“What does success look like for you? Understand how many hours a week you want to work but also what holidays you want per year, how much time you need to build sick leave, that sort of thing. When you do that, you can come up with an hourly rate.”
Justine McLean

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As you’ll know from the book, I think understanding our money is one of the biggest factors in winning this whole Parenting and business battle.
Second only to managing your time.

Because even the most highly productive humans can find themselves struggling financially. Put simply, if you’re not able to overcome your money mindset issues and your financial illiteracy, you’ll find it’s amazingly easy to make no money at all.

So in this episode, I want to give you some practical advice on how to understand your finances, get clear on your budget and work out how much money you actually have.

As well as providing some invaluable tips on how to increase your profit and charge more for your products and services.

Sticking to a budget can be hard, especially if you’re overestimating how much money you actually have, and if you’re undercharging for your products and services.

Our guest today is an expert in money management who knows how to plug money leaks while juggling a family – and don’t worry, I’ll for sure ask if she’s making six figures in school hours.

Tune in to learn:

  • Justine’s family set-up and how it works with her business
  • What led Justine to train as a BAS agent
  • Why Justine moved from retail stores to coaching
  • How Justine’s parenting style has changed over the years
  •  Why setting boundaries is so important, for both your family and your business
  • The three biggest mistakes small business owners and ecommerce store owners make with their finances
  • What the actual essential first purchases in your business are
  • How to realistically manage your finances and change your mindset

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Thanks to Renae O’Neill for their lovely review of the book: 

“Honestly, Six Figures in School Hours is a book EVERY Mum in business needs to read. It is filled with such value, practical advice but also coupled with real, raw + honest experiences shared from the funny Kate Toon. You read it feeling so seen and understood. Kate sharing her challenges, makes you feel less alone in your own journey, whilst inspiring you at the same time. It is possible to build a successful business and be a good Mum and this book shows you how.”

If you like what you’re hearing on Six Figures in School Hours, support the show by taking a few seconds to leave a rating and/or comment on iTunes or Spotify. Thanks.

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“What does success look like for you? Understand how many hours a week you want to work but also what holidays you want per year, how much time you need to build sick leave, that sort of thing. When you do that, you can come up with an hourly rate.” Justine McLean

 

 

About Justine McLean

Headshot of Justine McLean

Founder of Flossi Creative, Justine McLean, is a business money mentor on a mission to help women in business improve their financial literacy. A registered BAS agent and host of the Secrets of Successful Business podcast, Justine was named one of the Coach Foundation’s Top Female Business Coaches for 2022.

With 30 years’ experience in small business, e-commerce, publishing and insolvency, Justine is sought-after for her practical, tailored and proactive approach to business. 

Fun fact: Justine is a plant whisperer; she can make just about anything grow with a few kind words and a little bit of woo-woo.

Connect with Justine McLean

 

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Transcript

 

Kate Toon  

As you’ll know from the book, I think understanding our money is one of the biggest factors in winning this whole parenting and business battle, second only to managing your time, because even the most highly productive humans can find themselves struggling financially. But simply, if you’re not able to overcome your money mindset issues and your financial illiteracy, you’ll find it’s amazingly easy to make no money at all. So in this episode, I want to give you some practical advice on how to understand your finances. Get clear on your budget, and work out how much money you actually have, as well as providing some invaluable tips on how to increase your profit and charge more for your products and services. Sticking to a budget can be hard, especially if you’re over estimating how much money you actually have, and if you’re undercharging for your products and services. So our guest today is an expert in money management who knows how to plug money leaks while juggling a family. And don’t worry, I’ll for sure be asking if she’s making six figures in school hours. Hello, my name is Kate toon. I’m the founder of Stay Tooned, busy business owner and okayish parents and today I’m talking to Justin McLean. Hello, Justine.

 

Justine McLean  

Hello. How are you Kate, very nice to be on your podcast.

 

Kate Toon  

It’s exciting Justine McLean. It rhymes it’s such a great name. I love it. It’s almost as good as Kate Toon. 

 

Justine McLean  

It almost is.

 

Kate Toon  

Let me tell everyone who you are. Founder of Flossi creative Justin McLean is a business money mentor on a mission to help women in business improve their financial literacy, a registered bass agent and host of secrets of successful business podcast which I’ve been on. Justin was named one of the coach Foundation’s top female business coaches for 2022. With 30 years experience in small business, e commerce publishing and insolvency, Justine is sought after for her practical, tailored and proactive approach to business plan fact, Justine is a plant whisperer, she can make just about anything grow with a few words and a little bit of woowoo. Oh, that’s lovely to know. I’m a plant killer.

