[00:00:00]
We've made a lot of progress as a society in many of the areas that we needed to in the last few hundred years. But one thing that has not changed enough is money. If we want to be able to tip the scales towards the favor of marginalized people, we need to understand the secrets to making money in small business.
The more we talk about money and the secret. That usually stay at the golf club, the more likely we are to be able to make money. My mission is to get more money into the hands of good people, specifically good business people like you. This is Money Secrets, the place to learn about the money secrets of successful small business owners.
Because I believe small business can change the world, and in order to do that, we need to be making lots of money. Let's go.
This podcast episode was recorded on the lands of the Wie people of the KO nation, and I'd like to acknowledge them as the traditional owners and [00:01:00] custodians of this land and water that I live. Work and play on. I'd like to pay respects to elders both past and present. And note that sovereignty has never been seeded.
This always was and always will be. Aboriginal and Torres Strait Islander land.
Hello, listener. We have already covered a lot of ground on the Money Secrets Podcast. And my podcast editor, Kira and I are really proud of what we have created so far. I hope you are really enjoying it. Today we're gonna do something a little bit different.
This is going to be a special remix edition of Money Secrets. The checklist episode, we've pulled together some of our favorite and most practical money secret shared so far. So you can think about this episode as your highlight reel, your business Money mood board. This might be a really cool one to share with your friends as well if you would like them to listen to the Money Secrets podcast. Each secret is a bite-sized gem, designed to spark something that might be a shift in how you are thinking. It could be an actual move with your money. Or it could be just a little bit of motivation and hopefully this one little remix is gonna help you focus on where you wanna put your energy. So you might be folding laundry, you might be out on a walk. You might be getting pulled along by your dog like I usually am when I'm listening to podcasts. Or you might be working away. Think of this as a little refresher to keep your money game strong. Grab a pen, nod along, or just listen and soak it all in. Let's get into it now.
So first on the Money Secrets checklist is money, thoughts.
Your money behaviors will be dictated by the thoughts and feelings that you have about money. One of the best things that you can do for growing your money and your bank account is to be able to understand what thoughts you are having about money. What you might like to do is think back on the last seven days in your business or perhaps the last month, and try to think about what thoughts seem to come into my mind a lot about money during that time.
Sometimes it can be hard to know what our money thoughts are, so another way of coming at this might be to look back at how you have behaved with money in the last week or the last month. What are the ways that you've behaved that have been surprising to you? What are the ways that you've behaved that have been helpful?
What are the ways that you've behaved in the last week or month about money that have not been helpful? And I can tell you that that stretches back to the thought that you are have about money. Try to understand what thoughts you are having about money that are leading to the behaviors that are happening in your business that are not serving you.
So whenever we think about something as. Being either scary, overwhelming, boring or hard. Our brain [00:04:00] will do lots of work to convince us that we shouldn't do that thing. Now, putting up your price or sending an email to a client to ask them to pay an overdue invoice, those things are not going to kill you.
The primitive part of your brain doesn't understand that it perceives that there is some kind of discomfort hardness. Or potential for danger, and it will tell you all the reasons you shouldn't do that. But it is possible to be in control of those thoughts, uncover what those money thoughts are that are leading the to those behaviors.
Then to think about what behavior you would like to be doing and try to work out what kind of thought might lead you to that behavior. And then the next time the old money thought comes up, you can try to also think the new money thought that's there. I'm not saying that you are going to be able to transform your money thoughts just with one thought, but what I am saying is that it is possible to change the way that you think about money, which will change the way that you feel about money, and that will also change the way that you behave with money. So if you don't love the way you are behaving with money, think about how you are thinking about money and see what you can do there.
Number two, a little money, truth. Money does actually grow on trees and anywhere else. You put your efforts. This idea that money doesn't grow on trees is really living in the past.
