#139 – 13 Money Myths Keeping Web Designers Under-Earning with Financial Coach Gina Knox

Shannon Mattern (00:01.813)

Hello everyone and welcome back to the Profitable Web Designer podcast. I'm so excited to introduce you to my guest today, Gina Knox. She's the host of the Small Business Big Money podcast and a financial coach for entrepreneurs with variable income. Hello web designers, right? And so Gina teaches them how to create strong business foundations by paying off business debt while saving for taxes.

and the most important part, paying themselves well. So Gina, welcome to the show.

Gina Knox (00:33.752)

Thank you so much for having me. I'm excited to be here.

Shannon Mattern (00:37.159)

Yeah, so you I'm just so glad you're here. And I really cannot wait to dive in to how you help entrepreneurs create more safety, security and peace with their money, which is what we all want. But first, I just want to learn more about you. Like, what's your origin story? What led you to becoming a financial coach for entrepreneurs?

Gina Knox (00:58.218)

Yeah, absolutely. So I have a bit of a different background. I went to art school in San Francisco. I went to California College of the Arts and I graduated with a degree in interaction design, which is like UX design. And I went right into the tech world. I actually specialized in user research. So researching that part of the design process. And I landed a job at QuickBooks where I was a small business researcher for five years.

which was such a cool job. My entire job, Monday through Friday, was to speak with small business owners about their finances, understand how they were doing their bookkeeping and their taxes and their financial strategy and their workflows and all of that. And then I would take that and bring it back to the design and engineering teams and be like, OK, this is the problem that small business owners are having, or this is the problem they're having with our design. We need to tweak this, right?

Because as you can imagine, we are high paid tech workers with benefits and a bi-weekly steady paycheck. We have no idea what it's like to be a small business. So that was my job for five years and I interviewed over 400 companies. It's funny because I would do long form interviews, so like hour long interviews. And afterwards, the business owners would always say like, that was like small business therapy, just to be able to talk it out with someone.

And eventually I just started feeling like I love my job, I love my coworkers, I was compensated well, so there was nothing wrong with my work, but it felt like I was helping millions of customers do small things, like invoicing better or doing their bookkeeping better. And it's not to say that that's irrelevant, right? It's relevant and it was helping millions of people, but I really was missing that like,

deep, deep transformation with fewer people. So I started coaching and I started with some friends and just kind of grew from there. And eventually I went full time and now I've worked with over, I think it's latest numbers. It's like over 450 small business owners that I've worked with in my coaching business. So I always say like, I have seen every P &L. I have seen the back ends of.

Gina Knox (03:21.47)

So many businesses, I've really, really seen it all. that's just how I ended up here. I just love talking about money all day, every day.

Shannon Mattern (03:30.397)

my gosh. When you said you got to talk to 400 small business owners about their money working at QuickBooks, I'm like, that sounds like my dream life. Like I love talking about business and money and I do an income report every single month on this podcast. And I talk about, here's how much we made. Here's how much we spent. Here's all of the lessons that I learned. Here's where I've messed up. Here's where I do things differently next time. And I love those conversations. And I just feel like

the more people talk about it, the more normalized a lot of the things that maybe we're ashamed about become, we just, you know, we tell ourselves so many stories about how things should be and shouldn't be. like, you know, none of that is necessarily true. So I love that there's someone like you who is like, I have seen it all. I've seen behind the scenes of these businesses. I've seen every PNL.

Like there's probably nothing anyone could say to you that would like shock you.

Gina Knox (04:33.134)

Honestly, no. Honestly, because I've seen like, I've seen small baby business owners making their first $5,000, what they're doing. And then I've seen like law firms with 200 employees and $83 million a year in revenue. Or I saw a company that has a thousand Amazon delivery trucks and their subcontractors. Like I've seen such a wide range. And yeah, you just can't shock me at this point.

Shannon Mattern (04:58.389)

So because you've seen such a wide range, what are the common threads that you see between the baby business and the 1,000 Amazon truck business? What are some of the common threads that you see that just permeate through regardless of the business size?

Gina Knox (05:04.981)

Yeah.

Gina Knox (05:14.114)

Yeah.

Gina Knox (05:18.988)

I think the first one that comes to mind is inconsistent income. Every single business has inconsistent income. And what's funny to me is that the baby businesses think that they just have inconsistent income because they're baby and that they just need to grow more and then they'll have consistent income. And that's just like laughable to me at this point, because I'm like, you don't know that the more you grow, the more inconsistent it gets.

That's not a problem, right? It is really not a problem. It's just, and when I say inconsistent income, what I mean is the amount of money coming into your bank account is different every month. There is a difference between inconsistent income and you not knowing how to consistently do sales, right? Because there's a business, there are businesses who

Shannon Mattern (05:56.159)

Yes.