 

Justine McLean  

Really? Yeah, I got it from my mum, my mum used to buy plants, that coals that were dead and bring them home. And our mission was to bring them back to life. So

 

Kate Toon  

That’s lovely. And you bring people’s finances back to life. I love that.

 

Justine McLean  

That’s right.

 

Kate Toon  

What a great segue. I am great with garden plants that My garden is lush, AF. But houseplants not so much. I can’t I don’t really do so well with those. I never remember to water them. So

 

Justine McLean  

I think that’s important. It’s also all about the light and your garden. It’s very nice. It’s

 

Kate Toon  

It’s very lush. 

 

Justine McLean  

Very lush.

 

Kate Toon  

 I’m now looking out on my new little swimming pool, Justine. I’ll send you a photo. It’s not finished. But it looks lovely. I’ve only been in it once I just like looking at it. Very expensive just to look at.

 

Justine McLean  

I know. It’s better than the Toon tub.

 

Kate Toon  

I know it’s a step up from the Toon tub. 

 

Justine McLean  

Sure is.

 

Kate Toon  

It’s the Toon pool. And you know, talking about that was interesting segue into money, I’ve been having to think about money a lot more than I usually have. Now, this makes me sound like a complete arrogant fool. But my business has been doing very well for a relatively long period of time. And, but when you go and embark on something as ambitious as putting a pool in and on your own, so I paid for it with no loans and no credit cards, I’ve just paid for it out of my own money. And I’ve had to actually budget again and really get in to grips with my money. And it’s been tight. And it’s been stressful. You know, like not having quite enough to pay Bob. And instead paying Phil, because Phil’s bill is a lesson. Ah, you know, so Yeah, put me back in touch with all that anxiety about money. And we’re going to talk about some of that today. But before we do, tell us a little bit about your family setup and your business setup. Where is that all at?

 

Justine McLean  

So I have four boys. I mean, I’ve been in business for 30 years. My family is all grown up now. So for boys, I started my very first business a few months after my first son was born. And by the time I had four and seven, I had a couple of toy stores and an ecommerce site. I was probably quite insane at the time. I’m not sure why I went down that path. But you know, nevertheless seemed like a good idea for myself and so someone else. But yeah, I guess my family thought has been center of my business. So even though they’re grown up now my business is very different. It’s all about legacy now because I’ve kind of you know, got the other side. So yeah, so that’s, that’s my family set up and my business has always been in with my kids and my husband and it’s been fab. Yeah,

 

Kate Toon  

interesting. So you know, how old is your youngest child now?

 

Justine McLean  

He is 22. 

 

Kate Toon  

My goodness.

 

Justine McLean  

And my oldest is 29.

 

Kate Toon  

Wow. I mean, very ambitious, pioneer, I would say to be doing all that kind of thing. You know, 20-30 years ago, I thought, you know, I’ve been doing this for a while, but I’m only 15 years in. So you’ve done amazingly. And also your business has morphed over the years. So you had ecommerce stores, I think you sold a business? 

 

Justine McLean  

Yeah. 

 

Kate Toon  

Well, you know, tell us a little bit about the changes over the years. 

 

Justine McLean  

Well, look, I started out really, you know, as a freelancer in publishing, I was the commissioning editor for a book publisher. So back then the men in suits did not do work from home, they certainly didn’t do freelance, but I was lucky enough to have a few authors that convinced them, they couldn’t work without me. So there you go. But then, in 2002, my husband and I decided we were going to move into this much bigger business, open retail just opened ecommerce stores. And so we did that thinking we were so special, and we knew exactly what we were doing. Pretty quickly, we ended up in $43,000 worth of tax debt,

 

Kate Toon  

Been there, love. Been there.

 

Justine McLean  

Yeah, kind of sent me on the journey that I went on to learn about money, because I knew in that moment, I had to become more financially literate, as well, I suppose I was doing all of that learning how to be a BAS agent, you know, getting an education

 

Kate Toon  

So you retrained as a BAS agent?

 

Justine McLean  

Yeah I retrained during that time, I certainly wouldn’t recommend that it was 1000 hours of supervised BAS preparation. In an insolvency firm. I did mine, I felt like I’d gone to jail for 18 months.

 

Kate Toon  

Oh, my goodness.

