What if the secret to building your dream business isn’t about saving more, but about spending smarter? In this episode, Danielle Hayden, CEO and founder of Kickstart Accounting, Inc., invites you to stop feeling guilty every time you make an investment in your business. Instead, learn how to spend with clarity, purpose, and profit in mind.
She walks you through the healthy spending percentages successful businesses use across categories like marketing, payroll, operations, and more to thrive. You’ll also get practical tools and reflection questions to help you make CEO-level money decisions that align with your short-term goals and long-term vision.
Key Takeaways:
- Spending is Necessary for Growth: Healthy businesses spend money, and the key is doing it with intention and a clear plan.
- Your Mindset Matters: Guilt-free spending starts with shifting how you view expenses—from “costs” to “investments.”
- Budget by Business Season: Your business’s financial plan should match the stage you’re in: growth, maintenance, or development.
- Know Your Numbers & What’s Healthy: Breaking down your expenses into healthy percentage benchmarks can help you make informed decisions.
- You Get to Define Success: Don’t compare your business to others. Use your goals to determine where your money should go.
Topics Discussed:
The CEO Mindset Shift: Spending as a Growth Strategy (01:01 – 03:32)
Understanding Your Business Season and What It Means for Your Budget (03:34 - 06:03)
Healthy Percentage Benchmarks Breakdown (05:07 – 14:34)
Using the Healthy Percentages Worksheet to Plan for the Future (14:40 – 16:53)
Resources:
KSA Healthy Percentages Worksheet | KickstartAccountingInc.com/Healthy
How to Build Your Team Series | https://kickstartaccountinginc.com/category/hiring/
CFO Services | https://kickstartaccountinginc.com/the-cfo-solution/
Book a Call with Kickstart Accounting, Inc.:
https://kickstartaccountinginc.com/book
Connect with Kickstart Accounting, Inc.:
Instagram | https://www.instagram.com/Kickstartaccounting
YouTube | https://www.youtube.com/@businessbythebooks
Facebook | https://www.facebook.com/kickstartaccountinginc
Episode Transcript
00:00:00:00 - 00:00:29:22
Danielle Hayden
What if I told you the key to building your dream business isn't saving more? It's knowing what to spend and when. Welcome back to Business by the Books, the podcast that helps entrepreneurs just like you stop being afraid of your numbers and start using them as a tool for growth. I'm Danielle Hayden, reformed corporate CFO and the CEO of Kickstart Accounting, Inc., and today we're diving into a topic that triggers so much emotion for business owners.
00:00:30:00 - 00:01:01:10
Danielle Hayden
We're talking spending, but we're going to do it differently today. We're stripping away the guilt, the fear, the shame, and looking at spending through the lens of strategy, data, and confidence. We're going to talk about healthy spending, what it looks like, how your money mindset shapes your habits, and what percentages are worth tracking. You're going to walk away from this episode knowing how to plan to spend with the business you want, not just the one that you have today.
00:01:01:11 - 00:01:25:10
Danielle Hayden
All right, let's jump right in. Let's face it, as a business owner, you have to spend money in order to grow a real business. You have to spend real money. And yet so many entrepreneurs feel guilt every time they invest. Hire a VA? I should be able to do this myself. Signing up for a new software? Is this really necessary?
00:01:25:12 - 00:01:54:16
Danielle Hayden
Booking a business retreat or conference? Is this the selfish expense? And I'm here to help you reframe this, that every expense in your business is a vote for the CEO that you're becoming. Healthy businesses spend, but they don't spend blindly. They spend intentionally. So we're going to walk through today how much you're spending in what areas and how that aligns to your goals.
00:01:54:18 - 00:02:16:14
Danielle Hayden
Now I'm going to walk you through each area of the income statement and how much you should be spending in each area. I want to give you a powerful framework and tools to ask yourself some reflective questions as we go through this process. Our businesses, we have our needs, desires and wants. We all have needs as a business owner.
00:02:16:14 - 00:02:42:01
Danielle Hayden
This is what our business needs or requires us to spend to just survive. Then we have our desires. This is what your business needs to grow. Then our wants. This really reflects that long-term vision. The business that you're building in the long-term. So as we're going through each area of the income statement, you can ask yourself, what do I need to just stay open?
