Episode 97 Transcript
Carrie
I feel like there's so much to say about today's interview, Lucy. And I know that, there's some great data shared in this conversation, including knowing that 70% of all SMEs (that’s small to medium enterprises in Australia and New Zealand) are actually self-employed, and the majority of these are spending up to seven hours a week on financial admin.
Karan Anand is today's guest on Mumbition, the Managing Director of Hnry, an account and tax automation tool for sole traders. Karan joined the company after a 13 year stint as a management consultant for big corporates because he wanted to make a real difference to the lives of people who were working so hard to build their own businesses.
00:00:52:08 - 00:01:21:18
Lucy
As Karan goes on to share in this interview, Hnry was started, like many small businesses, to help solve a problem that the founders themselves faced as small business owners. And he loved the passion they had for creating a solution. And what a team they all make. And to your opening point, Carrie, it also feels really important to say that Karan's reflections on the way his religion, the Sikh faith, guides his approach to harmony in business and life was so inspiring too. Lots of goodness in this interview. So let's get stuck into it.
00:01:25:00 - 00:01:44:17
Carrie
Now, Karan, we, love hearing and sharing, stories of small business owners, women who run those businesses. And we love educating women around the importance of pitching and sharing that story and doing it with, what we call confidence. Would love to hear what you have to say about Hnry. And hearing the Hnry pitch.
00:01:50:05 - 00:02:18:17
Karan Anand
Sure. So let me try and keep it to less than 60 seconds. Right. Art of pitching is to be as succinct as possible. But thanks. Thanks for having me on, Carrie. So, Hnry takes the hassle of tax and financial admin away for the 2 million or so Aussie and Kiwi self-employed people. So what we do is we automate your tax calculations and tax payments, making sure that exactly the right amount of tax is taken out of your paycheque every time it comes in.
We then offer through our app available on the, iOS and Playstore you to issue invoices, quotes, everything you'd need to run your business. And thirdly where your tax accountants as well. So we lodge your income tax returns, and deal with any of those nasty letters you get from the ATO. So we're basically like financial admin service and software in a box for the many, many self-employed people who'd be listening to this podcast all around Australia, New Zealand.
00:02:44:23 - 00:03:14:11
Carrie
Now 2 million like that really is the, the fuel of, small business, isn't it? These, these sole traders, these kind of even micro, micro business owners, and small business owners, and what I heard was problem solving because, you know, the amount of time I think I've heard this, this stat that you've shared before, around how much time do we spend a week just doing the books?
00:03:14:11 - 00:03:38:12
Karan Anand
Yeah. That's right. Yeah. So the 2 million is sort of, you know, about 70% of all SMEs in Australia and New Zealand are actually self-employed. So they aren't they are businesses running their own businesses in their own right. But for a lot of them, it's a lifestyle choice. We extensively study the sector. It's the place we play in, and we study it because we think there's an absence of literature which is available in the sector. What our studies have continuously shown, we run the Hnry Sole Trader Pulse, which is an independent run survey once every 3 or 4 months. The next edition, which is coming out of the next fortnight, actually, and I can share some early numbers with you, which is, some traders are spending on average about seven hours a week on tax and financial admin. Like that's a whole business day a week. It's kind of a ridiculous number when you think about it. And for those who are trying to make the lifestyle choice, it shouldn't come at the cost of the exorbitant amount of time that you're spending, which is either time spent away from building your business or time spent away from your family and loved ones, which that's an impossible trade off to make right?
00:04:15:20 - 00:04:16:18
Carrie
Yeah. You know, the family of the business needs you. And your real family needs you. So who doesn't want another extra day in the week to do what, you know, to spend the time on where we where we need to be. So love it. Now, Hnry was also started by a mum and dad duo. I understand, so, you know, they they're business owning parents. Can you tell us a little bit about that?
