’m sure that they’re not everything has gone as planned. You’ve hit some bad notes. So tell me, can you share something that didn’t go as planned and what we can learn from that?

Denise Cagan: Yes, absolutely. So it was. The year that I transitioned the company from a sole proprietorship to an S corp, which was probably only a year, well, it’s, it was actually my first company. Um, when I did that, it was probably a year or two into it. And I did my own taxes cause I had been doing it as a S corp or as a sole proprietor.

That’s just a schedule C, not a big deal, but guess what? [00:05:00] There is a whole lot of things you have to take into consideration when you are filing differently, like, as LLC or escort, because it’s passed through entity. And now I understand that, though. I still don’t think I’m qualified to do my own taxes. So I don’t do them any longer because, uh, after about 3000 dollars worth of owed money to the IRS and some penalties.

Yeah, that was cringe worthy. Absolutely.

Tim Melanson: Wow. Yeah. Uh, I’ve, I’ve heard the same thing as well. Like my accountant and I, I ask him quite often about that kind of stuff. Cause we’re, we’re actually in the point. I’m not actually incorporated. I’m self employed and I’ve asked him a few times to, you know, when, cause I want to incorporate, like, I feel like it’s like a thing.

Right. And he’s like, no, I don’t think you’re, I don’t think you’re quite ready yet. And, It’s going to cost you a boatload more money in filing taxes. So really, are you going to save money on doing this? He’s like, you know, I’ll keep an eye on your numbers and [00:06:00] we’ll see. So, you know, I may be able to do it this year, but, but it’s, there’s a lot of things that you don’t necessarily think about.

It’s not the same as what you were doing before. So that’s good information as well. Now, um, what was your reasoning for incorporating?

Denise Cagan: Uh, at that time, so my 1st company that was more than 20 years ago, I owned it for 20 years and then sold it, uh, was a cleaning company. And so I had people in other people’s homes and businesses.

So, the main reason was liability. You know, the S corp is a separate entity from Denise and so it made sense. And then this company is as corp as well. I. Mainly, because I’m just familiar with that

Tim Melanson: structure. Okay. Yeah. Yeah. Because that’s the thing is if you have very limited liability to start with and there’s not a whole lot of reasons to incorporate as I learned from my accountants.

Yes. So, uh, so that’s one of those things where you, you get the advice from the, [00:07:00] from the accountant. So in your case, then you really just. Work familiar, familiar with it and just went for it. Right. Absolutely. But it wouldn’t necessarily be recommended for all businesses to do that. Right.

Denise Cagan: Well, keep in mind, I’m not a tax specialist or lawyer, but no, uh, I think there are definitely businesses.

If you are, if you work for yourself, you have no employees and you work directly to, with your clients. I think a social. Proprietorship could be possible, and it depends probably on what you do. If you’re doing something where you’re financially in their records and, you know, have access to that type of information, you might want to have that layer of protection by incorporating.

So, you know, and again, speak to. Attorneys and tax advisors on tax advisors will give you the. The structure for financial, you know, how it will impact you financially and for your taxes. [00:08:00] And of course, the lawyer for the legal entity structure.

Tim Melanson: Yeah, absolutely. Definitely recommended that. And so that leads us right into the next topic, which is talking about your band.

So tell me about, yeah, tell me about that. Who do you, who have you got around

Denise Cagan: you? So, I have about, um, 16 people in the band right now. So very exciting. We are experiencing a period of growth, which is amazing. It’s been going on for quite a while. And we’ve been really fortunate that we have had steady growth over the years.

I believe when I incorporated this company in 2011, I brought my 1st team member on in 2013. and so we’ve just gone up from there. The, um, some of the band members include my operations manager who started out very, very part time. She actually worked with me at my other company and now she works with me here.

She’s been with me at least 8 years, maybe 10, but anyways, pretty quite a quite a bit of time. And so she’s [00:09:00] moved up through the ranks. That’s another success story. We’ve also been able to promote another team member to a team leader. And then the rest of the band are the supporting members. My, you know, superhero and the social media coordinators, my design and technical, uh, design and technical specialists.

So that’s who’s on my team.

Tim Melanson: So now what, uh, what do you look for when you’re hiring someone to get into your band? What, what’s the main things you’re looking for?

Denise Cagan: So, first of all, um, we, we look for, you know, the skills. Okay? Skills are, are the very first thing that we look for. Are they able to do the job that we need them to do?

Then we look at cultural fit. We have an extremely flexible, semi-autonomous schedule, and what that means is if somebody says, I want 20 hours and I want to work from 8 a. m. to 12 p. m. I already know they’re not a fit [00:10:00] because that’s not how we work. Okay. Um, we have some parameters within their booth where they need to schedule.

