For the love of small business with Tanya Ibberson

27 Apr

Description:

In this week’s episode of the Future-Proof Your Business podcast, I’m joined in the studio by the incredible Tanya Ibberson for another behind-the-scenes conversation in my series of 'For the love of small business.'

With over 25 years experience of working in accounting, financial training and business mentoring, Tanya is also a certified trauma-informed financial coach and on a mission to empower individuals and business owners to design the life you want using your finances.

In this fab conversation, Tanya and I discuss:

What made Tanya look at things differently and decide to become a coach.

Removing the stumbling blocks that get your way, to help you achieve what you want.

The importance of getting under the skin of your business and understanding your numbers.

The value of having a clear strategy and a plan.

Bookkeeping tips and tricks for getting started.

Why you need to understand how things work before you delegate them.

The three biggest challenges that business owners face today

The foundations of strong bookkeeping

The benefits of saving for tax and remembering it is not yours.

3 ways to help you feel more confident in your pricing

And finally, Tanya shares why she believes you should face the fear and do it anyway.

Find out more and connect with Tanya Ibberson here:

https://www.facebook.com/thefinancialwingwoman

https://www.instagram.com/thefinancialwingwoman/

https://www.linkedin.com/in/financialwingwoman/

Hello and welcome to the Future-Proof Your Business podcast with me Lucy Rennie.
I’m a massive champion for small business and I’m on a mission to help you to love what you do and to build and grow your business in a way that works for you and feels good.
I’m convinced that the best way to create a successful and sustainable business is to do it from the inside out, which means that it has to start with you, the business owner.
In fact, I believe that business really is all about people, and if you want to future-proof your business and make an impact then you need to get really clear on why you do what you do, create the best experience and then build relationships and trust.
In this podcast, I want to share with you as much of my knowledge, expertise and experience with you, as I can, as well as some behind the scenes stories and strategies from my business, and I’ll be having conversations with and learning from some amazing business owners and experts so I can give you everything you need to stay focused, on track and feel more in control on this rollercoaster ride that is building a sustainable business.
Lucy Rennie 01:12
Hi, and welcome to this week's episode of ‘The Future Proof Your Business’ Podcast. I'm Lucy Rennie and today I have got a wonderful guest with me. Someone who not only does she really know her stuff and is an expert in her domain, but she's also a gorgeous human being and I'm dead excited to welcome Tanya on today's episode. And I've been working with Tanya now for gonna say about a year but it's probably just under a year, isn't it? she's wonderful. So I'm going to read out I've got her official bio, and then I'm gonna let her introduce herself properly. And tell us a little bit about her story, what she does and how she came to be doing what she's doing. So officially then Tanya Ibberson welcome. So Tanya has over 25 years experience of working in accounting, and financial training and business mentoring. And more recently, she's qualified as a trauma informed certified financial coach, and is on a mission to empower individuals and business owners to design the life they want using their finances. Now, I know there's loads more to Tanya than that. And I know you've got lots of other plans in the pipeline, even some that you've announced this week, I think on social I've seen that this morning. So would you like to introduce yourself Tanya, and tell everybody who you are, and a little bit about your journey where you've gone? And kind of where you are right now?
Tanya Ibberson 02:54
Yeah, I'd love to thank you so much. Firstly, for inviting me on. I've been so excited to do this with you and come and chat. And so I guess in my own words. Hi, I'm Tanya Ibberson and the financial with woman. And I'm an accountant, business mentor, and financial coach, or trauma informed financial coach, I always forget to drop that bit in on the end. What does that actually mean? Well, all of my working life, I've been working as an accountant, I went straight from school into an apprenticeship into employment. So the work that I do today is a culmination of everything that I've done over the last 25 years, which is a bit of its accounts work, I worked in financial training for a while. So it's sort of a mishmash of everything that I've done before.
With the ultimate goal now being to help people remove those stumbling blocks that get them in the way that get in their way to help them achieve what they want to do when they're running their business. Because we don't tend to start businesses for the good of our health, we either do it because we want the flexibility or we do it to earn more money rather than earning it for someone else. So it's important that we do that with our eyes wide open, in my view. So that's the mindset side. And then the very practical side of where now we know what you want and what's important to you as a person, but how are we going to use your business to get you there in the fastest time possible? And keeping HMRC and all the people like that happy.
Lucy Rennie 04:41
Yeah, it's so true, everything that you're saying. And I think it's brilliant because we need more people like you who can help us because you're absolutely right, isn't it? I think most people who start a small business, they do it because they love what they do or it's a passion or it's, something they're not really thinking necessarily about the plates that they've got to spin. I think as well, maybe because of the sort of, I don't know, is it a stigma? There's something around money and finances? Isn't there that kind of? Is it being British? Maybe we're not used to? Are we talking about our finances and money? And so I know for me, it was quite tricky, to let somebody in and to see what's going on behind the scenes of a business or to find someone you can trust that you can have those open conversations with? So I think, yeah, I get what you're saying. So, I don't know. Do you find that as well? I'm not on my own. I don't think am I with that?
Tanya Ibberson 05:41