00:04:41:14 - 00:04:58:08
Karan Anand
Yeah. That's right. Hnry was founded by Clare and James Fuller, in Wellington, which is where we are headquartered, and we have a large operation now in Sydney as well. So they like a lot of companies, you know, Start-Up companies, they don't set about, you know, with a passion for tax, I think that’s kind of an oxymoron right, they set about trying to solve their own problem, which was they went from being salaried employees to being contractors. And, you know, the benefits of being contracting, you know, are widely publicised. So you get higher rates of pay that you can control and also the flexibility to work when you want. But what came with it was the challenges of being, was all the tax and financial admin that came with it. And so they organise it, they're two very smart people. So they organise their own system around spreadsheets and trying to avoid using expensive accountants and trying to calculate the right amount of tax. They keep aside and over time, what they built was like this pretty neat Google Sheet driven system on how to organise their own tax affairs. As they had friends coming into contracting, their friends started to ask them going, well, what do you like? What do you do? How do you manage the tax and financial admin? And they said, well, here's some spreadsheets, I've sanitised them. You can use them going forward. And you know, depending on which version of revisionist history you subscribe to. From there, the spark of the business idea was born going, actually, it's not just our problem, the problem that the tax effectively that we've put in place to try and get more time back in our lives so that we can have the benefits of independent earning, but also then spend time, at the time they had two very young daughters who are now still reasonably young. I'm only, you know, I'm only going back about six years. They realise actually this is, this is a problem that many other, independent earners like us are facing. And we should actually turn this into a business because, this problem that we're solving can impact and positively influence the lives of so many other, you know, young working families like ours who are struggling with this challenge.
But they also want the flexibility to build a career around the family commitments that they might have. And so Hnry was born from there. And fast forward five years. We operate in two countries. We've got about 90 staff in the business. We, you know, raised a bunch of money and we process about $1.3 billion in payments through the Hnry system on an annualised basis.
Which is super exciting to think, you know, started by a husband and wife duo, just, you know, trying to avoid speaking to accountants and engaging with it with the tax office.
00:07:19:02 - 00:07:37:17
Lucy
100%. And I love that. What you're discussing now. The momentum of the businesses is awesome. Congratulations on that. One of the questions we like to check in with our community all the time when there is growth, is what you're actually loving about the business? Because we know that when growth happens, like, that's exciting, but it's also hectic. What are the parts of the business that you're really loving at the moment?
00:07:41:06 - 00:08:01:14
Karan Anand
So I think the first thing that I've always loved about Hnry, and it was probably the number one attraction I had to it was I had quite a lengthy career in management consulting, about 13 years. And that's, that's a really it's a really exciting profession to be in. But what happens over time, and I don't want to cast aspersions on the profession because I think it's fantastic. But ultimately, the clients you serve, you end up helping rich people get richer. And you know, when you when you go to bed every night, you sort of think about the impact you're having in the world and going, is this the best use of my capability that I have in the time I've got available in my career? The thing I love most about Hnry, and I love to say that it's also the thing that motivates a lot of the team who, with us and adjoining is that we impact the lives of everyday Aussies and Kiwis who are trying to live out the dream of being self-employed, which for many, many more than the 2 million people who are doing it is genuinely where they want to get to in their lives and within that, I think the thing I'm proudest of is our largest customer segment in Australia, independent workers who work through the NDIS, that's disproportionately indexed towards women. And these are the support workers and care workers who are caring for the most vulnerable Aussies in the country. And they're attracted to contracting and independent work because, again, of the pay rates and the flexibility, and to the extent that we can help them live out that dream and that lifestyle and work some pretty challenging jobs, to be frank. It gives me and the team a lot of satisfaction to then go, hey, look, we're supporting Australia's support workers. You should be really proud of that. And I am incredibly proud of the work that we do in that space.
00:09:28:07 - 00:09:50:01
Lucy
Well, that's some fascinating insight there. And something that we share, too, here at Mums and Co, because we know that about 30% of all of our community are in that, either, the women, the starting businesses because they're caring for people with disabilities or they have disabilities themselves. So fantastic work there. This probably touches on that a bit too. I was going to ask you a bit about what the what the most important thing to you in terms of being able to pay it forward. I suppose it touches on that, isn't it? That satisfaction of helping others who are helping others?
00:10:03:03 - 00:10:26:21
Karan Anand
Absolutely. I think it's bang on, and I think, I don't know if I could, you know, emphasise how important that part is in it. It's even for us when we think about, the, when we're recruiting, like, we talk about the impact we're having on the lives of everyday people, like, I had the benefit of I was the first person hired into the Australian business to help set the business up. And so I had the privilege of being, you know, one of the customer support agents for the first few months because it was literally nobody else here. Right. So who does the work? It's the person on the ground. But I spent a lot of time on the phone just talking to, our customers who, you know, a midwife in regional Queensland to a graphic designer working in Melbourne or a tradie in south western Sydney.