Gina Knox (06:09.154)

consistently close sales, consistently are earning revenue. But even those companies will always have a different amount of money coming into their bank account every single month. So that's what I mean when I say inconsistent income. And that's also what I mean when I say it'll get worse as you scale. I've just seen it consistently get worse as you scale. And when I say worse, I mean the highs are higher and the lows are lower. So that's the first thing. Because of that kind of reality, that truth,

The businesses who learn how to manage the inconsistency survive, and those who don't don't. That's kind of dog-eat-dog harsh reality. But if you don't ever learn, if you just tell yourself, I just need to wait till I get to consistent income, and then it'll be better, you are setting yourself up for putting yourself out of business. Because that day will never come. You just have to learn the skill of managing the inconsistency. So that's number one very common thread.

Number two, common thread. Almost every business uses debt at one point or another. And it's interesting because, especially in what I've noticed is in male-dominated industries, that's not taboo. And in female-dominated industries, it's like, don't go into debt. You're a bad business owner if you're in debt. Get out of debt as quickly as possible.

Right? so there is some, there's definitely some like unpacking to do there around the different types of messaging that different types of industries get. But I really like to say like, I've only met in my time out of like, again, nearly a thousand businesses I've, I've personally spoken with. I've only met four that have never used debt. Four. And even of those four, they still use credit cards. They just pay them off and they've never held a balance, but

Shannon Mattern (08:00.295)

you

Gina Knox (08:05.544)

Everybody else has had and held debt at one point or another. And I like to say that, to de-stigmatize it, but also, B, to show you that debt truly is a tool for growth. It's just most people don't know how to use it properly. And we end up using debt as a tool for cash flow management. That's where we get into trouble. Again, going back to the inconsistent income, if you don't know how to manage your inconsistent income, then you will have to lean on debt for cash flow management.

I never want you to go into debt for cashflow management if we can avoid it. I want you to go into debt for growth only if we can do that. those are the two big ones. I feel like there might be a third that we could talk about, is, gosh, there's like a couple ways we could take this. We could take this mindset or we could take this another strategy.

Shannon Mattern (09:01.173)

Everybody here on this podcast loves mindset. So if it's coming at you from a mindset angle, we can go down that road for sure.

Gina Knox (09:08.096)

Okay, let's go mindset angle. The businesses, the biggest businesses I've seen and the biggest entrepreneurs, like business owners I've spoken with have a sense of separation from their company. And they view it as I'm building a company and it is not me. And I earn a salary from my job as the CEO.

And maybe I even earn bonuses if the company does well, but it is not me. And what that helps you do is not take every financial circumstance personally because there's so much coming at us, right? There are failed payments. There are clients who refuse to pay. There are surprise tax bills. There are surprise, you know, unemployment, ex-employee.

claims unemployment and it dings you, right? There's a lot of things that come at business owners all the time. So the businesses who I see get past the seven figure revenue mark have a sense of separation. You just can't hold all that. You just can't hold all that. And the businesses who stay small view themselves as the business, 100%. And there's nothing wrong, I wanna be clear, there's nothing wrong with staying small. There's nothing wrong with deciding that's where you wanna be.

A lot of business owners I speak with who have aspirations to grow, also, they don't realize that they also have to like in their identity remove themselves from the business and that that's one of the biggest things holding them back. I also do have clients though who are like, I'm the business. I want to stay at this level and I never want to grow and I'm happy. More power to you.

Shannon Mattern (10:56.469)

Okay, I don't even know which one of these to dig into first because they are so good. So we'll just start at the top where you talked about like managing inconsistency in revenue is a skill. I think the fallacy or the myth or the thing that people are chasing, especially as web designers is like that there's some magic recurring revenue secret out there.

Gina Knox (11:04.727)

Okay.

Gina Knox (11:24.854)

Yeah, yeah.

Shannon Mattern (11:25.503)

that if I just build a template site and I sell templates or I just get everybody on a maintenance plan that I don't ever have to touch and I get enough of those, I find the magical pipeline of the, I step into the magical river of clients that are always flowing to me and like I've cracked the code in one of these areas that I will never have to.

Gina Knox (11:29.07)

Ha ha ha ha.

Shannon Mattern (11:51.441)

worry about marketing or recurring revenue or like, I just won't have to think about money again. And I would love to hear your thoughts on like, how do we build the skill of navigating inconsistent revenue instead of chasing consistent revenue, which I see so often, just shut down momentum, just kill any kind of like, it's, it's almost like the, that chase.

Gina Knox (11:58.222)

Yeah.

Gina Knox (12:19.907)

Yeah.

Shannon Mattern (12:20.042)

of that consistent recurring revenue comes at the cost of revenue.

Gina Knox (12:27.074)

Yes, yes, 100%. Something came to mind as you were speaking that I think is actually an interesting take on this compared to just the normal strategy, money strategy I talk about. This idea of like, I just need to get to a point where I don't have to market anymore and then I can just do my job.

Shannon Mattern (12:46.515)

That day is never coming friends.

Gina Knox (12:48.492)

That day's never ever coming. And I say this with all the love, if that's truly deeply in your bones what you want, get a job. And I really say that with all the love, get a job, you'll be so much happier.

Shannon Mattern (12:58.963)

Yes.

Shannon Mattern (13:04.113)

Yeah, and go work for a company you love and respect and want to serve. Yes.

