Listen to this if you don't understand tax and accounting

Numbers don’t have to be scary. If spreadsheets make you want to hide behind the reception desk, this episode is for salon owners who want to take control of their money without the stress. Accountant and salon numbers coach Kate Slater breaks down complex financial topics into simple, actionable steps so you can stop guessing and start planning. From tax traps to cash flow clarity, we cover the essentials that every salon owner needs to know.

We dig into the real-world issues that trip up owners, including BAS, payroll, WorkCover, and equipment purchases. Kate shares practical systems to protect your cash, understand deductions, and plan for both growth and lifestyle, so your business runs on numbers—not panic.

In this episode, we cover:

• Why your “$30k profit” doesn’t equal cash in the bank
• Multi-account systems for GST, PAYG, super, and income tax
• WorkCover, apprentice ratios, and wage estimates explained
• Commonly missed deductions for home admin, marketing, and subscriptions
• Bonuses, withholding, depreciation, and repair vs renovation strategies
• Cash-first checklist for upgrading equipment or taking loans
• Pricing for profitable services without chasing trends
• FBT risks, luxury purchases, and company structures that protect assets
• Paying yourself consistently for predictable planning and energy

Take control of your salon’s finances and replace panic with a plan. Subscribe, share with a salon friend, and leave a comment with your biggest money question for future episodes.

To follow our journey:
Instagram @aheadhair_
@the_conscious_salon

Transcript

Meet Kate Slater And The Mission

SPEAKER_01 0:06

Welcome back to the Conscious Allen podcast. Now, Tess, we're very excited for our guest here today. Yes. Because we happen to have our favourite accountant sitting in the studio with us. No shade to our accountant, Craig, who's been with us for 12 years. But we didn't know Kate Slater when we signed up with Craig.

SPEAKER_03 0:24

But now we get all the girlies onto Kate Slater. Yes.

SPEAKER_01 0:26

And you know what? Kate, the reason I adore you is because obviously we're here for the girlies and everything that we do is always female focused. Sorry, Ali. We love Ali as well. Absolutely. But we I love how digestible you make numbers because obviously we're passionate, so so passionate about educating salon owners about numbers. But you do it in such an easy to digest way, and it's also aimed to be well, I feel like it's really aimed to be delivered to women, which makes it incredible and so accessible. And I've learned so much just from watching you on Instagram.

SPEAKER_00 1:09

Thank you.

SPEAKER_01 1:10

You're making me blush over here. But we love Kate Slater. So anyone that doesn't know Kate, we have done a previous episode, which I think everyone needs to go and watch. It's like I feel like it's like 101 accounting for business.

SPEAKER_03 1:21

I feel like it was like when I'd just given birth, because I remember being like in recovery and listening to Kate's up, and I was like, I'm just so grateful that it is going out to the masses for people that are like, I don't understand my numbers, or my don't know my like my accountant doesn't do this and X, Y, and Z, and actually being able to like give them something tangible. We're really getting into like part two today, aren't we?

SPEAKER_01 1:41

Yes. So anyone who doesn't know Kate, she is the CEO of Camtech Slater. She has over 14 years of experience in accounting and strategy. Like, what do you say? Like consulting? There's so many different words. What are you? I I'd say like you're like a strategy expert. You are a numbers coach for salon owners. So I think that's so important because this is one of the most prominent conversations that we have with salon owners when they come into our world. One of the first questions we ask is, how's your relationship with your accountant? Because that is such an important partnership that so many people underestimate and they just think, Oh, I've got, you know, Darren, who's my dad's friend, as my accountant. And when we actually pull apart that relationship and we say, How how much are you communicating with your accountant? What advice are they giving you? What strategy do they give you? How do they prepare you for your quarterly BAS? Like how what actual what's actually going on in that dynamic? And people start to realize, oh, there's other options out there. Whereas we don't know what we don't know. And most people just have the same accountant and they think there's not even an option to change.

Why Your Accountant Relationship Matters

SPEAKER_01 2:45

But basically, you're an incredible numbers coach, you're a certified accountant, and you are basically horny for numbers strategy. Let's just call one years.

SPEAKER_03 2:56

And you're hot. And you're hot.

SPEAKER_01 2:59

Which is yeah, stunning to um Craig. Exactly. Craig's also hot. Um but yeah. Basically, the reason that this is such an important conversation is because you make accounting interesting and you make numbers interesting, and even just from your social media, the things that salon owners can learn, and you really specialise in working with salon owners. Do you want to talk a little bit about what you do and why you love it?