Oh, my goodness. No, I can I completely completely agree, I think there is a huge amount of stigma. And it's a trust thing. So we're brought up, we're not taught about how to manage our finances in schools, the only examples that we have our nearest family members, mum and dad, maybe grandma and granddad or aunts and uncles. So if they weren't happy to share and comfortable to talk about money, then as children, we just soak up our environment, we just pick up on what's going on around us. And if dad comes home from work one day and says, Oh, God, money is the bane of my existence, just as a well known example of a throwaway comment to do with money. As a child, we find that really difficult, our brains find that really difficult to understand. That's just having a bad day, and he's just shouted spouting off, we hear that and we go, Oh, my God, when dad's had a bad day, it's to do with money. And it makes me feel really anxious because he's, not in a very good mood, or he maybe shouts at me a bit more. And talking about the stigma the side of things, I remember once asking my dad how much money he earned. And a typical Northern 80s Dad he just threatened me with a thick ear. So when you when you actually look at what that means to a child, the very basic I asked about money, I get threatened with violence. So what is it that we learn, just from those day to day conversations that our parents just make these throwaway comments, we carry those comments with us. So it's no wonder when it comes to, you know what I'm going to set up my own business, I'm really, really good at this. Why should I be earning all this money for an employer when I can only for myself, but there is all the other stuff as small businesses that we have to pick up, and we have to be able to manage, including the finances, but all of the other stuff, too, like getting yourself out there and marketing your business, the legal side of your business. So it's huge, I think it's really tricky, particularly when you do it on your own. And if you're in partnership with someone else, that's great to share that burden. But as a sole trader, or a single director, as a business, it's hard. There's a lot going on, and when our emotions get in the way, which is often what happens with money. We find that we stop ourselves without even realising why. Or we find it tricky to have those conversations about what our prices are. All we know is that it makes us feel uncomfortable. It's tricky to get under the skin of that without the help of somebody that can safely take you through it. I think that's, part of what I like to do.
Lucy Rennie 08:25
I think it's so powerful. I think tradition, I don't know, I'm going to talk about stereotypes now of accountants. But I think, traditionally, we think traditional accountant, kind of quite stuffy, quite, not very approachable, quite scary in a way. And also, I don't know, for my experience, we always used to think of accountancy as kind of looking back over what's happened and kind of looking back over the years accounts, whereas actually, I suppose as business owners, and a lot of the clients I work with myself included, we kind of need that support of looking ahead, don't we, like you've just talked about, it's not just about accounts, but it's actually about pricing and, strategy and how we're going to do things and helping us to think ahead. So I'm really intrigued as to your journey really into what made you kind of look at things differently and what made you bring in that mindset and go and be trained as a coach in that sense, can you talk us through a little bit more about your experience and how you started? Did you start more as a traditional accountant or did you always know you were going to be this amazing financial wing woman that would do things differently? What was your story?
Tanya Ibberson 09:52
No, the financial wing woman is really new she's a really new part of my business And, since being more online in the last couple of years, my background has always been traditional accountant. It's always been I am a support role, I sit behind my laptop or behind the desk, I play with my calculator, and I give the information to the business owners. But I was finding that the more conversations I was having with clients, particularly when I was progressed in corporate, and then when I branched out on my own, that there's just so much more to the numbers. Like you've just said, accountants traditionally look back. But whilst that's needed, we need those historical numbers to work out tax bills and things like that. It's actually irrelevant. At that point, it's only useful to calculate the tax liability. And that's not good news for nobody, unless we can reframe I only pay tax when I have a good profit in my business, in which case we can be really positive about it. But what's actually useful is what am I going to make this month, this quarter this year? How can I make more if I want to make more. How can I save more money? How can I pay less tax? Or how can I support my profits to be able to remortgage my house next year, which is what I've got on the car. So to be able to understand what people needed, I knew I needed to have more of those personal conversations, because, as you said earlier on, you can't just speak about stuff like that with someone that you don't trust, or that someone that you don't have a little bit of knowledge about. And the mindset side of things for me really stemmed from going way, way, way back into my story now. Actually not really having an understanding of the technical, this is how you are an accountant.
Tanya Ibberson 11:42
These are the textbooks these are the exams. I qualified as professional accountant in 2004. But I have not mastered the mindset side of money. I found myself in a financially controlling and abusive relationship. I found myself in a lot of debt. And, again, linking back to the stigma, I felt rather that I couldn't ask for help. Because I felt not only did the normal person who had debt might struggle to talk about it, I felt if I actually told people that I had this issue with money, and the fact that I had such a terrible situation going on at home, that I would lose my job, which is probably likely, I potentially could have lost my licence because the debt was a professional issue, not just an ethical or a stigma issue. And I knew I had to turn that situation around. Because at the time I physically couldn't afford to leave my ex husband, I had to find a way for myself and my girl at the time, she was only four. I had to turn that around. And in doing that work, I understood that a lot of what was getting in my way, was how I thought about myself how I thought about what my value was, how am I charged my prices, and once I actually got round to sending those invoices, then chasing upon being paid on those invoices. So I felt as though I had to do absolutely everything the hard way. But then when it came to having turned the situation around and thinking well hang on, if as a professional accountant, I can find myself in that personal situation. I should share this story more. Because it really doesn't matter what your background is, doesn't matter what your situation is, it doesn't matter who's to blame. At the end of the day, we can all take control, we can all be empowered, and we can do that work to be able to turn any situation around. And if that means that all you have to do to get that is ask for help. Then here I am.
