#awinewith Amy Fox
MEET Amy Fox, Founder of Goldi Group
You can find them here:
Transcript
Danielle Lewis (00:05):
Amy, welcome to Smart tv.
Amy Fox (00:07):
Thank you.
Danielle Lewis (00:09):
I'm very excited to have you here. I know that this is going to be a very interesting chat for lots of women in business, so let's kick things off by telling everyone who you are and what you do.
Amy Fox (00:21):
I am Amy Fox, I'm an accountant, but I'm not a tax accountant, so a lot of people don't even know there's different types of accountants, but I'm what's called a management accountant and I focus on helping businesses make more profit and not worrying so much about the tax consequences of that. So when you make more money, you pay more tax and that's just the world we live in. So I just focus on making as much money as possible and then managing the cash so that you can pay your tax obligations like stress free.
Danielle Lewis (00:56):
And that is so interesting, isn't it? I feel like a lot of people dread the tax bill and because of it being a cashflow problem, I think we've associated taxes bad. So rather than focusing on managing cashflow, we are focused on reducing tax or not paying tax or I don't want to earn more because I don't want to pay more tax. We've kind of got the flip, the script flipped.
Amy Fox (01:24):
Yeah, it's a bit backwards to come in it from an angle of paying the least tax possible. I always think of it, if you had a job and your boss said, congratulations, you've got a $20,000 pay rise, it is the first thing you're going to think, shit, I'm going to have to pay more tax now or yay, I'm making an extra 20 grand. But when you become a business owner, I don't know why this is the case, how this has happened, but everyone is so focused on that tax bill and reducing it and I'm just like, the ways to reduce your tax bill are to earn less or spend more, and I'm like, that is the opposite of making money. So yeah, it's just such a retraining to think of it from a different perspective.
Danielle Lewis (02:12):
Yeah, and I mean it's interesting the employee example, I guess because the employer looks after the tax component, it's almost like all employees think about is what is my take home pay? What is the thing that I'm is hitting my bank account? And almost that there's not a light shone on how much tax you paid maybe until the end of financial year when your accountant's like, what can we deduct to try and get a little bit back? But again, when you're in a bigger tax bracket anyway, the likelihood of getting anything back at the end of the year diminishes. I think,
Amy Fox (02:52):
Yes, it gets harder and harder
Danielle Lewis (02:55):
To
Amy Fox (02:55):
Do it legally anyway.
Danielle Lewis (02:57):
Yeah, totally. But I think when we're business owners, there is this like, oh shit, every quarter I seem to be not able to pay my tax bill for some people that aren't managing don't think about separate accounts or setting money aside or even, I think a lot of people, even when they're mapping out their products and services, they don't even think about, well, what portion is going to tax? They kind of think, well, I charge a thousand dollars for social media management, therefore that's my money. It's like, no, that's not your money.
Amy Fox (03:33):
I know. And then you add GST into the mix and that's another one that's really not thought about in I think the right way as well by a lot of business owners, so many business owners, I need to reduce my bass bill, I need to pay less GST. And the thing with GST is it, it's never been your money. It's not your money. So you actually, when you send your a thousand dollars invoice, it's plus GST and your client is paying you the GST
(04:05):
And now you're a business owner, congratulations. You basically work for the A TO and you collect GST and then give it to the A TO quarterly when you do your bath. So thinking about how do I reduce that? It's the wrong way to think about it. How do I manage that money? That money's not mine, that's my client's money and I need to give it to the A TO so's. Just so simple, separate it out into a separate bank account, don't think of it as your money and then just there's no stress when you pay your bass bill. It's sitting there ready to go. And I totally, I've been a business owner of a physical store, so I had infantry, oh my god, so much inventory. So the BA bills, they were huge and it is so tempting when things are a little bit tight to just be like, oh, just dip into that and I'll
Danielle Lewis (05:04):
Dip into that account
Amy Fox (05:05):
Later on. Amy can deal with that. But yeah, it's such a trap when you've spent it and then you are constantly behind because you can never get ahead because you've spent that money that wasn't yours and then you are trying to save for the next one and pay off the last one. It's just like, and you get into such a tough cycle then, and I think that's when it gets really like, shit, how do I reduce my BA bill because I just simply can't pay it. But it's such an exercise in managing your cash.
Danielle Lewis (05:42):
How do we do that? What is that? Well you mentioned separating it out. Is that the best strategy? How should someone think about the money that's coming into their business?
