Profit First
In July 2022, I was proud to become a certified Profit First Professional.
I am always looking for the best way to support clients and after reading and researching entrepreneur Mike Michalowicz’s book ‘Profit First’, I knew this would be a valuable approach to practice and add to my ‘tool kit’ for supporting clients.
What is Profit First?
Profit First is a cash focused approach to running a business to make sure that, as the business owner, you reward yourself and you grow the business in a profitable manner. I like to think of it as the ‘jam jar’ approach. For those of us that had a Grandma who would divide the weekly money up into jam jars, so she knew there was enough money for the essentials as well as Christmas when it came around. It’s the same idea!
Established in 2014, the Profit First Professional membership organisation supports professionals, such as myself, to increase the value we deliver to make a real difference for our clients.
In the words of Mike Michalowicz:
“The Profit First formula flips the equation, giving profit the focus, it deserves”
Sales – Profit = Expenses
Traditionally, profit was a leftover. However, with the Profit First formula, business owners take profit first and use the remainder of revenue to operate and grow the business. It won’t all happen overnight but with discipline, time and focus it will play a large part in you growing a profitable business that you are fairly rewarded for.
It is not complex and requires you to focus on your bank balances – you do not have to spend your time battling with Profit & Loss Statements or Balance Sheets.
Profit First Coaching
I think of Profit First as being another tool available to me to add value for my clients. Taking this approach as part of bringing clarity, control and challenge to a business provides long-term benefits both to profitability and growth.
Phase 1 - The Profit Assessment
A historical review of your company’s financial trends, agreement on how you want your profit to look as a percentage of your revenue, a plan of how to get your business there.
Phase 2 - The Profit First Implementation
The set up of allocation bank accounts and immediate allocation percentages of profit and other funds.
Phase 3 - Profit Optimisation
A quarterly process of continuous improvement including profit, owner’s pay and other areas. Leverage Parkinson’s Law to build maximum efficiencies and innovations in your business. I know that having a trusted coach and advisor can be crucial to your business, and I aim to help you thrive, ensuring you meet your business objectives including rewarding yourself fairly throughout your business journey.
If you want to feel some of the advantages of profit first such as:
and want to know more then please get in touch and let me share how this could work and make a difference to you and your business.
