How To Get Your Biz To Pay For Childcare & Makeup

Time to talk more about the #WomanhoodPenalty and what you can do to minimize it in your biz.

First off, let’s talk childcare.

While not every business women is a mum, more and more mothers are moving into the self-employed space.

And here's the hard truth, without regular childcare you will struggle to run your business efficiently and achieve the growth that you want.

So, can childcare be considered a business expense?

What about all the other stuff you use as a woman in business? Those items that are essential for operating successfully, because the reality is, when you're the "face of your brand", you're likely to be be investing much more heavily on makeup and skincare, clothes and a great haircut to promote your personal brand.

These aren’t traditionally business expenses… but can they be? (And should they be?!)

Let’s find that out right now!

The Extra Expenses

As a female business owner we tend to have a whole lot of extra business expenses, simply because we're women.

Personally, I spend way more on my hair now that I'm the “face” of my brand.

Then there’s how much I spend on makeup and clothing that matches my brand colours. And do not get me started on how much it costs to have childcare, after school care or holiday programs! This stuff ain’t cheap!

These are all genuine expenses that we have because we're running a business.

And if lockdown has proven anything, expenses like childcare are required to actually generate revenue, because we all know you cannot work effectively with a child at home! (I’ve tried!)

Where this becomes a gender issue, is that these expenses predominantly fall on us as women in business.

And I want to teach you how you can actually get your business to pay for them because they do help you generate revenue.

Let’s take it back a step, what Is A Business Expense?

Put simply, a business expense is a cost you incur (aka have) during the day-to-day running of your business.

It includes things like marketing, website hosting, branding, business coaching, all those online subscriptions, and a whole heap of other similar costs.

Basically any cost you need to run your business and generate revenue.

Often these are thought of as the boring or hidden costs of business.

But I like to think of these costs as your friends! Because every business expense you have helps you achieve something you couldn’t do without it.

Hot Tip: If the expense DOESN’T really help you achieve something, then stop paying it!

The other thing about these typical Business expenses is that you can “claim them” in your tax return.

When you submit your end of year tax return, you have to pay tax on any profit, which is calculated by taking your total revenue and subtracting all the expenses you incurred.

The more expenses you claim, the less tax you have to pay. So this is why you hear of business owners trying to run as many costs through their business books as possible.

The Less Boring Business Expenses

Would it shock you to know that my business expense budget includes items like health and beauty, clothing, and even childcare??

You can even include a housekeeper or a cleaner in there!

Often my clients ask me, “can we claim for this stuff?”

Well, currently the answer for most of those expenses is no.

That’s because, in the past, a lot of those expenses didn't help business owners generate revenue.

Why?

Well, in my view it’s because historically, businesses were run by men.

And traditionally, all of those other activities (looking after the kids, running the household etc) were handled by a woman at home - usually the wife.

It was viewed that childcare was managed by someone else and therefore not a requirement for generating revenue (so you couldn’t claim them as a business expense at the end of the year)

But times are changing.

More and more women are starting up and taking the lead in small businesses.

Women started 49% of all new businesses in the US in 2021, up from just 28% in 2019*.

More businesses were started by women in the last few years than by men, and we're doing a lot of it from our homes.

Required Expenses

For those of us with kids that are running a business, often we're still the primary caregiver. So if our kids aren't in school or in care, we're the ones looking after them.

If we use the revenue generating methodology, having that care is absolutely required to generate revenue.

Recent lockdown experience has taught us that when we've tried to work and look after kids at the same time, particularly if they're young, you simply can't do it all. It’s one or the other.

I believe costs like childcare, holiday programs, after school care, daycare, along with the kind of personal branding costs of clothing, hair, and makeup are all required expenses.

That’s because they enable you to grow your biz and generate revenue. Technically, this should make them a claimable expense.

Unfortunately, most tax divisions currently don’t recognise them as true business expenses. But, that is something I'm working on changing!

Because I believe preventing biz owners from claiming childcare expenses is discriminatory against women in business.

