Let’s start at the beginning. Why did you build your business in the first place?

While you might have different answers, it all boils down to one thing – to earn profit. You don’t put excessive hours of hard work and all your capital into a venture that won’t pay off. No, you genuinely believe that one day, your money will be making money for you. But why should you wait for that distant future when you can earn profit now?

You’re probably thinking with all the expenses necessary to keep the business afloat, it’s impossible to earn a profit now. You start living from check to check – covering new costs with new profit, which only brings about other new expenses. It doesn’t take long before you take on debt. You cycle the money you’re making now to pay the bills you owe, and it goes on and on. Even imagining the stress of it all will stress you out. This is what we call the Survival Trap.

 It’s deceptive to allow ourselves to think that our reactionary behaviour to our problems is moving us closer to our promised land: financial freedom. The only thing we’re actually spending our money on is time – more time. It’s human nature to revert to established habits in times of stress, as Charles Duhigg explains in The Power of Habit. So instead of applying new and better practices, we revert to what we have done before, no matter how destructive they may be. Running a business meant running on fumes from the draining stress. But that’s not the only way to reach financial freedom.

With Profit First, you don’t have to work yourself to the bone trying to balance everything. It also doesn’t force you to take a different path, just a different ride parallel to the one you’re taking but with less stress. So how? How do you book a ride that lets you sit back and relax while, at the same time, earning profit for you and your business?

There are four Core Principles of Profit First, and we’ve taken the foodie approach just for you:

Use Small Plates - Smaller plates mean smaller amounts. By limiting the amount you see in your bank accounts, you can restrict yourself from spending it all.

Serve Sequentially - Prioritise profits first. That way, you know the business is making a profit, and the rest of the money can be allocated for taxes, bills and of course, to pay yourself.

Remove Temptation - Remove temptations, or at least keep them out of sight, out of mind. Try limiting yourself to the resources available to you by using multiple banks.

Enforce a Rhythm - Manage the rhythm of your cash flow by ensuring it is consistent and steady. The peaks and valleys in your cash flow are costing you more than you realise.

Are you still confused? Let’s put it this way: by intentionally creating a smaller space to put your food in, you limit yourself to what is there and develop a rhythm of eating that will satisfy your hunger. If you first extract your profit and remove it from sight, you’ll be left with a nearly empty plate to run your business.

When less money is available to run your business, you will find ways to get the same or better results with less. Taking your Profit First will force you to think smarter and innovate more.

Join a Profit First training and learn how to take control of your finances and grow your business!