 

Justine McLean  

But it kind of bought me out the other side. And so when we decided to move away from the retail stores, you know, I, I went back into publishing, actually, I, you know, wasn’t, it’s not like I left that store. And I thought, Great, I’m going to use these skills that I’ve learned. But I had a whole bunch of women who were freelancing at the time coming to me and saying, How do I do this? How do I make money? 

 

Kate Toon  

Yep.

 

Justine McLean  

And I thought, there’s a market there. So that’s when I started to open my compliance business. And that’s kind of morphed over the years, I sold that part of my business in February this year. And, and now I’m all about, you know, helping people just improve their money skills. 

 

Kate Toon  

 Yeah, so now totally coaching. Well, I mean, what a range of experience to have run e commerce to have had a proper job than to work in an insolvency company to have sold a business. I mean, that’s such a great experience, as well like to work out how to sell a business and then the difference, and then now resetting yourself up as a coach, and bringing all those skills to bear. I mean, wow, it’s, you know, it’s, uh, you know, it’s, it’s a much richer experience than someone who possibly has just been an accountant. And now as a money coach, like you’ve been on both sides of the, of the trenches. And I think that makes it much more interesting, you know, than coming from it from a purely financial perspective, when we, when you think about now, we all have a parenting style. I know you’ve read the book. And in one of the early chapters, I talked about the four different parenting styles that baumrind defines, you know, around being permissive, and being responsive to your children. When you look back now, do you think that you’ve you fit into a particular mold? Are you a helicopter parent? Were you very permissive? Are you very boundary driven? Can you think, ya know,

 

Justine McLean  

for me very boundary driven? Definitely not a helicopter parent. I mean, I think for me, it was varied, depending on the age and the age of my kids. I think sort of feel like you should be one thing, but I think you go through stages where you can be all of those things independently or together. But yeah, I’d say that at times when it was needed. You know, I was pretty strict. I my philosophy was, I’m not here to be your friend, yet. I’m here to be your mum. And so let’s do you know, if we commit to something we’re going to see it through. And I’m sure my boys didn’t like it. I mean, especially when they were planes. And you’ve got those eye rolls and grants that you kind of get when you’re suggesting things for them. But

 

Kate Toon  

stage that’s the stage I’m in. I find it interesting because like, you know, when I wrote that chapter, it was illuminating for me. And I think, even in a given day, I can be you know, an authoritarian parent or authoritative parent and permissive parent, all in a given day. Well, what I find very interesting is often the way you parent is the way that you run your business. So in my business, I’m very strict. I have boundaries, but then I have some days where I just completely completely permissive, do whatever I want, you know, so I find that it transfers often your business as a child. And if you are bad at setting boundaries in your family, you’re probably pretty bad at setting boundaries in your life. And if you’re bad at setting a budget, in your family, you might be pretty bad at setting a budget in your business. Have you found that in your coaching so far? Yeah,

 

Justine McLean  

I think so. I think that if there’s an issue that, you know, is around boundaries or around money, it tends to come back to mindset and probably when you dig all the way back, it’s got some to do with you were parented. Right? And so I think it’s interesting, being able to identify those things, and then being able to say, Okay, what is going to work for my business doing what isn’t because sometimes it’s okay to be, you know, to have those boundaries in your business and to be a bit, you know, on one day, and then to be a bit permitted on another day. But I think it’s all about the balance. I hate that word. But it really is. However, I think when it comes to the financial side of business, I think it definitely is about boundaries, I think you have to set up some really strong foundations. And again, when I go back, thinking about my parenting style, I think I kind of set up those strong foundations with my boys, like talking to them being really open, and I’ve done the same in my business. So

 

Kate Toon  

yeah, I mean, I think balance is an interesting word. I think awareness is a really good word. Because when I again, when I was thinking through the book, I did look back and realize that a lot of my attitudes to money were based on my parents, and some were good, but some are bad, some were holding my business back, one of them, you know, my dad is very much never a borrower or lender be no credit cards, no substantial debt. And, you know, unfortunately, in business to a degree you can’t move forward, sometimes without making investments there is there is mitigated risk, there is good debt and bad. You can define it like that. So, you know, it’s not just about looking back your parents and thinking of everything they did wrong, but everything they did, right. And just being aware of that. I also found it super interesting that your big pivot was when you got a massive tax office, because that was 250 $1,000 in debt to the Tax Office. And we just had to make dramatic changes, and it forced me to be more literate. So I think this is quite a common problem. But what do you see? We’ll do this quite quickly, what do you see as the three biggest mistakes small business owners and ecommerce store owners make when it comes to finances?