Like, for instance, if they’re doing forward facing communications for 1 of our clients as their executive assistant, it needs to mirror their business hours. Okay. But that’s fairly loose. Could be 7 a. m. to 7 p. m. roughly. Okay. Yeah, but it’s not going to be, but in a seat for 3 hours or 4 hours a day. So, so I look for that type of cultural fit.

Tim Melanson: Okay. And, uh, do you have like a, like an interview process that you go through or do you just test and stuff like that? And so how does that all work?

Denise Cagan: So we have. Revised our interview process many, many times, um, and that also. From from with help from our advisor, our process right now looks like so an initial screening, a phone interview, a zoom interview, a 3 hour working interview, a background check, and then the offer of employment that we do the new [00:11:00] higher orientation.

Our new hire orientation technically lasts over a period of 30 days, though. The majority of it is done. Like there’s like huge blocks on the first two days. And then the majority of it is finished in the first two weeks. There’s just a few other steps going on for the rest

Tim Melanson: of the month. Wow. So that’s really in depth.

You’ve got like a real good process in place. Has that always been the case?

Denise Cagan: I know.

Tim Melanson: What’s the difference between before and

Denise Cagan: now? So, when I started up the company, um, as I said, the 1st, couple of people on the team, I hired my daughter, which is 1 of the only family members that I’ve hired. Um, just simply because I’m of the mind that if you’re not able to fire them, you shouldn’t hire them.

Good. A lot of people gets. Duck sometimes with underperforming family members and don’t know what to do with them. So, uh, my daughter is a great employee and then Dan, who came back from the other [00:12:00] company. Okay. So initially we started out very much like warm circles, you know, Oh, your sister’s looking for a job.

Okay, great. Let me have a quick conversation with her. And that’s how it worked. Uh, then we started adding in well, you know what I’m doing all this work going through these resumes when we would do an indeed add. It’s not uncommon right now for me to get a 1000 applications. So, we’ve had to set up criteria things, like, um, for instance, we aren’t registered in every single state.

So we filter. We filter we only the ones the states that we are registered in are the only ones that come to my inbox and then we, we, we started doing the phone interview was 1 of the 1st things we enacted and then it evolved. We had a few other iterations over time. I will say this the book who by Jeffrey smart every business owner should read that.

Tim Melanson: Love it. I love book recommendations. Good stuff. Absolutely. Is [00:13:00] it on audiobook too?

Denise Cagan: I wouldn’t be surprised. Yes. But it really talks about how the selection of, of your people and how, what you should be looking for and how to not get, you know, how. Some people will ask, you know, well, what’s the most creative thing you’ve done when it has nothing to do with the job.

So it really talks about distilling it down to actually defining what this person does with outcomes. What is the outcome of this position? And what do you expect this role to do? And it, if you have that conversation with that person and you are not 90 percent confident they have, are able to produce that outcome, they should not pass on to you into the next step.

Hey,

Tim Melanson: Rockstar. I hope you’re enjoying this episode of the Work at Home Rockstar podcast. If you didn’t know already, my business is Creative Crew Agency. We build websites. Now let’s talk about your website for a minute. Most people realize that at this point. day and age, we need a website, [00:14:00] but we don’t really know what the website is supposed to do.

And sometimes you’ll just go and build a website for the sake of building a website. What I do is I make sure that your website actually accomplishes a goal. Now, there are three main goals. To most websites, number one is to provide information and build credibility. Number two is to schedule some sort of appointment and get them on onto a sales call.

Number three is to sell something like an e commerce site. Now, when you’re setting your website, you have to be very mindful that the visitor doesn’t know what to do. And so you have to provide them with a roadmap that leads them down a path to wherever you want them to go on my website. I want them to be on a free consultation.

So that’s why when you go to creativecrewagency. com, you’ll see information about scheduling a free consultation. Now for you, though, I’m going to provide you with an extra link so that you can get your free website audit. Go to creativecrewagency. com forward slash free website audit. And schedule an audit with me and I’ll go through your website live [00:15:00] and determine what we can do to improve your conversions and make sure that you’re getting the business from your website.

Go to creative crew agency. com and and, and a lot of this too comes down to the business owner also figuring out exactly what they need as well. Cause there’s a lot of, I find that there’s a lot of. Miscommunication between the person who’s doing the hire and then the hiree and it’s not necessarily that they’re a bad hire.

It’s that you didn’t really have that job. Figure it out yet, I guess, right?

Denise Cagan: That’s the 1st step of the process is making sure that you’re conveying what you’re looking for in your expectations in your. In your job ad, not just the. You know, job description, but the job ad is usually worded slightly differently.

Um, and it’s also a marketing piece. A lot of people don’t understand that you have to market your positions. You have to make people want to come work for you. So, um, enticing people to [00:16:00] respond to that, but in a way that’s responsible, that also tells them, Hey, this is, we, we’re a great company, but this is why you should work for us.

