The Bookkeeping Project Part 10
Bookkeeping profit report and tips
In this revealing episode, Amy shares her year-to-date results for her bookkeeping business. Making a comparison of her business now, to her former version of the business, including some major improvements. And shares about her plans for the remainder of the year for both Off The Hook Bookkeeping and The Bookkeeping Project.
The real message of this episode is “Your business doesn’t need to be BIG, it needs to be profitable!”
Series: The Bookkeeping Project
Host: Amy Hooke
Guest speaker: None
Topic: The Bookkeeping Project Part 10
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Welcome back. Thanks for joining me today. Happy Friday. Now, technically, it's not the last Friday of the month. As you know, I do record these podcasts on Wednesday. It was still October when I was recording this, but we're now in November. I have not planned the timing of my podcast very well. Let's just pretend that we're still in October and it's the last Friday of the month. You know what that means, the bookkeeping project. I'm going to be giving you an update on what's going on with off the hook bookkeeping. Today is going to be a little bit about what I'm planning for next year. I'm going to talk to you about the results that I've got in the business so far. Also, I've been doing some work on my marketing in the last little while, but I also want to give a bit of an update, I guess, of the past 10 months. Yeah, the past 10 months, basically.
For those of you who are just brand new joining me, you'll be able to check way back to Episode One where I restarted my bookkeeping business again as an experiment, so that I could apply all of the new and glorious creations that I'd made through my journey of running Savvy. Not only that, just to be able to have … yeah, just be good to be able to show people rather than tell them how to use all of the resources that I'd developed for Savvy over the years. As you know, I closed my business down a couple of years ago as I merged or naturally progressed into running what is now known as the Savvy Bookkeeper. I felt that this was a new direction in my career. Still in the bookkeeping industry, which was really important to me to stay in the industry. Yeah, I felt like this was such an organic growth, but what happened was, in the process, I thought, I enjoy working with bookkeepers more than with business owners. I decided to actually just completely shut the business down.
Yeah, I gave away my good clients and the ones I didn't like, I just canceled them and just kept going on with what is now known as Savvy. Anyway, January this year wasn't a well thought out idea. I decided to start the business again. It was a really off the cuff decision. For those of you who know me well, you will know that sometimes the way things become what they are is that an idea pops into my head, and the next thing I know I'm already working on it. I do have a habit, which doesn't always end well of acting on things before I think about them. I am rather impulsive when it comes to decision making in the business. That led me both down good paths and not so good paths. For those of you who are very measured and thoughtful and logical in your decision making processes and perhaps, take a long time to make decisions, I do not do that. You may not be able to relate to what I'm talking about, but some of you will be able to relate.
How the Bookkeeping Project started
Yeah, for me, it doesn't always end well, but in this case, it's really headed in a great direction. For me, an idea popped into my head. I was in a Facebook group where I had a monthly advertising spot. I started to promote my graphic design service, which is a part of the holistic service that we offer at Savvy. I did an ad. I paid for the ad. I advertised our logo design service. I didn't get any response. I thought, “Gosh, that was a waste of money.” I had to do one more post for the month, which I'd paid for. I thought, “Gosh, what am I going to write about?” It just popped out of my brain. I think I had, maybe, thought about it briefly the week before, but it just came out as I started typing. It just all came out. I hit post thinking, I might be lucky to get 20 people interested in following me in my journey.
> When I next came back to Facebook, I had over 200 comments on the post. I thought, “Oh my gosh, I couldn't keep up. I couldn't reply. I had to get one of my staff members to login.” Because what was happening is, as I was replying to people, more comments were coming. I got my staff to login and actually help me to reply to the messages. I got blocked from Facebook. Facebook banned my account multiple times. Apparently, replying to all of the comments that I was getting was in breach of community standards. I don't really know how, but anyway, it was actually a little bit stressful because I just haven't expected that response. I thought a handful of people. I've been working in the bookkeeping industry for a number of years now. I've been hosting webinars and in-person workshops. I've hosted various events and training and things like that.