 

Justine McLean  

I think the first one is just having no concept of their cashflow, none whatsoever. So particularly if you’ve got a business where you’ve got a lumpy income, which let’s face it, most service businesses have, there’s no understanding of that cash flow. So they don’t know where the money is going. They don’t pay themselves weights, they’ve got no saving. And they’ve got no idea about the profit. And then I think the other one is time management and pricing. So really not understanding how long something takes you not building in things like holidays and time off for sick kids, when you’re kind of putting your pricing together. And then the other one is the guilt that starts to creep up. And while it might not seem that that has anything to do with the finances, I actually pretty big thing, pretty big mindset thing. So I think when the deal comes in, it’s like, right, I’ve got to work harder, I need to hustle more, I need to do all the things all the time, and then you feel bad about not spending time with your kids. So I think, you know, that sort of dichotomy there as well. But yeah, definitely those three things,

 

Kate Toon  

well, let’s break those down a little bit cash flow. So I totally agree with you, one of the biggest first things we need to be aware of is how much money is coming into our business, how much is going out how much is actually ours. And often it’s a lot less than you think it is. I mean, I’ve applied Profit First to my business. And the base figures that they give for most sole traders are that about 50% of what you earn will actually be your owner’s pay, the rest is going on tax on tea, if you’re at that threshold expenses, and hopefully a little bit towards profit, which is gonna create your buffer. But if you even just have that awareness, every dollar you earn probably only 50 cents is yours. It’s it manages that expectation a little bit better, doesn’t it? Because I think people like I remember what I thought all and I’m when I break six figures, I’m going to be rich. And I broke six figures. And I had a salary of 50k, which is probably the Australian average, I’d say or 60k. Yes, it was much as I thought it was do you find that happens? Absolutely.

 

Justine McLean  

Because then of course, you’ve got the text element on that which you never think about, and especially if you’re a sole trader until you put your tax return in and then you get this nice little tax bill. Certainly in the first few years until you get kind of dragged into the government’s payments system anyway. Yeah, I think yeah, just not having that awareness is a massive problem. And I think it comes down to that literacy, quite having, you know, sort of less financial literacy then you should when you start a business, a lot of people start a business to do a thing, provide a service provide a product, they don’t think they have to worry so much about the money, but it’s very much what’s in my bank account.

 

Kate Toon  

Oh yeah,

 

Justine McLean  

yeah. not hiding anything that might be coming up. And so one of the big questions I’m getting lately is, what should I do? I’ve got this lumpy income, I don’t know what to do and I and I just say you know, cash flow forecast cash flow forecast. And basically what that means is just understanding what’s coming in, and when it’s coming in, and what’s going out. And more importantly, when it’s going out. So you know, when you can spend, and you know, when you have to save, and a lot of people find that easier to implement than, let’s say something like profit first. So yeah, I

 

Kate Toon  

don’t know. I mean, I think its profit versus pretty basic bitch, to be honest. And yeah, even even in the principle of just not having all your money going into one account, or having go going into a joint account. But I think as well, there’s a base of attitude that, you know, the first couple of years are all about investment, and you shouldn’t be paying your salary service salary, you should be bootstrapping. And you got to do this personal development. And, you know, there’s a lot of coaches out there saying, you know, you will not succeed unless you have a coach, all nonsense. Do you know what I mean? 

 

Justine McLean  

Totally, totally. 

 

Kate Toon  

And I think you need to set yourself up for success. My first two hires, were an accountant and a bookkeeper. My first software that I bought was Xero, before Canva before frickin Active Campaign, or any of these sexy things that you needed, I got my money sorted. And although that profit was minute, you know, and I’m not saying being honest here. This is about year three, year four. For the first three years I just floundered like a fool like you’re talking about. But even with cash flow, like someone asked me the other day, yesterday, actually, how do I set a budget? And I’m like, you know, well, if you’ve been in business for six months, look at the last six months and use that to project the next six months. If you’ve been in business for a year, look at the last year and use that as your production. If you earn five grand in January, maybe it’s highly likely you might earn five grand again this January, if you earn 10 grand in June, because that’s your best time then use that to map and, yeah, totally. That’s basic, isn’t it? But it’s, it’s not basic when you’re terrified of it? Well,

 