And this is what we expect in return. Okay, and this is how you’ll be compensated. So all those things, all those pieces need to be in there. As a matter of fact, there’s several. Um, states and regions that countries that require you with that pay transparency to have those rates in there. So, even if you’re not in a location that does.

You really should.

Tim Melanson: Yeah, I agree. So let’s move on to a little bit to that marketing piece of it. You know, how do you go out there and get fans and get people to like your business and be your customers and be here and even work for you too.

Denise Cagan: So podcasts are clearly one of the. Pieces, make sure that you’re out there and that you’re talking about your business, whether that’s in blogs and we, we do blogs, we do podcasts.

Um, I do have a podcast of my own that focuses on female business ownership and then [00:17:00] also in your networking circles in, in your area. So I’m also on the board of national association of women, business owners in my region. So that’s. You know, that’s part of the piece being consistent on your social media.

You don’t have to be an expert necessarily. But if you post a message. Once a month, and then you forget next month, and then maybe it’s three months go by. Guess what? People aren’t seeing you consistency and consistently and the algorithms work against you. So having that consistent posting out there, you can always get better.

You can always learn how to tell your story better. You can always learn how to tweak your verbiage to make it more compelling or to make people engage. But first of all, start by being consistent. Absolutely.

Tim Melanson: Yeah, I agree, because you will get better over time. And I think that there’s a lot of people that get kind of stuck because they think they should be perfect at [00:18:00] first.

Right. Mm hmm. And it’s probably better to just do to be perfect. Right.

Denise Cagan: I do, especially for small business owners. I agree. I mean, if you’re the Microsoft’s of the world, yes, you should have copy editors on site and should not, you know, let anything go out with a mistake, but for small businesses, don’t sweat it.

It’s a digital age. You can switch out the thing that, you know, spelled their T H E I R instead of T H E R E. Not a big deal.

Tim Melanson: Yep, exactly. And, and like you say, you, you will get better over time. And, uh, I guess your audience will grow with you as well, because when you’re first starting, you’ve got zero people on your, on your page, you just started, right?

So who cares if you put out something that’s, you know, not that good because there’s nobody even looking at it yet. But by the time you get to the Microsoft level, you’ve got this huge audience and you’re also much better. Right.

Denise Cagan: Agreed. Agreed. I think the other [00:19:00] piece that I would add to the marketing is build your tribe.

Okay. Figure out who you’re, if you do a net promoter score, that’ll tell you who your tribe is. Those who raid you at nine and 10 all the time. But if not figure out who it is, that’s willing to sing your praises. We have clients that do video testimonials for us. They go on YouTube when I’m doing sales, I’ll send a link, Hey, this is somebody who we do a similar type work for check it out.

You use that in your sales process, not just your marketing, but you can also use it in your marketing and on your website. Um, and then make sure you’re returning the favor. It has to be a two way thing.

Tim Melanson: And so how would you return the favor, especially if someone wants to give you like a video testimonial?

Denise Cagan: So it could be something like. We’ve had clients give us video testimonials, then we turn around and say, can we do a feature article on you? Okay. And it might be right in advance of a big event that they’re doing. So we’re doing that. I mean, it’s helping us, but [00:20:00] we’re also doing them a favor by helping, you know, get their information out.

Liking them on social media, following their things, sharing at times we have, we have a very specific strategy about sharing partner posts and partners could be somebody who’s been a web podcast guest. It could be somebody who’s podcast I’ve been on. It could be a client. It could be somebody that’s on the novel board with me, or 1 of my Goldman Sachs alumni that I’m also in the group with.

So we, we have a definite strategy for for partner shares. I

Tim Melanson: love it. Yeah. And it’s a win win for everybody too, right? I mean, when you, when you can and it’s so low cost as well, which is the other part of it. This is all social media. Yeah, you’re right. It does take time. Um, however, you, you would assume you’d have some time blocked out for marketing anyway.

I hope so. Exactly. It’s not like it used to be. Yeah. It’s not like it used to be where you had to spend, you know, tens [00:21:00] of thousands of dollars really to do it. Massive marketing campaigns and billboards and all that stuff. Now it’s social media and you know, they’ve got social media, you’ve got social media, you can, you can support each other.

Right. Absolutely. So now, uh, you know, over the years, you’ve probably had many different sources where you learn. I know you’ve mentioned books already and podcasts, but how is it that you get. To know everything, you know, right now, where did you learn it?

Denise Cagan: So, first of all, massive amount of networking and just know it, getting to know different people.

Part of that includes, um, you know, asking them about what, what’s their biggest lesson in business. So, so some of it’s just 1 on 1, um, I’ve had an opportunity through another women’s organization. I belong to to participate in a mastermind groups. So I’ve done mastermind groups and then, um, coaching and.