I think that, probably, the highest attendance I've ever had at that point was about, maybe … I had a big attendance, maybe 50 people on a webinar, but in general, you probably get more like 30 people or something like that. I've hosted things where nobody has been interested at all. I just thought, “Oh, well.” I was surprised at that, but it was very exciting. The only problem is, I haven't figured out what to do with everybody. I had no plan on … I just said, “Join me and comment, I mean, if you want more information and I'll send it to you.” I didn't know what information I was going to send. I didn't know where I was going to put people. I didn't know what method I was going to use to share about my business.
I'd already started the podcast. I knew podcasting would be a part of it, but I didn't know how I was going to actually share with people about the bookkeeping industry, how it's going to share the templates. I just had no idea. What I started doing is just replying to people and asking them to send me a private message. I thought that'll buy me a little bit of time. Well, I can decide where to put people. I decided I'll just put everyone in a Slack channel and we can just communicate from there. Now, for those of you who have been following us, we've actually decided we're probably going to close down the Slack channel and move to Facebook. I think that's a bit of a more friendly place for people to be. Then what we're going to do is, we've got some people that are in some paying program parts of Savvy where they'll go into a different platform that we've started to use instead of Slack. That's basically the gist of the background of that.
If you're looking for the Slack channel and you're not able to access that, the reason is that we are actually moving. Don't worry. We will update you. If you're in our database, we will definitely send you an email giving you the new instructions so that you can continue to follow the project. Of course, they'll be continued to be updates on the podcast. If you guys are interested, I can keep going. I probably will, anyway. The podcast is going to continue into next year. I assume, what I'll do is, once a month, I'll still just keep giving an update on my bookkeeping business. I said I'd do it for a year and see how it went, but what I'm going to share with you about today is that I have decided that I am going to continue into a second year which is good.
Working on Pricing
I have been working on my pricing. Part of working on the pricing, it isn't just about deciding how much to charge for things, but for those of you who have done any of my pricing programs or anything like that, you will see that it's quite a comprehensive detailed process where you look at the big picture of the business. You look at your business goals, your income goals. You make a bit of a financial model, showing what your team looks like, working at team capacity and that kind of thing. Obviously, I set that up. I set up my own pricing catalog for the bookkeeping business using my templates from Savvy that I developed over the years for Savvy clients. I applied my own pricing structure, set it all up in PandaDoc. I was already using PandaDoc for my quotes and proposals. I set that up. I branded it. I got a new logo as part of restarting the business and everything. I re-setup my new engagement letters. I redid the terms and conditions. Obviously, I shared that with the members of the program and that kind of thing.
Growth so far
Yeah, I did that. What started happening is, as clients came in, I would just give them a fixed price quote and then they'd either accept or reject quotes. I've gone through and I've done a whole review of my pricing. What I've done in there is, I've updated my team capacity spreadsheet. This was really, really good because I … Look, honestly, I hope that the bookkeeping business would be bigger than it is by now. I have five clients in total. Since I started the project, it's less than I would have hoped for. In my first year of running the business, the first time, I had 10 clients by the end of the 12 month period. My income was $11,000 a month. Unfortunately, I was bit disappointed, but as of now, my annual income is $17,000 a year. I have had five clients. Three of them are ongoing and recurring clients. I was a little bit disappointed and you might be a bit disappointed hearing this.
You might have thought, “Oh gosh, Amy, I thought you were going to be a little bit better at growing the business.” Now, unfortunately, I really haven't committed the time to the business that I should have and that I would have liked to. Because what happened is, as you can imagine, so after, I think, 900 comments on that post and all the people in the project, we've got about 500 people doing the bookkeeping project. What's happened as a result is, once I started this project, Savvy absolutely and completely exploded. I have been up to my eyeballs here for the past … I started it in January. From February onward it's like gosh, I would say our business at Savvy has multiplied by two … I don't know how to explain it, 2.5 times. We're making two and a half times as much income and two and a half times as much work. Well, actually, probably more than two and a half times as much work because I had to employ more staff. I've gone through the hiring process. We've had to go through our final, their templates and things like that.