Gina Knox (13:08.974)

Yes, but as a business owner, even if you decide that you want to continue to be a solopreneur and you never want to scale, marketing is your job. There is no outsourcing it. And I say this too, because I talked to a lot of people who were like, I just need to find the right marketing person and then it'll be good. And I'm like, actually, no, because in your company, you cannot outsource something that you don't know how to do yourself.

A, because you'll not know how to write a job description. You'll not know how to hire for the role. You'll not know how to evaluate the person in that job if they're doing well. And if they do do really, really well and grow your company and then they leave you, your company is going to crumble fast. And now we're going to like, the fall is, the fall is faller. The fall is steeper, right?

Imagine I had a marketing person that scaled my company from 100K to 500K and then they left and I have 500K level expenses and then the income stops. That's what I mean by crumble. You're putting yourself in a very precarious situation. So I love that you said this. either learn to love marketing.

And that might mean finding a way that marketing fits into your personal style, right? You don't have to fit into somebody else's definition of marketing. You don't have to do it any kind of way. But you do have to find a way that works for you. Number one. So good. Number two, to your point about like chasing consistency is actually losing you revenue. It really is just that when you have this, it's really, it's a false ideal. I can get consistent income.

I can get a level of MRR that will be consistent. What you do, think about what you do when you believe that. When you believe that, you make business decisions in line with that goal and that goal doesn't exist. So you're making business decisions to hit something that will never happen. And I want you to put on the table, if I didn't ever believe there would ever be consistent income, would I make different business decisions?

Gina Knox (15:14.53)

The answer's probably yes. You'd probably make different pricing decisions, offer decisions, operation decisions, right? And when you make those decisions that are in line with the reality that there is no such thing as consistent revenue, you'll probably make more money.

It's really that simple. I mean, I know it sounds not simple, but it is. It really is.

Shannon Mattern (15:39.247)

No, I, I, it truly is. And I know, like, I agree with you. And I know our listeners are like, is it but is it that simple? And I always say it, it takes just as much time, energy and effort, a lot of times more to get a low paying client than it does to get a high paying client. So if I'm going to go through all of this work, why not charge profitably, sustainably appropriately.

put my time, effort and energy into building that relationship, building trust, creating a long-term relationship with that client, creating more referrals from that client. There's so much more that can come from deepening the existing relationships to help you grow than like spending three months offline, not talking to anyone, trying to build some recurring revenue engine that you launched to no one and...

Now you're like, what am I doing? Why isn't this working? I need a course. I need to run ads. need to, and you're just like spinning your wheels over and over and over again. So yeah, we're, we're on the same page.

Gina Knox (16:46.35)

Please stop with the courses as a way to fix your business.

Shannon Mattern (16:53.087)

my gosh, yes. I did a podcast episode about like 25 questions I asked myself before making financial decisions. And it's like, am I buying this to save something or is this a Hail Mary? Am I secretly expecting overnight results? That doesn't work. It doesn't exist.

Gina Knox (17:12.717)

Yeah.

Gina Knox (17:18.382)

One of the things I tell my clients, and they hate it when I say this, because a lot of my clients will be like, I want to do a course because I want passive income because I want to be a mom and I want to be president. Or I want to do the template shop because I want to have passive income because I want to have time. basically, they're like, get me out of delivery. So do some kind of passive offer to get me out of delivery. And I always tell them in response, and they hate me.

If you don't have the demand for your active delivery offer, you're not going to have a demand for your passive delivery offer. I don't care if it's 10 times cheaper. You're going to launch it. You're going to expect something. And you're going to get nothing. And you're going to be like, damn, I just spent all that time and energy setting this thing up. And I got a handful of sales out of it.

Shannon Mattern (17:53.481)

Yes.

Shannon Mattern (18:07.701)

And my job is marketing that as well, like 100 % of the time, which never ends.

Gina Knox (18:13.762)

Yeah, well, to this point too, and we could make this work for the web design industry as well, but I'll speak from a coaching perspective. I always tell people, and this is what I experienced as well, it is just as much time to have a one-on-one client as it is to have a group coaching program client. Because even though maybe I'm only coaching the full group one hour a week, I'm doing 10 times more marketing to fill that group versus one-on-one.

And I'm sure the same could be said for like a custom design project versus having a template shot that makes the same amount of money.

Shannon Mattern (18:48.287)

For sure, absolutely.

Gina Knox (18:49.698)

And so then the question is, if both options take the same amount of time and effort, which one do you want to do actually? And it really can depend, because if you're, and this is where financial literacy comes in, if you're sitting here in debt, you're drowning, your cash flow isn't enough, dah, dah, dah, dah, dah, dah, if it's the same amount of time and effort, you have to make money now. So you have to go for the high ticket client now. I'm sorry. There's no other choice, really.

If you're like, I'm sitting on six figures of cash in the bank, I have six months of runway, I'm good to go, and I wanna really shift my business model into more passive, knowing it's gonna take the same amount of time. Well guess what, maybe you do have the cash on hand to enable the business to shift its business model, but shifting your business model isn't something you do to save the business, it's something you do after your business is already stable.

Shannon Mattern (19:44.277)

Ooh, that is so good. Can you just say that again for the people in the back that didn't hear that?

