Here in the South, it’s not unusual for someone’s famous last words to be: “Hey, y’all! Watch this!”
More than likely, someone responded with, “I wouldn’t do that if I were you.”
Have you ever gotten a really great piece of advice from a friend—that you proceeded to totally ignore? Have you regretted it ever since—especially when that friend is “kind” enough to keep bringing it up?
Friend: “Do not do [insert ill-advised thing here]! If you do, bad things will happen.”
Us: “What’s the worst that can happen?”
[bad things happen]
Friend: “I warned you!”
It’s a cycle that repeats itself way too often for a lot of people. If you’re a small business owner in need of redeeming yourself from some of those moments…good news! Here’s your chance to grab hold of some truly great advice!
There is a better way to manage your finances and profits to make your business and your life way better!
It’s called “Profit First,” and—no exaggeration—it will revolutionize your finances. (Here’s a post where I wrote about it in more detail. Go ahead and check it out! I’ll be here when you get back.)
The essence of the idea of Profit First is having five basic accounts that you funnel every bit of your money through. The psychology behind it lines up with the way you and I already think about our finances. That is, we think of what we have to spend before spending any money. (To prove my point: how many times a day do you look at the balance of your bank account?) So instead of trying to force us to change our behavior, Profit First uses the momentum of our existing behavior like a Jujitsu master to turn our money into real profits.
Today, as we get into the first of a series of posts on Profit First, I want to go a little deeper into “why” I think it’s a great idea for your business. So here they are:
Five Reasons You Should Implement Profit First
- It works. ‘Nuff said.
- It’s based on how we do things in actual practice, so we aren’t learning new habits. (You’re already really good at checking your checking account, right?) And let’s face it…no small business owner really has time to be learning any complicated new systems or processes. We’ve got actual businesses to run!
- It’s designed to naturally make you more efficient with your time and money. Parkinson’s Law says that “work expands to fill the time available for its completion.” Business expenses are the same way. They’ll expand indefinitely to fill whatever space you give them. Dave Ramsey says, “You’ve got to tell your money what to do, or it will leave!” Profit First gives your money clearly defined rules, and forces you to make it behave better. (Here’s a post I did on how to boost your profits with Parkinson’s Law to go further on that idea.)
- It’s designed to be implemented over time, so you can adjust to it and go at a pace that is comfortable for you. Never do anything with money that you don’t understand! That’s where big mistakes can happen…and where big “I told you so’s” are bound to follow. Profit First puts you in the driver’s seat of the entire process.
- The old way just doesn’t work. (At least not for 99% of small business owners.) Time for a Dr. Phil moment: “How’s that working for you?”
Profit First is a better way. I am convinced enough that we are structuring our business here at Patrick Accounting to help as many small business owners as we can realize bigger profits and a better quality of life by implementing this simple, but wonderfully disruptive, concept.
Stay tuned for more posts in this series! Check out the “Stay Informed” box in the footer below to make sure you don’t miss out!
In the meantime, if you have questions about your accounting and bookkeeping needs:
Contact Patrick Accounting online or call us in Memphis (901-755-5858) or Little Rock (501-834-5757 to set up a time to see how we can help.