SPEAKER_00 3:25

I love what I do because I really love the education piece behind the numbers. I feel most business owners go into business because they're so good at their craft, but they haven't had the understanding of how business actually works. And there's this misconception that you're supposed to just because you're in business and people feel so much shame around it, and they get themselves into those situations where they may have made a little bit of a mess and need to go backwards. So I'm really passionate about it because I want to put the education piece forward and just say this is how we can do things, we can show you something one step at a time without all the overwhelm as well, and make them understand that they shouldn't have had to know everything about business. For us, like you said, I've been in industry for 14 years, but to get to here, I had to do at least three years of study. So when I have that conversation with the client, it's like you haven't had any years of study, you aren't expected to know that. So that's where the passion comes from through educating and helping people understand and seeing those lights go on and helping them have the confidence to make decisions with their business.

SPEAKER_03 4:23

That's I think even with that though, like you also support people with like I know for me, I would sit in those meetings and I'd you know be told all these things and I'd be like, Yep, I get it, I get it. And I'd walk out and be like, Okay, what just happened? Like what's whereas you're kind of like the it's because you're so passionate about people understanding and educating, educating them so they can truly understand what you're saying. It's people are working with you and truly understanding what you're telling them, where they can, you know, do things better, how they can change things, and they're not walking away going, wait, what what just happened? Or and that support is so necessary because I feel like as business owners, so many people go into these meetings and situations just pretending that they know what's being said, they're not and like I did this for fucking years where I'd sit in and be like, Yeah, I know what a bass is, quickly Google what a bass is, or I know what a um, what was it, like um not Pip, the um KPIs? I was like, Yeah, them. What? Constantly I'd hear these things and went mm-mm mm, quick Google. Yep, I do know what that is. You're giving them permission and understanding to like really dive in, really understand what's going on without the shame or like the pressure that you should know this sort of stuff.

SPEAKER_01 5:36

Can we can I really throw you out there, actually, Kate? You probably might hate this. I want to take away the shame for salon owners because a lot of the time actually you've changed the lives of some of our clients that we've sent to you who have had rocky relationships with their accountants and we've said no, you need more from your relationship with your accountant, or they don't have enough preparation for tax time and they don't know how to prepare for tax, and you have transformed the lives of some of our private clients and some of our girls in becoming conscious salon, which has been incredible. I would love to take the shame away. And if you can share some sort of success story or some sort of, you know, a salon owner came to me with this amount of debt, and then we got through it, just so that people can understand that if you are being helped by the right person, it can change the story for you.

SPEAKER_00 6:27

Yes, we have had that happen, unfortunately, quite a few times. It may have been because of bad advice, or something was just missing with their numbers. So what we generally do is we we sit people down and we ask them what's been happening. And once you open the gates for people to tell the stories, all the little pieces come out. It might be they were undercharging for their services, it might be they just didn't understand how much to save for tax. So we

Education Over Shame In Money

SPEAKER_00 6:50

always come back to the systems and structures because business is so overwhelming. So we pop the business owners into a situation where they've got different bank accounts and they understand how much needs to be in those accounts to save for taxes. But once those systems are in place and we can get them into a place where it's automated as well, so they don't have to think about some of that stuff, we see just a transition happen with that, and we see the bank accounts building up for the tax because that's one of the biggest challenges for a lot of business owners is not understanding that they've all of a sudden become this agent for the government. They have to collect money to give to the government on a quarterly basis, they have to hold their employees' wages tax back. And once you start explaining that, you can see other light bulbs come on and say, now I understand what that's for and why I can't be spending that money.

SPEAKER_01 7:35

It's actually crazy that the government puts it in the hands of the business. Like I when you were talking then the light went up and I'm like, why would they why wouldn't they collect this weekly?

SPEAKER_03 7:44

Yeah. Yeah. Like it's just because it would I remember when we first started and you were like, we've got a quarterly best. I was like, again, like why? Could not work out. I was like, why do we keep getting these huge bills? Whereas now it's like, oh yeah, this is because now we know to like set it aside and have it as part of our process. And I feel like this is truly one of the this is why these relationships are so important, because you have to know these things because otherwise you do get that big bill and you you want to run. You want to just how how am I gonna do this? How I I don't have that. I'm currently, you know, week to week, or and I feel like this is such a common thing, especially in our industry. I'm sure you know it's in so many industries, but I truly think one of the first whenever we're speaking with people is that people have either got big tax debts or they don't understand their numbers, or they have no idea how to get out of the week to week paying things, which is where you come in to really transform and make a new experience.