Gina Knox (19:50.446)

No, a hundred percent. Imagine this. Okay. If you're shifting your business model, i.e. I'm going from branding clients and website clients to a template shop, or I'm going from, for me, it was like one-on-one coaching to group coaching. Even the way you sell, I'm going from evergreen selling to launches, or I'm going from launches to ads, funnels, right? If I'm making a major shift in what I offer or how I sell it,

think about this for a hot second, who is going to succeed more in that shift? Someone who's financially stable or someone who's financially unstable? It's really not that complicated. The person who's already financially stable is going to be able to make that shift. And do believe any major shift you make in your business will have a lag time where you're not going to make money from it for a while. So you have to walk in. And maybe that's the misconception that people have.

Shannon Mattern (20:28.725)

Yeah. Yeah.

Gina Knox (20:47.33)

they think I'll make a major shift and it won't have any lag, it will always have lag, always. Because fundamentally, we're better at things that we've practiced more. And if you're making a major shift, you have never practiced this new thing, so you're not gonna be as good at it at the beginning. So it's really like, it's funny, because it's like the mindset drives us to do these things. But when we sit and just look at the numbers and put it this way, it's like, yeah, maybe I shouldn't make a major shift.

if I have no money in the bank or I'm like barely making payroll next month.

Shannon Mattern (21:22.337)

gosh. So I just want to say that like all of the things that Gina's talking about and I'm like, yes, yes. And I'm so in agreement with her on it's not because I am like so good at them and I did them all right. It's because I've learned from a lot of my mistakes and I've touched the stove and I've learned the lesson the hard way and I've grown and built resilience and really had to do deep mindset work to get to the place where I'm like, yeah, everything she's saying.

Gina Knox (21:34.508)

You

Shannon Mattern (21:51.773)

sounds so aligned because if I would have met her five years ago, I wouldn't have had to touch the soap 700 times. so yeah, I just want to say like my my everything you're saying, like I have experience doing quote unquote, the hard way and I will say, you know, you can build a lot of resilience that way you can learn a lot of things that way. And also, there are people out there like Gina who are like,

Please don't do that. Please let me help you. Just back away from the stove. You really don't need to touch that. You can just work with me and I will guide you through this because you have such a big picture view of what this looks like. So I just wanted to share that I'm not up on my high horse looking down like, I've made all the correct financial decisions. Anybody that listens to this podcast knows that I've like,

you know, learn some major things from making decisions out of fear, out of scarcity, out of reactions to things happening in my business in the world that I made about me that weren't about me and not having a healthy separation and neutrality and all of the things that we talked about here. So I just wanted to share that in case anybody, have any new listeners that are like, you know, thinking that I had it all together. I did not.

you

Gina Knox (23:21.038)

I've touched the stove my fair share as well, but I think I've really been able to avoid touching the stove because I've had a thousand mentors. I've seen firsthand through my research and through my work, I've gotten to actually see clients actively touching the stove. So I catalog all that in my little brain and I go, okay, let's not do that. Cause I've seen 30 people do it at this point and maybe that wasn't a great decision, right? So a hundred, a hundred percent.

Shannon Mattern (23:32.073)

Yes.

Shannon Mattern (23:50.357)

I want to talk about number two. said almost every business uses debt. You've only really met about four businesses that didn't use debt, but they were still cash flowing on a credit card every month. That was me up until 2022, from like 2015 to 2022. like, I bootstrapped. This is awesome. Like, you know, didn't use debt. I ended up.

Gina Knox (23:54.22)

Yes. Yeah.

Shannon Mattern (24:18.163)

getting a line of credit and I had a lot of credit card available to me. 2023 as we all have heard on this podcast, like was a very challenging year for my business and a lot of other businesses as like the pandemic cashflow captive audience thing, that trend interest rates went up. Everybody was like, yeah, we're done just like with all of, you know, there was a big shift that happened in 2023.

Gina Knox (24:21.966)

Mm-hmm.

Gina Knox (24:36.844)

No, interest rates went up.

Gina Knox (24:45.9)

Yeah, 100%.

Shannon Mattern (24:48.541)

And so I used debt probably for the wrong reasons, I've cleared that up in my mind. I'm like, I'm good. I've forgiven myself for that decision. Business is good, but I want to talk about all of that, but also the taboo between male and female of like it's tab.

Women business owners tend to think of debt as bad, wrong, taboo, shameful, bad decisions. And men seem to think of it as, or the stereotype is men seem to think of it as a tool, leverage, access. So tell me more about that. Cause I just want to hear what you have to say about it.

Gina Knox (25:37.442)

Yeah.

Yeah, 100%. So here's the thing, right? Like I said earlier, debt can be used for what I'd call the right reasons or the wrong reasons. Right reasons being growth, wrong reasons being make it through a cash flow crunch. I want to be clear though, because it sounds like you did it too. And I know a lot of business owners who've done it. There's nothing wrong with staying in business. Right? There is.

Shannon Mattern (25:57.653)

I

Shannon Mattern (26:03.445)

That's exactly what I did. I needed to stay in business.

