How many of you hate talking about money?! 🙋♀️
Let’s face it… money is hard to talk about. Especially if you hate working with numbers.
That’s why it’s so frustrating to do research on what you should be doing with your money. Most resources are difficult to read through and frankly… some articles are boring. 🙃
You’re trying to figure out how to improve your finances, but you’re still struggling to understand what method is best.
Fear not! I’m here to tell you about The Profit First Method in a way that’s (hopefully) easier to understand. 😉
What is Profit First?
That’s the question you’re most interested in, right? What makes Profit First the answer to all of your problems? What will this management system do that others won’t?
After all, you’re sick and tired of getting more and more clients, only to see your money continue going down the drain. Aren’t you supposed to be making more? Instead, you’re working harder and harder, and there’s nothing left for you after paying employees/subcontractors, bills, and taxes. What’s the point?
I know it’s hard to see your business drain your bank account. How would it feel to transform your business into a money-making machine?
Pretty good, huh?
This is exactly what Profit First will do for your business!
Profit First challenges the existing GAAP formula (Generally Accepted Accounting Principles) of Sales – Expenses = Profit.
The GAAP formula conflicts with the entrepreneur’s natural behavior. Business owners tend to use bank-balance accounting — so they simply check their balance and assume that the money in their account is what they have to spend.
This formula puts them into a sales trap, where more sales = more costs, which in turn equals more responsibility, more stress, and more loss.
The more you grow, the more profit you’re losing and you wind up working harder and harder and harder, without seeing any profit from your work.
Profit First turns that equation upside down.
We look at Sales – Profit = Expenses.
And here’s why!
This new equation compliments your natural behavior. By splitting the money into separate accounts, you can look at the balance in your ‘expenses’ account and spend accordingly.
In turn, Profit becomes a habit and not some miracle event!
How Profit First Works
Before you start implementing Profit First into your business, I highly recommend you come up with a Profit Plan to help you achieve your personal and business goals!
Certified Profit First Professionals (like me!) can help you come up with this plan so you can have accurate percentages to create a cash waterfall.
When you get paid for your services, all the money will be deposited into the income account. Then we’ll waterfall that money according to your fixed percentages between the profit, owner’s pay, taxes, and operating expense accounts!
Why Profit First Works
The reason why the Profit First method works so well is because of Parkinson’s Law.
The more you have, the more you consume.
For example, let’s say you have a packet of cookies with you. You know you should only have one or two, buuuuut… the whole packet is there. So in the end, you’ll wind up eating the whole packet of cookies.
If you had only three cookies on a plate in front of you, you would only eat three cookies.
The same exact thing works with finances.
If you put cash into smaller accounts and make it clear what the money should be spent on, you’ll learn to make do with what’s in the account.
After all, you can’t take money from taxes, because you need to pay taxes!
So if you can’t pay for something out of your expenses account, that simply means your business can’t afford it yet!
By putting our profit first, we become more innovative and think outside the box to keep our expenses to a minimum — which in turn, creates a healthier, more profitable business.
You Have Two Choices…
The way I see it… you have two options. You can either try and do this alone, or you can hire me! As a Certified Profit First Professional, I help entrepreneurs (like you!) implement Profit First in their business the right way. (and yes, there is a wrong way)
Before we start implementing Profit First into your business, I’ll create a Profit First Blueprint to help you put together the proper structure and systems in place.
Why I Recommend Profit First to My Clients
Before the COVID-19 pandemic hit, I began looking into a way to help my clients manage their finances so they can sustain any world crisis.
Only a few months later, the world shut down thanks to COVID.
As I was researching my options, I came across the book Profit First by Mike Michalowicz and it was such a great read!
I have implemented Profit First in my own business and I’ve seen a huge change in my spending habits.
- I’m finally able to pay myself fairly for all the time I put into my business
- For the first time in… probably ever, I’m paying my estimated taxes on time each quarter and I don’t owe anything at the end of the year!
- I am living within my operating expense percentages
Overall, I have found this to be a pretty easy transition.
It is possible to have a financially healthy business. You don’t have to stress about paying off debt, missing quarterly taxes, or overspending!
Profit First helped me achieve my financial goals, and I truly believe this program will work for you too! Even if you start small and work toward full implementation.
I highly recommend Profit First for all service-based business owners who are struggling to manage their finances. If you think this program is right for your business, contact me and I’ll help you get started!
The road to financial freedom is just one click away!