Amy Fox (05:54):
I think I'm such a big fan of profit first. I don't necessarily love the percentages. So I think you don't have to be super prescriptive when you read profit first to be like, okay, I need to set out this percentage and that percentage, I think it's 50% is owners wages and for some businesses that's just not feasible at all.
Danielle Lewis (06:18):
Some people don't have that much margin in their
Amy Fox (06:20):
Exactly. It depends what type of business you're running too. If you're a consultant and you work from home and you've got no overheads, maybe you can do that. But if you've got a physical store and staff to pay and products and slimmer margins, that's just not feasible. So the principles are awesome to separate out the money and it goes into a lot of the psychology of how you think about money. And I always tell my clients this, it's not your fault. It's just like how we've built to, if we see money, we spend money.
(06:57):
So if you think of it as not your money and it's in a separate account, you are so much less likely to spend it. But if it goes, cashflow is like a washing machine. You put everything in, it's spins around for however long and sometimes you might be able to take some out at the end. If it's all in the same washing machine, it's all mixed up. You dunno who's is, who's super messy, it gets spent on the wrong things and then you get in trouble and you're on the back foot trying to fix it for 12 months. Cashflow can be super tough to get on top of once you're behind. So yeah, I'm such a fan of the Profit first principles, separate out your money, don't think of it as being yours, really. Don't dip into it and just you'll never get behind.
Danielle Lewis (07:57):
That's such good advice too. I think that a lot of people even think about, I should just be putting everything through the business. Everything should be a business expense, so then therefore the card just comes out and it's paying for my morning coffee, my this. Yeah,
Amy Fox (08:17):
This is free because the business paid it.
Danielle Lewis (08:20):
Totally. And then you get to the end of the month and you're like, did I even make any money? Did I have an income? A really interesting thing that I'm hearing a lot of people like women in business talk about right now is actually even paying themselves ever and it's different. I think you mentioned before, what kind of business do you have? I think a lot of product-based businesses or tech startups, the idea of making money as a wage is it's almost, you don't do it. You raise capital or you investing, investing, investing back into the business. But I think like you said, if you're a consultant and you've got higher margins and it is just you working on there, it's a little bit easier to pay yourself. I just think that even that thinking about whether something is a wage, something is a business expense, and we really do have to reset our mindset around
Amy Fox (09:18):
This. Yes, I'm not a fan of making up business expenses just for a tax deduction. I think that's a really slippery slope. Then you're overspending because you're thinking, yay, it's a deduction. And then you just get a bit spend happy and it's still your money. I think a lot of people when you go into business, it becomes a bit like monopoly money and it's just like, oh, it's coming in, it's going out. But it is like your money. So if you thought about it in terms of how much you get to keep and how much you want to be paying yourself, it becomes a little bit different to are you spending a dollar to save 25 cents and get the tax deduction? Is that a smart way to spend a dollar to save 25 cents? It still needs to have a return on investment. I think people are just like, yeah, you put it through the business tax deduction, but did you get a return on that or was it just a total waste of money because you wanted a tax deduction?
Danielle Lewis (10:29):
And then I guess then it does come to that end of quarter, end of year and you're kind of looking at the bigger picture numbers and asking yourself, what am I even doing here? Is this business viable? Is it profitable? Is it helping me get towards my goals? I think that's the real trap of not compartmentalizing everything and not paying yourself and just running everything through the business and just thinking, I'll sort it out later. I think that can be a real trap for people. I get to that end of that period and they're just like, did I just work for Freak?
Amy Fox (11:08):
Yeah. And a lot of the time the answer is yes, your business might've paid for a bit of your lifestyle in those, getting those sneaky deductions through. But yeah, I mean I've seen so many businesses which from the outside you think are going amazingly well, and then the profit is just not there. And you were talking before about reinvesting back into the business and not necessarily drawing a wage. I'm such a big fan of drawing a wage as soon as you can, even if it's $50 a week or something. I think a lot of people get into the trap of, I'm building up an asset which is valuable, or I'll pay myself when X happens. And sometimes X never comes around and then you feel so disheartened. Normally three years in is when you start to feel quite disheartened that you've invested so much time and energy and effort into the business and money and you're not getting back what you've put in. It's like a bit of an energetic in a woowoo way. It's an energetic exchange. You've put so much energy into the business
(12:30):
Three years. If it's not coming back to you, you start to feel not great about it and you can start to feel like a bit of bitterness towards your business. So if you can start even drawing a super small wage, it doesn't have to be much. Just get into that habit and then build it into your costs. I think a lot of time you think, I'll buy this thing for $10 and I'll sell it for $20 and yay, I've made $10 on it, but you haven't added in, like you said, you haven't added in tax, you haven't added in your overheads. I think that's a real problem people get into where they don't spread that overhead costs and it's not easy to do spreading the overhead costs into your expense, into your products. You actually need to assign that cost as a product cost and it needs to cover it.
