How to Successfully Get Started with Profit First
Do you have your business set up where you are guaranteed to get a paycheque every single week or month? Do you have money set aside for your expenses and taxes each month and are turning a profit at the same time?
Unfortunately, most business owners cannot make this claim, but I am going to help you change that with the Profit First System. Don’t worry, the entire process is simple and you will wonder why you didn’t implement it years ago!
The first thing you must understand with Profit First is you are working opposite of what you have been told all of these years. Instead of calculating your income and subtracting all of your expenses to get your profit, you are going to calculate your income, subtract your profit, and then get the money you need for your expenses.
If you do this properly, you will have more than enough money each month to cover it all, so you never need to worry when you will get your next paycheque!
Now that you understand the basic concept of the Profit First System, it is time to open up four different bank accounts. These accounts will all serve a different function and they are all necessary for success with Profit First.
The Designations of Your Four Bank Accounts
Income
Profit
Owner’s Compensation
Operating Expenses
You may also want to consider opening a fifth account for your tax savings, so it is not mingling with your operating expenses every month.
As soon as you have these accounts set up, you will be ready to tackle your business finances twice a month. Yes, you read that right, twice a month! This ensures you have plenty of time for the fun part of your business for the rest of the month!
On both the 10th and 25th of every month, you will deposit every single penny of your income into your Income account. From there, you will allocate a specific percentage of the money to your Profit account, Owner’s Compensation account, and your Operating Expenses account. The percentage will be the same every month, so you never need to worry if you have enough to pay your expenses, or yourself!
As you can see, it is really easy to set up the Profit First System and get it implemented within your business. I am more than happy to help you accomplish this, so let me know if you are ready to put profits first in your business and earn the consistent paycheque you deserve!
