This is the mission of Mike Michalowicz, the author of Profit First. I started working with Mike and his organization because of how deeply I connected with this statement. I started my business so that I could assist small business owners with their finances and taxes and help them “understand” their numbers better than ever before. I moved them to the cloud, implemented processes and procedures and interact with them often. Am I giving them more attention that the traditional CPA? Yes. Do they think things are better than they were before? Absolutely. Is this enough? No.
There are bigger issues at play – some are personal, some are business related, and some go back to how they were taught to manage money growing up. A large part of successfully running a business is behavioral and emotional. You can have the best business idea on the planet. You could have been the smartest MBA graduate. You could have millions of dollars of VC funding behind you. But, if you don’t have a very specific plan on how you are going to manage your resources, manage your cash, and ensure you are making a profit, from day 1, a whole bunch of unforeseen issues can quickly derail the best of intentions.
I had so many “ah ha” moments when I read Profit First (the first time). Mike was right on the money about the issues and human behaviors. He was stating truths that most business owners are just trying to avoid.
It is a fact that after I give clients their P&L and we discuss what it means, they still look at their bank account and make purchase decisions based on the cash in the bank. Traditional accounting sometimes muddies the picture because they will show a profit in accounting terms, but can’t keep enough money in the bank to pay themselves.
Look, I have even done it myself and I am a CPA! I get it. I understand how to read financial statements. But financial statements are not intuitive to the average person and financials do not do a good job of bridging the gap between the numbers on the paper and the balance in the checking account.
The result is a cash flow nightmare!
As a business owner myself, I understand the challenges pf growing a business, controlling expenses, and managing cash. Even as an accountant, I understand the typical way of functioning – run your business as you always have and at the end of the month (hopefully) take a look at your Profit & Loss Statement and hope you ended up with a profit!
What I love about Profit First is that it is a system. A system that works if followed and a system that takes these behavioral and emotional concepts into account. With the Profit First system I can assure my clients achieve multiple goals – Pay themselves appropriately for their hard work, ensure they have a profit at the end of every month, and allocate funds to taxes so there are no surprises at the end of the year. If there are other goals, like paying down debt, we can accomplish those too.
As a financial professional, with an expertise in working with entrepreneurs and small business owners, I have brought Profit First into my firm specifically to get my clients to the next level of financial management and address these very important, recurring issues that can make or break a business.
It doesn’t have to be so hard….
For more information on how you can implement the Profit First methodology in your business Click Here!