Tanya Ibberson 13:53
I'm not the only person that does this. There are lots of people that offer this support. But the first step comes from an awareness of I can't do this by myself. The second step comes from actually speaking up, I need some help. Does anybody know somebody that can help you with this? And then the rest sort of follows on? So, that was a long time ago now, my eldest daughter, she will be 19 in September. So it's been a long time coming, which she’s going to university in September, she's excited but am in pieces. That's that. So I did the financial coach, and then I did the trauma informed coaching. And now I'm just started doing the ICF coaching accreditation, because what I've actually really liked to do deep down is to change the energy of the industry in general. Rather than having people that are fearful of having those conversations with accountants or feeling that they're untouchable, they don't understand them. Let's turn the onus on that back on the accountants and a professional in the industry to say, You know what, there's no reason we can't be accessible to all of these people that need our help. Let's change that. And make it easier to access make the language easier to understand, it really doesn't need to be complicated. But accountant’s it's one of the market in joke with accountants is if you don't know what to do read last year's file. And what that means is, if we're not sure how to treat something in the accounts, we've listed, look at what they did last year and go well, that will do all and obviously, it's not as simple as that, but it's just the standard joke. And it's why I quite often put on my social networks, if in doubt, just check the file for last year. And that's it's an in joke. But it doesn't need to be that way. You know, we can do better as a profession. So I'd love in time, maybe not in the next week or so. But I would love to be able to do training and working with more accountants to do things differently.
Lucy Rennie 16:02
Ace, and this is what I love. And I love that you said it. This is what I love about you. Keep me accountable. But it's so powerful, it's so good. Because I think I mean, that's kind of what I'm trying to do here really is join the dots and kind of bridge that gap between these big organisations that have got all this knowledge and people who know what they're doing and help small business owners get access to that and even like you say, just being able to ask for help, even that is huge, isn't it and knowing that there's someone there who can help them, and it doesn't have to be tricky, and there's big sort of taboo, and there are ways around and it doesn't have to be all scary. But actually you can really get under the skin. I'm always talking to people in the future proof club or my coaching clients about getting under the skin of the business and really understanding,whether that's the numbers or the people that they're working with, or the values and all those foundations, it's the same I think if we can break down those barriers and get people talking about it a lot more and communicating and understanding it and embracing it, then that's the power. That's the key, isn't it to future proof your business? Really, it's kind of knowledge and not making assumptions and not like you say about that? Just what what they did last year? Well, no, let's actually go and fact check it and understand what was really going on? And certainly, we can do something about it or fix it.
Tanya Ibberson 17:35
That's it. Yeah, it's knowledge is power.
Lucy Rennie 17:37
Yeah. And I know you came in, didn't you and you did a session in the future proof club all about the money mindset. And I know you had a massive attack on everybody in there. And kind of thinking about different things. And again, it was honestly, the feedback that we got was amazing. And it got repeat. And like you said, sometimes it's just noticing or being aware of what's happening, or what you're thinking or these inner beliefs that maybe we don't really know that we've got, and, communicating or sharing that. And I think that's probably the first point, isn't it to them, being able to work through them and work with them? And, you move forward on it. I'm just wondering for you, because I know you work with lots of different small business owners. What would you kind of class I'm gonna put you on the spot now. But what would you kind of class is sort of the biggest the three? The three biggest challenges that most small business owners sort of face today, in terms of their numbers or their business? What do you think they would be? What do you find that most? I'm sure they're probably the same, Aren't they pretty much for most business owners?
Tanya Ibberson 19:01
Yeah, yeah, they are. I think. Firstly, I think bookkeeping is hugely underrated as a part of the process. So if we think about when we prepare a set of accounts, or we prepare a set of numbers, whether that's for filing with the tax office and Companies House, or whether that's management accounts internally to be able to make decisions, the numbers that we look at, are only as good as the data that's actually pushed into that accounts machine like a sausage machine. And if we put rubbish into a sausage machine, we're not going to enjoy the sausages that come out the other side, they're not going to be very useful to us. So getting the bookkeeping and getting the real foundations in place first, is really, really important because we don't then have to worry about Well, wait a minute, I think I could have claimed VAT back on that invoice or, Oh, we have claimed VAT back on all these invoices. And I'm not sure that I should or I'm not sure that I've got the bits and pieces. It's just a massive distraction from giving you the information to enable you to be the CEO of your business. So getting lost in the minutiae of, well, the 17 penance straight there, that is irrelevant, but it's important that it's dealt with correctly. Because if HMRC decide they're gonna come and take a look at a business's books and records or ask questions about the taxes paid, they will pick up on the 17 penance, because it could be an indication of a bigger problem somewhere else. So we just want to show them, I've got this great system in place, I am in control. And this is how I store my purchase invoices. This is how I deal with my expenses. My banks are reconciled every week or month, or however often they're done. And it's taken care of. So bookkeeping is the number one, saving for tax as you go along. Here's another really important one, whether that's purely business tax, so income tax or corporation tax dependent upon how you run your business, and then also the sales tax or VAT, if again, if relevant if your VAT registered, because we've all got the money that we earn. And we have to remember that it isn't all our money, it's not something that we get to keep. So making sure that again, we're just taking that out of the equation to start with, and then we don't fall into spending too much money or withdrawing too much money for ourselves, and then leaving a huge issue that's going to bite you on the backside in nine months time or however far down the road.