Justine McLean  

I think that’s the problem. I think so many people, particularly creatives, and I work with lots of creatives are terrified of money, because at some point in their life, they were told they, you know, you’re hopeless at math, or or they think they don’t do money, or they went to an accountant to get some advice, and they were kicking off their business, and their accountant gave them some kind of throwaway line, you’ll never make any money out of this. And I think that’s wrong, I think you have to go into it with your eyes wide open. And all those people who say, Well, I’m not going to pay myself a wage, you know, because, you know, and so whatever reason here, I think that’s rubbish, I think, you know, unless you’ve got all this money set aside and savings, which I would recommend having something when you’re starting a business, I think you need to live in need to know what it costs to live. So you need to be able to pay yourself a salary. You need to be able to pay yourself superannuation, if you can, even if it’s not the same salary and stupid that you’ve got when you work for someone else, it needs to be something because otherwise, why have you got to be in there? Well,

 

Kate Toon  

why not? If you’re not paying yourself money, it’s a hobby, and you’re just playing and having a business. And I do think a lot of people enjoy the play of having a business. But unfortunately, unless you have generational wealth, or a rich partner, or great savings, most of us can’t afford to play at this. And I find that often freelancers, I think are a little bit different, because I do think freelancers are good at being kind of almost stingy in their spending. But I think a lot of like, especially ecommerce owners and kind of lifestyle businesses, they do Okay, on the income, they do pretty well, but they fritter it away on nonsense on the the look of having a business. And I think, you know, really sitting down and working out what your Minimal Viable income is, and what the least you can spend is at least for a couple of years till you’re solid and you’ve got that budget in place. There is such a rush to spend money.

 

Justine McLean  

Totally. And I think the rush to spend money comes on all the sexy things, 

 

Kate Toon  

Which is why marketing is wonderful, you know.

 

Justine McLean  

And if I had $1, for everyone who I sort of pit, you know, ask a question, have you got cloud accounting set up? No, with their answer, and I say why? Well, because my business isn’t big enough. I don’t have enough clients. I’m like, That is rubbish. I’m with you. But first, make it one of the first things you buy, start as you mean, continue, because to me, it’s one of those non essential things, I think it’s immediately going to give you visibility over what’s going on with your money. And it’s going to be a great investment way better than getting, you know spending three grand on someone to do your branding colors. In my opinion.

 

Kate Toon  

Totally agree. 

 

Justine McLean  

Sorry to all the branding people out there.

 

Kate Toon  

No, you know, branding has its point, but it’s something that maybe you have when your business is slightly more mature, you know, do you really need, you know, agency level branding, when you’re first 10 customers are probably going to be friends and family who don’t give a shit about your branding. The other thing is I’ll see people saying, oh, no, you know, I don’t want to invest in Xero and then the next week I see them at someone’s four grand retreat in the Hunter Valley. And I’m like Look, how did you make that rationale? How did you make a short term dopamine spend that really is a jolly, rather than a longer, more boring, sensible purchase? And we all do that, don’t we? Oh,

 

Justine McLean  

Sure.

 

Kate Toon  

You know, we all sign up for the things and hope it this thing is going to be the thing that changes everything. And the harsh reality, especially when it comes to money is that there is no easy fix is literally the tedium of checking his bank balance every morning, looking at your fingers, looking at when invoices need to be paid, looking at when expenses are coming out. And it just needs to become a habit like brushing our teeth. 

 

Justine McLean  

Sure does. And as you know, I often say to people that it doesn’t have to be boring. I think putting those you know, really robust financial foundations in place can be something that you can make fun. I personally do a Money Monday or a finance Friday, it’s usually a Friday. If you can think of an alliteration for another day, go for it. But I think just having that habit of one hour a week, focus on the money is a game changer. And so if anyone’s listening and they’re thinking, What should I do? Yeah, get your money Monday, get your finance Friday, do that. And then think how can I start build those really robust financial foundations. So get your cloud accounting, sort out your business bank account, so you’re not you don’t have an account that you’re dipping into? You know, the personal stuff, have a look at your prices, really understand what it costs you to run your business so that you can pay yourself a wage and super and have MYOB, and make profit.

 

Kate Toon  

Yes. Well, we talk about this a lot in the book, you know, I will just share that what I do is every day the first thing I do in the morning is check my Xero. 

 

Justine McLean  

Yep.

