Are you constantly wondering if you’re spending too much or maybe not enough in your business? Here’s the truth: not every season of business is meant to be profitable. And if your spending isn’t aligned with the season you’re in, you could risk stunting your growth or draining cash you can’t afford to lose.
In this episode, Danielle Hayden, reformed corporate CFO and founder of Kickstart Accounting, Inc., walks you through the four seasons of business—developmental, growth, optimization, and stability—and shows you what healthy spending looks like in each one and their percentages. You’ll learn how to align your financial strategy with your business stage so you can invest wisely, protect your cash, and build long-term sustainability.
Key Takeaways:
- Not Every Season Is Profitable: Understanding that profitability isn’t the goal in every stage of business gives you permission to reinvest strategically without guilt.
- Four Seasons of Business Guide Your Spending: Developmental, growth, optimization, and stability each have their own financial priorities and spending benchmarks.
- Healthy Spending Looks Different in Each Season: From investing in marketing during developmental mode to streamlining expenses in optimization mode, knowing where to focus can keep you on track.
- Your Season Isn’t Fixed: Business isn’t linear. You may cycle back and forth between seasons depending on opportunities, challenges, or market shifts.
- Financial Clarity Builds Confidence: Using your numbers as a tool helps you spend with intention and make empowered CEO-level decisions.
Topics Discussed:
(00:00) Intro – The 4 Seasons of Business Explained: Developmental, Growth, Optimization, and Stability
(01:41) Development Mode: Spending Priorities and Benchmarks for Startups and Solopreneurs
(06:48) Growth Mode: Building a Team, Scaling Systems, and Aiming for Profitability
(12:29) Optimization Mode: Reducing Expenses, Focusing on Efficiency, and Leaning Into What Works
(17:42) Stability Mode: Reduced Investments, Strong Profit Margins, and Balancing for Life
(20:04) Outro: Kickstart’s Free Healthy Spending Guide, Like, Share and Subscribe!
Resources:
Free Download | Healthy Spending by Seasons Guide
Book a Call with Kickstart Accounting, Inc.:
https://kickstartaccountinginc.com/book-a-call/
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;28;18
Danielle Hayden
Are you constantly wondering if you're spending too much or not enough in your business? Here's the truth: not every season of business should be profitable, and if you don't align your spending with the season you're actually in, you could either stunt your growth or burn through your cash you can't afford to lose. In this episode, I'll walk you through the four seasons of business: developmental growth, optimization, and stability, and I'll show you exactly how healthy spending looks in each season.
00;00;28;18 - 00;01;00;13
Danielle Hayden
You'll finally know whether your spending is on track, where to invest, and when to expect profit. You're listening to Business by The Books, the podcast that helps business owners understand their numbers and make confident financial decisions. Today, we're going to be talking about my favorite topic, healthy spending, and how to use our money mindset as a CEO to spend money in the business that aligns with the season of business you are in today.
00;01;00;15 - 00;01;24;18
Danielle Hayden
So I'm gonna walk you through the four seasons of business and how that relates to how you're going to spend money in the business. And spoiler alert: whether or not you can expect to be profitable, not all seasons of business are going to result in profitability. So let's walk through the different seasons of business and how it can relate to your profit.
00;01;24;20 - 00;01;48;16
Danielle Hayden
I want you to walk away with strategies that you can implement in your business today. All right, so what are the four seasons? We have our developmental mode, growth mode, optimization mode and stability mode. We'll walk you through each and the healthy spending for each season. First is our developmental mode. This is where most of our startup clients land in developmental mode.
00;01;48;16 - 00;02;18;19
Danielle Hayden
You are wearing most or even all the hats of the business. Your revenue is inconsistent and really just beginning during a developmental mode. You have heavy investments in learning and setup. At this time, your ideal client is still evolving. Your systems and your SOPs or standard operating procedures, they're not yet in place. A lot of your time and energy is being spent creating those systems at this time in our business.
00;02;18;22 - 00;02;41;06
Danielle Hayden
We are hardly even breaking even in profit, and there's going to be months where we're operating in the red and so our clients ask us all the time, am I spending too much in my business? Does this align with where I should be at? And we've always had a consistent framework that we've used to apply across our clients where we see healthy spending.
00;02;41;07 - 00;03;11;18
Danielle Hayden
However, over time, what we've learned is that not every business owner is in the same season of business, and so we can't apply the same spending methodology to all business owners across our seasons of business. And so during this developmental time, this time, you're going to be spending more money in advertising and marketing. It's likely to be closer to 10 to 20% of your sales is being spent back in advertising and marketing, you guys.