SPEAKER_01 8:40

And you have transformed and changed so many lives in uh for our clients. So yeah, that's incredible to hear. So what we thought we'd do today with Kate is we put up a questions box on Instagram and just said, give us all of your most rogue tax questions because let's be honest, as business owners, we don't fucking have a clue what like I reckon I'm quite like relatively savvy for a business owner in terms of understanding tax and accounting, and I still have no clue whatsoever. So we want the roguest questions, and we're gonna do a fire round QA and to get through as many of these as we can to really see where we can help people and give people quick, fast advice. Right. Do I have permission to speak chipmunk or not? Yeah, speak whatever you want. Okay, cool. So, first question: someone's asked, what's the best way for me to pay bonuses to my team? They are deflated by what they get once they're taxed on it.

SPEAKER_00 9:35

It's so challenging for this because it is just a mind shift set uh change for a lot of the employees to understand they're not getting taxed more. It's just because they're getting taxed in a one-lump sum pay. So they might be getting a two grand bonus. If they're sitting in a certain tier already, it's going to be taxed at 30%. So there aren't better ways to pay the bonuses as such. There are small things you could do, such as giving them a gift card here and there, but that needs to be a little bit sporadic. But it's just about educating the team members as well how that tax system works. And I find once that happens, a lot of the members start getting on board and realizing well, if I had two jobs versus if I had this job and got a bonus as well, it's going to work out the same. A lot of people don't realize that they just think that the bonus gets this extra special tax, but it's not special, it's how they're going to be taxed regardless.

SPEAKER_01 10:24

Right.

SPEAKER_00 10:24

So I know the gift card thing, because obviously if it's less than $300, you can put it through as like it's considered a gift to a team member and it can be tax-free or like it's deductible for the business owner, and then the other person on the other hand gets that $290.

SPEAKER_03 10:40

Well, like a gift card, so you could do them more like m monthly, say, rather than weekly.

SPEAKER_00 10:45

Correct. Yeah. So it depends on how much the bonuses are because you're not going to like if somebody's getting a $1,000 bonus, it's gonna look very different, but it is a different way to split it up. That's how we pay our bonuses. Yeah.

SPEAKER_01 10:56

So I wasn't sure if that was uh like whether it's that your question. Yes, that was personal notes. Very good. Okay, next question. My accountant, I love this question. My accountant says we made $30,000 profit. When I look in my bank account, I'm like, where's

Success Stories And System Fixes

SPEAKER_01 11:15

all that money? Where is it? That's mine.

SPEAKER_00 11:18

That is honestly everyone's, and this is where it comes back to understanding about accounting. And people aren't gonna understand the accounting system, but to try and explain this in a way that people can understand is whatever your profit is doesn't translate to cash. So your accountant may say you've made 30k, but let's just imagine that you've got a car loan, you've got some outstanding tax debt, that has to get paid out of the profit as well.

SPEAKER_04 11:42

Yes.

SPEAKER_00 11:42

So this is the biggest misconception for all business owners, not just salons, but profit's one thing, but cash is king. So really looking at your bank accounts is what's going to actually be available to you. So understanding what your monthly loans are or your other debts that you may have is really important to see how much of that profit you actually get to keep. And this is where tax planning really comes into play as well. Going, okay, well, how much are we expected to make for the year? Therefore, how much tax do I have to save? Let's make sure that we're putting aside of our profit away for the year and tax bill as well.

SPEAKER_03 12:14

Wow, I love that. I love that too.

SPEAKER_01 12:17

Okay, is there some sneaky tax deduction that salon owners usually forget about that I should know? This person's like a weasel, I can tell already. And I love it. Is there some sort of sneaky tax deduction that salon owners usually forget about that I should know so that I'm not leaving money on the table? That's a great question, actually. Yeah, sneaky devil.

