So I was having a

conversation with one of

my clients and she is a

pretty brand new business

and we were talking about

what she needs to bring in

from a family

revenue perspective.

You see, when you go into

your own business, You

need to sit down with

your partner and work

out what you actually

need to bring in , from

a family perspective.

And then you need to work

out what you actually need

to bring in from a business

perspective two quite

separate conversations.

A lot of business owners

start as a sole trader.

And so they think

all the revenue they

bring in is theirs to

do with what it is.

And to some extent it is.

But also you need to put

money aside for costs

of running the business.

And so when I left the

corporate world, I sat

down with my husband

and I said to him, what

do we need as a family?

And he said, well, I

need you to bring in

the same amount of money

that you bring in from

your corporate role.

I'm like, great.

Now it felt like a lot

of the time and I kind

of went, Oh, I would

love some relief on that.

But That is just

the way it is.

We had family

expenses, and so

I needed to contribute

that amount of money

to the family coffers.

And sometimes as an

entrepreneur, our

financial situations

can ebb and flow.

It's one of the banes of

our existence that we have

lumpy cash flow, isn't it?

Lumpy cash flow means

that we don't get to

do all the things that

we actually want to do.

It means that we worry

about the finances.

Sometimes there will

be leaner months and

other times you get an

avalanche of income.

Having a monthly recurring

revenue or MRR, is great

for stability of income.

So if you can somehow have

a revenue stream in your

business, that is monthly

recurring revenue, which

means we can actually

charge the same amount of

money for the same output

month on month, perfect

as a base, but not every

business can do that,

and not every revenue

stream works like that.

So you still need to

have some kind of buffer

set up so that you're

able to weather the

storms when they arise.

and feeling financially

free as an entrepreneur

takes planning.

It does not just happen.

Oh my goodness How I

wish it just happened

Sitting down to think

about how much money

you actually need

is the first step.

Let's say you sit down

with your partner and you

agree I need to bring in a

thousand dollars a week in

order to make sure that the

family is taken care of.

You also then need to take

into consideration what

it costs to run a business

and what investment you

may need to put into

your business, right?

I sat down with my daughter

the other day, she is

10, she's in grade 5,

she was doing some maths.

The way she worked

it out blew my mind.

I said, where do you get

your maths genes from?

I get my maths

genes from Daddy.

She's right.

She does.

I said, Oh, okay.

And what about mum?

And she's like, I

get my business woman

jeans from you, mum.

And I thought that was

really cute, but we're

not taught at school

how to run a business.

it's like, you just have

to learn on the job, which

is great in one way, but it

also means that sometimes

we can go for years without

working out how to sort our

finances out, how to work

as a sole trader, when to

flick over to a company,

all the things, right?

So the first thing is

you need to work out what

income do you need to

bring in for your family

every week or every month.

So let's say I've sat

down and I said, I

need to pay myself a

thousand dollars a week.

So then the next

question you need to ask

yourself is what business

income do you need

to pay your bills

and your expenses?

So really, if you want

to bring in a thousand

dollars a week that

you pay yourself,

you need to bring in

$2000 a week revenue

for the business because

you would pay yourself

half of that and the other

half goes to things like

insurances, website setups

and costs, any marketing

investments, all the things

it takes to run a business.

And so from there, you're

able to establish what

your lowest operating

income needs to be.

And then you can start to

put together a system To

either scrape off the top

or as I do scrape off the

top before I pay my bills.

I'll get to that later.

Financial freedom to me

looks like not worrying

about money in the bank

because I have six months

worth of buffer, but I

have to tell you, I'm

almost seven years into

my business and it took me

working on that goal for

three years to make sure I

had six months worth in the

bank account as a buffer.

We as a family have

a personal goal to

pay off our mortgage

by the time I'm 50.

And this motivates me,

but it also means that

we make choices in order

for that to happen.

It means that I work hard,

and I'm able to

have downtime.

