Are you a business owner looking to take your financial management to the next level? Traditional accounting methods may have left you feeling uncertain about your profit and financial stability. Enter the Profit First method - a revolutionary system that flips the script on how you approach accounting and budgeting for your business.

What is the Profit First Method?

The Profit First method is a game-changing financial management system for businesses of all sizes. It was introduced by Mike Michalowicz in his book "Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine." This method challenges the traditional profit formula and provides a fresh perspective on managing your business finances.

Traditional Profit Formula vs. Profit First Formula

In the traditional profit formula, businesses calculate profit by deducting expenses from sales:

Traditional Profit formula: Sales – Expenses = Profit

This approach often leaves business owners uncertain about their actual profit margins and can lead to financial stress, because profit is seen as something that is "left over" at the end of the year, rather than something you are building throughout the year.

The Profit First formula, on the other hand, prioritizes profit from the beginning. It advocates for deducting profit from each sale before considering expenses:

Profit First formula: Sales – Profit = Expenses

By putting profit first, this method forces business owners to be more mindful of their spending habits and to invest in their own financial well-being.  It encourages all other business related costs and spending to be considered before Operating Expenses (bills) are paid.  In front of expenses are Taxes (an everyday part of doing business), Owners Pay (so that you can feel like you are the most valuable person on the team), Profit (not that elusive end of year number that's not in your bank account, but Real Profits) and then Bills last.  

How Does the Profit First Formula Work?

The Profit First formula encourages you to allocate a percentage of every sale as profit, setting it aside in a separate account. The remaining funds are then available for covering expenses, taxes, and your own salary. This approach ensures that you always have profit on hand, even before you start paying your bills.

For many business owners, this approach can be a bit uncomfortable at first, especially if they are used to prioritizing expenses over profit. However, this shift in mindset can be transformative, as it helps you build a financially sustainable business while also taking care of your own financial needs.  We have seen mindset shifts in mere weeks after starting the transfers to the different accounts, and this alone has been worth implementing the system.

Why Choose the Profit First Method?

Embracing the Profit First method can have numerous benefits for your business, including:

1. Clarity and Control: With profit set aside from the get-go, you gain clarity on the cash in your business and what it has been allocated for.  Want to invest in something new?  Set up a bank account and allow for this, rather than using tax money to pay for it and then having to create a payment plan.

2. Financial Stability: By always prioritizing profit, you create a safety net for your business and ensure that you have funds available for growth and unexpected expenses.  Your business will actually make a profit!

3. Improved Decision-making: Knowing your real profit margins allows you to make more informed and strategic decisions for your business's future.  With clarity over what money you have to spend on certain items, you are shielded from the "See Money, Spend Money attitude that most of us have when we operate from one bank account".

4. Personal Well-being: The Profit First method emphasizes paying yourself first, enabling you to enjoy the fruits of your labor and maintain a healthy work-life balance.  We have had business owners who have set up profit first tell us that they now love their business a little bit more, rather than being a chore to turn up at work, it is enjoyable again.

Take Your Business to New Heights with Elevation Training

Ready to revolutionize your business finances? Discover the power of Profit First and gain control over your profits. Sign up for our exclusive elevation training today and secure a prosperous future for your business. Don't miss out on this opportunity to transform your financial well-being. Take the first step towards success by joining our training. Sign up now