Navigating the Financial Landscape of Your Business with Justine McLean

What happens if you dodge the numbers in your business?

Well I have Justine McLean joining me in this episode and we are going to dive into why regardless of whether you're a "numbers person" or not, it pays to care about the numbers.

Justine McLean is a profit-focused business money expert, and she uses her own story from avoiding finances to mastering them to educate business owners on how to change your financial mindset and secure your business's success.

Hear how Justine has turned her costly mistakes into valuable lessons, and discover why so many business owners shy away from numbers.

We're chatting practical methods to help you become financially savvy and explain why understanding your business's finances is crucial for telling its story and shaping its future.

Justine provides actionable strategies for managing your personal income, like setting a fixed weekly wage and allocating money for taxes, superannuation, and savings.

We discuss the importance of taking business finances seriously and mastering both financial and marketing aspects to succeed.

With simple tracking methods and a fresh perspective on financial education, Justine encourages openness and learning within the entrepreneurial community.

Website: https://www.justinemclean.com/

Book: https://www.justinemclean.com/book

Instagram: https://www.instagram.com/flossifiles

LinkedIn: www.linkedin.com/in/justine-mclean-business-money-expert-educator

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This podcast has been produced and edited by Snappystreet Creative

Transcript

Speaker 1: 0:06

marketing espresso making marketing as enjoyable, energizing and digestible as your morning coffee. Hello, hello. Thank you for tuning in to another episode of marketing espresso. So grateful you are here, as always. Now, if you haven't already, make sure you leave me a review or you reach out to me and tell me what you're loving about the potty, and if you have a burning question, genuinely make sure you do it. I want to hear from you and I'd love to hear any marketing questions that you want to throw at me.

Speaker 1: 0:32

Now, of course, it is a Tuesday, so I have a fantastic guest for you on the show today and I'm excited to introduce Justine McLean. She is a profit-focused business money expert. She's helped countless business owners maximize their revenue and increase their bottom line. She's also the host of Secrets of Successful Business Podcast. She sold her Baz Compliance and Bookkeeping business in early 2023. And since then, she's been on a mission to help small business owners increase their financial literacy and become business money magnets. She's got close to 30 years experience in small business, retail, e-commerce, publishing and insolvency. She's been described as a nice, warm hug when it comes to the business money and she's sought after for her practical, tailored and proactive approach to business. I'm excited. Bring Justine to the potty and I hope that you love this episode. All her details will be in the show notes. Don't be afraid to reach out to her. Justine, thank you so much for joining me today.

Speaker 2: 1:27

Thank you for having me, Bec. It's nice to be here and chat with you I know I love that.

Speaker 1: 1:32

We've chatted quite a lot today and I love this we have chatted a lot today.

Speaker 1: 1:36

We're going to be sick of each other by the end of this, but you know, never, never, never, never. So I'm excited because you are talking money today and we love money. We're in the business of making money because, let's face it, if you're in a business, you are. But what I'm excited for is you're doing something like I'm always guilty of saying this I'm like I'm marketing, I don't do numbers. So you are coming here today to educate us about doing numbers and why you need to understand numbers, and I actually quite liked the story you told me before. But I'll let you take it away and if you tell us the story, you tell us the story. If you don't, you don't. But yeah, so take it away and give us, I guess, the lowdown on why we need to understand our finances and our numbers in our business.

Speaker 2: 2:19

Absolutely Well, look, I think I don't do numbers is a pretty common thing that we tell ourselves, especially if we feel like we're a creative business owner. So by creative I mean you know it could be from interior designer to writer to a marketing person. When I started my first business, I was literally working in publishing. And then in my second business I had toy stores and we were kind of doing kids' birthday parties and buying fabulous things and making things look pretty. And as this person who was creative both outside of my business and inside of my business, I was definitely the I don't do numbers chick. And so one of the first things I did was went to the accountant and said, okay, how can I run this business so I can make money?

