How the Profit First Method Works
As a business owner, you work really hard and wear multiple hats (and scarves and shirts) to make everything work. You deserve to enjoy the fruits of your labor and live well without feeling stressed come tax season or hoping there’s enough money to pay yourself each month.
There’s a better way to manage your business cash flow without increasing sales. Don’t get me wrong, more sales are always welcome! If you notice that increasing your sales doesn’t always equate to more income or help solve your problems, I have three questions for you.
Ask yourself the following ‘yes or no’ questions:
Do you only focus on surviving tax season?
Are you unable to pay yourself consistently each month?
Do you wish you had a trustworthy business financial professional in your corner?
Did you answer yes to any of them? Don’t worry, you’re in the right place to change those answers. Profit First is a cash management strategy created by Mike Michalowicz to help business owners implement a system that ensures YOU get paid.
Intrigued? Let’s walk through how the Profit First method works and see if it might be a good fit for you to implement in your own business.
Quick pause here - the BEST way to learn if the Profit First Method will work for you is to read the book! I know, you’re busy and you don’t want to buy the book right now. Good news! I can give you the core chapters for free and send them right to your inbox. Click here to claim your chapters.
3 Ways the Profit First Method Works for Small Business Owners
1. Flips the Equation to Focus on PROFIT not Sales
Instead of focusing on generating more and more sales, this methodology flips the traditional accounting equation to put your emphasis on your profit goal first. Most accounting and tax professionals will tell you that sales-expenses=profit; instead we flip that around to start with your profit goal and focus on paying yourself and saving up for taxes, the leftover amount is what you have available to cover expenses.
2. Forces You to Spend Money Wisely
As you probably gathered, because you’re smart, by flipping the equation you are forced to spend your money much more wisely. Parkinson’s Law tells us that the demand for something increases in direct correlation to its supply. As a result, if you decrease your cash available for expenses, you will find a way to make it work. By paying yourself first, you’ll be able to make profitable business decisions without impacting your own income.
3. Creates a System of Balances
By implementing this cash management strategy, you ensure that you are consistently paid, tax season is a breeze, and all your business finances are in order. Whether you’re a solopreneur or run a larger organization, this system will work.
Find a Profit First Professional Near You
Does the idea of consistently paying yourself and making tax season easier resonate with you? As a certified Profit First Professional, you can trust that together we can put this methodology into practice and turn your business into a profitable machine. Click here to schedule a 60-minute introductory consultation. We’ll chat about your business and see how we can make the Profit First Method work for you.