I was really hoping to dedicate a day a week for the bookkeeping business, and I rarely did that. There were some weeks where I didn't do anything, but really, I think … Oh gosh, I could probably tell you how many hours I've worked on the bookkeeping business. I think that's [inaudible 00:12:07]. I'm going to guess it's about 20 hours in total. Yeah, obviously, as you can see, I haven't really wholeheartedly committed to this, but I just wasn't able because I had to really manage the hiring process in Savvy, also refining all of our processes for Savvy. Because what happened is, as we had this influx of clients, what happened from there is that everybody … Really, what we needed to do is really refine our processes more and that kind of thing. Anyway, everything's stabilized at Savvy now. We've actually relaunched our pricing programs called, Pricing for Profit now. That's kicked off. We're doing monthly group sessions and things like that. That's really been fantastic.
Does it matter how big your business is?
Unfortunately, poor little bookkeeping business fell by the wayside. Well, I was feeling down on myself and I was feeling a bit embarrassed. I was thinking “How am I going to go to the whole community and go, ‘Guys, I suck. I've only got $17,000 annual income from this.'” I thought, “Hang on a second.” Look, this depends on where you're at in your business. Some of you are probably thinking, “Gosh, Amy, I make more than that in a month.” A lot of our clients at Savvy make more than that but some of you might be thinking, “I would love to make $17,000 a year from my bookkeeping business and only work this year.” The cool thing about that, I mean, does that work out? I've just got my calculator here. 17,000 divided by 20 hours. I just got paid $850 an hour. How good is that? Now, obviously, I didn't receive all of that because I had to give it to my staff, but what actually worked out, I sat down and I thought “Okay, does it really matter how big my business is? What actually matters is, is that possible?”
I went through. I've got this fantastic template, which I've actually spent … I've worked on it all weekend and just actually made it a lot better as I was working through it and updating my own data in there. I originally went and thought I'd restart the business. My goal, I thought, “Oh, yeah, I'm going to aim for $500,000 in the first year, and then I change it to $100,000.” Because I thought, “All right, well, I don't really have the capacity to do that.” As you can see, from what I said before, I can be a little bit impulsive and not really think things through. Sometimes I'll just go like “Okay, let's just pick a number out of thin air and start working towards it and then just see what happens.” Yeah, for me, I was like “Oh okay, $17,000 annual income.” That's a bit disappointing, but I thought, “Well, that's $17,000 that I'm going to continue to get every year, but I need to look at the bigger picture of this. Is the business profitable? How are we doing?”
What I did was, I plugged in all of the figures into this beautiful spreadsheet that I've made. The first bit is called, Profit Analysis. I've done an analysis of my profit. I've got the breakdown of whether the clients got bookkeeping, BAS services and payroll and whatnot. From there, I break it down. I've got this little comparison of how much work, based on the clients that we currently have, what team capacity do we need? I worked that up. I can also see what our breakeven rates are. I can see what our required hourly average billing rate needs to be for the basis of calculating our packages, which is really important. A lot of people just pick numbers out of thin air. I definitely say like “Let's stop doing that because, yeah, it's not a good idea.” Oh my gosh, I can't believe I said that. Before, I did just tell you that I like to pick numbers out of thin air and then work towards something, but this is different.
Yes, it's okay to pick a number out of thin air, but then what you do is, you need to actually look at that number that you've pulled out of thin air and you need to look at it and put it in the context of everything else. That's what, exactly, the reason why I decided to go, “All right, $500,000 in one year is not going to be achievable for me given my capacity.” If I had time to work on it full-time, I definitely think I could do that. Because I'm only dedicating a day a week to it, I'm going to aim for 100 anyway. I've hit 17,000. It's nothing to be upset about because as I said, it's ongoing income. Not only is it ongoing income, but there's other opportunities within these instances. Some of the clients that we've started with, we're just starting out with … For example, one of them said, “Look, start with the bookkeeping and then we're going to move on to taking over their payroll and then we'll move on to taking over their BAS.”