There is so much money in the world today, we don't even have to make it. All we need to do is go and ask for it. So if we keep believing this idea that money doesn't grow on trees, we are going to use that every time we get a rejection from our customers. Telling us that our prices are too high every time we see something that we want to purchase.
You might have this thought in your mind that money doesn't grow on trees, and if you use that sentence in your mind as a way of stopping yourself from taking the next step or. Self-sabotaging your efforts to [00:06:00] make money or to invest money in really great things, you are doing yourself a disservice if you think about all of the different ideas out there that have been turned into businesses. If you think about all of the ways that you can improve the lives of your clients or improve the businesses of your clients, money grows from wherever it is that I am able to put my efforts and energy.
Number three, let's talk about revenue. Profit, and more importantly, cash flow. If I'm trying to focus on getting to know my numbers, my finances, my profitability more, can I please focus on revenue, which is how much you can sell your products and services for your profit, which is the difference between how much you sell things for and what the costs are in your business. And the third thing is your cash flow. So how much money is sitting in your bank account? How long would that give you to survive? Is there more [00:07:00] coming in than going out? And if there isn't, I want you to be prioritizing your energy on how can I either get my clients to pay me faster or how can I have more money coming into my.
Bank accounts through the month. If you're a service provider and you send all of your invoices out on the 30th of the month, that means that you are only giving your clients an opportunity to pay you then, right? And you'll be waiting for all of your clients to pay you at the same time as opposed to invoicing your clients on any date of the month.
So you could do that in batches. You might have two invoice. Batches where you have invoices going on the 15th and the end of the month. If you are an e-commerce business, you'll already have money dropping into your account, hopefully on a daily basis. So the way that I'm doing it works really well for me where I take payment from my clients in advance via subscription, except for my really long term, very trusted CFO clients who pay me on [00:08:00] invoice.
That is something that I've built up to over the last. 15 years in business because I had some really unpleasant bad payers early on in my business. That caused me a huge amount of financial stress, and I decided that I just did not want that to happen again. And if that meant that I sacrificed working with clients who weren't interested in working like that, I was okay with it. I haven't had a client not pay me now, since that occurred, oh, maybe 12 years ago. So try to focus your efforts on bringing revenue into your business that is profitable and making sure that you are getting the money into your bank account as quickly as you can. And that you are managing the money well when it gets there, probably the most important number in your business right now is how much money is coming in and out of my business bank account each month, and do I have a plan and a system for managing my money?
I'm sure you've heard the statistic that poor cashflow is the number one reason why businesses close, and I can tell you from seeing the books of. Thousands of small businesses that you can have a really profitable business that has revenue that is growing and you can lose your business because you are not managing your cash flow.
I have seen this so many times, and the operators are good people, they're good operators. They're just not putting enough focus on the things that really matter, which is getting money into your bank account.
Number four. Please pay yourself. Do not listen to people telling you not to pay yourself from your small business.
When we don't pay ourselves from our business, we make our business weak. We build a situation or conditions or an environment where our business simply does not have the money to be able to pay us. When you don't have to pay yourself from your business, you [00:10:00] can actually do things like under price, not bring in enough revenue, overspend on your expenses, and you won't even know that you are doing these things because you are not paying yourself a wage.
It almost feels like your business has kind of like play money, right? So one of the things that we can do to make our business strong is pay ourselves. When we, from day one, price our products and services to be able to actually have enough profit, enough buffer to actually pay us a wage, we are always pricing at a high enough amount.
Now, when you don't pay yourself, maybe your thought is. Okay. In the future, somehow magically I'll be able to pay myself, but future use problem is actually current use problem that you are not dealing with. So when you set your business up in a way that you allow it to not need to pay you a wage, you are making it weak.
You are not pricing enough for your products and services, you are overspending because you can. And that doesn't necessarily mean that you are growing a strong business. Now, I'm sure lots of people will disagree with me on this one, and like anything, it's nuanced, right? So there are some businesses where, or some business models where you really do need to invest all of your profits into building your business and you don't have the funds.