Andyou hear their stories, you connect with different parts of Australia, you connect with what they're going through and the challenges, which is I'm sure my Mums and Co play such an important role is particularly when you're starting out in business and you're a sole proprietor and you may be for a long period of time. It's a very lonely endeavour. And so the ability to engage with either a community or a support network is, you know, rare. And then if you think about professional services, which is basically what we're in the business of, they're really inaccessible for a lot of people who are in that echelon of being self-employed. And so that's why for us, whilst you know, the principle Hnry product is software where we get the most, positive feedback from our customer base and where we spend a lot of our time is about the service model as well, is essentially what we're trying to do is how can we democratise access to world class, finance and accounting skills?
And what we've learnt is that it needs to be a human being who's fronting the service. It can't be. You're just interacting with, you know, articles and chat bots. We need part of that. You need part of that to make the economics work. But fundamentally, at any given point, you need to be able to pick up the phone and speak to someone locally who understands the pain you're going through and has a deep level of empathy to go like, we can solve the thing that's stressing you out. But if you want, if you need half now just to vent a little bit because you've got nobody else to vent to, we're here for you there as well. So I think, you know, not to say that we do anything specifically from a pastoral care perspective, but there is an element of that in our service model. So I think it still comes back to supporting that segment of Australia, which we're very proud to support. But it goes just beyond doing the accounting and the payments calculation. It's actually being an ally and helping them progress what they trying to do from a business perspective, which is frankly very in line with what Mums and Co does as an organisation as well.
00:12:57:00 - 00:13:19:03
Lucy
Absolutely. I think what you're beautifully describing there is the ability to listen to your customer. Because very often, it's what they are not telling you also that's giving you the clues to what they need as much as what they are telling you. So you’re doing that wonderful combination of listening and then providing that expert advice and service. Just in terms of creating visibility for Hnry, that's one of the challenges that most of our community face in building their own brand. I'm just wondering if you could share a couple of the ways that you, you guys have used in order to bolster that visibility for Hnry over the last couple of years?
00:13:35:16 - 00:14:07:12
Karan Anand
Yeah sure. So we predominantly acquire our customers through sort of 2 or 3 main channels. So, you know, SEO, SEM, is a huge channel for us. And the principal method we use around that is sort of tailored content marketing, there is a high degree of intent associated with people who are searching for information within in this genre. Like, if I'm searching for self-employed tax, I'll try to tax, you know, how to do my best when I'm new to when I'm new to, this space registering for GST, ABNs or like, oh, there's this there's lots of topics, but they all are, sort of different pathways of navigating this quite complex part of your journey when you're self-employed.
So, you know, we get a lot of high internet traffic through that channel. So it's quite successful for us. The other sort of realm that we do quite well in is, through our partnerships, which is our partnership with organisations like Mums and Co, where there's clearly a firm overlap in the work we do which is, you know, you're bringing together a community of, all of a number of Australia's, you know, emerging businesses and self-employed women in across different, different backgrounds in Australia and we solve a specific, quite well defined niche for them. You can’t bury your head in the sand when it comes to tax, so what the partnerships allow us to do is give another opportunity to give you to get more content out there to engage your customer base, it’s another way of not just Mums & Co but other partnerships we’ve got extending the duty of care and say look, we know your going to confront this problem, here’s a partnership we have with another organisation that’s solely focused on this segment of the market, here’s a friendly introduction for you, so it between those two channels, referrals from partners and really rich content marketing means we’ve been able to build quite a large customer base across Australia and New Zealand.
00:16:00:15 - 00:16:44:00
Carrie
Amazing. And we do, very much call Hnry our friends, because we are trying to ultimately support, you know, the optimism of the 2 million Australians and, you know, whatever proportion to that, if you're not in the mum category, that's fine. It's still the Co, you know, that that we need a lot of support in that area, whether it be, the technical specialists support, which are providing in tax and accounting or it's the broader upskilling networking, and perhaps even just the psychological safety to do that, you know, to run that business whilst you have all these competing priorities. So we love, working together. Now, I wanted to flip our attention a little bit to more of perhaps the, you know, just maybe even just for how we combine what we call, you know, livelihood how people actually make a living. And you say that Hnry services gives a business owner potentially, maybe four hours a week back at each week back. Where do you think that a business owner is actually best to spend this time?