00;03;11;19 - 00;03;40;05
Danielle Hayden
During this time, we have to build awareness. We have to attract our clients, and we're building the foundation of branding and social media support. Maybe even paid ads are operating because expenses are high during this time as well. We're spending around 7 to 10% of our sales in operating expenses. Remember, we have to get everything set up. Our CRM, system scheduling, email accounting.
00;03;40;08 - 00;04;06;19
Danielle Hayden
This percentage is high due to having to decide which tools we're going to use. We are experimenting at this point and we have those initial set up charges and time commitments during our developmental season of business. We also see our outside service costs high. This is usually about 8 to 12% of our sales. Freelancers, consultants and outside services,
00;04;06;20 - 00;04;37;29
Danielle Hayden
they're filling the gaps in your skills. As a business owner, there's always going to be skills that you don't have, and we are hyper aware of those gaps when we're just starting out as a business owner. Things like legal, accounting, I.T., you're not ready to hire those in-house yet and maybe even ever. And so you need to have experts in your business who can come in and show you and guide you in what you need in your business right now.
00;04;38;00 - 00;05;01;08
Danielle Hayden
Now, during this developmental time, your payroll is going to look like 10 to 25% of your sales. I want to be clear, this does include your payroll. As a business owner, you are starting out as a solo business owner and you're just starting to delegate. So your own pay, like your own payroll, it might be minimal at this point.
00;05;01;08 - 00;05;31;24
Danielle Hayden
During our developmental stage, we have to reinvest our profits so that we can have a healthy, long-term, sustainable business. Next is training and consulting during our developmental season of business. We're spending between eight and 15% of sales in training. You guys, remember, during this phase of business we have to invest in learning to be a CEO. This requires business coaching courses, maybe even a certification.
00;05;31;24 - 00;05;57;21
Danielle Hayden
You are not expected to know it all during this developmental stage. Next, are facility costs. Healthy spending during our facility costs are going to be no more than 5% of sales. If you are investing heavily into a facility or space, then we are going to have to dial back our spending in other areas like advertising and marketing, our operating expenses, payroll.
00;05;57;23 - 00;06;23;06
Danielle Hayden
So if our facility costs are higher than 5%, it's important that you're dialing back your spending in other areas. What we find is that many entrepreneurs are able to take advantage of remote working from home, or cost efficient options for space. Lastly is our travel, meals and entertainment. During this time of developing our business, we are going to have networking, training.
00;06;23;07 - 00;06;45;01
Danielle Hayden
We need to be mindful of our spending during this time. However, we hear from our clients, we have to travel for the training. We have to travel to network and perform our advertising and marketing. And so we will find spending in this area during our developmental stage. Now developmental stage, this isn't going to last forever. It's a tough stage to be in.
00;06;45;02 - 00;07;10;21
Danielle Hayden
I remember being in developmental mode, but next we move into growth mode during our growth mode, this is when client demand starts to grow, and this is when it becomes essential for you as a CEO to start to delegate. You cannot do it all on your own. You have to build a team. Outsourcing key functions are going to be crucial for you.
00;07;10;24 - 00;07;38;14
Danielle Hayden
And having systems that are set up and ready to be scaled is going to set you apart as a business owner. Now during growth mode, we want to start to see profit of 10 to 15%. However, I want that to be a goal for you. During growth mode, you might have profits as low as 3 to 5% during times that you are being intentional about investing in growth.
00;07;38;16 - 00;08;01;07
Danielle Hayden
There's going to be a reduction in your profit as you increase your expenses. So you might have expenses of 90-95% of your total sales being reinvested back in the business. So I want to go through each of the categories again with you, and I want this to be a tool for you to use as you're thinking about your season of growth and business.
00;08;01;10 - 00;08;28;19
Danielle Hayden
Now, during this time, our advertising and marketing costs are going to be between 8 and 15%. You are still investing in paid ads, PR and outreach. We have to attract more clients. If you are still spending 15 to 20% in advertising and marketing, I want that to be for a very short season. And I want you closely watching the return of investment on those advertising and marketing costs.
00;08;28;22 - 00;08;53;00
Danielle Hayden
So during this time, you know, remember in developmental stage, we were spending closer to 20% in marketing. At this point, we're starting to bring that down 10 to 15% so that we can start to spend money in other areas. We have to grow a team during this time. I'm getting ahead of myself. Let's talk about operating expenses. In every season, you have to have operating expenses.