We're doing some consulting with with them as well. There's an opportunity there to be able to move into more consulting work and to branch out into doing more within that one company. I guess, you've got to also think about the lifetime value of a client. You don't just want to think about, is this client good at the start? You want to look at the potential value of the client. This is an excellent company to work for, this particular one. Then one of the other clients that I'm doing some ongoing work with, he's got another business. When he gets back from his holiday in Mauritius, I've got to set up a second company. We've gotten a second client through that one. The third one that's an ongoing client, that's just bookkeeping and BAS client. Fairly low maintenance and stuff like that, but the coolest thing about all of this is, even if you're laughing at me for only having $17,000 of annual income, I don't have to do any of the work. I've actually set myself up.
Importance of a good team and utilising them properly
I've got three team members. What I'm sharing with you is not identical to what someone else would be able to do. Look, I'm not doing this completely from scratch. I do have a team, an established team, at Savvy that I can borrow stuff and resources. Whereas, if you're starting from the beginning, starting from scratch and having to do all of this, the way that you would do it, it's not going to look the same as what I'm doing, but there's still lessons that can be learned from this. The way that I've setup my team is, I have a bookkeeper. I have a BAS agent. I have a Katie. I have a Katie. I don't even know what to call Katie, but she's management accountant/finance, strategist/business planning expert.
What I do is just work with these three ladies and they do the client work for me. The one thing that I do do is meet with the clients who have the consulting packages. I do the meetings with them. Yeah, what I do is, I just split the work between the girls. One girl doing the data entry, the other one checking the BASs. She does some bookkeeping as well. We've got Katie who then go through the data and I don't even know how to say it, analyzes it, puts it in a format. She'll help with like a cash flow or wages budget or something a bit more complicated, although the BAS agent can do this stuff as well, but it's good to have that across the whole team.
What I've been doing as well, I just realized the other day, what I really want to spend my time doing is investing in the team, teaching them my processes, teaching them what I believe is best practice bookkeeping and actually, nurturing the staff. What I decided to do was send them … as quotes come in because I've had quite a few inquiries, not all of them have turned into clients. I would say, I'm still on my average standard, which is about 25%. Of every four leads that comes to me, then one will become a client. I've got a whole bunch of proposals out there in the world. I look at some of them and I think, “Oh, they're not really good fit,” and that kind of thing. I don't really mind if they don't come back.
Anyway, as these quotes were coming through, I thought, “I didn't even need to do the proposals.” This is something that I've been fighting for profit. You don't actually need to do the proposals. You can train your staff on how to do it. What I did was, I sent my training to my staff. I said, “Hey ladies, can you please all do this health check training and get familiar with all of the templates so that you all know how to do a bookkeeping health check?” In that way, when new leads come through, I can just distribute them across team and have them do the health check and then prepare the quote based on the health check and then just send it to me to check. In that way, we can get proposals out quicker and then I'm not spending all of that time. Look, a health check takes about 30 minutes. It can take up for an hour.
Also, once you've got the health check done, then you have to put the proposal together, which is another … it can take up to 30 minutes depending on how complex it is. You're looking at like at least half an hour but up to 90 minutes to do that. If I can save myself 90 minutes and have the team do that and I just come in and do a 10-minute check and send it out, that's perfect. Because as business owners or as bookkeeping business owners, we always think about outsourcing the bookkeeping to the bookkeeper, but we don't often realize that the bookkeeping team, as they work together with each other, they can free up a lot of other things of my time. It doesn't just have to be bookkeeping, but it can also be part of the sales and onboarding process. Just gradually teaching all of the things that I know from my own career in bookkeeping to be able to pass that knowledge on to the team, but also the business skills, pass the business skills onto the team as well.