Tanya Ibberson 21:39
So get the basics foundations, right, save for tax. Third one, pricing, I think, is probably the next biggest thing. That is probably one of the most common conversations that I have, whether that's a confidence thing, can you just check does this make sense? Or a little bit, I don't actually don't know how to price my services. And I always talk about three different approaches to look at pricing. So the first thing I would suggest is to look at what costs you have, in order to make sure that what you're pricing covers everything, plus paying yourself plus the tax and everything else. So cost is one. The second one is competitors. So what are other people charging for similar services to you. And that might sound quite straightforward. But it quite often isn't, because it depends on how you position yourself within your industry within the marketplace. So you might market yourself as selling, I don't know off the top of my head water bottles. Well, a Chili's water bottle would be a lot more pricier than something you might get from the supermarket. And there's a reason for that. So they might be better at keeping your drinks cold a chilly water bottle rather than a plastic one from the supermarket or whatever is involved in the pricing decision. So it's not just about well, let's just get three prices for a water bottle and compare. And then the third one is the customer, we've got to give some thought to what people are prepared to pay. Because sometimes we can have the best offering the best value with all this amazing stuff thrown in. But if people aren't prepared to pay what it costs, you're not going to sell it. So there needs to be some thought given to am I completely priced myself out the market? Do I need to cut back on what I'm trying to include in order to get people over the line? So the three C's, I call it? So those are the three main bits I would consider on the pricing side.
Lucy Rennie 23:52
Yeah it's so good. And you're right, I'm going to come back to those C's and bookkeeping. So getting the foundations in place you said about saving for tax. Yeah, I suppose I see that quite a lot, actually, in terms of especially when people reach the VAT threshold, and suddenly they've got this big vat bill and they almost kind of feel hard done by that they've suddenly got to pay this money to HMRC. And I suppose it's like you say it comes back to mindset again, isn't it? It's not your money in the first place to be but exact logic isn't it that we need to embrace? And then the third one, which is pricing. So couple of questions that with the bookkeeping, any tips, any tricks, anything that you would recommend to kind of help people in the beginning or maybe to just take control? Or are you just gonna say because I know that's what I do delegate to somebody else to look after? Because I know there's loads of apps now and things like that because I imagined the olden days when it was like I remember like a shoebox it's full of receipts and things, at grandma’s. Yeah, times have changed a bit now, haven't they?
Tanya Ibberson 25:06
Yeah, but the gear they have, and with the tax rules changing as they are people in business now have to have digital accounting records, all the rules have sort of been phased in, so that’s going to eventually impact everybody. Anyway, so Tips To be honest, I mean, delegation is absolutely the right thing to do, particularly once you've got your business running how you want it to, and you understand yourself, I think, My personal preference is not to delegate something that you don't have an understanding of, just purely from the point of view of if your bookkeeper isn't able to do it, or they decide that they're going to leave you or the supplier using closes down or whatever hurdles might come in the way it needs to be something that you've got a handle on it, also that you're able to interrogate. So you can blindly trust somebody to do that for you. But are they doing it correctly? Are they giving you information that is of use to you. So there needs to be an over overview, really, on the bookkeeping side of it. But my tip for getting started certainly, is to do it frequently. And often. Because with the best will in the world, I can't remember what I had for breakfast yesterday, nevermind what I spent in app on Amazon a week ago. So if I don't keep on top of my expenses, and my mileage claims and making sure that my receipts are saved, and the system that I used, it very, very quickly becomes a huge task, which I then put off even more, because oh my god that's going to take me ages. I leave that and so I've got a quiet week, which never comes. So before you know, it's the day before your VAT return needs to be found and you've got a quarters worth of stuff to deal with. And it's now become urgent. And then it's stressful. And that's where mistakes are made. That's when we try and cut corners. Or we may do or we maybe miss out on tax relief, because we're just gonna have to get this in, I'm just going to process it without the VAT playback, for example. So almost setting a date with yourself in your diary, whether that's once a week, once a month, or however works for you. I guess it depends how many transactions you've got going on in your business as well. But setting a date and holding that time sacred, is money time. And it's really empowering to understand and know, because at the same time, you can check who owes you money you can check have i invoiced for all the work that I've been doing. So it's not just about I've got to play with receipts now for the next hour, which there's nothing enticing about that. But if we can combine that as a, when I get this done, I'm going to know exactly where I stand, and I'm going to know what I'm owed, and what's payout? And I know that those numbers are correct. Which is really important as business owners.
Lucy Rennie 27:57