00:02:42:01 - 00:03:03:15
Danielle Hayden
Like, right, what do I need to spend just to stay here and continue to survive? What do I need to spend in order to reach the next level? The next goal as a business owner? And then what do I need to spend to support my long-term business? My long-term goals of where I want to be in the next three years, five years, ten years?
00:03:03:17 - 00:03:32:06
Danielle Hayden
That's why when we work with our clients during our CFO framework, one of the first exercises we have our clients do is to set ten-year goals, three-year goals, and then build a one-year budget because we need to know and understand where does the long-term vision of the brand, and then work our way backwards to actually plan out strategically and specifically what the next 12 months are going to look like?
00:03:32:08 - 00:03:58:13
Danielle Hayden
All right, let's talk data. We're going to talk through these healthy percentages. If you want to go through this worksheet with me in real time, I invite you to go to KickstartAccountingInc.com/Healthy to download this Healthy Percentages worksheet. Now I am specifically speaking to service-based business owners as I walk through this first set of categories.
00:03:58:15 - 00:04:26:22
Danielle Hayden
Now, as businesses, we all have seasons in our business. We're not all in high growth mode every year for years on end. It's really exhausting to be in super high growth mode. So first, as we're thinking about how much we should be spending and how it aligns to our long-term strategy, I want you to understand and ask yourself, what season of business are you in today?
00:04:27:00 - 00:04:53:15
Danielle Hayden
Are you in high growth mode, meaning that you're investing in strategies like marketing and advertising? Maybe you're building your team, really building your money team, legal team, operations team, so you have higher outside services or payroll costs. Maybe your business is just starting out, and so you are spending more money in training and consulting, and so you're really in developmental mode.
00:04:53:17 - 00:05:19:19
Danielle Hayden
So what season are you in? Is it growth? Is it stability? Building a team? Or is it in that developmental cycle where we're really focusing on training, consulting, and building who we are as a CEO? All right, I'm going to start at the top is our advertising and marketing costs. Healthy businesses spend annually between 8 and 10% of their gross revenue on advertising and marketing dollars.
00:05:19:22 - 00:05:45:20
Danielle Hayden
If you are not a Kickstart Accounting, Inc. client, you can go to your QuickBooks file and you can download your QuickBooks Percentage of Sales report. Kickstart Accounting Inc. clients, you all have this report that comes to you in your email without you having to lift a finger every single month. So I want you to open your Snapshot, scroll all the way to the bottom, and you have the Healthy Percentages worksheet right there ready for you to do this comparison.
00:05:45:22 - 00:06:07:19
Danielle Hayden
So I want you to find your advertising marketing line and see how much of your sales, you'll look at that percentage. How much of your sales are you spending in this category? Now, if you are closer to 15 to 20% in advertising and marketing costs, I want you to be thinking, am I in high growth mode? Meaning this isn't sustainable.
00:06:07:19 - 00:06:29:19
Danielle Hayden
I know I won't stay here forever, or you're in a low percentage, meaning you're spending less than 5% of your revenue in advertising and marketing, meaning that you're really not growing right now and you're building your business maybe on referrals or you’re in stability mode, and so growth and new business is not a priority for you today. Then we have our operating expenses.
00:06:29:23 - 00:06:55:05
Danielle Hayden
You guys, as business owners, we have to operate our business. We have to have the tools, software and systems to help us create efficiency in our business. We should no longer be doing things manually or keeping track of things on a spreadsheet. We have to have operating costs in our business to run our business, so that we can step into our role as CEO.
00:06:55:07 - 00:07:21:11
Danielle Hayden
We want 5 to 7% of our sales going to operating expenses. Again, you might be higher for a season, so maybe you're at higher than 10%, but I want you to know that this is seasonal, that we do not want you here long-term. So maybe you made a large investment into a software and we are waiting for new clients and the fruits of that labor of that investment to come to fruition.