Keeping on top of your scope review
I've just actually brought my … I thought I'll just get the spreadsheet in front of you so I can actually talk about literal numbers here rather than just going off my memory. All right. I've actually got it here. In the pricing worksheet, what I've actually had to do … I totally forgot about this. One of the clients that we've engaged, I've quoted him for three hours a week. It's working out on a consistent basis. We do a monthly review and then a quarterly review. Now that it's up-to-date, it's consistently taking four hours. We need to actually switch him from the three-hour package to the four-hour package. What that's actually going to do … I totally forgot about this. This is actually going to take the annual income straight up to 22%. If he decides to come on for … Not 22%. Sorry. 22,000 annual income. That's total practice income, not just the one client.
He also said that he'd like us to start doing payroll. That's a weekly payroll. What I'm doing is, I'm just adding in one weekly payroll into my pricing worksheet. I'm adding in one more quarterly BAS. I'm going back to my profit analysis. That's 26,000 a year just by adding those two little services. He's got a TPAR as well, which his wife is doing. We would probably take over the TPAR and the work cover reconciliations, potentially. We're doing monthly consulting at the moment. Probably, I'm going to offer him a one off package at some point, but I'm not going to put that in there. Just by adding the TPAR, the payroll and the BAS, that takes out income up to 27,000 per year. That's fantastic. By doing that, I can immediately see the changes. I can immediately say, “Okay, if we're going to take on that extra work with that one client, I actually need an additional 100 hours a year from my staff.” What I can do is, I can jump into the team capacity spreadsheet. I can just increase the BAS agent and the bookkeeper's hours.
The other thing this client wants to do is, they want to move to zero from MYB. There's another opportunity there. I won't actually add that in there, but what I'm quickly just doing is working out, “Okay, if I add an extra hour or something a week from the bookkeeper and the BAS agent, well, I'll more than cover that extra 100 hours.” I can say what my profit will be at that point. My profit will be 27%, which is really good. That's with paying myself as well. I'm paying myself just a percentage of the revenue, but what I decided to do at the moment, I'm just paying myself 10% of the total income.
Marketing your business
I'm putting aside 5% of my income for marketing. It probably needs to be more than that. I'm going to be launching three Facebook ad campaigns this week. Because now that I've got my team in place for Savvy, I'm like “Okay, I'm going to actually start marketing the bookkeeping business.”
Up until now, I haven't actually done any digital marketing. I was about to launch a marketing … I did, very briefly, launch AdWords versus Facebook one, but I got so distracted that I just switched it off. I didn't have time to go through the leads. From there, I just thought, “Yeah, I'll do it later.” Because our SEO is so good, I've been working on that for a number of years. I'd get a lot of inquiries just from organic SEO. I thought I don't really need that now. We're going to start to do a push to start to build up the leads for the new year. Because the reality is, people love to think about generating leads online and things like that, but there's always a timing. When you get a new lead, they're not always going to become a customer straightaway. Sometimes they might, sometimes they might take … they could take a couple of months. Sometimes people will be in your database for a year or more before they become a customer. It's really about getting the processes in place. Just make sure that you keep track of all those people.
Hourly rate analysis
When I look at my profit analysis, I can see what my breakeven hourly rate. I can see what my effective hourly rate. That is the number of hours I'm actually working divided by the total amount of hours that I'm working. If we get that little increase of work from that client, that takes my effective hourly rate up to about $160 an hour, which is fantastic. It means that our practice is actually earning $21.47 in profit every hour. That is awesome. Well, I'm super stoked about that. From there, I can work out what the average payout rate. On average, I pay my employees in the business, the bookkeeping team, I'm paying them $39 an hour on average. No, that's including mine. On average, the bookkeepers are getting $31.51. This has been so helpful. I'm just so happy that I actually made this spreadsheet a while ago just to be able to help my clients in Savvy.