Yeah such good advice. I'm just gonna pick up on the bit where you said, it's really important to understand how it works first before you delegate because I think that's such good advice. And that can be applied to all areas of your business cant’ it, whether that's marketing or, whatever that might be before you say, let's delegate and when you can grow your team, but I think it's really valuable advice to understand what's going on so that you can sense check it, exactly what you just said. So you know, what's happening, and you can then understand the value that comes from that. So yeah, that's so, so important. And then we talked about, you said that the last thing was about pricing, didn't you? So saving for tax? Definitely. And I think that's just one of those things that you've just got to do and be really disciplined about it, haven't you? I think and I don't know if there's any tips on that of how, you might help people to do that. But I think the pricing is also really important. And link to so many things within a business, isn't it in terms of mindset, again, and how your self worth and how you value yourself? You know, there's such a mixed bag of so many things, I think that come in behind the scenes on that your input and I suppose your expertise in that is really valuable. So I don't know if there's any other things you want to share with that in terms of helping people to does that help? Does it get better? Does it get easier as you go along? I'm not sure.
Tanya Ibberson 29:34
I think if its something that I mean, at the end of the day when we're running our businesses, even though it's small in inverted commas. It's not small to us, is it? Our whole livelihood really depends on it. And the plans the future that we want for our family depends on it. So if we can start to view ourselves as the CEOs of our own businesses that we actually are, then to be a CEO. We don't get bogged down in the 17 penances and have I reclaimed the VAT on that parking ticket, for example, we rise above the business. And we take an overview of everything because at the same time as thinking about what budget you have available for marketing in the year, we need to be thinking about what choices I'm going to make with the marketing, and how that's going to help get me where we want to be within the business. So is that to be doing some more networking is that to be putting adverts in local trade press is that to be focusing on social media and Facebook ads and things like that, all of that needs to be really targeted. And, we can't make that decision without having all of that information. So when we can step up and out, it means that we've got more of a, like a helicopter view, almost to be able to make different decisions. And the other thing that I think people quite often can lose sight of, particularly on the pricing side is we think of pricing as money we think of pricing is what I charge people and what they get for what they pay, as well as what it costs.
Tanya Ibberson 31:12
So it's easier in a way to use the water bottle analogy, because I've got to buy those water bottles in I've got to pay for them to be printed and to be branded how I want them to look. And then I've got to post them and I've got to put them in a nice box with packaging. And I've got to print a lovely card to say thank you for buying my water bottle. So I've got a tangible cost. And I know that's going to be per item. As a service based business, that's harder to do, because we don't have very much by way of cost. So the way to price it then is to put a value on our time, which is where those mindset Gremlins can come creeping in. Because we always we tend sorry, not always I always, but we tend to undervalue ourselves. And we also tend to underestimate how long something is going to take. We underestimate the short term and we overestimate on the long term side of things. So really managing the pricing, it's not just about the financial resources, it's about us as a resource. Because time is completely, totally non renewable. Once it's gone, it's gone. So having a handle on how we're spending our time as a resource is a really big factor in pricing and how we run our business. And that's where the delegation piece comes in. Because once we get to grips with, it's okay to trust other people to help us with certain parts of our business, that's when we can really free ourselves up for the really important things on where we can add the value. So the time is important, and it's often overlooked in the same way as connections is another resource is people if we're cash poor, but we've got more time, we can maybe learn a new skill, or we can network more to make more connections with people where you could have like a skill swap, for example. Rather than having to spend more money to get that help within your business. Sometimes, a lack of immediate financial resource can be enough of a block to stop us in our tracks. And it doesn't need to be if we think about what other resources we have available to us. So all of that can be brought in when we're thinking about the pricing side of things.
Lucy Rennie 33:25
Yeah, it's really resonates. Even just today, in fact, I've had a conversation with a coaching client where they were, I'm not going to name names, but they're organising a two day event in a couple of months time. And we were talking through the communication plan and how to really target the right people. And the question in the session was, how can I make sure that we, get more people buying and coming to the event? And actually what happened was, we had a conversation about, well, actually, what's the objective for the event? What are we trying to achieve? And actually, what does that look like, even just in terms of breakeven, in terms of actually to make sure we've covered costs? And then is there a target for profit, or all those things? And this particular person kind of went up? It's going to be okay, I know when we're going to be okay. And actually, they hadn't gone through the process of mapping out what all the costs were so couldn't give me a definitive number. And I think very often as small business, we kind of do that, don't we? We've got an idea in our head, and we sort of think, oh, it's going to be okay, we've got this, this kind of idea. Whereas actually, again, going back to having the facts and getting really clear on what that looks like helps us to get there. But secondly, I think what you were saying as well was the fact of even when we did actually start to look at the cost, her time wasn't a consideration. It wasn't even implicated into that, that cost equation which is huge, isn't it? What you're saying is we've completely forget about the fact that we've been doing this and that's our livelihood isn't it, this is the bread and butter of the business.
Tanya Ibberson 35:10