To pay a wage for yourself at the start, but the percentage of small businesses that are in that business model is so small. If you are a service-based business of any kind, you should be paying yourself pretty much from day one. If you are a product-based business, you may find that your business model.
Means that you may not be able to pay yourself for the first year. However, I encourage you to consider what would I need to do to be able to pay myself a wage from six months in my business? What are the things that I would need to do? How would I need to price my products and services? How many would I need to be selling per week to be able to cover my wage?
Are there expenses that I'm spending money on just because I can and not because I should. So am I investing in the sort of things that are building my business for the long term? Am I investing in shiny things that actually aren't getting me anywhere just because the money is sitting in my bank?
There is nothing more clarifying about whether or not you should be investing money in something than seeing that there isn't money in your bank account to buy it.
Number five. You guys love this one. You ready? It is not your job to be affordable. You simply do not have the economies of scale that a big company has, which is what allows them to be inadvertent, commas, affordable. It is your job as a business owner to be valuable. So understanding. What your ideal client is looking for? How can you improve their life? How can you improve their business? How can you make their problems go away? Or how can you meet the desires that they have? How can you be the lighthouse in the sea of other providers?
Or the other e-commerce businesses that are selling the same thing. How can you be the person that reaches out of the screen and says to your client, I get you.
Here's another one Worth listening to. Number six, pricing. Now there are some mathematics that we need to do in order to understand what our pricing needs to be, and the best way to go about that is to consider how much do I wanna pay myself? What will my expenses be, and therefore. What does my revenue need to be for the year? Then you can start to think about how you wanna earn your revenue, and you can come up with a price or a package or some kind of system that you are going to use to bring money into your business. How many things will I be selling and what will I be selling them for? But there's a lot more to pricing than just the mathematics. Pricing is that area of business that brings up the most feelings. We have a lot of thoughts and a lot of feelings about money, and so there's a lot of work we need to do to unpack all of these different things that we've been told our whole lives about.
Money, if we wanna be able to make money through our businesses, making sure that you are in a healthy mindset when it comes to money, that you see money as a tool that you can use in whatever way you choose. Then there's also building demand and making sure that you have product market fit. So product market fit is a fancy way of saying the people want to buy what you've got and they wanna pay the amount that you wanna charge. So it's all well and good for me to talk about how much we need to be increasing our prices. And I say that with a lot of experience working with small business owners who are undercharging. If we wanna be able to charge the premium prices that I think we want to, there needs to be a demand for our services and products, and we build demand through our own branding and marketing.
Sometimes we enter an industry or we offer a product or service that already has a lot of in-built demand. But one of the best things that we can do if we are wanting to charge a premium price is to really understand. What is the value that I'm creating here? How am I making somebody's life or business better through delivering this product or service?
And then we need to get really good at communicating that because it's one thing to be amazing at what you do, and it's a whole nother thing for people to actually know about you.
Ad
Are you a female or lgbtqia a plus small business owner who wants. To make more money, but you also want to do that while changing the world. Good Money Club is the place for you. It is a six month program experience and membership where you'll get everything you need to build your bank account, grow your business, and increase your impact.
We have no more than 40 members, so you get lots of really tailored and focused attention from me, and the doors are open right now, so head to my website, peach. bm.com au to find out all about Good Money Club. And if you are a good egg, a business owner who really wants to do great things for the world and make money and pay yourself more, good money Club is for you. Can't wait to meet you in there.
And another pricing reminder coming your way here is number seven. Under pricing, how are you going to hit your revenue goal? Break your income or revenue goal down into the two levers that are going to get you there, price and volume, or in other words, how much will you charge? How many will you sell? Your price sets the perception of quality, and if you want to bring in high quality clients who value what you do. You need to show them how valuable your products and prices are with the price that you put on them. When our price is set too low, it gives our prospective client the perception that we are low quality or inexperienced.