00:07:21:13 - 00:07:48:21
Danielle Hayden
If you are spending less than 3% in operating expenses, I want you to evaluate what you're doing and how you're doing it. Where is your time and energy best serve to support the growth of your business? Next, we have outside services. You guys, we aren't meant to do this alone. We have to have attorneys, accountants, bookkeepers, virtual assistants, operations, team members, outside services.
00:07:48:21 - 00:08:13:21
Danielle Hayden
These are the people who they're experts in what they do. They have their own business and they're sharing their expertise with you. You are not managing them like an employee. We want to see between 7 to 9% of our revenue in outside services to make sure that we're growing a sustainable business. We want to have healthy, sustainable and profitable businesses.
00:08:13:22 - 00:08:35:06
Danielle Hayden
So we have to be spending between 7 and 9% in this area. Next we have payroll. Just like outside services, we are building a team and you can do this in various different ways. We have an entire series that I'll link in the show notes on hiring, when to hire, who to hire, and how to determine when you can afford to hire.
00:08:35:08 - 00:09:04:06
Danielle Hayden
But again, we are not meant to do this alone, and so we want to see payroll between 35 and 40%, including your payroll as a business owner. Now you might be in a season where this is higher. You might have decided that as a service-based business, that your team members will always make between 50 and 60% of your sales, which I am okay with, as long as we're not going over in every area in every category.
00:09:04:12 - 00:09:33:22
Danielle Hayden
So if we're going over in payroll, we need to know that we're going to be under in other things, like facility, travel, training, maybe even operating or marketing costs. We don't have to be perfect in every area. We need to choose what is important to your business in this season and in alignment with your core values. Because if you are spending less than 20% in payroll, though, I want you to look yourself in the mirror and ask yourself how your energy feels.
00:09:34:00 - 00:10:03:15
Danielle Hayden
We are not meant to do everything in our business. When I worked as a corporate CFO, my CEO, he wasn't in the bookkeeping. He wasn't doing the advertising and marketing. He wasn't playing around in Canva or editing the podcast. He was doing the important visionary work. Oh, and the important client service work that moved the business forward. So we need to have team members who are going to support you and your energy as a business owner.
00:10:03:20 - 00:10:33:12
Danielle Hayden
Unfortunately, fees are just a matter of doing business these days, so we're going to have between 2 to 3% in merchant fees. Then we have training and consulting. Training and consulting will make up between 5 to 6% of our gross revenue each year. You might be in a developmental phase. What we found in working with thousands of business owners over the last ten years here at Kickstart Accounting is that over the first few years as a business owner, we’re really learning the skill.
00:10:33:17 - 00:10:57:14
Danielle Hayden
We came into this with a craft, something that we're really passionate about, but we have to learn all the other aspects of being a business owner. And so there might be a time where you're spending 8 to 10% of your revenue on training and consulting businesses. And you guys, I don't want you long-term staying in the season where you always are investing in the next course, the next coach.
00:10:57:16 - 00:11:20:13
Danielle Hayden
We need to move into implementation and bring the training cost in line between 5 to 6% of your revenue as your team grows. This might fluctuate. You know, our biggest training costs here at Kickstart Accounting is training our team. And so it's not just me anymore as a business owner training myself. But these costs also make training my team.
00:11:20:17 - 00:11:47:10
Danielle Hayden
Next we have facility cost. Facility costs should make up no more than 8 to 10% of your revenue. Now, maybe you signed a lease that is for a larger space and it's taking 15% of your sales right now. That's okay if we know that we have room to grow in that facility. It is part of our long-term desire, our long-term strategy to be able to grow into that space.
00:11:47:14 - 00:12:19:17
Danielle Hayden
If we're spending less than 3% of sales in our facility costs, I want you to ask yourself if you long-term are going to be able to build the business of your dreams in that space. At what point are we going to be opening up a second location, or moving into a space that will allow for growth? Now remember, if you are a service-based business who's operating online that 8 to 10% of sales that are going to facility cost can then be spent in other places.
00:12:19:19 - 00:12:41:18
Danielle Hayden
So if you don't have a facility, then you get to spend those dollars on payroll or outside services, operating expenses. So we don't need to be in this perfect alignment in every single category. Here at Kickstart, we don't have a facility, so that 8 to 10% of sales that we are saving on our facility cost, it goes right back up to payroll.
