Virtual COO Brenda Violette, Founder of Violette Business Services, asked me to write a guest blog on Profit First…
…and here it is!
Are You Taking Profit First in Your Business?
Profitable. Debt-free. Thriving.
These are the words every business owner dreams of using to describe their company.
Most small businesses will struggle for years, though, if they don’t know how to effectively manage their finances.
Enter Profit First
Mike Michalowicz, the best-selling author and creator of Profit First, takes ideas from making healthy lifestyle changes and applies them to finances.
He proves that having a specific “work out” plan is the best way for a business to get and stay healthy.
People tend to join a gym and “wing it” when they decide to get in shape. Once they’re in the gym, they end up mimicking exercises that aren’t specific for their goals or their fitness levels.
Many small business owners also buy the gym membership first, so to speak.
They have a skill and a passion they know will change people’s lives, but they know very little about running a healthy and successful business.
They try to learn how to be profitable once they’re already on the treadmill.
Profit First is Like a Personal Trainer
Profit First is like the personal trainer for your financial health, cash flow, and profitability goals!
Profit First has specialists trained to assess each business on an individual basis. They then teach their clients how to use the “equipment” and do the “workouts” effectively.
Profit First Specialists Begin Instilling Healthy Habits
One way Profit First specialists begin instilling healthy habits in their clients is by changing their perspectives.
They do this by having business owners think differently about how and when they get paid: first instead of last.
Their clients get a pre-set percentage of all the revenues they’ve generated before anyone else gets paid. This minimizes the risk of not having enough cash left over. It also cuts down on the company incurring more debt in order to cover other business costs.
It’s like the personal trainers who encourage their clients to exercise in the morning instead of after their long work days.
The Profit First System
The Profit First system also gets its clients on a regular payment schedule. For example, business owners can start paying expenses or collecting revenues on the same days each month. This develops healthy financial habits and keeps budgets balanced.
While delayed gratification is something very few people enjoy, it’s a necessary evil. To reach a weight loss goal, putting off dessert is a good idea. So is putting off business purchases until they’re absolutely necessary.
Developing this “wait muscle” keeps financial (and health) goals more tangible, noticeable, and sustainable.
While change is rarely ever easy, it’s the only way to take a business to the next level. But you don’t have to “wing it” or go it alone.
When you team up with a Profit First “personal trainer,” your business will be “beach body” ready in no time!
Is this you?
Are you ready to team up with a Profit First trainer? If so, contact JMV Financial Management today!
(This article was originally posted on Violette Business Services‘ blog page.)