(13:32):
You need to sell it for enough to cover it, which is kind of like I was in business myself and I noticed that no accountants were doing this. I was trying to work with an external party because you're emotionally invested in your business, you're super close to it, sometimes you're a bit blind to what's going on. And I would've just loved someone to look over it from a profitability perspective. Tax. I was like, in a way, tax is what it is. It's laws, it's compliance. You make money, you pay tax. That's just part of life, but you get to decide how much money you make, that is the one thing that you can control in a way. So I was like, who can help me with just looking over the profitability of the business? And there was just no one doing it. So I was an accountant. I worked for really big manufacturing companies like Peter's Ice Cream.
Danielle Lewis (14:36):
Oh wow.
Amy Fox (14:37):
And then I was like, I'm going to start my own wellness business. Just total step change, just huge. I was going through, I had endometriosis, I was going through a big wellness journey myself, and I was switching to low tos, everything, and I was obsessed. And I started my business. I was selling low tos, like skincare, makeup, cleaning products, and we had float tanks and an infrared sauna. So I had both products and services. So it was such a good mix in terms of I made a lot of margin on the services, especially because there was no staff. It was sauna and float tank, so there's no staff cost there. And then selling other people's products, not the most amazing margin ever. So the volume had to be quite high. But yeah, it was so interesting going from looking at the profitability of a huge business Peter's and then going into a small business myself. I can't remember how I ended up on this tangent, but
Danielle Lewis (15:46):
No, well, it was interesting. I think even just the journey, I think a lot of people start businesses like, oh, I'm an accountant, or this, I've got the skill, and then they kind of get in and they forget about all of that kind of stuff. But how cool that you could actually transfer those skills into a completely different business. What was that transition? How did you feel looking at Peter's and then looking at yourself and was that a bit of a, oh, this isn't what I expected it to be, or was it this is better? How did that feel for you
Amy Fox (16:21):
In terms of the actual work? I loved it. So I absolutely loved, I had a physical store. I loved doing the fit out. I loved sourcing all the products. It was so fun for me. And in those first couple of years, I think I was working seven days a week and I just loved every second. I'm obsessed with business. I think it's just so exciting. And then becoming a business owner, and I've always worked in big corporates and it was so frustrating at times, especially being in the position of monitoring the profitability and I'm like, there's an issue here, and it takes six months to resolve it because it needs to go through this management team and that person needs to sign off and the CFO gets involved and the CEO needs and there's, it's so slow to, it's kind of like the Titanic. Turning around a huge boat is really hard When you become a business owner, you're like a speed boat. You have so nimble, you can make super quick decisions, turn the thing around so fast, which is I think such a superpower of small business. And I loved it. I loved, I see a problem, I can fix it tomorrow.
(17:53):
And that was very exciting to see how quickly you can move in a small business. But I mean, I had the same issues, like you were saying, I knew all those things and I still didn't pay myself very well for two years. And I was working on the assumption that I'm building up something that I can sell or things will magically fix themselves next year when I get to this revenue number. And I think I started paying myself something like $200 a week, and then it just was like nothing. I could just easily afford it. And I was like, why wasn't I doing this from the start? I just had it in my head, oh, the business can't afford it, or I'll keep reinvesting until it can.
Danielle Lewis (18:46):
And I think the challenge is startup costs depending on what you're doing. Like you said, if you're physical, there's a fit out cost. If your product, there's inventory. Unless you are home-based service, I mean even then people spend money on websites and all of this tools,
Amy Fox (19:04):
Oh, you can spend so much on a service-based business still.