So what we think we are doing is providing a really affordable or accessible price for our product or service. But in fact, what we're actually doing is setting the perception that our product or service is poor quality. Your price. Is the financial decision that you make every day in your business that has the biggest impact on your bank account.
If you are wanting to attract high quality clients, which who isn't? You need your prices to reflect the fact that you are offering a shit hot product or service that is full of value, high quality, and backed by an experienced business owner. Savvy clients understand what good quality costs. Unless you have done some work on your money psychology and your money making, there's a very high chance that you are undercharging.
I want you to sticky note this one, number eight, when to spend money to make money and when not to spend money. To make money.
Now, when you are six to 12 months in your business, you actually need to be working on optimizing your website. So making sure that when people come to your website that they do the thing you [00:19:00] want them to do.
That might be that you want them to book a discovery call. It might be that you want them to buy something, you know straight. Into their cart if you're an e-commerce business. And the other thing that we need to be doing as a small business owner in those early stages is working out who is the ideal client for my business?
What sort of business or individual am I wanting to work with? And how do I position myself to get their attention? Now, if you are spending your very valuable money on ads to get people to your website, but you haven't yet worked out who your ideal client is, exactly what you want to do for them, and you haven't.
Worked out yet whether your website is actually causing them to book the discovery call or buy the thing, then spending money on ads is actually going to be a big waste of your money. And I see a lot of business owners turning to ads when things aren't going well. Now let's flip it to when spending money [00:20:00] on advertising.
Is a great way of spending money to make money. So if you've been in business for a longer than six to 12 months, or you started your business as an already experienced business owner or a very experienced marketer, and you've already optimised your website and you are converting from visitor to customer at a really nice rate, it's very broad, but we'd wanna see that at least at 2% of your visitors. So you've already optimised that. You've already worked out exactly who your ideal client is, exactly what it is that you want to do for them, exactly what your price point is going to be. So now when you turn the ads on, you are so much more likely to get the right people looking for the right product or service.
Coming to your website and buying that is one of those instances where. Spending money will help you to make money if it's done right in the first couple of years of our business. The thing that we have the most of is time, and I actually think that it's a really crucial and amazing opportunity for business owners to be able to use that time that they have.
Before they hae a big client list and emails, endless emails that need to be answered and all of the other things that come along with owning a business. Because we have that excess of time, we can actually invest all of our time into skill building, training, and actually doing the thing, picking up the phone and calling a prospective client or.
Sending an email to, you know, the person you met last week, or working out how to market yourself on Instagram. You've got time to invest in all of those things. And whilst yes, you could also, or instead actually invest money in those things, there's no guarantee that those [00:22:00] things are going to work because you haven't tested them yet.
When you move to later in your business. So maybe once you've been in business for five years, or maybe even longer, you'll find that your time is actually more expensive than your money. This is a concept that can be a little bit hard to get your head around, especially if you are new to business. But the bigger your business gets, the more expensive your time becomes. So that's when your time becomes more expensive than your money. That is also a really great time to invest money to make money. So hopefully me pulling out these examples has helped you see that while sometimes spending money can help us to make money when we spend it on the right thing. To say that you have to spend money to make money is factually incorrect, and it's often being said by somebody who is trying to get you to buy something from them.
So next time you see this in somebody's marketing, just take a pause and consider how much certainty do I have that this particular investment is going to make me money? If I do think it's going to make me money, then what sort of return am I looking for? If I invest a hundred dollars, am I looking to have $500 return?
If I invest $2,000, am I looking for a $20,000 return? What is the return that I'm hoping to get from this investment? And is this a good use of either my time or my money?