SPEAKER_00 12:39

I know. And I wouldn't even say it's sneaky, but the most common things that we see are missed are working from home expenses, especially from salon owners that have a salon and they're not at home. They may have their personal mobile bills, their telephone bills. They may spend 15, 20 hours after they leave their salon doing payroll, marketing, all that kind of stuff actually can be claimed and people don't remember it. They often have their personal telephone bills in a different account and it'll be forgotten. The same goes for subscription costs. A lot of salon owners I've noticed haven't realized the different subscription costs they can claim for their business. Like they might have a chat GPT that's helping them with their marketing, for example. That can be claimed too.

SPEAKER_01 13:19

What about how you for reality TV?

SPEAKER_03 13:21

Surely mental health. It's interesting though, isn't it? Because like even that, like on a cleaner, like my cleaner is one that I can claim because I work from home. And that's something that was like massive. Office clean. Office clean, yeah. That was something that I would never have like even considered with that. But then when we like sorted it through, it's like, yeah, great, perfect. It's things like that where you can so easily have those things start, you just assume. Like, even I remember when we started doing our phone bills, and that was massive. It was such a win to like not have to worry about that. I don't know, it's probably like eighty dollars a month at the time.

SPEAKER_01 13:56

Actually, I feel like something like that's high, but so Kate, what should sell on owners be claiming from work at home spent? So phone, internet, a portion of the electricity?

SPEAKER_00 14:06

Yeah, they should keep a diary of what they're doing when they're working from home. There's some different ways, I don't want to get too technical, but you can claim a percentage of your expenses or the ATO lets you claim a set rate based on how many hours you work. So we just ask our clients to take a bit of an audit on both of what they're doing, and we can have a look at that and see which one's going to work best for them. Just keep record of when and how many hours you're working from home and potentially percentages of what's for business, what's for personal use? I love that.

SPEAKER_03 14:34

But that also take in like solar power as well. If we do the actual, these really are my own questions.

SPEAKER_01 14:42

If we didn't get any audience submission because we just wanted some free advice to renegade, bring me back this time. Okay, so this is a really good question. Should I pay myself a wage or just take money out of the business where whenever? And what's the difference after tax?

SPEAKER_03 15:01

Yes, so I'm so glad this question's been brought up.

SPEAKER_00 15:03

Yeah, and so many people go down the trap of taking out money whenever, wherever. If you're a sole trader versus a company, it looks really different. However, I'm gonna say that you want to take a set amount, regardless, because it's easier to manage your personal life rather than like, oh, I see

Rapid-Fire Q&A: Bonuses And Tax

SPEAKER_00 15:20

another thing for the business, I see something for me, tap, tap, tap. Yeah, and then you get into this situation where you're spending more money than you should. So whether you're a company and you're receiving a wage or a dividend, or you're a sole trader and you can just take money from your company, I would recommend and well, I'd strongly recommend that you set yourself up a set amount that you are taking as though you were employed by someone else. So have that on direct debit. Again, have it automated so you don't have to think about it and keep business, personal, super separated, and not just take money whenever you feel like it.

SPEAKER_01 15:50

And don't you think as well, Kate, like I know you're as a very logical A-type personality being an accountant, you may not agree with this. But don't you think the energetics of taking a set wage where as a salon owner you go, okay, I've got a set wage to reward myself for this work that I'm doing, as opposed to I've got leaky boundaries paying myself way too much and not respecting my finances, or the other end of things of I'll never leave anything left for myself and I'll just always say I can't take a wage this week. I think energetically it's really important to respect your finances and and to help you grow your money as well.

SPEAKER_00 16:23

Yeah, absolutely. I love how you describe that as well.

SPEAKER_03 16:26

But it also takes the pressure off as well. Otherwise, you are in that like, oh, it's a good week next week. I can only take, I can take, you know, bigger, and then or the week after it's a bit gappy, I'll just take a teeny to I'll take none. Yeah.

SPEAKER_01 16:35

Like that, we did that for so many, like the first few years. It was like, oh, here's 20 bucks for you, and you know, it was just, yeah, it was wild. Oh, yeah, absolutely. Humbling. Um, so the next question, we just did a huge reno in the salon, and I'm now wondering how that affects our taxes. Do I get to write some of that off over time and how or how does that even work? I'm assuming that this person may be asking if they're gonna potentially get a return if they've done a reno, or like they're I don't know.

SPEAKER_00 17:06

Yeah, so it depends what they've done. So if you've done repairs and maintenance, we can claim that. Whereas if you've done some structural stuff, that's when we start claiming it over a few years. So depending on what they've done, some of it you'll have a benefit this year, some of it you'll have benefit over multiple years. Isn't it funny?