Absolutely, And if we're not factoring in our time, to be able to pay our bills and contribute to the household running cost, then we might as well just go out and get a job and go work anywhere, it doesn't matter where. So that has to be factored in. And the rest is just an appointment, but with all the stress and all of the responsibility, and then needing to fulfil and meet the needs and expectations of clients for no reward. And that just makes no sense at all.
Lucy Rennie 35:47
And that's when we lose the joy, isn't it? That's when we start to resent it.
Tanya Ibberson 35:52
Yea we get resentful.
Lucy Rennie 35:56
And I think you mentioned it before the word control. And that's something I like to talk about when we've got a really clear strategy. And we know where we'd go in and we've got a focus, we feel so much more in control that we have our business and we're not shooting from the hip, or we're not kind of, going day by day, but we feel more content and it changes the whole demeanour, doesn't it and the way that we approach business.
Tanya Ibberson 36:23
That’s it and when we're making decisions, if we don't have that financial information at our fingertips, because the software that we're using, such as Xero, or QuickBooks or whatever you're using, if it's takes a month or six weeks to get that brought up to date, it means that when someone asks a question, or they ask for ‘Could you do me a price for an event’, and this is what I want, and this is when I want it, you don't have the information available to be able to give an accurate quote. So that could mean overpriced, and it could mean underpricing. But it all comes with a bucket load of stress and anxiety, because you just don't know, we could be really close, we could be thereabouts. And, or it might be okay. But it might not be okay. Because we've not got that information at our fingertips. So that's where getting the foundations in place and running regular updates to make sure that when I need to know this information from my business, I have the financial information up to date to be able to make decisions. We can be more strategic, we can be more long term.
Lucy Rennie 37:29
Yeah, I'm completely with you on this. I did a session. I don't know, maybe at the beginning of the year in the Future Proof club about just KPIs and just helping people to think about, not necessarily just financial, but just kind of how are they going to measure success? And how are they going to know actually whether, the business is moving forward and what that looks like. And I'd be dead honest, it blew my mind. And I think that's probably because my background is corporate. So, when I was head of communication, I was literally reporting every week, and we had every single thing had to be kind of, reviewed and reported on and we had a whole team of financial controllers who would look at the budget, and what was our forecast for the next five years? Or where are we with that? And what's that look like? And which is the other extreme, but for me, I suppose what I'm trying to say is that it's kind of the norm to have those KPIs in place, and to be able to sort of monitor at least even just to have a target or a goal of where we're going. And what blew my mind, was it actually quite a few people. They've never done that before, it was completely new concept to actually think about, having that forecast, or having that budget or having just even just a couple of targets or goals in place to be able to then track it and see whether actually, something's working or not. So I suppose my question is because what I don't want to do is, is kind of overwhelm people and go, Oh, here's 50 KPIs, you need to be tracking and putting in place tomorrow, because that's just going to have the opposite effect, isn't it? It's not going to work at all. But if there were maybe two or three things that people should be, maybe focusing on or having as a kind of a priority to monitor or to track, what would you suggest that people sort of keep an eye on or make sure that they do know these numbers, what would they be?
Tanya Ibberson 39:24
So there's, when you look at a set of accounts, you've got two main parts to a set up accounts, you've got the profit and loss, which is like a video shot of the entire accounting year, let's say so if your financial yearends in December, then the profit and loss shows you a video of everything you've brought in and you've spent from January through to December. And that's all the income in that time and all the costs in that time. And then you've got the balance sheet, which is the other main one, which is essentially a photograph. It's a snapshot of what the numbers are on that one day. The Profit and Loss is really important. And there's two main sort of KPIs two factors that I would look at in there. And those are both the gross and their net profit margin figures. Because the gross profit margin will tell us if we're immediately covering our costs. So if we've got a product based business, we need to make sure that we are charging enough to cover the costs of the items that we've sold. So the gross profit margin will tell us if we've got the base pricing about right, so we need to have an idea of what we would expect that margin to be. And it means that on a week by week, month by month basis, we can see straight away if that number is wrong. And it might be that we're not pricing it correctly. Or it might be that there's a problem with the recording side of things. And we can take action, before it becomes a huge problem before we get three months past the year end. And actually, we've been doing this role for six months. And now it's really impacting the bottom line. And then the net profit margin is after everything else has been spent. So all of our overheads including our own salaries, what percentage of profit is available, after we've spent everything we need to spend to run our business? So are we covering our costs? What is the run rate of our business? How much are we spending on an annual quarterly monthly basis, because that then gives us the basis of a forecast. So if I know on average, I spent 5000 pounds a month on overheads, well, now I know how much I need to bring in every month is an absolute bare minimum, and then the rest is profit. So we can flip those numbers around once we've got an idea of the margin. And then on the balance sheet, so where our assets are, whether that's computer equipment, office equipment, how much money we've got in the bank, how much money is owed to us, from our customers, and then how much money we owe out to the tax man or suppliers, etc. Then any loans or more money owed to directors, I would look at the debt ratio on the balance sheet. So have I got enough money to cover the amounts that I've got going out? So if I owe 50,000 in tax and supplier payments, but I've already got assets of 20,000? And that will be a really big red flag?
Tanya Ibberson 42:18
