“What the heck is Profit First?”

I heard this question a couple of years ago from across the room where I was speaking. An entrepreneur was explaining the system to a friend, and the concept of taking profit first before all else was confusing. After all, that goes against everything accountants learned, right? But, is there a better way to manage the finances of your business?

(Hint, the answer is yes.)

Profit First is the book that introduced cash management systems that helps increase your profit by changing the way you manage your cash flow. The system is based on the principle that profits should be allocated first, rather than being an afterthought or a leftover.

Here are some ways in which Profit First will increase your profit:

1. Improving cash flow management: By allocating funds to different accounts based on their intended use, Profit First helps you stay on top of your cash flow and avoid overspending. This helps ensure that bills, taxes and expenses are always paid on time, while also allowing for a more accurate projection of future expenses and profits. 
2. Encouraging frugality and discipline: By setting aside a specific percentage of revenue for profits, you’ll be forced to operate within your means and find ways to reduce expenses. This leads to better habits around cash management and an increased focus on revenue generation.
3. Facilitating informed decision-making: By tracking revenue and expenses in real-time and making regular transfers between accounts, business owners using Profit First have a better understanding of their financial health and can make more informed decisions about investments, hiring, and other business activities.

Overall, Profit First helps you increase your profits by focusing on cash flow management, encouraging discipline and frugality, and facilitating informed decision-making. By prioritizing profits and building a strong financial foundation, you will achieve long-term success and sustainability. You can take the first step by reading Profit First and checking out the resources here.

Wishing you health and wealth.

-Mike

PS – Want the FAQs? Check out the free, downloadable resources for all of the books, including Profit First, here. 

PSS – Peer support has been an essential aspect of my entrepreneurship journey, so I created a mastermind group so you can benefit too. I’m hosting a One Day Mastermind this spring. Learn more here and make your own journey easier!