I don't mean naps,

I mean proper downtime.

It means I can take a week

off of school holidays.

I used to take the whole

school holidays off, but

I felt like my business

didn't run quite as well.

So we've boiled that

down and now I have

the first week of

school holidays off.

And it also means we

closed down over Christmas

and the new year.

And so I have six

weeks off there.

That is financial

freedom to me.

Knowing I've got money

in the bank account

and can have a break

and can switch off.

And it will look different.

It will look

different depending on

who you are,

what your values are,

what's important to you.

Some people want a stack

of cash because not having

that gives them anxiety.

some people, um, want

to buy material things.

Some people want to

invest in other things.

we have a share

portfolio that I have.

I bought an electric

car because that's

really what I wanted.

And we are moving, we are

in the middle of building

a house, which means

it will be eco living.

and so some of the

choices that we make

are based deeply

on our values.

Some people just want

to live a simpler life.

Some people just want less.

So the numbers are

going to vary along with

whatever your values are.

Yeah.

I think the beauty of a

financial buffer is that it

means you can take the ebbs

and flows as they happen.

It means you can take those

leaner months and just

you can work with them.

It means you can have

a little bit more

choice on what you do.

Choice leads to

hope and freedom.

I also think having extra

money in the bank account

means you can actually

be a bit more creative

about some of the services

or some of the offerings

that you actually put

out into the world.

And when we're leaving

a corporate , job, we

don't want to just say,

well, let's bring in

the bare essentials.

When you have your

own business, you have

the opportunity for

uncapped potential.

when you're first

starting out, you don't

see that when you're

first starting out.

It's like, right, we

need to make this much

amount of money and then

we need to go from there.

But if you're not adding

20 percent on each year

and you want to grow,

then I would suggest

that that's what you do.

If you're sitting there

going, Emma, I'm happy

making a hundred grand

or 200 grand a year,

et cetera, et cetera.

Awesome.

But if you want to

make more money,

you have the

opportunity to do that.

I will put a

caveat around that.

I don't know if you know

my views on this, but

if you are charging an

hourly rate, it will

feel very capped because

of that situation.

So my first piece of

advice would be to get

out of charging an hourly

rate and start thinking

about output based.

results, not hourly rates.

Since the start of

my business, I have

used Profit First, but

it's not a traditional

way to bookkeep.

So every week from

Profit First, and we are

barefoot, investors as

well, but every week I

move a 10 percent and I

have done since I started

my business, I moved 10

percent of whatever is in

my bank account each week

on a Wednesday morning.

Very specifically, I

move 10 percent into a

profit account, and then

I work with the rest

as operating expenses.

And that's where we pay,

out our wages, we pay our

subcontractors, we pay

all of the other expenses.

But knowing that I've

got 10 percent buffer

week on week, and

sometimes it doesn't feel

like much, other times

it feels like a lot.

I just put 10 percent

away, and that is what

helps me create a buffer.

I'm curious about what

financial freedom might

look like for you.

Does it look like getting

clearer on your numbers?

I had a love hate

relationship with my

numbers and so now I spend

an hour a week lovingly

staring at my numbers,

wondering what we can move,

what else we need to do.

I've set up a budget

in zero because it

has that, capacity.

And I love looking at

my numbers just to, to

tweak them and to work out

what's working, what's not.

We need to get comfy

with our numbers and

we need to have a

date with our numbers.

So This week's homework,

if you choose to take it,

is to actually go back and

have a look at your numbers

and make a date every week

to stare at those numbers,

to get really good at those

numbers, because financial

freedom is in the details

and if you don't

know the details,

you don't know you're

trying to achieve.

Anyway, I hope you have

found this episode helpful.

This is all about financial

freedom, which I love.

I love it when people come

to me and say, I've got

money in the bank account.

I'm not worried about this.

I can go on holidays.

Bang, bang, bang.

Beautiful.

Beautiful.

All right.

Until next week.

Have a great week.