00:12:41:20 - 00:13:05:17
Danielle Hayden
We are a people first organization. It is part of my core values, as part of our core values of the firm to be people first; benefits, time off, training. We are putting our people first, and so those facility costs slide right up to payroll. And now we have more dollars to spend and still stay within that healthy profitability area.
00:13:05:23 - 00:13:46:15
Danielle Hayden
Then we have our travel, meals, and entertainment. This is going to be very different for every business owner, whether you travel for work, whether you are attending live conferences, or what exactly you do for business. I want to allow you to have dollars here, and so healthy is between 7 to 8% of your sales. But if you are expensing every meal that you go out to or every meal on the way to or from work, I want to ask you if that's really a business expense? Because when you look at your business, I want you to be able to see what is truly a business expense and what serving your customer, what serving you as
00:13:46:15 - 00:14:16:13
Danielle Hayden
a business owner. Your total expenses should take up between 75 and 90% of your revenue. You heard me, you guys. As business owners, we need to spend money to create healthy businesses. So we're turning around and spending 75 to 90% of our revenue, including paying you as a business owner. That leaves us with profit of 10 to 15%.
00:14:16:15 - 00:14:41:15
Danielle Hayden
So a healthy business is between 10 to 15% of profitability. Now, if you are at 4%, 5% this year, but you are in a season of investments, say you signed up for a big training program, a conference, certain paid advertising. Know that this is a season. There's no shame. There's no right and wrong. You did not fail. It's an opportunity to learn.
00:14:41:20 - 00:15:16:21
Danielle Hayden
Ask what worked, what didn't work, and make pivots into the future so that long-term we're creating healthy, sustainable, profitable businesses that light you up as a business owner. So remember, as you're evaluating this, I want you to ask, are you hiring for your current workload or your future capacity? Are your tools maxed out and are they scalable? Are you investing in marketing to stay busy, to stay where you are, or to grow and reach long-term?
00:15:16:23 - 00:15:43:21
Danielle Hayden
Healthy spending is about capacity planning. It's about preparing your business to hold what you're building in the future. Let's wrap this up. You have to spend to grow, but you must spend with intention. Know what season of your business you are in as you walk through these numbers and always ask yourself, the reflective CEO questions that only you can answer.
00:15:43:23 - 00:16:16:04
Danielle Hayden
Know your numbers. Understand your breakeven and your profit goals so you can create a healthy percentage of your business. Healthy businesses aren't built by spending less and saving every dollar. They're built by spending on purpose. If you're ready to start spending in alignment with your goals, I want you to consider the Kickstart Accounting Budget or CFO services. Our CFO team walks you through our framework.
00:16:16:06 - 00:16:44:00
Danielle Hayden
I call it the ultimate goal setting process where we are looking at your ten-year goals, the three-year, and then building out a one-year budget so that you can spend intentionally and finally hit your goals, pay down your debt, and pay yourself what you deserve to be paid. I hope you enjoyed today's episode. Remember, this is a tool in your toolbox.
00:16:44:01 - 00:16:58:18
Danielle Hayden
We are not approaching numbers with shame or guilt. Let's look at the numbers as a tool to guide our actions as the CEO. So thank you for joining me on today's episode of Business by the Books. I hope you enjoyed today's
00:16:58:18 - 00:17:03:06
Danielle Hayden
episode of Business by the Books. Don't forget to hit like and subscribe!
00:17:03:06 - 00:17:06:02
Danielle Hayden
This is the number one way we can help other
00:17:06:02 - 00:17:18:14
Danielle Hayden
entrepreneurs find this podcast, cause here at Kickstart Accounting, Inc., it is our mission to help entrepreneurs understand their numbers, get access to this information, and grow and thrive in their business.
00:17:18:14 - 00:17:22:00
Danielle Hayden
So please help me, help other entrepreneurs
00:17:22:00 - 00:17:42:07
Danielle Hayden
understand their numbers so they can finally grow and thrive.