Gina Knox (26:06.58)

There's nothing wrong with staying in business. You've got to do what you got to do. But what I do see happening, which does scare me as a coach, is I'll see people who've gone through major businesses decline, declines, and then they start avoiding their numbers because they're so afraid to look at it. And they just don't change anything for like six months or a year and lean on debt for six months or a year. And then they wake up from the stupor and they go, I'm on the brink of bankruptcy.

Shannon Mattern (26:30.59)

Yeah.

Gina Knox (26:31.254)

because we didn't change anything when the initial trends started showing. They just kept telling themselves, it'll go back, it'll go back, it'll go back. It might not go back.

Shannon Mattern (26:40.019)

I told myself that for the first month or two. And then I was like, uh-oh, this is not, I'm not, the lag was longer. I wasn't seeing the shift that I expected to see. I tried a couple of the same things again, got the same results. And then I was like, I have to make some big changes to the structure of the business. Thankfully they worked. Maybe they would, maybe they wouldn't.

Gina Knox (26:42.924)

Mm-hmm.

Gina Knox (26:48.983)

Mm-hmm.

Gina Knox (27:01.196)

Yeah.

Shannon Mattern (27:08.861)

I had no way of knowing, but I just knew I had to like try something. And then there was some lag time after that, but yeah, I could see where someone could be so, you know, we talk about on this podcast and I, it sounds like you're familiar with this too. It's like our thoughts drive our feelings, create our actions, create our results. And my, had to really manage my mind through that whole entire process to

Gina Knox (27:12.227)

Yeah.

Gina Knox (27:25.046)

Mm-hmm. Right.

Gina Knox (27:34.53)

Yeah.

Shannon Mattern (27:38.613)

create wanted results. always say there's no mistakes or failure. It's like wanted results and unwanted results. I had to really manage my mind to be like, okay, now I'm getting unwanted results. What do I do to create wanted results? And so I can absolutely see how someone could be so in their fear that they would not want to look at things for a very long time and wake up on the brink of bankruptcy like you, like you said.

Gina Knox (27:40.258)

Yeah.

Gina Knox (27:45.207)

I like that.

Gina Knox (27:51.478)

Yeah.

Gina Knox (28:01.118)

Yeah. Yeah. And you shifted things within 30 days. So I really want to be clear. Do what you got to do to stay in business, but don't avoid it, because you're just setting yourself up for a very, very scary wake-up call down the line. And some things are unavoidable. We think business is going well, and then major shifts happen in the economy, which affects us, and there's no preparing us for it.

Shannon Mattern (28:13.801)

Yeah.

Gina Knox (28:30.38)

But let's come back to the question around male and female thoughts on debt. I think that this kind of comes, A, societally, but also B, we have to put this into historical context that women only got the right to have their own business loans without a male cosigner in the 1980s. Okay, so we're literally,

Shannon Mattern (28:52.456)

It's crazy to me. Yeah. I was born before that happened.

Gina Knox (28:57.752)

We're the first generation of women with this right in the United States. We gotta let that sink in for a second. We're figuring it out as a sex, as a gender. We're figuring this out in real time. So I wanna put that on the table. And if we think about that generationally, of course that seems scary. This is a new tool that we have not had access to in this way, so we're gonna tread lightly versus men have always had access to this tool.

Now, I also think there's just ways we raise children. tend to, I'm gonna just very much make a sweeping generalization, we tend to teach boys to take risks and we tend to teach girls to think things through. So of course, how does that show up with money? Men tend to take bigger risks. Men actually,

Um, are quote unquote worse at money than women. Like there's been studies done around this. They tend to be more reckless. They tend to invest in things that lose them money. They tend to be worse at budgeting. They tend to have more debt, but men end up ahead without thinking about the pay gap for a minute. So that's a huge whole thing. But men tend to, think, tend to end up ahead because some of those risks pay off major versus women were taught to think things through. Right? So what do we do when it comes to debt?

We think about all the paths. don't act right away. We try to avoid debt. And that may work for us in terms of stability, in terms of staying in business longer, perhaps. But we also miss out on major growth opportunities because we hesitate or we decide debt isn't even on the table. So if I think about my own business, every time I've gone through a major growth period, I use debt to kick it off.

I went from 275K to 525K by going into 40K of debt. And then I promptly paid it off because I had a very clear plan on what I was using it for, what growth mechanism I was using it for. But every time I've gone through these major jumps, when I went from 500K to a million last year, same deal. I went into some debt to do that. And it's helped me grow.

Gina Knox (31:17.77)

So I think that like, I love that us women are more considerate, are more thoughtful. We're not just jumping into debt for no reason. But I also think that there's a lot of female owned businesses that could be way bigger, but they're not because they refuse to touch debt. And because they refuse to touch that, because they're bootstrapping it, they're bootstraps, right? Their capital is only as big as their capital is, which means their growth is only as big.

or has as much potential as their capital has. So yeah, I think there's like a lot, there's a lot to unpack there for sure.

Shannon Mattern (31:53.917)

So my question is, because I had a visceral feeling in my chest when you said that you like used 40K of debt to jump from 275 to 525. Was that what you said? was it what either way? The numbers don't matter the feeling in my... And the thought that came into my mind that always comes into my mind and I'm curious if it did to our listeners too is like...