00;08;53;03 - 00;09;25;21
Danielle Hayden
So you'll hear me consistently say that this is somewhere between 5 to 8% during the growth season of your business. You're going to be intentionally investing into robust systems. Think your automation tools and your upgraded platforms. This investment of software, it is crucial for you to be able to scale your business with your client volume. You cannot invest in advertising and marketing and bringing more clients into your business without having the operations and systems.
00;09;25;26 - 00;09;55;07
Danielle Hayden
In order to be able to support the growth in your client base, you're also going to hear me consistently talk about outside services. No matter what season of business you're in, in your growth season, you're going to have between 7 to 10% of your sales being invested in outside services. Remember, these are your consultants and your contractors. These are the people who are experts where you don't need to be an expert; HR, accounting, I.T., bookkeeping.
00;09;55;07 - 00;10;16;24
Danielle Hayden
We all need to make sure as CEOs that we're maintaining the quality of our business as we scale. And so you as a CEO don't need to worry about being the expert in HR or who are the expert of QuickBooks and bookkeeping and tax. I want you to focus on your zone of genius. Only the things that you can do.
00;10;16;27 - 00;10;42;11
Danielle Hayden
Keep your outside services between 7 and 10% so that you can have the help that you need. Now, during our growth season, again, we cannot invest in advertising and marketing unless we're investing and growing a team. We have to be spending between 35 to 45% of our sales on building the team. This is the client facing staff, our admin roles, a VA support during growth mode.
00;10;42;12 - 00;11;08;11
Danielle Hayden
You might even consider bringing on a leadership team to help you get to the next level. As a CEO at this point in your business, you don't need to spend so much money in training and consulting. You always have permission to spend around 5% of your sales on training, both you and your team. But what you're training yourself in, it's going to change during developmental mode.
00;11;08;19 - 00;11;34;24
Danielle Hayden
We are building the foundation and learning to be a CEO at this point in our business. We need to learn to lead. We need to have team training, investing in managerial coaching, and learning to optimize our operations systems. So we'll always have costs in training. It's just how we use those trainings will change over time. Now facility costs,
00;11;34;24 - 00;11;59;17
Danielle Hayden
you're going to hear me say it over and over again, I don't want you spending any more than 5 to 10% of your sales in a physical office, studio, or warehouse. Now, if you are remote, you can use those costs in other areas. If you're able to work from home or keep these costs lean, you'll have more money to spend in advertising and marketing, payroll, training, outside services.
00;11;59;17 - 00;12;22;12
Danielle Hayden
You get it. Now lastly, our travel, meals, and entertainment. This is always going to be around 5 to 7% because we're going to have to get to the conferences, the trainings, vendor meetings, client dinners. And now we're also bringing in offsite team building. So this growth season, you guys, this is my favorite season to be in as a business owner
00;12;22;14 - 00;12;51;24
Danielle Hayden
and to see our clients in it. Being in growth season is exciting, but we can't stay here forever. Our business needs to turn to optimization as our business grows and you become a more sophisticated, successful CEO. Our goal as a business changes during optimization mode. Your revenue is stable or it's growing modestly. We're not seeing a hockey stick of revenue, but we're stable and we're growing.
00;12;51;24 - 00;13;19;27
Danielle Hayden
And at this point in the business, it's important that we have the time and energy to start to identify what are the bottlenecks, what are the inefficiencies in business? Do we have the right people in the right seats? And during this optimization season, we are able to look at performance and enhancing the performance of our entire team. The goal of optimization mode is to start to increase our profits.
00;13;19;29 - 00;13;51;17
Danielle Hayden
So we need to analyze our numbers more closely. This is an important season for you as a CEO. Our clients are mostly in growth and optimization seasons of business, because this is where successful CEOs know that they need to be, analyzing their numbers every single month. You need to have financial statements and our Snapshot to give you the information that you need to make business decisions quickly.
00;13;51;17 - 00;14;21;18
Danielle Hayden
Now during optimization mode, this is when our expenses can start to come down and we're only spending 70 to 85% of our gross revenue and expenses. This is where we want to see our profit start to increase towards 15%. We're aiming for strong, sustainable profit with efficient spending. So what does that look like? At this point we have spent a lot of money on advertising and marketing during our developmental and growth stage.
00;14;21;20 - 00;14;50;13
Danielle Hayden
Now, at this point, we can start to pull back on our advertising and marketing. We are focusing on the strategies that work. We're dialed in on our ideal client. We know the best marketing channels for our business and for our client. During optimization seasons, we need to focus on conversion over broad reach. Spending here needs to decrease. But this is through impactful strategic moves.