Speaker 2: 3:07

By that time we had a couple of toy stores, e-commerce store, and she said to me, quite simply, register for all the taxes and make sure you earn more than you spend. I'm like, okay, I don't do numbers, but I can really manage that and I thought I was doing really, really well. And then we did our first tax return and I got a bill for $42,000 from the ATO and I was completely flabbergasted. My accountant couldn't really explain. It took a new accountant to teach me exactly what had happened. Turns out, thankfully it was not my fault, but what I realized at the time was this I don't do numbers. Attitude I had, which had come from my childhood, my you know maths teacher, telling me how bad I was at numbers because, you know, I couldn't do the formulaic equations that we were doing in maths at the time.

Speaker 1: 3:58

I have the same story, yeah.

Speaker 2: 4:01

Yeah, my English teacher telling me that he hoped my life was as smooth and as comfortable as my pros because my math scores were so bad.

Speaker 1: 4:12

I got 36% in the trial HFC hey.

Speaker 2: 4:15

And now and now. The irony is I teach people about money, but I was definitely that person and I think you know I mean, obviously I got really educated and then I spent a thousand hours doing supervised BAS preparation, which I'm not suggesting to anyone. But I think the thing I hear over and over again now is this I don't do numbers attitude. So people think, oh well, as you said, I'm a marketer or I'm a writer, I can't possibly get my head around it. But the reality is, I think that we all have the capability to understand whatever the hell we want to understand. It's just whether or not we're prepared to put in the time and effort.

Speaker 2: 4:55

So, first of all, I think we can all do numbers. There's no question about that. But I think, for me, why should you do numbers? Well, your business tells a story and, oh sorry, your numbers tell a story. And the numbers in your business tell a story and I think you deserve to be the author of your story. So, rather than let everybody else decide your accountant, your bookkeeper, the people that you're working directly with, your customers just becoming a bit more educated about the numbers is going to allow you to really inform that story, to create a business that is exactly the sort of business you want, and I am absolutely here for that. So this is why we have to do numbers, and I can absolutely share some fabulous ways to go about it.

Speaker 1: 5:43

Yeah, I love that. I definitely want you to share those ways because I think what I obviously, as a marketer, like, I'm always like, yeah, like you know, I just need a really good accountant because I can't do that stuff. But you shared with me when we were talking about this earlier. You were like it's just good to have the fundamental knowledge, like as in, you don't have to be able to be the one doing it, but just understand that how it's done. Like don't just sign the paperwork and not actually understand what's going in there. Like understand your P&Ls, set budgets for yourself, right? Like I share with you.

Speaker 1: 6:13

I have on my whiteboard what target I need to meet every single month from sales, because I'm like, well, if I want to grow this thing, like I have to do that and if I'm not meeting those things, then I'm not putting food on the table. And you know, it does surprise me how many people actually probably don't even know how to rate a profit and loss or like they have no visibility over the numbers in their business. And it comes back to even when they're working on their marketing. They don't know the numbers in their marketing. And I'm like knowing your numbers across all fields finance, marketing, like sales. All of it is so fundamental to building a really, really solid business that's going to last the test of time. You're exactly right.

Speaker 2: 6:50

You're exactly right and I think what you said is so true. A lot of people don't even know where to find the profit and loss on their business, or maybe they're not using cloud accounting, or maybe they do abdicate their financial work to their accountant. But for me, it starts with more than the numbers. I think you're an advocate of this, and I think it's about really understanding what success means to you right now in this season of life and business, but understanding that from the point of view that your business is unique and you want to run a business, that speaks to whatever that success definition is for you right now. And I think the next thing is just, if you're the sort of person who's saying I don't do numbers or I don't understand, or you know, perhaps you don't want to understand, I had a client who was very much about oh, I'm just not interested in that stuff, you do the stuff and then I'll sign it off and I'm like well, first of all, you should be interested. If you're not, why are you in business? Because you should be interested in all parts of your business. But I think it's about really thinking that with a tiny bit of education, you can absolutely do what you need to do and then, sure, still asking for that help, but doing that because you want to build those solid foundations. So it starts with the story of your numbers. You get that from the profit and loss statement, because that's going to tell you where you can spend, where you need to save, where your expenses are blowing out, where the products that you're offering may not be hitting the market. So you might be offering a whole series of things that just aren't working for your business right now. Maybe you're turning over all this money, but the money is all getting dished out in a whole lot of subscriptions and things for your business that you really don't need to be spending on. So I think once you start to get educated and once you start to take a bit of an interest in your numbers, you'll identify all of these different things in your business where you can improve, because being a success at the end of the day is about making a profit. If you're not making a profit after you've paid yourself a wage that is really key. You have to pay yourself a wage before you even consider whether your business is profitable or not, then why be in business? You might as well go work for someone else, and I know a lot of people are going to hate me for saying that, but I think it's really true. So I think that's where you really need to start. And then I think, if you really kind of want to get into that nitty gritty, if you're thinking, okay, yes, I want to embrace this, I want to understand my numbers.