Danielle Lewis (19:08):
Yeah. So I think that in our heads we go, I've got to invest all of this money upfront. I don't want to take a wage until I've kind of almost paid that back theoretically. But yeah, I really love the idea of thinking smaller, go. No, it's got to be structured right from the start. Even if it is 50, a hundred dollars a week or whatever it is for you just being in the habit, because then it is, you can look at it and kind of go, yeah, what is my wage? What is this expenses? What is tax? What is this and what is left? And then it's like, oh, I have a real business now.
Amy Fox (19:49):
Yes, that is so true. If you come out of it in the thinking, and this comes back to profit first as well, the principle of profit first is take the profit first and then run your business on what's left. I need to cough too, actually. Let's have a
Danielle Lewis (20:06):
Cough. Oh my God. Do it. Yeah, do it. Sorry. No,
Amy Fox (20:13):
Get that
Danielle Lewis (20:13):
Out. I know. I'm literally going to blow my nose while we
Amy Fox (20:18):
Yes, do it.
Danielle Lewis (20:21):
How funny. And that's why you have a podcast. Oh my God. And looks through my nose is so right. I've blown my nose all of the time and I look like a weirdo. Seriously, just
Amy Fox (20:35):
Edit that
Danielle Lewis (20:36):
Out. Yeah, Dan, my editor, he'll be like, what the hell is wrong with you? That hilarious. Just fix that up in post. Totally. Now I'm writing it down, edit out middle. Otherwise I'll forget. Otherwise, if he forgets that, this will just be a fantastic little side note for everyone where it's like, yeah, that's life blooper.
Amy Fox (21:04):
Anyway, first principles.
(21:07):
So yeah, if you don't, and this is human psychology too. If you've got budget there, you will spend it on something and it might be a good something, it might be bad something, but you'll spend it pretty well guaranteed. But if you take the profit first and run your business on what's left, you actually start to realize you can run leaner than you thought. Like me paying myself, I was like $200 a week. The business should be able to afford that. We could easily, the business could easily afford that. We got up to doing half a million dollars of revenue. We could easily afford that. But I was telling myself a story that we couldn't, and then just running off, I'll just take the scraps that are left at the end, no scraps. Take it first and then run your business on what it should be run on, I guess.
Danielle Lewis (22:08):
Yes. I love that. That is it. Stop thinking about me scraps and whatever's left. It's like, no, I built a business for whatever, freedom, financial freedom, financial independence, whatever it is. So that is a non-negotiable. That has to happen first, and then the business has to maybe reduce expenses or expand or whatever to meet that objective
Amy Fox (22:34):
Or as well, maybe the goal is to increase revenue. And then you start to get pretty scrappy with how am I going to increase the revenue because I want to pay myself a thousand dollars a week and I'm $300 off. Then you actually start to get motivated, whereas if you just like, I dunno how much I can pay myself, I dunno what our revenue targets are, it becomes very difficult to actually put something in place when you don't have those goals
Danielle Lewis (23:10):
And motivation.
Amy Fox (23:12):
Yeah, exactly.
Danielle Lewis (23:14):
Circling back to the start, why would you bother running a business that can't afford to pay you?
Amy Fox (23:20):
Yeah. I work with my clients a lot on that, and it's sometimes very interesting to see, especially how women operate. We're very like, well, I can't put my prices up, my clients can't afford it. And it's just a story that you're telling yourself. I've worked with women who have put their prices up and their clients haven't even said anything. They've just been call paid, done. It wasn't an issue. And in their mind, they're working themselves up for six months to put their prices up or whatever the thing is. So yeah, sometimes those stories that we're telling ourselves just aren't true, and
Danielle Lewis (24:03):
You
Amy Fox (24:03):
Need
Danielle Lewis (24:03):
To, and I think there's, sorry you go.
Amy Fox (24:06):
No, I was just going to say, you need to be rewarded. Business is a risk you invest. No one's selling a product or a service that they think is shit. Most women in business have an amazing product or service because they're so conscious that their clients are spending money with them and they want that money to be well spent. I don't think any women in business, at least that I know are ripping people off and selling garbage selling.
Danielle Lewis (24:41):
And they usually over-delivering as well.
Amy Fox (24:44):
Normally, yes. Yeah, a hundred percent. So the money is well spent, their clients are getting good value. But yeah, it's just that piece, a little piece about worthiness, I think at the end of the day.