Number nine, back yourself. Trusting your financial decisions is going to get you so much further in your business. I believe that it is more important to back your financial decisions than it is to make the right financial decisions. Here's why we make decisions every single day. As we just discussed, we are constantly making decisions as business [00:24:00] owners, and this is part of why a lot of us, including myself, often find it hard to sleep because we have so many banked up decisions that we may not have even made from the previous day that then get added on top of the next day. So because we are making so many financial decisions, sometimes of course. We're gonna get it wrong. This is why I think it's more important to back yourself than it is to make the right decision. So first of all, we need to accept that we are not always going to make the best decisions. This can be about not having had enough sleep, not being in a great mood, having something un. Fortunate happened on the way to the office. It could be about reading something that puts you into a bad state of mind. It could be that you heard a song that you love and that made you feel overly optimistic, and so you went about making a decision with an overly optimistic mindset. So there are. So many reasons why we are not gonna always make great financial decisions. But as soon as we start backtracking and stepping back on and rethinking and re-strategizing every single decision we make, not only have we now wasted. All of the time that it took us to get to the decision in the first place, but now we're expending extra energy, extra time, extra resources to backtrack, go back and forth. Oh, should I have, shouldn't I have, what was that decision I made? Did I make the right decision? Was that the best approach? Oh, now I think maybe I wanna unravel what I've done and I want to go back and I wanna make a completely different decision. What happens when we do that is we've now, as I said, invested all this extra.
Extra energy and resource and time into this same decision, but we've also taught ourselves not to trust ourselves by choosing not to listen to the previous version of ourselves that said, Hey, the right decision is X, Y, and Z. We are now. Saying, Hey, look, fee. I know that past you made this decision of X, Y, and Z two weeks ago, but right now, from where I'm sitting, I just don't think it's the right decision anymore. So now I'm gonna backtrack. Next time you are trying to make a decision, you're also going to struggle to trust yourself. So what we really want do is back our decisions. What does that look like? It looks like backing yourself in. It looks like saying, you know what? On the day that I made this decision with the information that I had available, the gut instinct that I listened to, the intuition that I know I can call on, I listened to all of that, and this was the decision I made.
I think that I made the right decision with the information that I had. Has it turned out to be the right decision? Perhaps not, but backing myself says that. I will say, look, the past version of me invested time and energy in making this decision, so I'm gonna back it. I'm gonna take it all the way through.
I'm actually, rather than going to flip Floop around about whether this was or wasn't the right decision. Instead I'm going to take this as an opportunity to look at it and say, cool. What was the information that I had when I made the decision, and what was I hoping would happen? So has something changed between now and then?
Is more information available? Was my expectation of the result of this decision out of order? Did I need to do a little bit more research? Is there information that I've learned through making this decision This. Time that I can actually apply next time I'm trying to make a similar decision. Now, what we wanna do, particularly as females, is we need to learn to trust ourselves with money. We need to learn to be able to listen to our gut instinct, our intuition, and the logical part of our brain when we are trying to make decisions and back ourselves. When we trust that we make great decisions, instead of getting tied up in guilt or shame or embarrassment or annoyance, or just delay through every single decision we make, we are able to speed the process up by putting a layer over the top of the decision that says, Hey, I trust myself.
I trust that I'm going to make the best decision that I can in this moment, and I'm not going to look at this in the future and feel any embarrassment, shame, or annoyance. What I'm going to do is look at this as a learning moment that says, this is the information that I had. This is the assumptions that I made.
This is the outcome I was hoping for. This is the outcome that I had, and we're going to apply that new learning next time we make a financial decision, rather than what I cease. So many women doing, including myself, is we make a decision. Then the next day, the next week, the next year, whatever, we look at that decision and say, no, that was wrong.
I'm actually going to untangle that. I'm gonna go back to doing things the way that I did them before. And so next time I need to make a decision. I can't trust myself because I can't even trust the decisions that I've already made. So when we learn to trust ourselves and trust that I'm not trying to always get it right.
I am trying to make the best decision that I can in this moment. Do I have all of the information that I could have about this particular topic? Is there other information that I need to access? Are there people that I need to talk to about this? How big is this decision? Is this something that's going to cost me less than a thousand dollars?