[00:22:00] Advisors, I had an amazing advisor for about 3 years and recently we, we split ways, not because of anything bad. I just felt like I was at a point where I probably need to do something just a little bit differently than what I have been doing it. She created incredible value for the company. She was 1 of the ones who helped me with getting out of the.

The red where I was, she also helped me with some of the revisions on our hiring process, got me to a point where I felt comfortable enough to make the remaining revisions on my own. And also got me to pull out and actually act like a CEO, which was. That’s why I decided to change the title from president to

Tim Melanson: CEO.

Love it. We talked about that before the interview. Cool. Cool. So she’s definitely giving you some confidence boosts then.

Denise Cagan: Yes, definitely.

Tim Melanson: Straight on. So, uh, have you ever been like, [00:23:00] uh, scared to hire a coach or an advisor and like that? Or did that kind of come natural for you?

Denise Cagan: Scared? No. No, but I think that most people look at.

Okay, well, I can get this person and go in this mastermind group or do this self learning and it cost me 500 dollars. And then this coach over here, which I’m not ashamed to say my coach was about to my advisor was about 2000 a month. That’s not a cheap ticket. Okay. And I worked with her for 3 years. So you can do the math.

Um, but the value that was created. The value is so very different. I would not, as a matter of fact, I would have bought that self learning module and done two of them, maybe, maybe one and a half. And I wouldn’t have done it. That’s, I know that that’s not my style. So understanding your style, but also understanding what the return on investment could be from an advisor or a

Tim Melanson: coach.

Okay, great. So now it’s time for your guest solo. So tell me [00:24:00] what is exciting in your business right now.

Denise Cagan: A whole bunch of things, so we recently started well, maybe not all that recently within the last 6 months, we started offering website audits. So they’re, they’re tiered that you can do the, um, just user experience.

Then you can you do the SEO audit that you could do the technical SEO audit. So we have started doing those for people, mainly because folks who know, they need website work. Don’t always know where to start, or if they need a whole new website, or can you just do a couple of things to fix it? So it’s been really helpful for our clients.

We also work a little bit with other agencies that do marketing and do this for them. So we we’ve been doing that and next year we should have coming up some consulting coming from us, which is probably my evolution, my next evolution in my career. That’s awesome.

Tim Melanson: So now [00:25:00] how does somebody go about getting, uh, you know, some of your services to, how do they find you?

Denise Cagan: Sure. They can find us on the web, dcavirtual. com. We shortened the business name, dcavirtual. com. I’m on LinkedIn, Denise Kagan with a C, not a K. And you can of course email me always. Um, and that’s easiest to do probably through the website with the contact form.

Tim Melanson: Now, and one more question. So what would be the client that would get the most benefit from working with you?

Denise Cagan: So usually not a startup. Okay. Typically startups, one don’t have the budget and sometimes they haven’t quite sorted out what they need yet. Um, we are really good at helping people see. You know, like past the, well, I need this done this done, but do you have a system for this? So we’re good at that. I would say the entrepreneur who’s found themselves growing.

Okay. You’re getting ready to hire your 1st person, or maybe you have your 1st, [00:26:00] 1, people and. You are growing, and you are struggling with your own things. So, an executive assistant makes sense because that executive assistant can help you manage your inbox schedule calls for you. And there’s several other things we track things and see, we do some sales support, uh, document creation, and follow up with people that you need information back for to do your work.

So there’s a, there. They’re usually in a growing capacity capacity where they’re needing to either outsource some things or ready to bring in somebody that’s more of a, a permanent partner, but on a part time basis.

Tim Melanson: Okay, so it could be somebody who is just starting to delegate and to and to hire some people.

Or somebody who has already been doing some delegating and they need to do some more of that. Yes. [00:27:00] Awesome. And you guys can provide lots of different types of services, like VA’s and stuff like that. What else? What else do you have

Denise Cagan: executive assistance? Um, that’s. Sometimes it’s called via as well, and then we also have social media coordinators and we do website work as mentioned a graphic design.

We’re doing some actual backfilling of graphic design for another design firm right now, because they have overflow. So that’s largely what we do.

Tim Melanson: Awesome. Cool. And so give us the website again. I’m sorry. Give us, give us your website again.

Denise Cagan: Oh, sure. Sorry. I misunderstood what you said. DCA virtual. com DCA

Tim Melanson: virtual.

com. Thank you so much, Denise, for rocking it with me today. That’s been a lot of fun.

Denise Cagan: It’s been great. Thank you, Tim.

Tim Melanson: And to the listeners, make sure you subscribe, rate, and comment. And we’ll see you next time on the work at home rockstar podcast.

Denise Cagan: Thanks for listening to learn how you can become a work at home rockstar or [00:28:00] become a better one.

Head on over to work at home. rockstar. com today.

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