Danielle Lewis (24:59):
Yeah. Oh my God, that's so true. And I find it wild too. A lot of times when women have a corporate career and they go into running it, so maybe they were a HR person or finance or whatever, it's like they forget that they were an expert and the best at what they did for a decade or two decades or however long. It's like you didn't lose any of that expertise when you started your own business. You are still a senior, highly valuable, highly whatever person you should charge accordingly.
Amy Fox (25:39):
It's so interesting, the difference, especially between men and women. I work with women. I just feel like women are really under supported, especially in the finance space. But there was this research around women and applying for jobs, and if a woman had, she needed to have 75% of the skills that required before she would apply, and men, it was like they'd had one or two of the skills and then they would just like, I could do that and apply. Whereas women needed to look at the job description and be super confident that they could actually do that job
Danielle Lewis (26:24):
That
Amy Fox (26:24):
They would even apply. So it's just the mentality between men and women is so different. I think that really comes through in business too. If I was working with a man and I was like, you need to double your prices, he'd be like done. Whereas a woman would be like, I can't do that. My clients can't afford it. I know I couldn't do that. It's super interesting
Danielle Lewis (26:49):
And I love how we project our own crap onto our clients. My clients couldn't afford that. It's like they probably can. It's actually you that has the block that you wouldn't pay that, or you don't have the money or you are not seeing the value, which isn't a huge problem. But it was interesting, someone shared a tactic with me for that to help women bridge that gap, which was, okay, if you're worried about raising your prices, you raise them for all of your new clients. So as soon as you start seeing, oh, actually everyone's just jumping on this new price. So now I go, okay, well, I can actually have permission to tell the rest of them that we're moving to this new pricing model or whatever. So it's a nice way to see that people will pay it first to get the proof, get evidence
Amy Fox (27:39):
If your prices aren't published. So I do that with my clients too. I'm like, just when the new client comes on,
Danielle Lewis (27:47):
And
Amy Fox (27:48):
You don't even have to raise the prices of an OG client. I think sometimes it's nice to reward someone who's taken a chance on you before you had amazing Google reviews or testimonials. You can keep your OG clients' prices as is. You don't have to increase them. But I think a lot of people in business as well, forget the basic economic principles of supply and demand. If you're a consultant especially, there's only one of you, so the supply is low, and if the demand to work with you is like, but you're still charging, you need to increase your prices to level out the demand.
Danielle Lewis (28:36):
And also, what is that profit goal? What does my salary goal look like? Therefore, how many customers do I need? Is this actually serviceable? If I want to make that much money, how many clients do I need? Can I actually physically deliver on
Amy Fox (28:54):
That? Be like, how many hours a day of client work is that? And can I actually do it
Danielle Lewis (28:59):
Or do I want to do it? It's all very well and say, well, if I worked for 12 hours a day every day, I could hit that revenue goal. It's like, yeah, but you'd be miserable.
Amy Fox (29:10):
Yeah, well double your prices and work six hours a day and pick up the kids.
Danielle Lewis (29:16):
Exactly. I love that so much. I could talk to you about this all day, but we better. Let's wrap up this podcast with one last piece of advice. So reflecting on your time in multiple businesses, what would be one piece of advice that you would give to another woman on her business journey?
Amy Fox (29:40):
Yeah, I think read profit first. I've said it like 20 times in this episode. I'll
Danielle Lewis (29:46):
Link it, going to link it.
Amy Fox (29:47):
Love the principles of it. It makes so much sense and it really does work when you implement it. And then also think of your business not as like a charity. You're running a business. You need to pay yourself, and that's not gross. It's not yuck. I think a lot of women, especially we've just discussed, feel a bit weird about charging for their time. And even though you were saying they might have, if they were going for a job, they would be fine to be like, the salary expectation is 150 grand, whereas when they're working for themselves, they're like, oh, I'll just take 50 bucks an hour, or whatever it is. And that for some reason, going, moving from being employed to working for yourself, the mentality really shifts where I would love more women to maintain the mentality of I'm providing a service. It's very valuable and it's worth it. You wouldn't go to work for free or for 20 bucks an hour or $50 a week. There's no way. So I think switch the mentality to your business is not you, it's separate from you. You're working for your business and your clients are getting a valuable product or service, whatever you're selling, and that you should see the value in that yourself.
Danielle Lewis (31:25):
Oh, I love it so much. Amy, you are incredible. Thank you so much for sharing your story and your wisdom with the Spark community. That was so good.
Amy Fox (31:34):
Thank you so much. Such a pleasure. I could talk about it all day as well.
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