SPEAKER_01 17:23

I feel like so many people go, I can claim that, and they think this is a hundred dollar, I don't know, like yeah, something. What's a hundred dollars? Anyway, this is a hundred dollar something. Thank you. I just saw one over there. Skip card. So many people, I think, and I definitely thought this in the early days, I was like, oh, if I'm claiming that hundred dollar pot, I'm gonna get a hundred dollars.

SPEAKER_03 17:48

People think they get I did. I would be like, Yeah, I'll I'll I'll donate $200 to that cause that I can claim back. It's like it's not, it's it's it's still good to get anything back. You shouldn't you shouldn't donate to get it back. It's not the right idea.

SPEAKER_00 18:01

Yeah, and it really's that whole premise, don't spend a dollar to save 30 cents, is what we're constantly saying. Okay. Oh, I like that 25, but just explaining that you're still out.

SPEAKER_01 18:10

Yeah, yeah, because people at the end of end of financial year, and actually, product companies in our industry, stock us, really, they really lean into that almost like scare tactic of you know, it's end of financial year, just get all your spending in, our pricing's gonna go up, all of those tactics to get sell-on owners to purchase more, and you can really fall into that of like, oh my gosh, I've got to be able to claim it for tax time. Yeah. Um, okay, cool. What's our next question? What's one big mistake that you see? I usually wear glasses, Kate, but they don't look cute when I'm on the thing. So half the time I can't wear contacts, but half the time I'm like.

SPEAKER_00 18:48

I didn't have my glasses, I'd be looking over here.

SPEAKER_01 18:51

I am, I'm talking to you like over there. Um, what is one big mistake that you see salon owners make with their money that we could avoid

Profit vs Cash: Where Did It Go

SPEAKER_01 19:00

if we just knew about it sooner?

SPEAKER_00 19:02

Not setting up the right accounts to save for tax. Yes. Yeah, absolutely. When everything's pulled into that one account, it gets really hard to know what's yours and what's not yours. So I'd recommend at least four different bank accounts when you're running a business to separate for your taxes. So that's income tax as well as your employees' tax and your GST, then have another account for your employees' wages, superannuation, and then you'd have another account for your sleep account so that you can make sure you've got savings behind you in case something happens, plus your everyday trading account, but your clients pay you and you pay for your running expenses.

SPEAKER_01 19:37

Love uh what our next one is why is my this is definitely a question I could have written. Why is my work cover bill so high? Um I've written in brackets here, we actually get this question a lot from salon owners because of the increase in our industry's premium rate. So in the last I think two years or 12 months, our industry's average has gone up dramatically and it's affected our work cover bill.

SPEAKER_00 20:03

It depends on how many employees you have. So we Work cover looks at the type of work you do and it assesses how risky that is. And then it's assessed on the type of employees that you have as well. So the more employees that you have and the higher industry risk that you have, the higher your work cover bills are going to be. So ours would look quite different. And we see it quite commonly where business owners have started increasing the amount of employees they have, and all of a sudden the work cover bills just start going up and up. And it is because of the extra employees.

SPEAKER_01 20:31

Yeah. And then and because our industry's gone. This is one thing I truly don't understand. If it comes in high, I would just always say, that seems really high. And then I always ask our accountant. But you actually, can I tell a success story? I'm not going to say who it was in case it's like a confidentiality thing. One of our private clients, who recently became a client of yours, got a hectic work cover bill that was like eight grand. And then something she sent it to you and said, Hey, can you just look into this? And you did some wizardry, and then it came down to like four grand or something. She said, like she had a credit and then something else, and I don't know what happened and how you did it. But I think if people are feeling like it's high, ask their accountant.

SPEAKER_00 21:10

Yeah, absolutely. Uh, one of my team members worked on this, so I can't remember directly, but I imagine that the wages that she was paying her employees were estimated to be too high. And also there was a split of apprentices and qualified salon stylists. So that makes a really big difference as well. So sometimes you might have a team of 10, all of a sudden you've got a team of five, you've downsized, your work cover bill is going to be different. It's the same as if you've got a premium vehicle. So if you've got a Range Rover or a Mercedes versus if you've got a Ford Focus, the insurance cover is going to be different. Yeah.