How am I going to get the cash in to cover what I've got coming up? So are my liabilities covered by assets or covered by imminent profit that I'm going to make? And then return on investment? So are we actually making money year on year is that number at the very bottom of the balance sheet? Is it going up. And if it's not going up, that's okay. So long as there's a reason for it. So you might have a year where I'm going to reinvest all of my profits back into my business because I want to invest in a podcast, I want to invest in a coach, I want to invest in huge big marketing drive, in which case, well, that might not increase year on year. But otherwise, if we're thinking longer term, we're thinking 15 years from now, I want to grow my business to a point where I can sell it. And that's my pension fund, well, we can start to put those KPIs in place now. If I want the value to be X amount in 15 years, I've got these 15 Little steps that I can use to get me there, I don't have to hit that button right now. I can start to put that plan in place. And it's easier to see your progress. I think when you use KPIs and margins and ratios like that, because it's not just a number, it's not just their profit figure. It's comparing to last year and it's like we as individuals, we should just be comparing ourselves to old us, are we moving the needle for ourselves and feeling fulfilled for ourselves as opposed to looking at what everybody else is doing? It's the same in our business, are we moving it forward to where we want it to be? And what we want might not be the same as the next person, the next person might be wanting to grow it to bring their family and to help so that their kids all are employed, and they're going to help run the family business. And then we're going to consult and they're going to pay me a salary and that's my pension maybe 15 20 years from now. It's so personal. And that's where that trust comes in that conversation. What matters to you? What makes you feel fulfilled? Where do you find joy? And then let's do it that way. Let's not read the newspaper and see what everybody else is doing. What is important to you as a business owner and then we make that work for you. I think KPIs are great to play with it. I think they're massively underrated.
Lucy Rennie 44:53
Yeah, me too. And I love everything that you've just said there because I mean, it's basically the essence of my book and kind of my approach, is helping you to build a business that really works for you and feels good and that you can enjoy. And you know, it is going to be different to the other people in and around us, isn't it, you've got to do it in your way. And that's the way that you're going to make it more sustainable and more successful. And again, like you say, success depends on who you are and what you're looking for. But I'm hearing what you're saying. And, almost I think, for me, the main takeaway is about keeping your eyes wide open, and getting under the skin of your business. So actually looking at those numbers and being aware of what's going on, because the sooner that you can see it, if something there is a red flag, or, the more you know what's going on, the more you can adapt, can't you? And you can, do what you need to do to make sure that you are sustainable.
Tanya Ibberson 45:57
I was just gonna say, knowledge and power, it's just we can remove emotion when we're dealing with money with knowledge. And we get knowledge from taking control of what's going on. So the eyes wide open, put those blinkers back on, nevermind or anybody else is doing. You do you. In a world where it feels really isolating to do that in your business, it's hard. And that's where examples like the future proof club, like your membership, it's so good to bring those people together so that they have a network and a resource and somewhere that they can ask for help.
Lucy Rennie 46:40
We've just had a check in today. And quite a few of the conversations was around how lonely it is, as a business owner, and how actually, to have that safe space where we can come along. And just sometimes you just want to have that contact with people and know that other people get what you're doing. And that, you understand the roller coaster ride that is running a business. But also, I think going back to what we were talking about the beginning just sometimes it's just about being able to say actually, things are a bit shit, or I need a bit of help, or, I'm struggling with this, or can you help with this, is so powerful, I think, isn't it to have that, that community or those people around you that you can ask for help? And because everything's fixable, we've just got to be aware of it, haven't we and understand it so that we can then find a solution to it, I suppose.
Tanya Ibberson 47:33
I think sometimes it can feel as though you're really putting yourself out on a limb when you say, You know what, I'm not okay, I feel like I'm burning the candle at both ends. I feel like I've never get everything done on my to do list. And for somebody else in the group to go, oh my god, I'm so glad you said that. Because I feel exactly the same. It's just to know that what you feel is normal, that lots of other people feel the same way. And then sometimes just to feel better about thank God, I'm not alone, oh, you know what, I can do it and the end is insight, or it's okay, I'm employing somebody at that point. So I know it's only temporary, whatever it needs to be put in place. Sometimes a fresh pair of eyes or somebody saying, Have you thought about doing this, or I started using this software or this app and it completely cut the time in half. It took me to do my bookkeeping, or whatever it might be using artificial intelligence for ideas on marketing, isn't it? I mean, it's a bit of a black art to me, I've got no idea how it works. But you know, it's something that's for someone that can get to grips with it and help it to be useful. It can be a real game changer for people in business who just don't have the bandwidth to think about all these new ideas, because you're so focused on what you know, you need to get done.
Lucy Rennie 48:52
Yeah, that's so true. And I think just to add to that, I think sometimes we have this, I don't know how to explain it. But there's I suppose we feel that we have the need to be an expert everything and know everything that there is to know about the business. And actually, it's impossible, isn't it? You can only learn, it's like a kid who's learning to walk or whatever. And, it's okay to not know, and to say, I don't know, I think that's actually it's a lot of respect to those people who can say that and then that will listen and be curious about it.
Tanya Ibberson 49:30