Speaker 2: 9:22

What are some of the fundamentals that I need to understand in my business? Well, first of all, what do you need to be signed up to? What are the regulations, the regulatory requirements? What are the taxation things that I need to sign up for? Is it GST? Is it PAYG, because I employ staff? Is it something to do with superannuation? What is it?

Speaker 2: 9:47

Understand those, but not just that you need to sign up for those things. It's about roughly how much are they going to cost you and when are the payments due? So there's that. It's looking at things like do I have bank accounts that are just for my business? And if I don't, then I absolutely should. So an operating account, savings accounts, somewhere to put away that tax liability that you've got. It's about having great systems and processes in place. It's about really understanding the cash flow, so those ebbs and flows that are going to happen in your business, based on what the money is that's coming in, any great launches or campaigns that you've got where the economy might be a bit flat, where business just doesn't happen for you, maybe that's around Christmas or the middle of the year, and so you know when you can spend and when you can save. And all of that stuff is going to come back to your profit and loss and understanding the story of your business, that number story in your business.

Speaker 1: 10:44

Yeah, I love that. That is epic advice, because I think, even if you do things like what I do, like map out what my goal is every month, the only way you can do that is by understanding historical data and saying, okay, so when I launched in 2020, you know like I noticed these patterns. And then in 2021, I noticed these patterns and you know, you'll notice there's patterns there and you're so right, like if I have, generally, june for me is a bit quieter, which, like most people would be like why would that be the case? But it is the case because people are wrapping up the year and they're not thinking about marketing until the new year. So, I know, in June, don't spend a butt ton. Like you know, everyone's like, oh, you got to spend in June because you want to get the financial year benefits. It's like, well, no, because I know for a fact that in June I have a slightly small month. So, like you, plan for it.

Speaker 1: 11:32

And I think I love this concept of paying yourself a wage too, because I think you know that was the one thing for me. When I first started, I wasn't set up as a company. Now I am. When I wasn't set up as one. It was really hard because you just have money coming at you and it's like you can pay yourself whenever or like what you know. The rules are so different, but I think getting into a habit around that of I want to pay myself this much or and having goals, I think that makes it a lot personally, I think that makes it a lot easier, but also, in terms of like targets for your business, allows you to kind of decide more what you want to be targeting.

Speaker 2: 12:02

So yeah, yeah, absolutely. I mean, I get asked that question a lot when is the right time to pay myself a wage? Or, you know, I'm a solopreneur. Surely all of that money is mine. And yes, you're right, you're a solopreneur, anything that you earn is actually yours, there's no question about that. But you know, and people think they need to wait till they're incorporated, till they're a company, before they have to start paying themselves a wage. But the truth is, for me, pay yourself a wage the minute that you go into business.

Speaker 2: 12:31

I had this conversation with a girl just last week and she said I'm not sure I can afford to do it. I said how much can you afford every week? She said probably a hundred bucks. I said, okay, from now on, every Thursday, a hundred dollars, that's your wage. You transfer that money and I don't want you to take another cent out of your business bank account until next week on Thursday when you transfer another $100. And if that $100 isn't cutting it for you now, obviously she has another source of income. So her business is obviously not servicing her lifestyle.

