Profit First Unleashed // Transforming Your Finances for Success
Let’s talk about the Profit First method.
So, what's the deal with it? Well, imagine a magical world of business finance where chaos turns into order with just a snap! That's exactly what Mike Michalowicz conjured up with this nifty method.
Picture this: we divvy up our monthly revenue into neat little buckets, each with its purpose, making bookkeeping a breeze! Sounds like a financial fairytale come true, doesn't it?
here’s a scenario
You had a 10K month. But how much of that goes into YOUR pocket!?
I’ll show you below...
Owners Pay 50% - $5,000
Profit Account 5% - $500
Taxes 15% - $1500
Operating Expenses 30% - $3000
Mike talks about separating your monthly revenue into different accounts. Always pay yourself first, budget for expenses, save for taxes, and then give yourself a FUN bonus, which he recommends paying out quarterly.
Awesome, right!?
This is the super-simplified version of Profit First. For more information, I highly recommend that everyone reads (or listens) to his book: Profit First. It truly changed my life as a business owner!
SO why Profit first?
I see more often than not (especially in the online business owner space) that we aren’t paying ourselves FIRST! Instead, we invest in all of the things like brand shoots, websites, virtual assistants, social media managers, business coaches, and masterminds…
NEWS FLASH: These investments are not bad… I have personally invested in them. But did you invest in them at the right time?
Did you go into debt because of those investments?
Most businesses that fail, do so because of bad financial management and unhealthy cash flow.
Don’t believe the lie that you need any of those things to be “successful.”
Reframe how you see success for yourself and your business. It’s about your belief in your ability, being able to be profitable, paying yourself WELL, and choosing to bring on a team when you’re ready (if that’s what you want). I know many people who have thriving businesses, and make good money, with small but mighty teams.
Don’t get caught up in comparison mode, YOU are the master of your income.
HOW DO YOU KNOW YOU ARE FINANCIALLY HEALTHY?
Make sure you understand your finances. Is cashflow healthy? Are your project profitable? How profitable? You should be reviewing your finances, cash flow, and profitability monthly so you can make adjustments. Make sure you aren’t paying for any tools/apps you aren’t using. Watch your expenses. Budget for large purchases and hiring. And remember you get to decide how you scale.
Finances feel overwhelming? Need some support?
We have a Financial Audit, click HERE to learn more. Or shoot us an email admin@fiercedecorum.com.