That’s for two main reasons:

Statistically it’s still women who bear the brunt of the childcare responsibilities and therefore a penalised without reliable childcare alternatives

Where we are the “face of our brand”, our personal branding matters - as solopreneurs especially, we ARE our product and maintaining our personal appearance for all those marketing FB lives, Instagram Reels, and guest appearances etc just takes more time and money than your typical man. Sorry but it’s true.

Getting Your Business To Pay

If childcare and makeup are not recognised as tax deductible expenses, how can you get your business to cover the cost of them (even if you can’t claim them for tax purposes)?

Let me tell you how.

As part of planning out your yearly forecast and setting your annual revenue targets, you should also be creating a Business Budget.

Here's why...

Forming the budget

There are some things that sound really nice when it comes to the numbers in your business:

I want $10k months, or
I want a "six figure business"

These numbers sound impressive, but in reality, they are usually vanity metrics that aren’t usually based on any actual numbers (as in, calculating what you need to be generating to cover all your costs AND your salary without working crazy hours)

So rather than throwing out arbitrary numbers that may or may not be profitable or sustainable for you to deliver, you want to first work out how much you need to invest in your business in the next 12 months, so you can afford all the important expenses you want.

Aside from the usual expenses your business incurs, include things like:

Daycare or After School Care so you have enough time in the week to run your biz and generate revenue.
holiday programs, so you can actually get work done during the school holidays.
makeup or face treatments you need that are over and above your usual, so you feel more confident on screen
Additional clothes you buy so you look and feel good on camera (for example I give myself a $500 budget to update my “Zoom ready” clothing in brand colours)
Any extra haircuts you will get to maintain the visual ‘face’ of your brand (for example, I used to get my hair cut and coloured three times a year. Now I do it four times a year because I’m on camera so often so I get my biz to cover the cost of that extra treatment)
Don’t forget the housecleaner who will keep your home sparkling so you can use the time you would normally clean to focus on working instead! (Though this expense IS usually claimable, at least partially)

No this isn’t about having a spending spree on your biz (I wish!). It’s about allowing for those genuine additional expenses that you only have because you now run a business, and you need them to help you make more sales and generate revenue.

And as with all of these things, speak with your accountant or bookkeeper about what is and isn’t claimable at the end of the year.

However, whatever the outcome is regarding what's tax deductible:

Make a PLAN to include all of those expenses in your business
Put a COST for them in your Business Budget, and then
Set your revenue targets to cover the costs (as well as your salary) so you can actually AFFORD them.

That way, you will know how much money you need to generate to actually pay for ALL of your expenses and your salary, rather than guessing and hoping.

Make the business pick up the tab

Now you know what those costs are, it’s time to make the business pay for it.

Take all those investments that you want to make in the next 12 months - including childcare, health and beauty, VAs, courses you want to do, programs you want to learn, business coaches you want to work with - and get a dollar figure next to them.

Here’s where your standard Business Budget becomes a Future Facing Business Budget.

This is where you get some practical figures on the page so you know what you need to earn to cover your current costs, PLUS all those extra items you wish you could afford AND pay yourself what you deserve.

Don’t just pluck a figure out of thin air. Instead, really think about what needs to go into your business and then create your revenue targets.

Getting The Answers

Now for some of you that all makes sense and you're already doing it. That's amazing! You are already ahead of the game so keep going!

For others of you it may be about just making small tweaks so you get the support you need to make doing biz (and life!) a little bit easier.

For others this may be complete gobbledygook.

If you currently don't HAVE a Business Budget or numbers just aren't your strength, don't worry. I can help you do it.

This is the exact work that we do in my Pricing Essentials System.

It’s a simple 3-step process designed to take the guesswork out of your pricing and your profit. AND get all the support you need to build a profitable and successful business.

At the end, you’ll have a plan to pay yourself what you’re worth, doing what you love, and only working the hours you want. Because you are worth it.

Check out the Pricing Essentials System here.

You won't regret it.

N