Speaker 2: 13:04

But I think it's important to just start. It sends this great message to you as a business owner that what you're doing matters, that it's serious, that it's a real business. Because again it comes back to that I don't do numbers attitude and I think if people get into business without thinking about the money, then they're not going to put paying themselves a wage as a priority. They're literally going to be hustling away and everything that they've got coming in they're going to be spending on something else without actually thinking about them. And it's not just that $100 a week. It's also then thinking, okay, should I put money away in superannuation? Hell yes. Should I put money away in a savings account? Absolutely. And should I be taking the tax portion out of what I'm earning and put that away 150%? Yeah, because if you don't do those sorts of things, you're going to pretty quickly get into trouble with your cashflow and the whole taxation payment story. I think a small business in Australia now $24 billion is what we owe just in back taxes on our BAS return yeah.

Speaker 2: 14:12

That's GST P-A-Y-G.

Speaker 1: 14:14

Yeah, and the tax agency is like nailing that at the moment too. Absolutely Like during COVID, they were like we'll be a little bit nicer to you guys, and now they're like, nah, nah, yeah, it's something. As soon as that money comes in for me, I just have direct debit set up. Yeah, I don't touch it, like it's not my money, I don't even, I don't even look at that account. It does not exist.

Speaker 2: 14:39

I wish it existed because it looks nice, but it is yeah, I mean I wish I could have that God, I wish I could have that money. And again, it's just that attitude, right it's. It's kind of this whole mindset piece. And I mean, you and I know business is about mindset, whether it's about marketing, whether it's about the finances, it comes down to really mastering that mindset, how you're thinking and feeling about your business, whether it is to do with the financial side of things, whether it's to do with the marketing.

Speaker 2: 15:04

Perhaps you're a really stats-driven person or a really analytical person and you think marketing is just a bit of fluff. I mean it's the same sort of thing. It's about just getting out of this kind of mindset that you're in, that you can't think about these things or you can't deal with these things because it's beyond your capability. Because I think everybody can grasp the concepts, especially when it comes to finance, and it is, without doubt, one of the firmest sources of bedrock in your business when you know if you want to scale, if you want to build your business in any way, and particularly if you want to sell, you need to have all of that sorted.

Speaker 1: 15:44

Yeah, that is excellent, and I feel like we're going to wrap up on that because perfect, and I feel like we're going to wrap up on that because perfect, and I feel like you're 100% right. And a lot of people have this dream of selling their business and it's like, well, you better know your numbers, because no one's buying it if that is not Mickey Mouse. So it's one of the first things people look at.

Speaker 1: 16:02

A potential buyer will always look at the finances, yeah, and I absolutely love the like you just have. Yeah, it's one of those. It is one of those foundation things like chicken and egg. If finances come first, like you don't have, you know, if you really want to call yourself a successful business, this is something that you really have to know about. So I think that is epic advice and I really hope people don't get scared by that. It's just about I think it's just even as simple as having a spreadsheet, like in out what you want to pay yourself, and like just know then, because that sets the bar for, like what you want to earn and that gives you targets to like well, if I want to earn that, I have to go get this amount of sales, and it really I think it drives you in your business. I think without that, it's easy to kind of lose focus and lose drive. Personally, Absolutely.

Speaker 2: 16:49

I couldn't agree with you more and I think if you are that I don't do numbers person, or if that's been part of your culture, or you tend to hang around with people who are like, yeah, you're a creative, that's okay. I want to change the narrative and I want you to be part of the change in that narrative because I think the more we embrace the finances and we're happy to talk about the business numbers and share our numbers and share our struggles and get that tiny bit of education, then the better off we're all going to be as business owners.

Speaker 1: 17:18

Yeah, love that. Thank you so much for joining me today, justine. How can people find you?

Speaker 2: 17:22

You can find me at justinemcclaincom that is my website or over on Instagram at flossyfiles. F-l-o-s-s-i-f-i-l-e-s. I know it's odd it's my childhood nickname and I haven't changed it. Or you can find me on LinkedIn Justine McLean Love that, thank you.