SPEAKER_01 21:42

No shade to Ford Focuses. Um, I think that is really important because she would have just paid that bill. Like she previously she would have just gone pay that bill. Whereas because she didn't have that close relationship with her accountant, where she could ask that question, which has been massive. Absolutely.

SPEAKER_03 21:58

I mean your inbox is going to be flooded purely from that. Everyone's gonna be like, Oh, she can halve my work cover.

SPEAKER_01 22:04

I mean,

Overlooked Deductions For Salons

SPEAKER_01 22:05

Kate Slater, how do we know if it's better to be a sole trader or to switch over to a company? And what does that mean for my taxes?

SPEAKER_00 22:15

I get asked this all the time, and I always say if I was going to start another business, I'd start as a company anyway, just because of the asset protection. But it doesn't necessarily mean it's going to save you on tax. So the way I describe companies is because people generally get really confused because it can be confusing, is a company is just like birthing a child. You've got your own identity over here when you start your company, you get a birth certificate through ASIC, you get your own identification numbers. So if something happens between you and your business, there's this line of separation. So that's really, really great for anybody starting out in business. If they've got their own personal assets to protect, then a company is just going to offer that extra layer of protection in case something happens. However, for tax-wise, you're not always going to see the benefits of tax savings by having that company structure in place depending on how much money you earn.

SPEAKER_01 23:06

And is it like I'm am I right in saying that if someone was to sue our company, like our salon ahead, if a client was to sue us, they can't come after our personal things. It's just the company. Whereas if we were, not that we could be, but if we were, if Tess was owned the owner of the sal and she was a sole trader, they could technically come after her stuff. Is that right?

SPEAKER_00 23:27

Correct, yeah. And unfortunately with the company, it's not a hundred percent guaranteed. But if you wanted to go sue McDonald's, for example, it's very unlikely you know the director of your local McDonald's, you're just going for Maccas and whatever assets Maccas has. Whereas if you're a sole trader, there's no company to sue, it's just that person straight away. So there's no protection from the beginning. Yeah, I love that.

SPEAKER_03 23:48

So I re I remember that being a conversation that we had, and I was like, oh yeah, put it, put it, put, put out, put up our shields.

unknown 23:55

It's like no.

SPEAKER_01 23:56

Um, this is a good one. What's a simple way to stash away money for tax time so I don't get a nasty shock when the tax bill comes? I'm gonna answer that and say, you need to work with Kate and get your account set up. I think that just comes down to money systemization. Yeah. Um, we want to, this is a good one. We want to upgrade our equipment soon. Is there a smart way to plan this so that we get the most tax benefit and don't mess up our cash flow? This person is a um skin clinic, and I know that she wants to purchase a couple of really high-end machines.

SPEAKER_00 24:31

I'm always going to say focus on the cash flow first, and then we can talk about the tax benefits because a lot of salon owners go out and they see the fancy equipment, especially if we're talking about skin. They're like, I want that. This is hot right now, let's get it in the door. No idea if there's a market for it for their clients that they're currently serving or what kind of returns are going to be coming in.

SPEAKER_03 24:51

So rewind that and listen again, because that was so fucking that's so important. Yes.

SPEAKER_00 24:57

Yeah.

SPEAKER_03 24:57

So important.

SPEAKER_00 24:59

Tax benefits-wise, there's heaps of things that we can do depending on how much that piece of equipment costs, and it will help bring that tax bill down. But if you're all of a sudden outlaying for a piece of equipment and no one's coming in and getting that treatment done, then your cash is going to be struggling overall.

SPEAKER_03 25:14

So it can't be your motivator. Yeah. It has to be there's a demand for it. It will like it can't be they're like, what tax benefit can I get back?

SPEAKER_01 25:21

Yeah. Or people buy an expensive piece of machinery, don't price their services properly, yeah, and then they're just doing services that are not profitable. Yeah. Kate, I want to ask a an extended question, my own question. Not that I have a skin clinic, but here we go. What do you think is better? Lease to own?

SPEAKER_03 25:37

Oh.

SPEAKER_01 25:38

Or like if you were to buy a hundred thousand dollar piece of machinery, what would you advise someone to do? Do you think it's better to purchase it to own it or to lease it so that they've I don't know. What would you think?

SPEAKER_03 25:50

I feel like it would be the same thing though, with the market is the clientele there if the clientele's there and like you have a demand for it. Yeah, but would the seller.

SPEAKER_01 26:00

Yeah, what do you think?