Gina Knox (31:59.778)

Mm.

Gina Knox (32:08.512)

Mm-hmm, yeah. Yes.

Shannon Mattern (32:23.017)

But what if that didn't work out? And so my question for you is like, how do we develop like a more resilient risk tolerance? I don't know if that's the question, but that's the question that comes to my mind is like, how do we develop a more resilient, healthy, not healthy, like a resilient risk tolerance? How do we expand our risk tolerance? How did you make that decision that it would be worth it to take that risk?

Gina Knox (32:33.588)

Mm hmm. Yeah.

Gina Knox (32:49.187)

Yeah.

Shannon Mattern (32:53.663)

Yeah.

Gina Knox (32:53.804)

Yeah, I have a expense, a business expense framework where there's five types of business expenses. Four of them are a waste of money. One of them will always create a return on investment.

The one that creates a return on investment is when you spend money to solve current business problems. So a problem the business is actively experiencing. When I solve that, it's like opening a bottleneck. The return on investment will be instantaneous. Not six months down the line, I'll make my money back. Not two years down the line. It'll be instantaneous. So we need to get really good at identifying our actual current problems. The other four are when we spend money on future problems.

that doesn't create a return on investment because you can't solve a problem you can't define and you can't define a problem you don't have. Identity problems when you're trying to buy the feeling of being successful, doesn't do anything for your business, it just wastes your money. Boredom problems when you just buy things in your business because you're bored. Of course, maybe it'll give you entertainment, but it won't build the business further. And then people pleasing. We spend money to help other people feel good instead of actually solving our current business's problems.

Knowing that framework, I'm very, very good. In fact, I think I'm one of the most skilled people I know at identifying my current business's problems. And I know because of my track record, when I invest money to solve them, I will at least get a 5x ROI. So I spent money on current problems. And within six months, I made $200K off the $40.

So it just paid itself off. Just very quickly paid itself off. How did I get good at identifying my business problems? And how did I get good at identifying when I tend to spend money badly? Because my problem area is future problem spending. It's like my knee jerk. love future problems because it feels so sexy. It feels like I'm so smart. I'm getting ahead of things. I'm so smarter. I'm smarter than everybody else. I'm going to solve this problem before it even happens.

Gina Knox (35:03.246)

That's my MO. I always have to pull myself back from that ledge. But the way I got good at this is just by looking at every single business investment I have ever made and writing, like I went year by year. I wrote down my revenue in that year and I wrote down my expenses on the things that didn't generate revenue. And I just saw a correlation. The years I spent a ton of money on future problems were the years I made very little money.

The years I spent a ton of money on current problems were the years I made a lot of money. So then what I did was I went through and I said, okay, what exactly were my low ROI investments? What was I thinking when I bought that and what was I feeling when I bought that? And then I did the same for my high ROI investments, which investments paid off the most? What was I thinking when I bought them? What was I feeling when I bought them? And so now I have little personal red and green flags.

When I feel that way again, I go, this feeling tends to lead to low ROI decisions in my body. For me, ironically, it's actually excitement. When I'm feeling excited, that's a red flag, because that's usually meaning I'm overriding my decision making, and I'm just going with what feels exciting. It's going to feel different for everyone. Also, my thought, my consistent thought every time I've made low ROI investments is,

Shannon Mattern (36:12.021)

you

Gina Knox (36:28.79)

I don't want to figure this out. I just want to hire an expert. Every time I've done that, low ROI. Every single time. And it's like a lesson I can't stop learning for some reason. But every time I've made a high ROI investment, the feeling is usually like, OK, like a little dread, a little bit like dragging my feet. And the thought is usually like, OK, I have to do this now. Because it's usually current.

problems are not usually the ones you're excited about. Current problems are usually the ones you're avoiding fixing. So it's counterintuitive, but because I have such a strong intuition about that based in my actual data, going into $40,000 of debt was no big deal because I knew it would pay off. And if I were wrong, I knew how to make $275,000. I knew I could maintain that.

And I knew if I did maintain that, even though it would suck to use 40,000 of it to pay off debt, I could profitably do that because I also knew my numbers from the previous year. like worst case scenario, I hold this debt for the full year and pay it off slowly with the 275K I already know how to make. Best case scenario, I pay it off early because I made the right bet. And that's what ended up happening.

Shannon Mattern (37:47.637)

I love that so much that you analyzed all of your past decisions and went back in time. What was I thinking? How was I feeling? And I think what, you know, I really do that every month in the income reports that I publish on this podcast, but not in that very specific way. And

Gina Knox (38:06.764)

Yeah.

Shannon Mattern (38:12.245)

So I'm just like, ah, I'm actually really excited to go back to the bigger ones that I feel like that now in hindsight, I'm like, I don't think I really needed to do that. Like what really was driving me to do that and use that to develop my own personal flag system for feature decisions. Because yeah, when you know like,

Gina Knox (38:32.898)

Yeah, do it.

