THE PROFIT FIRST DIFFERENCE…
DON’T CHANGE HABITS, LEVERAGE THEM
Many entrepreneurs try to force themselves to become better at accounting and to become more disciplined in their fiscal management by pure willpower. But just like a muscle, willpower can be drained. And in a moment of financial stress or bigger than expected expenses, the entrepreneur will break their own fiscal rules and spend the money they have.
The Profit First principle does not try to change your habits (that is nearly impossible to do). Profit First works with your existing habits. By first allocating money to different accounts, and removing the temptation to “borrow” from yourself, your business will become fiscally strong and you will benefit from regular profit distributions.
The GAAP (Generally Accepted Accounting Principles) formula for determining a business’s profit is Sales – Expenses = Profit. It is simple, logical and clear. Unfortunately, it’s a lie. The formula, while logically accurate, does not account for human behavior. In the GAAP formula profit is a left over, a final consideration, something that is hopefully a nice surprise at the end of the year. Alas, the profit is rarely there and the business continues on its check to check survival.
With Profit First you to flip the formula to Sales – Profit = Expenses. Logically the math is the same, but from the standpoint of the entrepreneur’s behavior it is radically different. With Profit First, you take a predetermined percentage of profit from every sale first, and only the remainder is available for expenses.
Financial Tally utilizes the Profit First method of cash management. Our team is trained and certified by the Profit First Professionals organization to guide business owners and entrepreneurs in maximizing their profits. Any accountant can do your taxes and reconcile your books. But how many accountants will also drive profitability in your business? That’s what we do. We are a Profit First certified firm.
After reading Mike Michalowicz’s book Profit First, it was immediately implemented in our business here. Once we saw the results of the process firsthand, it didn’t take long to realize how beneficial this cash flow management system would be for our clients too!
Our firm is one of the select few, nationwide, that have received a certification in Profit First. What does this mean for you? We will guide you with the methods to greatly increase the profitability of your business.
“Most business owners don’t take their profit or pay themselves first. We specialize in implementing a cash flow management system that allows them to keep more of what they make to support the lifestyle they deserve.” – Lori Mercaldi