It just evolved. The templates have just evolved. Now, coming back and putting my details into the new version, it's such a relief to be able to see that because on the surface … What I'm going to do is, I'm just going to quickly take those [inaudible 00:28:23] back to what they were before I just made these changes right here now. I'm going to quickly go back now and tell you. Based on the 17 … I actually have made a mistake. Our annual revenue now is 20,000 not 17. My mistake. Okay. At the moment, our profitability … If I look at hourly rate, my effective hourly rate is $150 an hour. The average rate I'm paying the staff is 31. That still remains constant. The practice profit is $13.20 an hour. That means, when I'm working very little, my practice is generating $13.27 an hour.
Now, obviously, in the earliest stages, because at the moment, we've got expenses in the business. The reason that the profit is lower is because the expenses are not covered by as much income by the clients yet. What will happen is, as the income goes up … Of course, we do have some variable costs. The biggest variable cost is the staff. I've actually split my worksheet into that so I can see what my cost of generating the income is, my cost of sales, which is my wages, my software packages, the ones that increase per client. Some of them don't. For example, some are on a fixed fee and that kind of thing for expenses. You've got your variable and your fixed cost which stay the same. Obviously, the more clients you get, the variable cost per client goes down. The fixed price, sorry. The fixed cost goes down as as the income goes up per client or per dollar of income.
On the flip side of that, you've got the variable cost. They go up and down as the income goes up and down or as the client demand goes up and down. This has actually saved my bacon. Not only that, it's made me realize that it's not as bad as I thought it was. I thought, “Oh my gosh, I haven't done very well.” You know what, in my first year of running the bookkeeping business, I got my income up to $11,000 a month by the end of my first year. I'll actually say, technically, it's the end of my second year. In the first year, I think I only made about like maybe a couple of grand or something like that because I started at the end of the year and I just had few little clients, but I wasn't really taking it seriously. Technically, it's the second year.
The second year, my monthly income was 11,000, but I did not make a profit that year. I lost money, a lot of money. Like $30,000. Not only did I spend the whole $11,000 a month, but I was spending $30,000 a year of my husband's salary and making a major loss. Oh my gosh, I was trying all these different softwares and turning over staff, hiring admin person, hiring bookkeeper, having to hire a new one. Just flushing money down the toilet, basically. That wasn't good at all. Yes. Now, I'm looking at it and I'm like “Okay, well, I've got this little business and it's not as big as I hoped it would be but you know what it is? It's profitable and it runs without me.” That is the best. That's really cool. Obviously, it doesn't run completely without me.
I'll do a final overview of all the client work every single month or quarter before the BASs are lodging. Because obviously, as you know, as the leading BAS agent in the business, I'm responsible for the quality of the work. I'll still always be involved in that, but I do really feel that the team is too confident to be able to take over this. To run most of it, the BAS agent is really … she's at the same level. Yeah, she's just fantastic. Yeah. Anyway, it's been great to share with you guys. What I was thinking as I've been sharing this is, at the end of the year … We've still got a couple of months to go. What I was thinking of doing is, I'm just going to get my calendar open here. I'm going to pick a date at a thin air off the cuff and I'm going to actually open up a training session where I'm actually going to go through with you and I'm going to do a full review of what I did in the bookkeeping business for the full year, but not just a full review.
I'm going to share my screen with you. I'm going to actually share on video, my actual screen. I'll share my spreadsheet with you. I'll let you see the numbers for yourself. I've got a couple of months more to build up the client base there. I guess I'll include in that summary … I'll show you the leads that are generated. I'll show you my conversion rate and the leads that are still outstanding and the dollar value of the clients and things like that. Yeah. Let's just do a full year summary and maybe a little bit of planning for next year. I'm going to do that in December. All right. I'm going to go with December, Friday, the 6th of December. The podcast runs from 10:00 to 11:00, Australian Eastern Daylight Savings Time, which is Melbourne, Sydney, Tassie time.