 

Kate Toon  

So sometimes there’s nothing to do I actually have a bookkeeper, but I look at what came in yesterday, what went out what invoices are owing, I’m always on my invoices. Like I don’t like oh, I’ll just send them once a month. No, send them. Um, yeah, it takes five minutes to forward that email or setup, repeat email. So that’s the first thing I do every day. And the reason I do it, it’s not because there’s any admin to do, but because it makes me think about money, and my business has to be about money, it’s my business is about many things. But if it does not serve me in terms of give me an income, it is a waste of bloody time. But we’re gonna we’re going to talk about, you know, some of the strategies moving forward to improve your finances. And you’ve talked about a few their accounting software, different bank accounts, setting up cash flow, I think is really important. Let’s talk about pricing. Because I think a lot of people misunderstand pricing, the way that I look at pricing is, I believe in a concept called Minimum Viable income, where you sit down and you work out what’s the least you can earn to support your family, pay your whatever, yeah, what’s your Minimal Viable income in your business to pay for your subscriptions and your website, hosting, whatever, that’s your base line. And then what over and above that is for your nice to haves. And then what over and above that is for your future and your security. And it takes a while to get to that future insecurity that where you’re at with your generational wealth and legacy. So you know, when you’re sitting down with someone, and they’re like, you know, how much should I be charging per hour for my service? How do you help them break that down?

 

Justine McLean  

I think it’s some of those things you said, I think first of all, you need to understand what it costs to to run your business. So that minimum Minimal Viable number. And really look at that, because so many of us spend so much money on crap that we don’t need, like those subscriptions that kind of pop up here and there. And we’re like, wow, okay, I’ve got charged for that, again, thought that stuff out. So what’s the minimum, it’s going to cost you to run your business. And then, as you say, one of the nice to haves on top of that, but understanding that cost, then understanding your personal costs, so you can work out that wage, make sure you pay yourself super super is at the moment 11% of the wage your wage. Why? Because you don’t want to retire drinking cask-wine, if you’re an hour cut into drinking alcohol or non alcoholic cask wine and wearing polyester track to that’s what I always say. So you know, paying a workout what it costs, so that you can pay yourself a wage and so far, and then I think you have to build in a profit number. When you know those things, you then have to have a look at what you want your business to be. So what does success look like for you? If you’ve got kids, you obviously are doing this but you can spend time with your kids, potentially? Is that you know, after school is that before school, is that both Do you only want to work three days a week. So understand how many hours a week that you’re wanting to work but also what holidays you want per year. How much you know, time you need to building sick leave that sort of thing. And I think when you do that, you can come up with an hourly rate 

 

Kate Toon  

Great. Okay, fantastic. Sorry, I was trying to stop you there because I wanted to talk about what you were talking about. So in the book, we do do that breakdown of time. And I think I got to the point where I realized I probably had about 15, productive billable hours a week. And that therefore helped me go with my target is 10k a month, the math for that works out, I need to be charging roughly $180 an hour. And if you in your industry, whether you’re an ecommerce store or whatever, we all need to have an hourly rate in our head. If that sounds high to you, then a lot of I think financial management is also managing your expectations. There’s only three ways to be richer, and that’s to charge more to spend less and to manage your expectations. And unfortunately, our expectations often massively outstrip our income potential. You know, if you want to work three days a week and work in a particular industry in a particular niche, maybe you can’t earn 10k and is better than a month, maybe you need to know that now, rather than constantly feeling like a failure and like you’re doing something wrong, you are never going to be able to make that money. Do you know what I mean? I think there’s a lot of expectation, I mean, even the six figure thing, which is really only about 8k a month, it’s still hard for a lot of people to get to that.

 

Justine McLean  

Yeah, absolutely. And I think that’s the thing, I think none of us really sit down and work out our pricing in that way, taking all of that into account, because we’re all spending hours and hours and hours now business, but as you say, for you, about 15 of those hours are billable. And that’s the key. That’s it. Because in those billable hours, you have to pay for all of that stuff

 

Kate Toon  

all the other fluffy time that you’re wasting on whatever. And the thing is, sometimes you will do this work. I recently did this work with one of my people at DMC people. And we went through, we did all the stuff of like, hadn’t reconciled the zero for like three months. And he said, I just do it every three months. I’m like do every day, like you’re not going to spot stuff, it’s going to be so far removed, you’re gonna be like, I’m not even sure what that direct debit was for. So do it every day. But then we looked at the money and I’m like, you know, your business is pretty lean, there isn’t a lot of profit in it. Yes, you can pay yourself a decent salary, you can cover your expenses and pay your tax. But there’s not much meat on that and there won’t be any more meat. And if you’re charging a decent rate as well, there won’t be any more meat until you can find more time or until you can get an underling that charges less than you and you can outsource you’re at the point where it’s at. And so if you have expectations that you’re going to make 100k more than you’re making now a year, you’re not going to need a real shoulder shake moment for this person to say, All right, well, I’m I’m doing okay, I’m not doing amazing. Not making 50 grand of profit every year, but I’m covering everything. And that can That’s enough sometimes, isn’t it? Depending on your face? 