Shannon Mattern (38:38.983)

It's that lack of self-trust, right? That keeps us from, or that keeps me, and I'm sure a lot of our listeners, from wanting to even make decisions that feel quote unquote risky because I don't have a framework within, of my own that I made from my own experiences and my own decisions and the outcomes that happened that I lacked the self-trust.

Gina Knox (38:50.371)

Yeah.

Shannon Mattern (39:05.631)

to take the risk. And I think what you just really explained is like, here's how you build self trust to be able to, you know, make these decisions and have them not feel so quote unquote risky and be okay with whatever ends up happening instead of just like woo woo pie in the sky. Like it's just gonna happen for me. Yeah.

Gina Knox (39:06.987)

Yeah.

Gina Knox (39:28.78)

Right. Self, well, to this point, like self-trust is built on a bedrock of data. It's not just built out of thin air from wishful thinking. And I always struggled with the term self-trust because I'm like, self-trust feels irrelevant to me. What does the data show? So that's been my way to, I like to think about it like I'm training my internal AI. It's funny because it's not AI, it's just I. It's just I, but.

Shannon Mattern (39:35.539)

Yeah.

Shannon Mattern (39:50.053)

Yes. It's just I. Yeah.

Gina Knox (39:55.018)

If you're training an AI model, what do you do? You give it a ton of data and then you ask it about new scenarios, right? So we have so much data. And this is where I always say like, I love looking at PNLs. I love, I think like I still do my own bookkeeping to this day. I make seven figures a year. I still do my own bookkeeping because every month I do my bookkeeping, I'm feeding the AI data. And that's so invaluable to me.

So yeah, of course, you just need to look at the data, analyze it a little bit, and then you'll be surprised at how fast you pick up patterns, because your brain is hardwired to find patterns quickly. Like, it's not hard. It's just that we're avoiding the numbers, and we're thinking, like, I just need to figure it out.

Shannon Mattern (40:45.817)

Yeah, or we have some shame around our numbers that we don't want to look at them or we feel like maybe we have like thought errors like I don't under I'm not good with numbers. I don't understand or you know, there's there's some reason that your subconscious wants to protect you from seeing it and it usually has nothing to do with the numbers themselves. It's you're going to have to make a change in how you operate once you look at things while your brain's telling you that.

Gina Knox (40:48.247)

Mm-hmm.

Gina Knox (40:56.216)

Yeah.

Gina Knox (41:03.074)

Yeah.

Shannon Mattern (41:15.157)

And your subconscious is like, yeah, don't look over here because then if you don't look over here, you won't have to change anything.

Gina Knox (41:21.442)

Right. And the irony is, and this is one of my core tenets in my business, is everything will stop working. I know that's kind of a funny thought. My thought is always, everything will stop working at one point.

So what works today, maybe right now I'm doing this like Facebook ads funnel thing and it's working really well for the first time. I'm like, that's amazing. I'm going to ride that wave as long as I can, but I'm going to keep on its neck because there's going to be a day where it stops working and I want to pivot fast. I don't want to wait six months to pivot. And it helps me be unattached from any strategy, anything in my business. I'm so unattached from because I'm like, it works now. And I love that.

And there have been times where things stopped working and I had to change. And I've loved that too. like everything was just always, so we just have to keep, we just have to keep looking and have to, maybe this is my thought. Your brain is trying to protect you from change, but change is the thing that protects you.

Shannon Mattern (42:20.181)

So good. So good. Okay. So how do you work with clients? Like what does it look like to come into your world? How do you help people with their businesses and how do you help them like, I wouldn't say manage their variable income because I know that's not what you do, but manage their mind plan for strategize all of those things.

Gina Knox (42:24.43)

Ha

Gina Knox (42:46.122)

Yeah. So I work with people in my group, Small Business Money School. It's what it sounds like. It's a money school for small business owners, which is very fun. and we're really hands on in that group. So we have a curriculum that teaches people all of our strategies. We have a PNL spreadsheet that I remember I went to design school. I think I designed the best spreadsheets in the world. so we have our spreadsheets that are really used. I've converted spreadsheet haters to spreadsheet lovers with these spreadsheets.

We teach you our cash flow management strategy. We do have a cash flow management strategy that's based in banking rules, not in percentages. So we have all the strategy stuff and then we look at your P &Ls. Remember how I like, can find, I can sniff out any problem in a P &L. So what we do is we have you submit your P &Ls and we create CFO reports for you every quarter on what's going good, what changes you might need to make, what expenses might need to be on the...

chopping block because they're not bringing in the return that they should be bringing in, et cetera, et cetera. And then we coach your face off every dang week. So I, right now, I only coach in that group setting. I don't do one-on-one anymore. as you can probably tell from this interview, I am very pragmatic, data-based, numbers-based. But then I just know that,

Shannon Mattern (43:57.781)

Yeah.

Gina Knox (44:14.4)

all of our emotions, like you can't out strategy a crappy mindset or worse, what's kind of like one of the things that I focus on in the program is financial panic. Panic is beyond an emotion. Panic is almost a physiological state that will ruin pretty much any business. It's super dangerous. So what we do is we coach on all of that.