If so, why am I. Spending all of this time on it, are there calculations I need to make about the possible return or the possible outcome? Who are the people that I spoke to last time I made a decision like this? And do I have any prior knowledge of this? So rather than looking at, Hey, am I wrong, is a decision that I made wrong, we actually wanna come at it from the angle of was the approach that I took to making this. Financial decision, the right approach for me, whether or not you made the right in inverted commas, the right decision or not. It's so important that we are able to objectively, calmly, and with love, look at the decisions that we have made in the past, assess them for what they are. Do a deep dive into the approach that you took, the information that you had at the time. What intuition or gut instinct moments you had, whether or not you listened to those. Did you actually ask. The right or enough other people for help or support. And if you don't have the right people around you for making decisions, they are a lot harder. There are so many fantastic people that I have called on in my career and during my time as a business owner that have made a huge difference to how I make decisions recapping this short episode.
I believe that it is way more important to back yourself when you make financial decisions than to be trying to get it right. All the time. We make so many financial and business decisions every single day. As business owners, it's exhausting and it takes up a huge amount of our time and effort. So the faster that we can make those decisions, the better, the more that we can learn to trust that we made the best decision we could in the moment, and the more that we can do to assess.
The approach that we took to making the decision and assessing whether or not that approach is the right one to take next time, those questions are much more valuable, much more likely to lead to a learning moment than you looking at yourself and blaming yourself. Self feeling guilty, feeling embarrassed, or feeling ashamed about having made the wrong decision.
The more that you can learn to trust your financial decisions, to listen to your gut instinct and your intuition when it is talking with you to having great people around you who you can actually go to for support, the more successful you will be as a business owner. The. Faster that you'll be able to make decisions and the less time you're gonna spend beating yourself up about some made up mistake that you made back yourself and your business will benefit.
And number 10, how to have a [00:32:00] great relationship with your accountant. Your accountant will love having this conversation with you because accountants really, really want to help you. They want you to have the best business that you can have. They want you to have a great experience working with them. So the more proactive that you are in asking questions and allowing them to help you, the better your relationship with.
Them is going to be, firstly, be really clear about what your expectations are. Be proactive with your accountant, possibly even booking sessions in advance. And I recommend seeing your accountant more than just once a year. Make sure that your expectations about what your paying your accountant match your expectations of their service.
If you're looking for a really high level of service, that is something that you will pay for because that is the value that you are looking for. Three questions that you might like to consider asking your accountant are, number one, can you please explain to me how you have [00:33:00] put together the tax? Was there anything you did to either minimize my tax or maximize my take home pay that you could explain to me?
Number two is the structure that I'm currently in. The best structure for me. And if so, please explain to me why. And the third question is, have you noticed anything in my books that you wanted to highlight? The last point I wanna leave you with is that there are so many people that can help you with your business.
I personally am a money coach and business strategist. And I tend to fill the gap between what your accountant is able to do and what you are looking for with your money. Not a lot of accountants are able to do the work that I do because it is very specialized. There are business coaches, there are marketing coaches, there are consultants and a wide range of different specialists and freelancers out there in the world who can help you alongside your tax accountant.
Your tax accountant doesn't need to be your sole financial [00:34:00] advisor in your business. There are many other professionals who can help you too, including me.
Thank you for listening to our little remix, our 10 Money Secrets. I hope you love it. I hope it gives you quite a few different perspectives to help you make more money and impact through your small business, and I'll see you next week.
Thank you so much for listening right up to the end. I hope you enjoyed this episode of Money Secrets, where we talk about the money secrets of successful small business owners. If you enjoyed the episode, I'd love it if you subscribe to the podcast, but leave us a review or share this episode with one of your friends.
I hope you learned something. I hope you got a new perspective and I really hope you enjoyed the listening experience.
