Perhaps the better question is why NOT focus on profit first? My past experience working with small businesses is that the owner works really hard to get the business started, selling their services, marketing, and paying all of their bills each and every single month. Every now and then we would see a business owner get paid, but not very often; if they did get paid they rarely had any funds set aside to pay the taxes the next year.
When I read the book, Profit First by Mike Michalowicz, I was amazed that after over 25 years of working in the accounting field something so simple could have such an amazing effect on a business. For me, it was a life changing event, a true business changer. It was a great combination of system and process, mindset/habit changes, and an actual reward for having a profitable business.
The basic premise is for every dollar that comes in it is: first allocated to your profit account; second to owner pay; third to taxes; and then the rest is for operating expenses. At first, “allocations” may seem odd, but it is all about changing habits. It is a little like the envelope system my husband and I did when we were first married. Cash goes into the different envelopes for different purposes, and that was what you had to spend on those purposes, nothing more.
As I mentioned, this is business changing; so much so that I incorporated these concepts and methods into my own business. Now that I am experiencing the benefits of taking profit first, I wanted to share the concepts and methods with you.
Only a few select firms are chosen to be a Certified Profit First Professional. That means they will use the methods outlined in the Profit First process to guide business owners and entrepreneurs into maximizing their profits. A bookkeeper will reconcile the business books, track the expenses, pay the bills, maybe even create a paperless system. At a minimum, that is what all bookkeepers will provide. A Profit First Professional gives you the bookkeeping foundation you need and takes it one step further by giving you the financial info you, the business owner, needs to drive the profitability in your business. Welcome to the modern age of accounting services.
The ADI Accounting Team will first work with you on the basics needed for proper record-keeping and bookkeeping. We then walk you through the assessment, which gives you a starting point. We will provide the tools to guide you on the principal of the Profit First system. Depending on your goals you may find it beneficial to work with us further on accountability and behavior changes. Since the ADI Team measures it success by the growth and profit of our clients, a true sign that we are serving our clients at the highest level is when our clients reach their profit goals; when they truly enjoy the freedom their business provides them.
We have a free gift to do just that, five chapters of Mike Michalowicz’s book, Profit First.
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Everyone has to start somewhere, so we begin the Profit First process with an assessment and give you actions that you can immediately use to grow your profits. There is no cost for the service, just a bit of your time. We are confident that you will be impressed by this system and what we can do for you. The first step is to schedule your free session. Once it is scheduled we will send you some homework that we will discuss on the call.
If you are ready to find out more and start getting paid
After a Profit Maximizer Session, businesses that are ideal candidates for the next steps will be invited to do a Profit Analysis. Here we take a deeper dive that allows us to compare your current profitability to optimal profitability (based on industry analysis). We will create a report with recommendations of specific steps to get your business to a strong and healthy financial position. The recommendations may include possible accounting services and we will discuss those when we review the report together. This is a stand alone report that you will be able to utilize on your own, with another provider, or when you choose to work with us.
Are you an ideal client for a Profit Assessment? First you need to schedule the free Profit Maximizer Session.