What I'll do is, after everyone is finished listening to the podcast, we'll have a little half hour break. I'm going to make it 11:30 a.m. Melbourne time. What I'm going to do, it's going to be a webinar. I'm going to run it for up to 90 minutes. Yeah. We're going to go through all of this together. I'm going to show this to you. It's going to be webinar style or potentially, maybe we'll do it like a zoom meeting where everyone can see each other's faces and just have a chat together. You can ask me any questions about it. You can ask me any questions about the whole year, everything that happened. Yeah, to be able to jump in there and actually find out every single thing that I've gone through. I can talk to you about my mistakes. Yeah, whatever you want to know, I'm happy to show it to you.
As I said, this is going to be Burke's Backyard style. I'm happy to show you all of my tips and tricks. Yeah, everything that I've done in the business. Whatever you need to know to help you in your business, I can do that for you. Yeah, I'm actually looking forward to that. I love it when I just have these ideas pop into my head because yeah, why not? Look, to be honest, I've had moments where I'm like, “I don't know if I want to share everything with everybody because I've put a lot of work into all of this.” It does make me a little bit scared because I guess the way a lot of people would look at it is, I'm giving away my intellectual property and I could be charging a crap load of money for. The reality is that it depends. It depends on what your end goal is. For me, of course, I would love to have a nice, cozy retirement fund when I'm older. I would love to live in a mansion.
Well, actually, I did discuss with the co-working group the other day, I use to think I wanted to live in a mansion until I realized I don't like housework. I decided a lovely four bedroom home is fine for me. I rent. I'm a renter. I would love to buy my own house. I'd love to buy a bigger car, like we're in a Mazda 2 and we were a family of four and things like that. I have hopes and dreams that require funds. I'd like to take holiday every year. I don't know. I wouldn't mind getting my boobs done at some point. I have things that I would like to do with my life. I know that I need money to do those things. Yes, I can earn living doing something that I absolutely love, which is to run this bookkeeping business, but also, the work that I do with Savvy, I absolutely love my client.
I love Savvy. I love our community. I love the bookkeeping industry as well. Yes, I like it when people pay me for my time. I don't necessarily like doing everything for free. I've got a family to support. I've got young kids. I've got my husband. He works with me in the business. We're both not on salaries outside of our own family. All of our finances rests on my shoulders. As the business is growing big, as I said, I've got eight staff. It's a bit scary when your business gets that big. Sometimes I think, “I don't know if I want to be this big. I don't know if I want to get any bigger.” It is a little bit scary.
Anyway, back to my point. Stay focused, Amy. The point that I'm making is, even though I like getting paid and I like earning money, for me, there's a bigger picture at play. Not just about bookkeepers. Yes, I'm so in love with the bookkeeping industry. I don't know. Maybe I have a little bit rose colored glasses for bookkeepers. I know bookkeepers are definitely not perfect, myself included. We all make mistake. We're all at different levels of experience and learning and being able to deliver good service and that kind of thing. Some of us are not Savvy Bookkeepers yet. Sometimes, I'm not even a Savvy Bookkeeper sometimes. I don't know. I've royally stuffed many times. Yes, I absolutely love the bookkeeping industry. I want to make a difference in our industry. I want every bookkeeper to have an opportunity to be able to access these resources and to tap into the knowledge that I've gained over the last 20 years and all that kind of things. Yes, there's that but then there's something beyond that, and that is businesses and small business owners and their family.
I look, also, beyond the bookkeeping industry. I think to myself, I know because one of my clients in Savvy told me this, that 60% of small businesses fail within the first three years. All those who fail or companies that go into liquidation. Apparently, this is on the attic website. You can find it there if you want to find it. The business value rate statistic is on the Australian Bureau Statistics. You can look that up as well. It's not just a made up statistic, but 50% of the companies that go into liquidation are profitable companies. I think, “What on earth is happening here? Why are profitable companies going broke?” I think, what's the impact on families and things like that? Australian small business owners, it's like six to 10 of the population. They account for a massive percentage of the jobs, small business owners, even just me, little old me from the spare bedroom in my house. I'm employing eight people and supporting a family and all that kind of thing. You've got a small business owners in Australia who are absolutely the backbone of Australia.