00:17:20:13 - 00:17:45:04
Karan Anand
That's a great question. I think it really just depends on where your business is in the business cycle. And what your position is in terms of your own ambitions for your business. So, if you're really early stage, I think you can never spend enough time on identifying product market fit and establishing your own niche with your client base. Like there is just so much rich literature which exists in sort of the global Start-Up community, about whether you're providing a product based business or a service based business, how do you find the right customer base, which is willing to engage with your product as well as the right price point, and really honing that craft down? And that was, you know, when I joined Hnry, we'd clearly been successful in New Zealand, but the challenge we had in Australia was about establishing that product market fit here, which we were able to do reasonably quickly. Once you find that, then you know the world is your oyster, right? So if you are self-employed and you use Hnry and we give you that, I think it's actually up to six hours back in your week, then you've got two options. You go, do I want to invest that time in building my business more, i.e., you know, more widgets to sell to my customers, finding more customers, thinking about other things I can do that create more income for me, or I want to spend it on other aspects of my life pursuing hobbies, spending time with my family or friends. I would never tell anyone how to structure their life when they've got the benefit of extra time. I think that is the greatest gift you can actually give anyone else. I think I'm pretty sure anyone would take six hours extra in a week. No one's going to turn away from that. But really, then it just depends on where you are.
But the only, the only word of advice I'd give is that when you're in the early stage, don't take your foot off the accelerator. When it comes to finding product market fit and the clients who are going to keep buying the service off you in a repetitive fashion.
00:19:23:20 - 00:19:43:17
Carrie
Before you mentioned, the isolation that a small business owner again you know, faces from time to time. And, you know, we don't tend to have the big teams and the staff and access to experts around us all the time. How do you sort of protect your business more broadly from some risk? How do you think, business owners should perceive risk?
00:19:47:10 - 00:19:48:14
Karan Anand
That's a great question. And I think the risk question is getting more and more complex, like, every week that passes. Right? Because we new cyber was a security threat. And then we saw the concerted attacks on even huge institutions like Optus and Medibank and the like and all. And it keeps happening. Right. Like we had latitude recently as well.
There's just these seem to be happening more and more frequently. If those big companies can't handle it, how do we expect an SME to handle it. And that's sort of a now unfortunately quite a tangible and quite a real risk. But then there's the existential risks, which are the marvel that is ChatGPT right now. Are you going like, what are like, what is what is the future of my job or my business when seemingly I can I was I think I was using it earlier this week.
I mean, we just write, we just use it to write job descriptions now, you know, frankly, an hour or two hours of effort, but, you know, like 20 hours of procrastinating trying to, you know, finesse a job description that you used to do and literally plugged in a few parameters into ChatGPT earlier this week, and it produced a about a 90% good job ad in like 15 seconds. So that's a whole other category of risk, which is genuinely like in the long term, I think, existential from a job and career perspective. I'm not a risk expert. The advice I would give is that as a business owner, it's incumbent on you to stay on top of what is evolving in technology these days. I think that's where the greatest source of risk is going to come from. So you don't need to be an expert in cyber. You don't need to be an expert in AI, but having a good understanding of the things which are moving and then how, frankly, in the first instance, you can harness those changes to make best use of them.
So can you make your production cycles go faster as a result of AI? and the democratisation of AI? You should harness that. But in the long term, think about, well, where if I was to linearly extrapolate this in 12, 18, 24 months, where do I think this is going to go? And then what are the changes I need to make for myself in order to protect myself from what's going to happen?
Companies pay a lot of money to management consulting firms to do large scale scenario planning for them. I'm not suggesting you do the same, but it's quite easy, like, on a personal level, to go, well, if this goes in this direction, it could impact my business in this way. And so I should start thinking about these things now, running those sort of if /then scenarios in your head.
It's a really good practice to stay on top of as a business owner. And then I think that mental discipline you get into, the early you are in your business, it actually will then help you find more opportunities as well, as technology evolves to.
00:22:41:01 - 00:22:53:06
Carrie
And in the meantime, we actually tried the ChatGPT, model more from a, I think we were doing a scenario where we were testing a media interview. Yeah, you can set the parameters. And I'm just wondering if you can actually go, you know, pretend you are a lawyer and craft a response.
00:23:04:18 - 00:23:28:10
Karan Anand
It's pretty good. It's really good at that stuff. Right? And, I mean, we we've been talking internally like, it feels like the evolution of AI in the last six months has exceeded the evolution of the last six years. And so it's like if we don't capture the opportunity, like, joke's on us, really. It's there to be harnessed as it stands, it's actually there to be used. And like that ChatGPT currently is free, so use it.