 

Justine McLean  

Yeah, for sure. And I think it just it always comes back to what success means for you, you know what it means for the next person or that influence on Instagram or somebody else that you see, because a lot of that isn’t the truth anyway, 

 

Kate Toon  

Yeah, we know that.

 

Justine McLean  

You have to talk a whole lot, but but I think just having that understanding of your numbers, illuminates what you need to do next. So as you say, it helps just in enable that strategy to, you know, get another stream of income, or as you say, get someone to work with you who’s going to charge less, maybe pare down your services, what can you take out so that you can still charge as much. But you’re saving on time, I think there are a lot of things that knowing the numbers really highlight.

 

Kate Toon  

They’ll give you a massive reality check. Yeah, you know, anything is achievable. I do believe that we can do whatever we want. But we have to understand the consequences. So if you look at your numbers, and you go really to hit 10k, I need to sacrifice another day a week, I need to put my kid in childcare for another day a week. Am I ready to do that yet? Yeah, I am great. There’s the money. If I’m not, I’m going to wait. And I can do that next year. But at least it makes you have much more black and white decisions and takes the emotion out of money. And I think that’s so important to take the emotion out of money, the shame, you know, the feeling that you’re not performing or that you’re behind. And even the shame of when you’re doing well to talk about how well you’re doing for me. I want to finish on this. No, no, I’ve strayed from the script. The biggest unlock moment. For me, the key for everything for me was working out my profit margin. And profit, obviously, is the difference between you know, income and expenses. And I don’t find gross profit particularly interesting. I find net profit. Interesting. We talked about this in the book if this isn’t something you understand it’s defined in the book. So net profit is like when all is said and done, and everything is paid for when your tax is gone. You just everything’s gone. What is what’s left for you, and then you work out your profit margin percentage based on that. And from what we see on the Google 5% is considered a bit low 10 as a sole trader 10% is considered pretty good and 20% is bloody amazing. You know, profit margin is a useful tool right? That’s the only figure I look at, to be honest. 

 

Justine McLean  

Yeah, I’m the same as you. And you know, I look at that profit and that profit margin. But I’ve also consciously got in mind, where am I at right now in my business? What does success mean to me right now? So right now in these couple of months before Christmas, I’m actually taking a fair chunk of time off. So my profit is not going to look fantastic.

 

Kate Toon  

It’s gonna be dropping.

 

Justine McLean  

Right? But that’s okay. Because I planned for this. That’s what success looks to me, like, looks like to me right now that I actually get up. And I’m not a slave to my business. And that’s okay for me. And I think that’s a really important distinction.

 

Kate Toon  

You have to be able to dot observe the knobs, you know, your profit knob is going down, but your free time is going up. That makes sense. But if you’re probably not going down, and you’re still working like a dog, then something’s wrong. For me. For example, my average profit margin is about 52%, which is pretty good. But it’s mainly an online business. So I’m very lucky. 

 

Justine McLean  

Well, that’s not pretty good. Kate, that is bloody amazing. I know. There aren’t many people who could can do it.

 

Kate Toon  

Oh, no, it’s been good. But like last year? Yeah. Last year, it drops to about 30%, which is still great, right. But for me felt like a bit of a failing. But last year was a year of massive investment in the book, in the book tour, in the time that I took away from focusing on the business to do that. I mean, I did, I missed the whole launch of my course, where recipe course I do it three times a year only do two. So the income on impact on income was massive. I spent a stupid amount of money on Facebook ads, which I regret, so I can see why. And that’s the important thing we’re talking about here. It’s understanding why things are happening and not feeling like your money is out of control. I think that’s that 50k tax debt. And I just never understood where my money when I was like, I’m working really hard. Where is my money? Why is bass always a stress? Why am I always having to get arrangements with the tax office. And there was nothing wrong, I just wasn’t looking at it. And if I’d looked at it, I’d seen that at that point, my business was super lean, there wasn’t much margin for error, things would get better, but I couldn’t afford the luxury of x and y. And I just needed to kind of keep going for a bit and earn money, get my head. What do they say head down, bum up, and work and spend less time on marketing and sexy things and just work for a bit and get the money in? So I mean, I think genuinely was saying, just don’t be frightened of your finger. Yeah,