Working with business owners
I can't say that I particularly like working with all business owners. Some business owners are really frustrating. A lot of business owners don't want to do the right thing. Often, it's bookkeepers who have to pay for it because they don't want to hear the news when they're doing the wrong thing, but I think that we are … This is part of our calling. This is part of who we are. This is part of who God made us to be. Do you know what I mean? Bookkeeper's highest value is integrity. Not every single bookkeeper, but I work for values, values exercises with my clients. I can tell you, integrity is one that always makes the top five, always. If not, number one. It's often number one, but if not, it always makes the top five. I know bookkeepers highly value integrity.
Most of us, we hate it when the clients do the wrong thing. It actually troubles us. It actually disturbs us and there's a reason for that. Because it's not laying a good foundation, both for their business and for our society. It has a flow on effect. Paying your legal wages has a flow on effect. Not paying staff properly. I've heard of business owners hiding their stuff at the back when they've had someone to come in and investigate them. You've got employees paying cash wages, very low wages and not paying superannuation. Or there's things that they're just not aware of. 60% of small businesses are still not on single touch payroll. I just think to myself, the long term effect of this is, it's a problem. It's a serious problem that would … If it weren't for bookkeepers, educating small business owners, most would be unaware or they would just have zero accountability. Basically, they need that second set of eyes in their business.
We know that, often, because the accountants are looking from a high level, they're not necessarily seeing the issues and spotting the things that we see in the business. Our country relies on us. If we didn't have bookkeepers with integrity, helping out small businesses to stay accountable and to do the right thing and to understand the rules and the laws and how to implement them, we would be living in a very dishonest country. There's already enough dishonesty out there, but there are business owners who want to do the right thing. They need advice. They need to know how to actually do it. For me, that's the big picture. That's why when I think about, “Oh, do I want to give away this template? Do I want to share my intellectual property?” I just think to myself, “What's the bigger picture here? Is it about me? Is it about whether I drive a Mazda 2 or Kia Sportage?”
In that sense, when I look at the big picture, it doesn't really matter. It's like “Yeah, okay. I'd love to have $1 million [inaudible 00:43:09], but the reality is, I just want to share this with people so that they can see what's possible for their business. Because the reality is, we need to set ourselves up so that we're not always thinking about our own business, because we need to be actually focusing on our clients. We need to be thinking about a bigger picture and what needs to happen there. In order to do that, we have to have our businesses running properly. We need to have the proper skills that we need. We need to practice what we preach. We need to actually go through this process ourselves of developing into the type of business owners that we need to be, so that when a client comes to us and wants to do something dishonest, we don't just fold and let them just do whatever they want.
Yes. You can't force people, but at the end of the day, we still need to maintain that integrity to be able to say, “Look, this is how this is. This is the situation.” In some situations, be willing to walk away from a client who is just doing the wrong thing. Yes. Okay. You might be able to stick with some clients and they might eventually have a change of heart. Hopefully, they will, but potentially, there's some situations where you might actually just have to say, “Look, this is going too far. I actually can't do this.” At that point, you're obviously laying down your income and you're giving up an opportunity itself. That doesn't happen easily, necessarily. We can have a client not pay us a couple $100 and we're taking them into the deck collector and we're taking them to small claims and stuff like that. I just think, “Okay, let's just move on and focus on what is forward.” Yeah. Anyway, there you go. I've shared a bit of my heart with you for the industry and for Australia as a whole. Maybe, the world as a whole.
I started to sense that we are a global bookkeeping community. We do have a specific purpose that we're to accomplish in the lifetime of our business and that kind of thing. Anyway, I hope you've enjoyed listening. I hope you've all had a great month. I'll see you again next week for the bookkeeping project in about four weeks' time. Hopefully, I get it on the right day. That would be lovely. If you're interested, I'll post a link to register for this webinar session where I'm going to share everything with you and show you what I'm up to and give you the final NB results and start to plan for the next year. That's it. I will give you the link. You can sign up. I will see you and your smiley face there. Okay. See you then.