00:23:32:12 - 00:23:54:12
Lucy
I want to, take the conversation completely the other way now. as we start to wrap it up, at Mums and Co, aside from speaking always about things like risk and the importance of that in a business, we also like to look at the other side of the coin, which is our well-being as human beings, which is obviously very integral to running a business. And we talk about harmony being the triangle of ambition, livelihood and well-being. Now, you are a proud Sikh. And I was wondering, how does how does your religion and your culture there inform your sense of well-being? And can you describe what a good life looks like for you?
00:24:13:10 - 00:24:50:21
Karan Anand
Yeah. That's great question. SO the influence from the Sikh faith probably comes about, in two parts. So we have a phrase in, Sikhism, which is called Chardi Kala, which means eternal optimism. It's intended to be the sort of the daily posture that you take to the world and society. So we don't believe in God in the same context of this sort of all seeing, all knowing single deity who rules over the universe.
We more see, where I think in the, in the sort of religious sphere where what's called a pantheistic faith, which means there is no separation between the creator and creation, and therefore all of the universe, every single thing is therefore divine. And so if everything is divine, you then live in eternal happiness, because you are a part of divine and you are part of the greater design.
The second part of it, which is mirror, is a lot of sort of other sort of eastern face. Is your path to enlightenment, if you will, or your path to eternal happiness is both living in society but unattached to what happens, with the things which are outside your control. So you should take control of the things you can, but do not dwell on the things that you can't influence, because that is the design of the universe. And the universe will do what the universe does, and so you will not like you will constantly make yourself unhappy, because the thing that you had no control over happened. And so what I try and do is basically live by those two principles going, I will apply the maximum positive effort that I can in that stance I take, but the outcome will be the outcome.
And I have gained so much more from both times of, you know, any sort of adversity, but I've gained the most happiness when I've had to struggle to deliver something. Like if I rolled into Hnry and it was super easy to hire staff we were acquiring, we acquired 100,000 customers in my first week. In my first week at the company, and we raised $1 billion in capital, I'd be really happy, but that happiness would be so short lived. It's actually like I'm hoping for a positive outcome of course, like the journey is far from finished, but it's a lot more enjoyable because there are bumps along the road. It's super hard to contextualise yourself for that when you're in the grind. Or it seems like the odds are not going in your favour. So that's where I think having some degree of non-attachment to the day to day machinations of the universe also helps you be happier as well. So it's kind of those two things that I that those two things I live by.
00:27:08:03 - 00:27:16:05
Lucy
It's a beautiful explanation. Thank you so much. Sounds like a real celebration of the growth mindset, too, in a really fundamental level.
00:27:16:05 - 00:27:34:00
Karan Anand
Yeah. I mean, there's a lot I think I'll say like if we if we took a extrapolation of history, we're very lucky to be living in the era we are now. Right? I mean, any, previous era in life was a lot worse. So, hey, let's just be happy that we're born and living in the 21st century.
00:27:34:08 - 00:27:39:02
Lucy
Here here. Karan, thank you so much for joining us on Mumbition today.
00:27:39:02 - 00:27:42:20
Karan Anand
Thanks so much, Lucy and Carrie. Really great to be on the show. I've had a lot of fun.
00:27:43:20 - 00:27:54:04
Carrie
Thanks so much for joining us on Mumbition, the podcast by Mums and Co. If you'd like to connect with Karan you'll find him on the Mums and Co member directory on the member platform.
And if you haven't already, join the thousands of business owning women just like you. Join us at mumsandco.com.au. We have membership tiers to suit women at all stages of business and motherhood. And if you enjoyed today's podcasts, please rate and review us. Lucy and I love reading your reviews and your feedback. It also means that more women in business can be supported and they can tap into these ambitious stories to inspire and inform them.
00:28:26:02 - 00:28:40:21
Lucy
As we finish up this brilliant interview with Karan, and then we have a great question from one of our listeners. And that question is if you were given six hours back in your day, what would be the first thing you'd love to be doing?
00:28:42:01 - 00:29:00:06
Karan Anand
That's a dangerous question for me, Lucy, because I'm a huge cricket fan, and cricket takes a lot of time. And so if I could just, like I thought when I became an adult, I would quit my addiction to watching cricket. Because, you know, you find better things to do when you're a grown up. But really, it hasn't changed. So now life and other priorities. But if I could spend a couple more hours a day watching a good test match, I would.
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