00;14;50;19 - 00;15;18;03
Danielle Hayden
You know what's worked. You're dialed in and you are implementing. So what else can change during this season of optimization? How do we lower our costs, operating expenses? If we can pull our operating expenses down to 4 to 6% of our sales by refining, automating, and integrating our systems? At this point, we can start to consolidate our tools and reduce redundancies.
00;15;18;05 - 00;15;43;20
Danielle Hayden
Again, we know what systems work and don't work because we were testing them during our developmental season. We were testing them through growth season and we're only keeping the things that work. We're also dialing in our outside services. Our outside services can be around 5 to 8% of our sales, and we're dialing this in by strategically using our high performing freelancers and consultants.
00;15;43;21 - 00;16;08;21
Danielle Hayden
You may start to reduce some reliance on your outside services as your internal systems and teams mature. There are times where experts can come in and strategically take things off of your plate that never need to be added back onto your plate. You'll hear me say a lot during outside services, HR, IT, bookkeeping, and tax, you never need to be the expert in these areas.
00;16;08;21 - 00;16;34;22
Danielle Hayden
Our payroll changes during optimization during this season. During an optimization season where we are really focusing on increasing our profits, this is where we are dialed in. We have the right people in the right seats, lean, empowered and efficient. So your compensation may shift during this time. We may be focusing on keeping our best performers through benefits and bonuses.
00;16;34;23 - 00;17;05;05
Danielle Hayden
Payroll is going to stay consistent at around 35 to 45%. If you are dialed in on the other areas of your business, then you can spend more in payroll. I want you to have an optimized team during an optimization season. We're also implementing our training. We don't need to spend so much money on training. We're focused on efficiency and using the information we learned during our developmental season.
00;17;05;06 - 00;17;33;04
Danielle Hayden
This means fewer courses and more hands on implementation. We're always going to have facility costs and travel, meals and entertainment as we adjust these areas and find the right blend of spending for your business. We can find profitability. You're not going to find profits across every area of your income statement as you identify this season for your own business.
00;17;33;06 - 00;17;59;02
Danielle Hayden
You'll find the right amount of strategic spending that's going to align for your goals in your business. So where do we go from here? Next is stability mode. As we mature as business owners, we don't always have to invest. We don't always have to have heavy investment cycles. Our profit margins can and should be strong in stability mode.
00;17;59;04 - 00;18;26;23
Danielle Hayden
When you have reliable, consistent revenue systems that are running and a team in place, you're no longer chasing the “more and more and more,” you're optimizing for life. Balance your expenses and your investments. They're more predictable. And you as a CEO, you're less reactive and more strategic. So during stability mode, we're going to find our profits around 15%.
00;18;26;25 - 00;19;06;07
Danielle Hayden
15% profit is our sweet spot. A healthy, sustainable business can always aim for 15% profit. So if you're watching here on YouTube, you can see on my screen how we have laid out the different categories of spending and how the areas of spending will change over time. You can also download this at KickstartAccountingInc.com/Seasons to grab the download of healthy spending by season, and want to give you permission as a business owner that you can make this work for you.
00;19;06;12 - 00;19;28;19
Danielle Hayden
If there's anything that I've learned in entrepreneurship is there's no exact playbook. We are not moving through each of these seasons 6 to 12 months, right? There's not a developmental season for 6 to 12 months and I'll spend 15% of marketing in developmental season, and then at this exact marker, I'm going to move to growth season. I know we all want those clear guidelines.
00;19;28;22 - 00;19;58;00
Danielle Hayden
However, business is messy. There's going to be a time where you are in optimization, and then there's an opportunity and you go back into growth mode, we’re in heavy reinvestment. There's times where you feel like you're in stability mode, and then the economy hits and we need to change. The idea is to use this as a tool. Your financials, your numbers and these strategies,
00;19;58;02 - 00;20;30;04
Danielle Hayden
these are all tools to help you to become a healthy, confident and powerful CEO. What are our next steps? I want you to go to KickstartAccountingInc.com/Seasons. Download the handout. Think about what season of business are you in. Developmental, growth, optimization, or stability? Each month when you review your financials, review your spending based on the season of business that you are in today.
00;20;30;07 - 00;21;17;14
Danielle Hayden
I hope you enjoyed today's episode of Business by The Books. Don't forget to hit like and subscribe! This is the number one way we can help other 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. So please help me, help other entrepreneurs understand their numbers so they can finally grow and thrive.