SPEAKER_00 26:02

Depends how much cash they have, because if they go down the leasing option, often they can just go, this is 200 bucks a week. And if it doesn't go well, I may be able to return that item. Whereas if they go out and they get a loan for the particular item that is theirs and they're responsible for that, and they have to hang on to it for a certain amount of years, and that's just how it is. So they don't have that safety net around what there could be with the different leasing options where it could just be a small six-month lease, one-year lease term, for example. But for

Paying Yourself: Wage Or Draws

SPEAKER_00 26:30

tax, it works differently. So when you go out and you purchase that item even under a loan, you can use that asset as your own to reduce your profit to then save on tax. Whereas leasing is different because it's not actually the ownership of your companies or your businesses.

SPEAKER_01 26:46

Okay, I'm gonna go a bit rogue here and just throw in my own random question. One thing that we see so commonly with sell-on owners is that they go out and buy these like fuck off expensive luxury cars.

SPEAKER_03 27:00

Yeah.

SPEAKER_01 27:00

When they don't have the cash flow and they hear that they can claim it. Well, that they can put it through their business. The business is going to pay back the loan, and they come in with a really high interest rate.

SPEAKER_03 27:10

I reckon this is like car debts is one of the biggest things that we've seen.

SPEAKER_01 27:13

So many people, or they go, I'll pay for my my car and my boyfriend's car or husband's car, and I will just put it through the business because a a person at the car sales place has said to do that. And on paper, and then they have these taxes.

SPEAKER_03 27:28

Did you just buy a new car?

SPEAKER_01 27:29

Pay for it in cash, darling. But afford focused out the front. It's not afforded focus. Amazing, but it's amazing, actually. My point is the my point is that these people that are uh spending outside of their means and then hearing I can put through my husband's car so that I can s lower my tax. And then all of a sudden their breakeven is enormously high when we actually pull apart all those personal expenses that they're riding off. They're just living outside of the means. And there's been some people where we've pulled apart their breake-even and said, You gotta sell your car and get get sell your friggin' Range Rover and get a forward focus. Ford focus or a Mazda 3. Yeah, because they're living so far outside of their means. It kills you, doesn't it? Yeah, it's hard.

SPEAKER_03 28:15

Especially when I see the husband's on there, I'm like off.

SPEAKER_01 28:17

Yeah, and the it's the the ego, you know, it's the ego purchase, and I totally understand it. It's the ego purchase where we go, okay, I want to appear to be this version of success. Meanwhile, I've got this hidden tax debt behind the curtains, and I'm really struggling to pay. Yeah. I'm struggling to pay myself a wage, but I look successful from the outside.

SPEAKER_00 28:38

What's your advice on that? I love what you're selling with this and the respecting your money as well, and understanding that and putting the ego aside. If you're absolutely banking in it, whatever, it's completely different. But it is very upsetting to see people living outside of their means. And one thing that the ATO is really cracking down on is fringe benefits tax. So if you go out and buy your car for you and your husband and you're saying this is all business, the ATO is spending a lot of money going down and having a look at that and saying, is this really a business car or are you just driving to and from work? And if you are and you're using that car for personal reasons, they're gonna come down. And if you're not already lodging your fringe benefits tax, you're getting slammed with it anyway. What are you doing it for?

SPEAKER_03 29:18

Totally. And then that car will be gone anyway. It is, it's yeah, this is something I feel like. It's so common. We've seen this so often, and I think it's I'm really glad that you threw that in there. Because I feel like, again, because we don't have this understanding, we hear someone say, You can do it this way, and we go, beautiful, like that's taken care of. I don't need to worry about that. And then we have these massive debts. And this is the thing, ATO is not like it's not a fucking myth. It's not like them being like, Oh, you know, you might get audited one day. Most people do, and multiple times, and like when that happens, there's if you're in the shit, you're in the shit. Like, yeah, and this is where we're hearing of businesses closing down and like people really having their world ripped apart because they haven't planned for it, they're living outside of their means, they don't have the correct systems in place. Chaos ensues.

SPEAKER_01 30:05

I agree. And it's always the husband's car on there. I'm like, what are we doing with it? What the h what's a husband

Renovations, Repairs, And Depreciation

SPEAKER_01 30:10

contributing to this business? The husband on the floor of the salon. Um, Kate Slater, I want to ask you one final question. What is the one thing that every salon owner should do to be better with their money?