Shannon Mattern (44:20.065)

you

Gina Knox (44:38.85)

And then insert the strategy so that it works. And I always say, the way I've designed my, even my cash flow management strategy, it very much is vibey. It's a vibe. And then if you ask me, I have all the reasons and all the data underneath why it works. But you don't have to know any of that. So if you're not a numbers person, it really doesn't matter. You can just go off of the vibes that we've already put in the numbers for you, if you will.

So yeah, and coming back to my design background, I really just think money's just a design problem. And we just haven't found the right solution for you yet. So we just got to keep iterating on it until we get there. That's very much my vibe. But yeah, that's how I work.

Shannon Mattern (45:19.674)

I love that. And it's very similar to, you know, how we run our web designer Academy program where it's like, yes, we're going to teach you systems processes, strategies for all of these things. And that's amazing. And that's awesome. However, it's how you think about these things and you know, what it brings up for you and what, you know, I'm going to hand you the strategy and you're going to feel a certain type of way about it. And that determines

Gina Knox (45:44.334)

Yeah.

Shannon Mattern (45:45.875)

Whether you do it or don't do it, whether you kind of sneak your own little mind trash in when you do it or whatever. And so, you know, I call, I call our program like it's the benevolent bait and switch. Like I'm going to hook you on like the systems and the processes and all of the strategies that you want, but really what's going to make the biggest shift for you is when you change how you really think, when you become aware of how you think of it and you realize like you have the power to think something differently about it, which will

really make it so much easier for you to take new actions to really get what you want. And I love that you have that component of what you do inside of small business money school because it's everything. It's everything.

Gina Knox (46:31.756)

Yeah. Well, and you know what's funny is like sometimes I don't even have to change your thought about something because you to the point of like the way you think about something determines how you act. A lot of thoughts that people have about money in business.

are actually assumptions about everybody else's businesses, assumptions about what's normal and not normal. And so then when you come into our group and you're surrounded by tons of business owners talking about their problems, you go, wait a minute. This is not actually true, right? Like, it's not actually true that people who earn over a million dollars have consistent revenue. Or it's not actually true that...

I just need to hire another person and that'll fix it. You start seeing because basically the education that I got around interviewing 400 business owners is a education that you'll just naturally get inside money school because you'll be around so many business owners talking candidly about their money. I've been in a lot of coaching programs. I don't know any other program that has as much candor about the actual P &L, the actual profit, the actual behind the scenes.

as money school. And I think that there's something like so powerful about that. So powerful about being like, okay, I'm not the only one with a crazy ex problem, a crazy cash flow problem or a debt problem or whatever. You are far from the only one.

Shannon Mattern (48:01.487)

my gosh, Gina, I could talk to you for three more hours about this. for those, if you guys love this, my income reports on this podcast where I get that granular and detailed about my money situation and you want to go hear that from like hundreds of other business owners, like you need to go check out like, go check out Gina's. So can you share with everyone where they can go to connect with you?

Gina Knox (48:06.19)

So good.

Gina Knox (48:20.416)

Yeah.

Gina Knox (48:29.484)

Yeah, so a couple places, my podcast, Small Business Big Money, we talk about all of this stuff every single day, every single week. There's a whole library of episodes that go into so many different topics. I'm sure you'll find something that speaks to whatever you're going through right now. Of course, my program, Small Business Money School, it is open for enrollment evergreen, so you can come and join us whenever you want. But specifically, I'll give a little give. I host a free class every single week.

week on how to pay off five figures or more of business debt. And if you're specifically in business debt and you're like, this all sounds great and this whole episode sounds cool, but like the big problem is I can't do any of this until the debt is like cleaned up, come to the free class. I host it every week. I host it live. I will be there. can chat. and, and we'll make sure that Shannon, you have the link.

Shannon Mattern (49:23.441)

Amazing. So one more question for you before we wrap up that I ask everyone that comes on the show and that is what belief about yourself did you have to change to get to where you are today?

Gina Knox (49:35.918)

Mm. I had to believe, oh, this is so funny because it kind of comes back to our earlier conversation. In the beginning of my business, so I started in like 2019 all the way through mid 2021, I had the belief I'm a bad marketer.

I believed I was a good coach. I believed I was smart. I believed I was, you know, like good at my craft, but I was like, I'm just a bad marketer. And that thought led me to hiring copywriters and it led me to hiring an ads agency that I had no business hire. It led me to so many bad decisions. And eventually, and I actually, my coach pointed it out to me and I worked for six months on that thought, that one thought I'm a bad marketer and

went through different versions of that. And if I had not have done that, I would still be making $80,000 a year in this business. I would still be working with a handful of clients. And I really had to reshape my relationship with marketing. Really reshape my relationship with marketing. Yeah.

Shannon Mattern (50:41.429)

So, so good, Gina. I will link up all of the stuff that we talked about in the show notes. This was an incredible conversation. Thank you so much for being here.

Gina Knox (50:51.49)

Thanks for having me. I had so much fun. I love chatting money, literally anytime.

Shannon Mattern (50:55.733)

Amazing. So thank you all so much for listening and we'll see you back here next week. Bye.