Becoming Business Barbie and Making Accounting Accessible for Founders: Featuring Rachel Harris
Jun 4, 2024
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Award-winning content creator and accountant Rachel Harris shares insights on community-building, founder finances, and company valuation. Topics include entrepreneur support, efficient founder compensation, tax strategies, valuing time, and improving productivity.
Establishing an internal charge-out rate is essential for time management and decision-making in balancing personal and business life.
Founders should prioritize taking a market rate salary to sustainably grow their business, ensuring personal financial stability and company growth.
Valuing a startup involves creating separate valuations based on various methods, which are then averaged and weighted for a structured valuation approach.
Deep dives
Developing an Internal Charge-out Rate for Time Management
Establishing an internal charge-out rate for time management is crucial for balancing personal and business life. This rate signifies the value of time and helps in decision-making on what tasks to delegate and prioritize. By understanding the internal charge-out rate, individuals can allocate time effectively and focus on tasks that yield maximum value.
The Importance of Founder's Salary and Valuing Time for Growth
Founders should prioritize taking a market rate salary to sustainably grow their business. Valuing oneself appropriately reflects commitment and professionalism to potential investors. Understanding how to pay yourself tax-efficiently using a combination of director's salary and dividends is key to ensure personal financial stability and company growth.
Demystifying Business Valuations for Founders
Business valuations, though complex, can be simplified by focusing on the concept that a business is worth what you can sell it for. Employing diverse valuation methods like discounted cashflow and top-down and bottom-up approaches helps founders understand their business's worth. By demystifying valuations, founders can navigate investor discussions effectively and make informed decisions for business growth.
Valuation Methods and Dragons' Den Simulation
When valuing a startup, three separate standalone valuations are created based on top-down, bottom-up approaches and profit multiples, which are then averaged and weighted based on their likelihood to happen. This comprehensive approach provides founders with a structured platform for valuation, including a dashboard to present to potential investors. Additionally, founders undergo a Dragons' Den style simulation to refine their pitch and face tough questions from angels, preparing them for actual investor interactions.
Internal Charge-out Rates and Monk Mode Productivity
Founders are advised to establish an internal charge-out rate to assign a value to their time, enabling clear decision-making on tasks to delegate or outsource. By following a formula based on their annual income, founders can determine a rate for outsourcing tasks, enhancing efficiency and prioritizing mental well-being. Additionally, implementing 'monk mode' allows for deep focus work during specific hours, creating a productive environment with intentional comfort measures to optimize time management and work-life balance.
As well as being “Business Barbie” to her followers on instagram, Rachel Harris, is an award-winning content creator, author, speaker, business owner, and most importantly, an accountant extraordinaire. Named as one to watch on the 35 under 35 list and recently crowned as the First Intuition Apprenticeship Mentor of the Year for 2023, Rachel is a true breakout star in the accounting world.
Rachel's passion for empowering accountants and small business owners shines through in her remarkable journey. From building the thriving Accountant She community of over 25,000 people to becoming the youngest-ever director and trustee of AAT, Rachel has been a trailblazer at every step. She’s also making an impact, including with her innovative corporate bursary scheme, launched in January 2023, fully funds aspiring accountants in financial hardship, providing them with the mentoring and support they need to succeed.
In this episode, we dive deep into Rachel's entrepreneurial journey and the invaluable lessons she's learned along the way. We'll explore:
The power of community-building and creating the support system you wish you had
What founders do and don’t need to worry about when it comes to accounts
The most efficient way to pay yourself as a founder
The importance of setting an “internal charge out rate” to value your own time both in the company and out of it
Approaches to valuing your company, and what Rachel looks for as an Angel Investor, and trains clients to prepare for in her mock “Dragons Den” investment readiness sessions