SPEAKER_00 30:26

They should set a date to look at their finances regularly and have somebody that they're accountable for. And it doesn't mean it has to be their accountant. It needs to be someone and they need to respect that time and look at their numbers and just get rid of that feeling of it's too hard, I can't do this. If they sit down and they have a look at their reports, they're gonna start asking themselves questions around them where their money is, matching it up with their bank accounts, and that can lead to further steps. For most business owners, I find it's just about starting. Most people don't until it's too late. They come to us and they've gone, oh, we've got X amount of dollars in debt and they're so stressed out, but they could avoid that if they just sit down and have the right money date from the beginning and have those systems that we've already talked about put in place with saving the right amount of tax from the very beginning to not get into those situations.

SPEAKER_01 31:14

My ego wants to ask one final question. What's the most amount that you've coached someone to get out of debt? Like the the the wildest number of debt that someone's come in with and you've seen them go to zero.

SPEAKER_00 31:28

The most amount that we've had I believe it was around the 800k mark a couple of years ago throughout that COVID period. Wow. And the person cleared it? They're almost there. Wow.

SPEAKER_03 31:42

That's amazing.

SPEAKER_01 31:43

Almost clearing $800,000. Big business, but yeah, big debt too. I think that's so valuable because so many people hold shame on the tax debt that they have. And this was something that Tess and I had to get a lot more sensitive to because we we never had a tax debt because we were always taught to put money aside from day one. And I'm so grateful because I I don't know how we got lucky with that to be taught that lesson. But 99.9% of the industry have never been taught that. So so many people have taxed debt and it is widely spread throughout the industry. But I want to be able to give people hope that there can be light at the end of the tunnel and that that we hold no shame around it. It's about getting in control, getting accountable, making a plan and working as a partnership with your accountant to get on track.

SPEAKER_03 32:35

And that is something I feel like as well, our industry, I believe so many like we have so many money stories playing out. We struggle to charge, you know, in put price increases in. Uh, you know, ask if someone asks for a pay rise, it causes like a you know cardiac arrest response. Money avoidance, I think, plays out really thick throughout our industry. I'm sure it could be, you know, in so many industries, but something I see a lot of. And having even without setting the date, as soon as you were saying that, it's like, oh yeah, I was that I was that person because Nikki would constantly come to me wanting to talk finances, and I'd be like, no.

SPEAKER_00 33:10

Too hard, can't hear this. Don't even come near me.

SPEAKER_03 33:13

I don't even want to go, like, that's not even like so having a business with a business co-pilot who doesn't want to speak about Bill's finances or anything. We were just going in circles. When we started having those conversations, that's when the change happened. Having reaching out to people that can help us with it. And this is the thing, guys, if you're hearing this and you're like, fuck, this is me, Kate Slater is here to help you.

SPEAKER_00 33:37

Can we plug your shit? Where can people find you? You can find me at CamTech and Slater's website, so www.camtechslater.com.au. We've got the Camtech and Slater Instagram. I've got my own Instagram, kateslater.ca. We're on LinkedIn.

SPEAKER_03 33:51

She's everywhere.

SPEAKER_00 33:52

We are on TikTok, we're not actively on TikTok. TikTok's hard. TikTok's so hard.

SPEAKER_01 33:56

I feel like every single person watching this needs to go and follow Kate. Absolutely. Whether you have a solid relationship with your accountant, you just need to go and watch Kate's content because she makes understanding numbers simple and makes you more passionate as a business owner about numbers. You have you came to us through one of our private clients who said you need to look at my girlfriend's Instagram. And it was like I'd never seen

The EOFY Spending Trap

SPEAKER_01 34:20

anything like it because when I think of accountants, I think of boring, you know, um, like very vanilla, very much like monotone, motone vibes, and you bring this flair, and the fact that you work specifically to our industry is just very cool, incredible. So, Kate, thank you so much for being here.

SPEAKER_03 34:39

Thank you for having me. Fun fire round. How did you were you sweaty at all? Were you just like on that?

SPEAKER_00 34:43

Oh, I'd say if like if you touch my armpit, you could there'd be a little bit so there, but yeah, but that suit is too good to be touched.

SPEAKER_03 34:50

That was brilliant.

SPEAKER_01 34:51

Thank you guys so much for listening to another episode of the Conscious Salon podcast. Love you guys, stay conscious.