 

Justine McLean  

exactly. And I think try to get into a very proactive mindset around your finances rather than being reactive. Because I think so many people, for example, think, okay, finance, what do I need to do? I know I’ll create a budget, nothing wrong with budgets, if you’re into budgets, but for me, they’re a bit like diet, you know, fail at the budget. And come Monday, you really want to go back on the diet, you know, do you really want to go back to the budget. But I think if you’re going to think about one thing, think about cash flow, and focus on that as the one thing that you think about and then take some of that pressure off yourself, because you know what’s coming? And I think if you do nothing else that is going to, you know, give you a massive sort of comfort. Yeah, fantastic.

 

Kate Toon  

And obviously, we can follow you share a lot of great money, tips and advice. You have your podcast as well, and your courses and memberships all manner of things. I mean, now life is looks very different to you. Your kids are a grown up one of them’s a very famous Instagrammer who I now follow. 

 

Justine McLean  

Yeah, he’s sure He sure is. How much money can take by make by tech

 

Kate Toon  

hopefully. Yeah, exactly. I don’t think it would work for us, unfortunately. No, no, definitely. Um, hopefully he can start providing you with some profit at some point payback time. But you know, I’m sure that there’s still a legacy of working within school hours. So I’m sure that you’re not at you know, you got I think you get into a mindset of nine to three nines or four even when they need you anymore. So I guess the question is, are you earning six figures in school hours, Justine? 

 

Justine McLean  

Yes, I am. Next year, it will be seven or going for that? Yeah, I think you’re right. I think it’s just us telling us that working in school hours, that that sort of how you continue and I think it’s a good way to work. Yeah.

 

Kate Toon  

I mean, just slightly more mature ladies, I would say and you know, when I’m finished with three, maybe I’m not going preparing a snack for my, for my son, I’m going for a nice walk or doing something and it’s that kind of mix of lifestyle and business that we want to maintain even after our kids have left home we can work as much as we want now, but I don’t want to

 

Justine McLean  

Exactly yeah, I’m absolutely with you. I think more time is an absolute gift. So if you can keep working in school hours even when you don’t have to, I’d highly recommend it.

 

Kate Toon  

Yeah, exactly. Just need it’s always lovely to talk to you. Tell us where we can find out more about you. Where’s the best place to go and follow you and learn more.

 

Justine McLean  

So if you head on over to Instagram, I’m there at Flossi files F L O S S I F I L E S. It’s my childhood nickname, I must change it. I am going to find me there fun and say hello. I’ve got a podcast secrets of successful business, which you’ve already mentioned. 

 

Kate Toon  

I’ll provide links to your LinkedIn and your Pinterest. Justine is actually running a session in the digital marketing collective in January, all about her new branding around being a money magnet attracting that money to you. But you know, on a mission to help people feel more confident with their money and not necessarily about earning a gazillion dollars, but being happy with the money you’re making, and just taking away the anxiety around money, I think is so empowering. Thank you, Justine. And thank you Justine’s dog. We will see you soon. Thanks for coming on the show.

 

Justine McLean  

Thank you. Okay.

 

Kate Toon  

So that’s the end of this week’s episode all about money. And our review today is from Renae O’Neill. Thank you very much. Really, honestly, six figures and school hours is a book every mom in business needs to read. It’s filled with such value practical advice, but also coupled with real, raw and honest experiences shared with the funny Kate Toon, you’ve read it feeling so seen and understood, Kate sharing her challenges makes you less alone on your journey. While inspiring you at the same time, it is possible to build a successful business and be a good mom. And this book shows you how Thank you, Renae, if you’d like a copy of the book, please head to my website, Kate toon.com, or six figures in school hours.com and Buy your copy. If you order from me, you’ll get a signed copy of the bookmark and some stickers and some goodies. So much more fun to get it from the author. Also, if you have time to leave a review for this podcast if you’re listening to it right now look at the app. Can you tap in a five star review? I would be so grateful. Finally come and join my Facebook group. It’s called The Misfit entrepreneurs, lots of other business owning parents and non parents sharing tips, advice, funny stuff and just good vibes. So until next time, happy juggling and remember the world will wait.