While working with customers as they implement their own version of the Profit First system (an intentional cash flow system), the one thing that pops up is the perfectionist tendencies that kick in as we change their money habits. What I found was that just outlining a new habit process was not enough.
Habits and Implementation of Profit First
When a business owner chooses to work with the Profit First system, we basically tackle a bundle of habit changes. We change how money comes in, goes out, gets prioritized, and even spent. We create a habit around how we use accounting data as a tool and metric to measure our actions and changes. With all these changes happening, it can send the money stories into high turmoil if a few actions aren’t taken.
- Knowing your personal traits to create a personalized plan
- Add accountability to the mix, because we rarely achieve success in a vacuum
- Squash the perfectionism bug as quickly as you can
The First Step: Understanding Your Natural Tendencies
As I took steps to grow my business, I chose to learn more about how I tick, especially as a leader. This helped me with communication interactions. However, with all that info, it still didn’t answer the problem with why I was a failure at developing new habits. That is, until I read Gretchen Rubin’s book, Better Than Before, and found out that I am an “Obliger” (based on her Four Tendencies framework). While I’m not a big fan of the word (and through Gretchen’s app, Better, I’ve discovered most Obliger’s dislike their new branding), it all started to kick in. See, an Obliger is super awesome at hitting habits that are tied to interacting with someone else, but left on their own, they don’t do nearly as well.
Here are some Profit First specific habits that are dependent on knowing your personal tendencies:
- When to make target allocation transfers – the book recommends making two transfers a month, for me that just wouldn’t have happened. I am way more successful when I do transfers every week when I update my accounting.
- Spending habits – I had a couple of spending habit that kicked in. One being a search for the greatest latest tool that would save the day (aka Shiny Bauble Syndrome). The other spending without much thought or plan behind it. Both of these habits can be resolved by implementing a 24 hour wait period and if debt is required, we create a plan on repayment in that waiting period.
- Adding barriers (physical and visual) – this habit kicks in when we don’t honor the agreement of the role we put on the bank accounts. For some businesses seeing all of their accounts in their accounting tool or online banking is just too much to handle and they have thoughts of borrowing from the accounts. Since this is an act of stealing this has consequences for your money – believe me, I know first hand – it also usually reverses any positive changes already made. This can be solved by having accounts at a different bank or even hiding them from view, online and in your tool.
Tracking and Accountability
Once you understand what makes you tick then you can move into what helps keep you on track. In the past, stickers on a calendar worked or adding them to my task management solution (they could be appointments in your calendar system too). What I found, is none of these excited me so I didn’t keep them going for very long – again, when I look at my natural tendencies it explains a lot. For me I need accountability and a creative way to track my success. The tool I am using right now is Map Your Progress. I also have a weekly accountability call with a couple of other business owners.
This one will be mostly on you to dive in and see what will work best like:
- What kicks you in the butt to do something – another person, a stickie reminder, or an app on your electronic device (HINT: a cattle prod is not an acceptable answer)
- What helps you feel accomplished – stickers, big calendar that you cross the days out (aka Jerry Seinfeld’s Productivity Secret), something you color in (like the Map Your Progress tools)
- How will you know you have been successful – somehow you need to track it and having a defined goal and target is necessary. (HINT: for Profit First this is actually looking at and using your financial info as a metric for your business.)
Perfectionism Can Kill Habits
Now that seems a bit strong, because there are business owners out there that have a natural strength and tendency to be perfectionists, and we need you. For the rest of us, really, the faster you can give up the need to be perfect, the faster you will make change in your business. In fact holding on to a perfect implementation kills all the lessons you can learn along the way. By opting for a sense of adventure instead, think of what you might discover! When we approach a new habit or process, asking more questions and looking at options may slow the process a bit but that’s the only way we can find the true path to a process that is customized for us.
As an example let’s look at how you use a budget or set a target. If all you did was implement strictly based on your accounting professional you will end up with a number perfect report that makes sense to the accounting person and probably makes you want to throw up a little bit. However, if you adjusted the report – add some color, change the format based on the Profit First bucket, used it in a tool that works for you: when you buy into it, you will use it. Which is the whole purpose of adding a tool to measure your success. So leave someone else’s idea of the perfect tool at the door and instead ask questions and tweak things until you find one that works for you.
Mike Michalowicz’s book, Profit First, has outlined that it takes about 18 months to fully integrate a new money habit into your business. To assist business owners, like you, that want to integrate this type of change, I created the Mission Profitability Program – 12 months of accountability, support, implementation, brainstorming, mentoring, and focused attention. If what you focus on the most is created, think what we can create by doing that together. If you are interested in learning more, complete this online form to take the next steps.
Want to explore more on habits and goal setting with us? Click here.