That's the thing because we don't know what we don't know. So there's a whole world out there of things that could help but there's also a load of stuff that is just going to overwhelm us even more. So being able to have that interface with people to be able to say, Has anybody tried this and seen all these adverts It looks amazing for someone to say well, it is cool, but it costs 500 A month or I thought it was okay once I got it set up, but if I was to do it again, I would do a b and c so just to give a little bit of a boost to somebody else, particularly when you've got the accounts hat on and the HR hat on and the legal hat on the marketing hat on and actually doing the work to get the money into your business. It's a lot, isn't it? It's so much that you need to do.
Lucy Rennie 50:15
Absolutely. It's Oh my God, I feel like we could talk for hours, there's so many things we could cover. And my Wi Fi is dreadful. So I know there's a lag at the moment. That's what happens when you live on a hill in which there's just no Wi Fi whatsoever. But I think I'm gonna let you go very soon. I just want to ask you one last question. If that's all right, Tanya, before I ask you to share how people can get in touch with you. But if there was one piece of advice, there's one thing that maybe you've learned or maybe from your clients, or just one golden nugget, and I know, there's no such thing as a magic pill. But if there's one thing that you want people to take away, and maybe go and apply tomorrow in their business, or to think about or to ask themselves, what would you suggest what would be your final kind of nugget of the day?
Tanya Ibberson 51:12
I think that will be to face the fear and do it anyway, will be my final nugget. Because quite often the things that we're avoiding, whether that's an uncomfortable conversation, or whether it's I know I need to set up that new CRM system, because it's going to revolutionise my email marketing, whatever it is. The reason is, it's almost like questioning within yourself, the reason why you're avoiding it, is it because you're worried about the time is it? Because you're worried it means you've got to look at detail at your bank statements, or is it because it's a mindset thing, It's like those jobs that you put off and put off and put off and then you do it. And it only takes you five minutes, and you just go why on earth have I waited six months to get that done? It's the same with the things that were avoided. The reason quite often that we're avoiding them is because we've got some sort of unconscious avoidance going on our brain is trying to keep us safe, it's diverting us in a different direction, or it's telling you it's okay, you can go and put Netflix on for a while now you've worked really hard for today. But if you just give yourself that extra five minute push, that is when you have the real change, that's when you have the real growth within a business when you think you've got nothing left or you think it's too hard just to push past that little bit. That will be my little golden nugget for today. And even if that means that it's part of a group, you all say, right, what's the one thing you keep putting off, we're going to have an eat the frog session, or whatever you would want to call it. That's what you need to do to move your business forward. It's always the stuff we're avoiding. That moves us on.
Lucy Rennie 53:01
Honestly, that's the best way to finish up. I think it's the best way we've ended in 34 podcasts. Brilliant. And I love that you've been coaching, which is so face the fierce and actually ask yourself why you're not doing the thing is, wow, that's just gold. So yeah. And I think everybody, we can apply that to everything can't we. And then like you say, that's how you move forward. And we grow and we can kind of I think I was talking about it last week in terms of the one thing and thinking about the most important thing that we can do moving forward. And sometimes it's just having the grit to keep going, isn't it even when things are really it's picking yourself up and going with it. So asking yourself why you're not doing the thing or why you're avoiding it is brilliant. So thank you so much. Thank you so much Tanya for coming on today. Can I ask just before you before I let you go? Do you want to share with people how they can get in touch how they can find out more about you how they could work with you where they can find you where's the best place for them to find you?
Tanya Ibberson 54:06
I would love to thank you so much. So I have a website, which is www.financialwingwoman.com And then I've got the same name on Instagram, the @financialwingwoman on Instagram. So that will be on Facebook. I'm on there as Tanya Ibberson. So any of those, whichever handle for using whichever platform. Thank you. It's been so lovely to chat.
Lucy Rennie 54:30
It's been amazing. Thank you so much. And I am going to just remind you, you have got a book out as well, haven't you?
Tanya Ibberson 54:39
I do ‘Your financial flight plan’, I have gone red now. Yes. It's available. I actually lost my copy. I went to an exhibition a couple of weeks ago. And somebody said Oh, can you sign this for me and I'll buy it off you and I didn't want to tell him No, he couldn't have it. So I've given away my copy of my book. So I need to buy a new one, but never mind.
Lucy Rennie 55:09
It's brilliant. Well, thank you. Thank you so much for coming on today. It's been so good. And honestly, I feel like we could have chatted for hours and hours and hours and so much that we could definitely continue. But there's loads and loads of golden nuggets in there. So thank you. And what I'll do is I'll pop Tanya's information in the show notes. So please go and check her out and go and connect with her on socials and buy the book. And just thank you for listening. And if you have enjoyed this podcast, I would really appreciate it if you would, leave me a review, subscribe. And if you really want to share it with other people, other business owners maybe that you think might get some value out of it as well. So thanks for listening, and I'll see you next week for another episode of Future Proof your Business Podcast.
Thanks for listening to The Future-Proof your Business podcast. I have been your host Lucy Rennie.
I want to help as many business owners build a business that works and feels good, and the best way for me to do that is to get this podcast out to as many people as possible. You can help me do this by sharing it, clicking subscribe and especially leaving a review.
If you want to get more of my insights and resources then head over to my website IamLucyRennie.com, and come and join me and lots of other small business owners like you in my FREE Facebook group, Communicate with Purpose. All the links are in the show notes.
Thanks again and I’ll see you next week for another episode of The Future-Proof Your Business podcast.